Category Archive: UK

Why governments should embrace the Blockchain

William Mougayar, author of “The Business Blockchain” and member of the Ethereum Foundation, explains why governments should embrace the blockchain.
A few days ago we published an article where ICAP suggested on why banks must adopt digital currencies; today we want to talk about this new important opinion by Mougayar, who is convinced that the distributed ledger could improve government services.
Government services, in fact, are one of the most important and revolutionary use cases for this technology , so it is not a surprise that governments are working to develop their own blockchain-based applications.
During this year several cities and governmental institutions made their own plans for the ledger.
Singapore, Delaware, Estonia, Georgia, Ghana, Sweden, Switzerland, UK are just a few of many countries that developed a project related to the blockchain.
So, if your government is not working on the blockchain, they should, explained Mougayar.
As the blockchain is an early stage technology, it is easier to implement solutions at smaller scales.

How governments should embrace the Blockchain

What can your government do with the blockchain? There are four main areas:
  1. Verification: licenses, proofs of records, transactions, processes or events.
  2. Movement of assets. E.g. Transferring money from one person/entity to another.
  3. Ownerships: the blockchain is a perfect ledger to custody any asset.
  4. Blockchain can be used to give e-identities to its citizens, enabling a safer kind of voting.
So, government leaders should:
  1. Study the blockchain and explore its potential.
  2. Let people develop a blockchain strategy.
  3. Start experimenting with blockchain technology
  4. Develop new ideas to improve the quality of life of the citizens

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Universities can have their own Bitcoin Nodes thanks to BSafe

Several researchers want to encourage universities to set up bitcoin nodes to allow students and teachers to work and test the blockchain.
This private testbed network is called BSafe and it aims at helping the Bitcoin technology proliferate and preventing hacker attacks.
“Most developers in this world think that bitcoin’s fundamental cryptographic algorithm is ideal and can be used as a black box,” explained to Coindesk Shin’ichiro Matsuo, co-founder of the BSafe network.

How universities can have their own Bitcoin Nodes thanks to BSafe

BSave will provide a communication channel between universities and Bitcoin Core developers on the several testnets, or the alternative blockchains used for doing tests.
Created in February, the network has five nodes deployed in Japan, UK and another set up by MIT.
Matsuo wants to have a group of 30 university nodes within the end of 2016; also he aims at setting up three university nodes per country in the next future.
“Right now the community is a meritocracy and the majority of it is based on whether you can code,” said Bitcoin Core developer Cory Fields. 
According to Fields, several groups of nodes would be able to measure things that have been difficult to study before.

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Bitcoin price rise again thanks to the Brexit

United Kingdom Flaf
After reaching a low of $550 during the week, the bitcoin price rose again reaching a high of $650 today.
Although it was normal to see a correction after the fast climb of the previous weeks, the bitcoin price probably fell also because of the “Bremain”, or the possibility of UK to remain into the EU.
This volatility has a main reason: Brexit and Bremain.
When it seemed that England would remain in the European Union the bitcoin price fell immediately.
Conversely, now with the official news of the Brexit, the Bitcoin price is finally starting to rise again.

Brexit and Bitcoin price rise

Yesterday England had to vote for a referendum in which voters had to decide if their country should remain (Bremain) or leave (Brexit) the EU.
When the official news of 54.4% votes for the Brexit arrived, the Bitcoin price increased from $560 to $655.
This phenomenon is probably due to the fear led by the volatility in the fiat currency and traditional markets.

5 reasons why Bitcoin price rise

Few days ago we talked about the causes of the Bitcoin price rise.
Among these we quoted the Brexit, and in fact it seems to be confirmed by the market movements.

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Microsoft to Sponsor the Ethereum DΞVCON1 Conference

The Ethereum DevCon1 conference is set to take place on November 9th in London. In a recently published blog post by George Hallam, the Ethereum team announced that Microsoft would be one of the sponsors of the first-of-its-kind event. MIcrosoft and Bitcoin have had a somewhat strong relationship since the American company started accepting it last year. Now, it seems that “Bitcoin 2.0” technology like Ethereum is taking some of the institutional attention away from Bitcoin. Vitalik Buterin, one of the founders of Ethereum, commented on the sponsorship:

DΞVCON1 is very excited to work with Microsoft and we look forward to having them in London.”Microsoft’s head of US Technology Financial Services, Marley Gray, explained more specifically why Microsoft had taken an interest in this international and decentralized technology event:“Microsoft is excited to sponsor and attend Ethereum’s DevCon1. We find the Ethereum blockchain incredibly powerful and look forward to collaborating within the Ethereum Community. We see a future where the combination of Microsoft Azure and Ethereum can enable new innovative platforms like Blockchain-as-a-Service. This will serve as an inflection point to bring blockchain technology to enterprise clientele”.

“Blockchain-as-a-Service” is a new term that we will undoubtedly hear more of in the coming years. Most everyone involved in the technology side of their business is familiar wit Software-as-a-service (SAAS) which has given rise to incredibly large corporations. In contrast, the service that the blockchain provides is removing the need for people and points of failure in the middle and back office. Smart contracts and blockchain-as-a-service obviously go hand in hand. What will be most interesting is if Microsoft’s potential use of Ethereum in their Azure platform is what finally prompts Amazon to get into the decentralized digital currency game. One can only hope.

Ethereum DevCon1 Is Bringing Interesting Companies and People Together… For a Better FutureAlready, it has been confirmed that not only will Microsoft be in attendance, but so will Nick Szabo. That is actually no surprise given that Szabo coined the term “smart contract” many many years ago and has become increasingly vocal on the internet as his pet idea has started to come to fruition. Smart contracts are a large part of Ethereum’s mainstream appeal, though the concept is still in the process of gaining momentum. The future prospects of robots and computers replacing humans for certain types of jobs has always been on the fringe of human imagination. The more you think about smart contracts, the more you realize that such a futuristic world couldn’t exist in a stable state without something like smart contracts. As panelists at the Money20/20 conference stated:

Cryptocurrency is the most natural way for machines to pay machines.

Bitcoin-inspired blockchain technology, of which Ethereum definitely is, has seen a lot of validation lately. Other Bitcoin-inspired blockchain technology like BitShares is also gaining traction, though not in the form of Microsoft sponsorships. Besides the fundraising and actual release of Ethereum’s Frontier alpha and a shaky first few days, the formation of a conference is a milestone that most “altchains” never achieve – not that there was any doubt that Ethereum would make it this far, anyways. After all, even Imogen Heap has even started using Ethereum, why wouldn’t Microsoft be next?

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Privatise the pound and replace it with bitcoin, says free-market thinktank

of Economic Affairs says governments should allow competition on a
level playing field between all alternative forms of money.
A man enters a bitcoin conference in New York.
A man enters a bitcoin conference in New York. Photograph: Mark Lennihan/AP
(TheGuardian) UK should privatise the pound and replace it with a
cryptocurrency like bitcoin, according to a paper published Wednesday by
the free-market Institute of Economic Affairs.
Kevin Dowd, a
professor of finance and economics at Durham University, says that
although bitcoin isn’t the first example of private money, it is the
first that governments can’t shut down. Therefore, he says, authorities
should admit that it’s here to stay, and allow competition on a level
playing field between all alternative forms of money.
That might
include allowing taxes to be payed in cryptocurrencies such as bitcoin
and dogecoin, or even fully privatising the pound, selling off the right
to mint the currency to the highest bidder.
“Let’s suppose that
bitcoin became a very prominent currency,” Dowd told the Guardian. “[To
ensure a level playing field], the government itself would accept
bitcoin in tax payments. So, in effect, the government should not be
favouring its own currency, or any particular currency, through any of
its unique powers. Nor have regulations against them.
“The natural
analogy is with some of the old, bad, monopolies like British Gas or
British Telecom. Telecom is a very good example: for a long time, we had
a government monopoly, which stifled innovation, and the service was
poor. Once that got opened up, competition opened, new innovation
prospered, and we got all sorts of innovation that we couldn’t possibly
anticipate, and we’re a lot better off for it.”
Dowd places
bitcoin at the pinnacle of a historical trend of government crackdowns
on attempts to create private money. The Liberty Dollar, a physical,
gold-based private mint, and e-gold, a digital, gold-based e-currency,
both ended up with their creators and proprietors in court, the former
on charges of counterfeiting, and the latter over allegations of money
But Dowd argues the charges were
politically-motivated protectionism. “Counterfeit 101 is that you try
make the fake look like the real thing,” he says, “and the whole
business model was predicated on saying that [the Liberty Dollar] is
superior to US currency.”
Because Bitcoin is decentralised, it’s
significantly harder to crack down on using the courts – “you could shut
the whole web down, but they can’t do that,” Dowd adds – and so
governments can’t stop its rise. If it does become popular, they will
have to deal with it some other way.
There’s a lot standing in the
way of cryptocurrencies before they reach that success, however. For
one thing, Dowd writes, “to displace existing state currency they not
only have to perform the basic functions of money at least as well as
state money, they probably also need qualities that transcend the way in
which state money works.”
For some advocates of bitcoin, as well
as for Dowd himself, those qualities come in the form of protection
from inflation: the cryptocurrency will only ever have 21m coins
created, ensuring that it will always “hold its value” (though also,
critics claim, rendering the bitcoin economy prone to deflationary
For others, they come from the purely digital nature of the currency. Venture capitalist Marc Andreessen describes it
as the financial equivalent of the internet, saying “The internet was a
new way to transmit data. Bitcoin’s a new way to transmit money. It’s
going to take a long time. The good news it’s a big opportunity. Money
is a very big deal, and so if you can build a new way to deal with
money, it’s very important and valuable. It just takes time.”

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Third CoinSummit to be held in London

(Cryptocoinchronicle) The Third CoinsSummit is to be held in London this July. San
Francisco was the acting ground of the previous CoinSummit convention
that was held in March; as the second convention presented, this next
summit will feature a series of panel discussions and speeches from
bitcoin enthusiasts, hedge fund professionals, VC and angel investors,
and experienced cryptocurrency entrepreneurs.

The information posted on the CoinSummit official site:

“CoinSummit London is a two-day event connecting virtual
currency entrepreneurs, angel and VC investors, hedge fund professionals
and others who are looking to learn and network in the virtual currency
industry. CoinSummit will take place on July 10-11 2014 at the East
Wintergarden London.”

Some notable speakers include Silk Road Equity co-founder Matthew
Roszak, new Bitcoin Foundation board of director Brock Pierce, angel
investor Roger Ver, and Maidsafe CEO David Irvine. Some of the others
participants include Megabigpower founder David Carlson, Lamassu CEO
Zach Harvey, eToro CEO Yoni Assia, and many others.

This 3rd CoinSummit, organizers are presenting a new set.
Besides the usual structure, a special platform is being organized for a
few startup companies. Coinsummit has informed at their site, that ten
startups will be given the chance to present in front of the entire
CoinSummit audience and will be chosen on the basis of the size and
charm of the opportunity they are designing, the strength of the team,
and their traction / metrics / achievements.

Some of the spreakers
Some of the speakers

The summit is organized by Pamir Gelenbe, a strongly firmed crypto
currencies entrepreneur and partner at Hummingbird Ventures. After the
last summit in March, Gelenbe has stated:

“We hope to bring together entrepreneurs, VC investors
and folks from hedge funds who want to learn about bitcoins as an asset
class…we really want to focus on the business side of Bitcoin as we
don’t think there has been an event like this before.”

CoinSummit has been the leading hand on taking Bitcoin discussion to
higher grounds by cementing the bonds between the Bitcoin communities
around the world and relaying trustworthy information to the media and
business investors.

CoinSummit London 2014, will be held at the East Wintergarden and
take place on July 10-11. Entrance to the conference is invite-only.
Digital currency enthusiasts and entrepreneurs who wish to attend the
event can request an invitation on the summit’s official site; applying for the presentation is free and the deadline to register is June 20.

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Bitcoin Regulation Update – 03/07/14

(BitcoinMagazine) This
week saw the outing (or not) of Satoshi Nakamoto, Bitcoin’s alleged
inventor, who is said to have abruptly disappeared from the online
forums he was known to frequent in Bitcoin’s early days. Though the man
alleged to be Nakamoto, who was living under a different name in the
United States, denied involvement with Bitcoin, Newsweek, the
publication that broke the story, stands behind their work. The early
response from the online Bitcoin community could best be described as a
low grade form of moral outrage, combined with a dash of horror. What
seems to have upset Bitcoiners most is the fact that a media outlet was
able to identify and publicly name a person who clearly was not
interested in being identified, using little more than public
information and basic detective work. To the extent that the majority of
crypto enthusiasts value privacy, if not anonymity, the Satoshi
Nakamoto affair does not bode well.
Canada-based Bitcoin exchange Vault of Satoshi announced via Facebook on Thursday that it would discontinue
support for US customers due to an “increasingly hostile” regulatory
environment. The exchange, which connects users with others looking to
trade crypto currencies for fiat currencies, claimed to be facing
considerable difficulties complying with FinCEN’s anti-money laundering
rules, not the least of which was FinCEN’s policy disallowing the filing
of paper reports by money service businesses and the seeming
incompatibility of the online reporting system with foreign businesses.
The decision to abandon the US market entirely seems to be a fairly
drastic response to US law, which could rightly be described as overly
complicated. Vault of Satoshi is neither the first nor the only non-US
based company to face US regulatory requirements, so it isn’t clear why
it seems to be having unusual difficulty in this area.  The company’s
Bitcoin to US dollar volume on Friday stood at 280 coins as of 5:00 PM
CST, compared to 314 for Bitcoin to Canadian dollars. Under the new
policy, US traders will be unable to deposit or withdraw cash from the
exchange, but will be permitted to trade coins.
Yet another exchange, this time Canadian company Flexcoin, informed customers this week that it is insolvent
as the result of a hack induced theft and would have no choice but to
cease operations. The exchange lost an estimated $500,000 worth of coins
in its hot wallet, but a spokesman said that customer coins in cold
storage would be returned to their owners.  Flexcoin referred to its
terms of service, reminding its customers that they agreed not to hold
Flexcoin liable for theft, while informing everyone else that they were
out of luck. The operative verbiage states that “Flexcoin is not
responsible for insuring any bitcoins stored in the Flexcoin system.”
Whether this will be sufficient to ward off civil liability remains to
be seen.
Her Majesty’s Revenue and Customs service in the United Kingdom has reportedly dropped
a plan to apply value added taxes to mined bitcoins and Bitcoin
exchange transactions. However, the treasury maintained in a brief
delivered to British lawmakers that the 20% VAT still applies to goods
and services purchased with bitcoins, just the same as it would if those
same goods and services were purchased with Pounds. After a careful
review, HM Treasury was more likely to have discovered the near
impossibility of taxing Bitcoin at the point of exchange or the point of
creation, than to have determined that it falls outside the scope of
transactions subject to the tax.  Merchants, on the other hand, are
already accustomed to collecting VAT and equipped with the
infrastructure both to report it and to comply with the audit
requirements of the British government. The UK has developed a
reputation in the Bitcoin community of late for being comparatively
friendly to crypto currency from a regulatory standpoint and more
accessible than US regulators.
Vietnam’s Communist government has officially banned
all Bitcoin transactions. The Vietnamese central bank announced the
policy, citing Bitcoin’s alleged role in promoting money laundering and
other criminal activity. The bank did not specify how the ban would be
enforced or what the penalties for non-compliance would be. The
Vietnamese government maintains restrictive capital controls (ostensibly
to protect the Dong against speculators), that Bitcoin could be used to
subvert. Few exchanges offer the ability to convert from Bitcoin to the
Vietnamese Dong.  However, other currencies, such as the US dollar, are
in common use on Vietnam’s streets, especially in urban centers.
Japan has announced
that it will not attempt to regulate Bitcoin transactions carried out
within its borders on the grounds that bitcoins are not considered a
currency. However, Japanese banks will be prohibited from buying or
selling bitcoins. The Japanese government also clarified that it intends
to treat Bitcoin as a commodity and subject it to the applicable
taxation regime. Japan is the home of Mt. Gox, the collapsed Bitcoin
exchange which is currently the subject of a bankruptcy filing in that
country, along with at least one criminal probe and numerous civil

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Bitcoin in the UK: HMRC suggests bitcoins are ‘taxable vouchers’

As Tom Gullen described on his blog, Her Majesty’s Revenue & Customs (HMRC) seems to be classifying bitcoins as vouchers, which means VAT would be due on any sales. A 20% mark-up on bitcoin prices would make UK exchanges untenable. In addition to Gullen’s statement, an independent source told us that HMRC had given them the same classification. We also spoke to Dr Tom Robinson of the UK-based bitcoin exchange BitPrice and consulting firm Blockchain Consulting, who recently attended the Financial Innovators Summit at 10 Downing Street. At the time, it was said that he “left the meeting feeling largely optimistic”. However, his subsequent communications yielded the following statement from HMRC: “Our Policy teams’ view is that these are not currency. It is our view that the provision of bitcoins is the sale of vouchers. These arelikely to be ‘single purpose’ vouchers.

United Kingdom Flaf

Robinson said: “This is obviously an entirely inappropriate classification for
bitcoin: they aren’t issued by anyone, they don’t have a ‘face value’
and they can be redeemed for a wide range of goods and services.”

Robinson also posted to reddit, saying: “We do now have a commitment from the Treasury that they will seriously consider how bitcoin might achieve official recognition in the UK. In doing this the government is seeking input from bitcoin businesses.” Any businesses that want to submit a comment should do so through this link. HMRC told CoinDesk that “There is a VAT exemption for currency transactions but the currency in question must be legal tender. We will of course listen to arguments for alternative VAT treatments under existing VAT law.

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