BitBrief 2015

California recently declared Bitcoin to be “legal money”. Some, including this article, argue “The fact that Bitcoin has now been given the status of “legal money” will make further progress in not only raising awareness of the digital currency, but also encourage further merchants and services to accept the newly official currency as an alternative form of payment.” Longterm, though, statement like this by regulators really change nothing about the fundamentals of Bitcoin.

In the financial world, we have the Winklevoss twins getting ready to start selling a Bitcoin ETF (COIN) and futures contracts for Bitcoin are starting to be rolled out.

Blockchain 2.0/cryptoequity:
Although this is an older article, one of the 2015 goals of Brick & Crypto is to explain things more simple, and this article does a great job of explaining decentralized organizations (DO) and decentralized autonomous organizations (DAO):

Imagine for instance a fruit seller in Indonesia: currently the fruit vendor operates outside the law. He isn’t incorporated, and doesn’t pay taxes – which is caused by a combination of overly complicated bureaucratic processes and the inability of the government to enforce regulations.

– A fruit seller in Indonesia

However, the fact that the fruit vendor isn’t incorporated also makes it more difficult for him to raise capital to expand, since he can’t offer much guarantees to investors. He does not have a registered entity, and he can’t sell equity. A DO solves this problem for him – it’s quick to register, nearly free, cryptographically secure and user-friendly. And besides, the prospects of legal repercussions are close to none.

Prospects of cryptoequity [and cryptocurrency!]

In developed markets, specifically US, the cryptoequity sphere is likely to quickly gain the attention of regulators, as it attracts investment and media buzz. Hence, the regulatory environment is likely to make it harder for DAO’s / DOs operating in the Western hemisphere as opposed to developing countries.

Over time however, the economic competitiveness of DAO’s/ DO’s may push western government to adopt a looser regulation regarding cryptoequity to stay competitive. It’s also a possibility that some emerging markets, governments, or economic free zones, will come to use this method to incorporate companies, as it’s more secure, cheaper and more time efficient than keeping paper records.

Within the Bitcoin community, some of the criticism raised against cryptoequity is that it will simply create more altcoins, which according to many is bad for the Bitcoin infrastructure because it detracts attention from Bitcoin itself. This view seems slightly misguided since equity shares do not compete with currencies; that would be like claiming that Microsoft stocks compete with the US Dollar.

(Taken from a document about Swarm, a new cryptoequity crowdfunding platform) Current cryptoequity offerings include:

(1) Product presales in which the token serves as a coupon redeemable for a real world good (i.e. the Comic Book sale done via Swarm)
(2) Product sales in which the token is redeemable for some service in a decentralized network (i.e. Storj or Ethereum)
(3) Product sales which serve as a “subscription” or membership to some decentralized network (i.e. Swarm)
(4) Token which serves as a license to use some type of intellectual property, potentially with an attached legal contract (i.e. sales being conducted in the Swarm 5th of November launch)
(5) “Shares” serving as stock equivalent for organizations that have no legal entity (i.e. BitShares)
(6) Shares serving as stock for legal entities (i.e. Overstock/Medici)

Here are some articles about increasing Bitcoin adoption:

Dish Network, which already accepts Bitcoin for some services, will launch a new service that accepts Bitcoin. For the recent St. Petersburg Bowl, ESPN accepted Bitcoin as payment for BitPay’s sponsorship, but immediately cashed it out for US Dollars.

Remember that accepting Bitcoin for a product usually implies the bitcoins are instantly converted into fiat currency such as USD, thus have no net direct effect on Bitcoin. This is due to volatility concerns, and indeed, in this case, ESPN avoided a large loss by converting the BTC to USD. Luckily though, there is still an indirect benefit for Bitcoin, which is extra publicity and the ability for Bitcoin users to spend their coins in a new way.

However, there are also larger projects such as a precious Metals dealer who pays staff in Bitcoin now or the Bitcoin City (Arnhem, Netherlands) that seem promising in this regard:

“A major boost to Bitcoin adoption could come as a result of local businesses not only simply accepting bitcoins, but also conducting their B2B transactions in cryptocurrency. On the supplier side, if local coffee producers in Ethiopia, for example, also use bitcoins, then middle-man fees could be significantly reduced across the entire supply chain, reducing costs for producers to consumers.”

…And what might be the most important reason for merchants to accept Bitcoin without converting them? With the Bitcoin City project setting its sights on museums, cinemas, expositions and libraries, all of your needs will soon be covered and payable with bitcoins. Perhaps the boost to the fledgling ecosystem might come not from bitcoin enthusiasts, but from the sputtering global financial system itself.

New & interesting uses:

Decentralization of the Bitcoin Foundation (which funds core Bitcoin code development) might happen sooner than expected, thanks to Lighthouse, which “makes use of an under-implemented conditionality function built into Bitcoin’s central code, Lighthouse opens the door to users easily creating contractual and crowdfund style Bitcoin transactions:”

“My biggest hope for Lighthouse is that it helps prove to the world that Bitcoin’s features aren’t just hype at conferences – they can be converted into real products that help real people. Existing crowdfunding platforms can easily soak up 10% of the funds you raise, and aren’t even available in most countries. Lighthouse is a great demonstration of how Bitcoin can dis-intermediate expensive middlemen – it’s free, fast, works everywhere and puts the user in control”.

“More specifically Lighthouse can do ‘crowdfunds’ that don’t fit our pre-conceived notions of what a crowdfund is. Think about friends doing a group buy for concert tickets, a drama group raising money to put on a show, and so on. These projects don’t fit existing platform policies and the overheads would be too big anyway. With Lighthouse, they could make sense. I’d love to see people explore new ways to use all-or-nothing fundraising.”

Recipient doesn’t need a social media account! “One of the best parts of our community is seeing how people use our products – often times in ways we hadn’t even imagined. Adam Guerbuez had a little giveaway – the first people to click his link won some money through the One Tip Tip link. And Martin Holland over at set up an online scavenger hunt, by hiding money in posts online!”

The first iOS game to tip players in Bitcoin was approved recently.

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