MITOCW 5. Blockchain Basics & Transactions, UTXO and ...

I am Francis Pouliot, full-time Bitcoin advocate and director at the Bitcoin Embassy. I'm running for a seat of the Bitcoin Foundation board. AMA

My name is Francis Pouliot and I am a full-time Bitcoin advocate, educator, and community organizer. You may have heard of me as Director of Public Affairs at the Bitcoin Embassy, the first physical space in the world dedicated to the promotion and development of the cryptocurrency ecosystem. Fellow Canadians will recognize me as the Chief Executive Officer at the Bitcoin Foundation Canada, a pan-Canadian membership-based advocacy group dedicated to ensuring a favorable environment for Canada's cryptocurrency ecosystem.
While I may not be a famous Bitcoin investor or entrepreneur, I consider myself a large stakeholder in Bitcoin since cryptocurrency (mostly Bitcoin) represents around 90% of my assets and is effectively my only source of income. I’m also a Bitcoin miner, integration consultation and certified Bitcoin professional with C4 (passed at 96%).
The best decision of my life has been to re-orient my rapidly advancing and successful career as a policy analyst for free-market think tanks in order to dedicate myself full-time to being an active participant in the cryptocurrency revolution. I still remain to this day an active supporter of the libertarian movement through my involvement in various pro-liberty organizations - but I will never use the Foundation as a medium to promote my personal beliefs.
My general assessment of the current state of the Bitcoin
Foundation is that by pursuing too many goals, the Foundation has misallocated and mismanaged resources necessary to successfully fulfill the essential mandate of supporting technical development. It has not lived up to its potential and has disappointed many of its members, including myself. I truly believe in the Foundation’s mission to protect Bitcoin's technological infrastructure and that, in realizing this goal, it must remain an important part of the Bitcoin ecosystem. I also believe that the only essential mission of the Bitcoin Foundation, that should take priority over all others, should become and always remain the protection and development of Bitcoin’s technological infrastructure.
My platform
With humility, I propose myself as to represent my fellow individual members on the Bitcoin Foundation’s board of directors. I have the skills, values, energy and time necessary to accomplish this task successfully. As CEO of the BFC, I have knowledge of the inner-workings of the Foundation and know exactly what its problems are and the best way to overcome them. On behalf of its Canadian members, I have attempted to act as a watchdog, being critical of its work and suggesting reforms directly to staff members.
If I am elected, I pledge to continue this role on behalf of all individual members. I now ask for your support so that I may obtain the necessary powers to bring the Foundation to implement the following:
After having discussed with Patrick Murck, I believe that he is the most capable Executive Director that the Foundation could have at the moment. I also believe that we share the same broad vision as to where the Foundation should be heading and as your representative I will support him in his undertaking to bring the Foundation back to its roots.
Nature and role of the Bitcoin Foundation – some thoughts
(On this point I particularly oppose candidates Cody Wilson, Olivier Janseen and Colin Gallagher)
The Bitcoin Foundations, as a private organization, is a platform through which individual and corporate members can voluntarily coordinate and implement their common interests. It does not, nor should it attempt to or claim to, represent the entire Bitcoin community. Although it provides a public service, it is only accountable to its members.
That being said, there is no doubt that the (uninformed) general public’s perception of the Foundation will taint its perception of the entire Bitcoin community by proxy. In addition, the Foundation’s technical team has a large influence on the development process and its actions will have an effect on the entire Bitcoin community, whether they are members of the Foundation or not. As such, the Foundation has moral responsibilities that other private membership-based organizations do not and should act with this specificity in mind.
The Bitcoin community and ecosystem are extremely diverse. In my opinion, there is only one common interest amongst all members of our community: the continued existence and expansion of a healthy technical development process which will ensure the continued decentralization and scalability of the Bitcoin network. I believe that this is also true within the Bitcoin Foundation membership.
I think the idea that the existence of a “centralized institution” such as the Foundation is contradictory with the decentralized nature of Bitcoin is beyond ridiculous. Nor is it contradictory with the crypto-decentralization movement to which I personally identify myself with. In fact, there can be no decentralization movement if individuals and corporations do not coordinate their interests via some form of organization. While it is certainly likely that such associations and organizations will eventually take the form of Decentralized Autonomous Corporations, I do not believe the necessary technology has been developed to a degree which makes this option a logical choice for the Foundation (and probably won’t for the next couple of years).
Let’s be clear: the Bitcoin Foundation should never, under any circumstance, attempt to impose any agenda or barrier to entry whatsoever on members and non-members alike via the coercive power of government.
Also, the Bitcoin Foundation should not attempt to assert a monopoly over the technical development process. I am extremely happy to see private corporations such as Blockstream and Bitpay contribute to this process, and am even happier to see that individuals are still contributing their time on a voluntary basis. However, I think a large part of development should be undertaken by non-profit organizations in order to ensure some form of neutrality.
Final thoughts – regulation
As a libertarian, I am naturally against regulation. I do not intend to idly stand by while arbitrary decrees are imposed upon us, and, as such, I believe that stakeholders such as individuals, private corporations or local Bitcoin advocacy groups should actively engage government officials and regulators to ensure that no discriminatory regulation or legislation concerning Bitcoin occurs.
Under no circumstance should technology-specific regulation such as the BitLicenses be tolerated. Moreover, government decrees that are in effect discriminatory (such as the “double taxation” of bitcoins via sales taxes) should be fiercely opposed. Innovation does not require permission.
However, as we lobby for government not to discriminate against Bitcoin, we must also realize that Bitcoin does not and should not operate in a legal vacuum. Bitcoin business models that mimic legacy business models (such as currency exchanges) should be regulated in the same way as their fiat counterparts. For example, a Bitcoin exchange should comply to financial regulation in the same way as a fiat exchange. If we demand not to be discriminated against, we must also acknowledge that we can’t have special treatment just because we do not believe in the validity of the laws that apply to us.
I do realize that compliance requirements of the legacy fiat financial industry are often outdated and that the cryptocurrency ecosystem will come up with its own innovative solutions for KYC/AML. These solutions are to be encouraged and, ideally, they will become the standard not only for cryptocurrency businesses but for the entire financial industry.
Bitcoin is like an economic trojan horse – if we really want the cryptocurrency revolution to happen, it is crucially important that there be an economic infrastructure with exchanges, payment processors, brokers, financial products, etc. This is the key to mainstream user adoption and this will only occur if we play by the rules. Government can’t stop Bitcoin but it can certainly greatly slow down progress by enforcing its power on the individuals and corporations that compose the Bitcoin economic ecosystem, something even the most anarchic members of the community should realize.
(On this point I particularly oppose candidate Jim Harper)
It seems to me that the Foundation has an “identity crisis” because its mandate is simply too broad. It cannot be at the same time a “Linux Foundation-style” organization and a lobby group such as the Digital Chamber of Commerce or think tank such as Coin Center. Because it has given itself too many goals, each goal has been inefficiently carried out.
The Foundation’s involvement in lobbying has considerably contributed to its negative perception by the community, which means less membership and less revenue. This means that there are fewer and fewer financial resources available for technical development. I believe that retreating from active political lobbying may reverse this trend.
The main reason is strictly based on pragmatism and resource allocation. There are various groups all over the world, including in the United States, who are actively involved in the fight against discriminatory or excessive Bitcoin regulation. The void that the Bitcoin Foundation had attempted to fill when it initially got into lobbying clearly does not exist anymore. However, there are no other non-profit organization involved in supporting technical development, so that in that area there is a very real void.
Finally, policy is inherently local and jurisdictional while the Foundation aims to be a global organization. I don’t think non-US members appreciate that their contributions are being spent on lobbying in Washington while the Foundation does nothing to prevent their own governments from obstructing the progress of Bitcoin.
10 reasons you should vote for me
You can reach me at [email protected] or at 1 855 922-3622.
I'll be answering all day, at least until 6 PM EST, or however long this stays on the front page!
submitted by FrancisPouliot to Bitcoin [link] [comments]

Financial Crimes Enforcement Network - New Regulations for BTC Exchanges

I thought this belonged here. Copied and Pasted from Wikipedia. This could be the easiest way for regulators to begin to crack the anonymity.
March 18, 2013 TL:DR - In summary, FinCEN's decision would require Bitcoin exchanges where bitcoins are traded for traditional currencies to disclose large transactions and suspicious activity, comply with money laundering regulations, and collect information about their customers as traditional financial institutions are required to do.[45][46]
-Actual Wikipedia Article-
On 18 March 2013, the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury, issued a report regarding centralized and decentralized "virtual currencies" and their legal status within "money services business" (MSB) and Bank Secrecy Act regulations.[36] It classified digital currencies and other digital payment systems such as bitcoin as "virtual currencies" because they are not legal tender under any sovereign jurisdiction. FinCEN cleared American users of bitcoin of legal obligations by saying, "A user of virtual currency is not an MSB under FinCEN’s regulations and therefore is not subject to MSB registration, reporting, and recordkeeping regulations." However, it held that American entities who generate "virtual currency" such as bitcoins are money transmitters or MSBs if they sell their generated currency for national currency: "...a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter." This specifically extends to "miners" of the bitcoin network who may have to register as an MSB and abide by the respective requirements of being a money transmitter if they sell their generated bitcoins for national currency and are within the United States.[34]
Additionally, FinCEN claimed regulation over American entities that manage bitcoins in a payment processor setting or as an exchanger: "In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency."[35][36]
In summary, FinCEN's decision would require Bitcoin exchanges where bitcoins are traded for traditional currencies to disclose large transactions and suspicious activity, comply with money laundering regulations, and collect information about their customers as traditional financial institutions are required to do.[45][46]
Patrick Murck of the Bitcoin Foundation criticized FinCEN's testament as an "overreach" and claimed that FinCEN "cannot rely on this guidance in any enforcement action".[47]
submitted by Throwawaytoday660 to SilkRoad [link] [comments]

Fraudsters and losers: Five greatest cryptocurrency flops in history

Bankruptcies, lawsuits, thefts and information leaks are inseparable companions of any big business, and cryptocurrencies are no exception. CoinFox recalls the most scandalous failures of the blockchain industry.
Every child learning to walk and run will be falling, and sometimes quite painfully. The teething problems of the rapidly developing cryptocurrency industry – gullibility, fecklessness, incompetence, overestimation – resulted in hundreds of millions of dollars lost. As we will see, even successful and reputable startups are not immune from this risk.
Mt. Gox: A company that nearly buried bitcoin
The Japan-registered exchange used to be the biggest online platform for BTC/USD operations, brought to the world in 2009 by Jeb McCaleb as an online marketplace for wizard-themed playing cards (its name stands for “Magic: the Gathering Online Exchange”). Just like an evil wizard, it made a vast sum of money disappear without a trace. Some of its clients lost a fortune.
The trading platform, which in 2013 processed 70% of all bitcoin operations, collapsed due to a flaw in its code that allowed hackers to steal digital currency from customer accounts. Over 2011- 2014, the violators managed to drain 744,408 bitcoins, including 100,000 belonging to the company itself. At that moment, the loss was estimated at over $450 mln and amounted to 7% of all bitcoins in circulation.
The company admitted the losses in February 2014. And it came as little surprise to people who had knowledge of the Tokyo-based company’s inner work. “Gox is the worst-run business in the history of the world,” said bitcoin advocate Roger Ver, who tried to help the company to sort out an earlier hack, which also resulted in a large bitcoin leakage. No wonder, the Wired magazine ruthlessly criticised Mt. Gox as a “messy combination of poor management, neglect, and raw inexperience.”
So frustrating was the money loss and so vast was the scale of the scandal that many people believed it would undermine public trust forever and drive cryptocurrencies totally beyond the law. Up until the crisis, bitcoin had been gradually gaining world acceptance, and the damage to its reputation could have destroyed it for good.
It is notable that on 20 March 2014, Mt. Gox declared it “found” 200,000 bitcoins worth around $116 million in an old digital wallet from 2011. In April, suffering from a lawsuit avalanche, the company that had nearly buried the world’s most popular cryptocurrency gave up its plans to rebuild under bankruptcy protection and asked the Tokyo court to allow its liquidation.
KnCMiner: the short journey “to the skies”
The Swedish company KnCMiner had an extraordinary start. In the beginning, it managed to raise $32 million of investments. Business Insider UK included the miner in the list of top-21 most influential bitcoin companies. In June 2015, KnCMiner implemented the new powerful Solar ASIC that was supposed to boost the efficiency of mining, but that turned out to be useless due to the anticipated bitcoin block reward halving.
“We knew that there were risks related to doing this in Sweden. We aimed for the skies, not to build a mediocre medium sized business. We got big investors on board and took a chance. But it hasn’t paid off,” said CEO Sam Cole.
Early in 2015, a scandal broke out around the quality of KnCMiner’s products and services. According to Swedish media, more than 100 clients accused the company of fraud and sent a collective complaint to Swedish authorities. As the dissatisfied clients claimed, the mining device called Titan did not work well and caused ignition, whereas the company refused to return the money for it. Besides, it was reported that the company refused to communicate with the lawyers that represented the interests of the clients.
“All the while we were having huge problems with their machines (fires, burnt-out cores, random shutdowns, etc.). [At the same time], KnC was making press/Twitter, etc. releases about how happy their customers were with the junk they had sent them,” wrote one of the enraged clients.
The Swedish court ruled in favour of KnCMiner, refusing to satisfy the claim of the applicants, but that did not help the company: due to the abovementioned reasons, the KnC was unable to cover its own expenses. Besides, the lawsuits brought in by its American clients are still being considered by courts in the USA.
Cryptsy: how to lose $6 million
The operation of the cryptocurrency exchange Cryptsy ended in January 2016, also in a flop. According to the company, that was caused by a hacker’s attack that resulted in Cryptsy losing 13,000 bitcoins and almost 300,000 Litecoins (which equalled more than $6 million in January). However, in reality, the theft had happened eighteen months before – on 29 July 2014. The management of the exchange decided not to report the large cryptocurrency leak from the users’ “hot wallets”, hoping to recompense the stolen money with their own reserves.
But the exchange failed to make up for the loss. In October 2015, rumours began to spread regarding the hard financial situation of the platform: users started noticing problems when trying to remove their money from exchange wallets. But Cryptsy CEO Paul Vernon denied any financial difficulties faced by the company.
The exchange blamed the hacking on one of the platform’s developers, Lucky7Coin. However, some of the clients have a different opinion: they suspect the owner Paul Vernon and his ex-wife Lori Ann Nettles of removing the funds and cashing them out. Now they are involved in court proceedings in Florida.
The collective lawsuit to Vernon and his former spouse reads that the money removed from Cryptsy was cashed out and spent to buy a $1.5 mln villa on the Florida coast and an Infinity QX80. A temporary sale ban has been imposed on this property following the investors’ demand.
Bitcoin Foundation: the weakest link
Lost credibility – that is the situation the Bitcoin Foundation ended up in. Initially launched to spread the knowledge of cryptocurrencies and popularise bitcoin, the foundation was supposed to act as a link between the bitcoin community and the conventional industries and governmental bodies. But the practice has shown that companies can perfectly do it on their own without any help, while the fund’s monthly budget, as big as $150,000, would make for a modest crowdfunding campaign of an emerging cryptocurrency startup.
The financial position of the Bitcoin Foundation has got worse during the last eighteen months. First of all, the foundation has lost part of its funds due to the high volatility of bitcoin. Secondly, the inflow of the donations to the not-for-profit organisation by bitcoin companies has considerably dwindled. That happened due to the fund being increasingly accused of inefficient spending of its money. For instance, the community was outraged to learn that Board Member Patrick Murck had spent $12,000 to visit a seminar in London.
In October 2015, at a board meeting, it was announced that the organisation has funds only sufficient to operate until March 2016. The board members had to donate money from their own pocket: the head of the Foundation Bruce Fenton, as well as Board Members Bobby Lee and Brock Pierce, contributed $10,000 each. About $65,000 was also received from a miner who chose to remain unknown.
Still, the foundation has failed to return the main investment – the trust of the industry. The letter Fenton wrote in May in which he tried to encourage Bitcoin Core developers to enhance cooperation with the fund was scorned by the community. The Core team was not convinced either: Peter Todd noted that Bitcoin Foundation is not the organisation that people want to be associated with. “I personally would like to distance myself from it,” he added.
After Bruce Fenton quit his position of CEO, it was occupied by a South African venture investor Llew Claasen. He will have to make a difficult choice: whether to try and return the trust of the industry with more investments, or follow the advice of some bitcoin activists and shut down the organisation.
The DAO: the tragedy of “not-so-smart” contracts
For a long time, the community only preferred to talk about the advantages of decentralisation: resistance to fraudulent schemes, saving on intermediaries, a more transparent governance system where every participant has a voice that will never be ignored in the voting. True democracy.
Now we know what the ticket costs that brings you to this democratic paradise: $60 million. This is the sum lost by The Decentralised Autonomous Organisation (The DAO), albeit not completely, due to a loophole in the platform’s code. Earlier this year The DAO triumphantly raised about $150 million attracting investors by its innovative design.
The smart contract turned out to be not so smart: the fraudster managed to outsmart it and make use of a vulnerability in The DAO’s architecture. On 17 June, 3.6 million ethers were removed from the DAO’s main account, which at that moment equalled $60 million. Formally, though, the thief has done nothing illegal, it was not even a hack: he made use of a legitimate function provided by the smart contract itself.
Now Ethereum developers are hastily proposing various decisions: from “doing nothing” to temporarily freezing all the funds in The DAO (including those rescued and removed to safe accounts) and even calling off transactions in the whole Ethereum network. Although the latter can certainly return the funds, it will give the industry an irreparable reputational blow. One of the advantages of the blockchain – irreversibility – will be discredited. And whenever you allow yourself to pull back and change the name of the game, there will be always room for fraudsters.
by coinfox.info
submitted by saracon to CoinfoxTopBits [link] [comments]

Bitcoin London 2013 Conference Recap DevCore Boston 2015 l Mastering Bitcoin l Andreas M. Antonopoulos Patrick Murck - Bitcoin: The Universal Currency for ... The Bitcoin Foundation - YouTube Bitcoin & the Blockchain Primer

Hello r/Bitcoin. I'm Patrick Murck, Executive Director of the Bitcoin Foundation. Ask me anything! I was recently brought on by the Board of Directors at the Bitcoin Foundation to be the new Executive Director, I'm 39 years old and live in Seattle with my wife and son. I'm a lawyer (sorry) and have been involved in policy and technology for about a decade now. While I had been following ... Die Gründer waren Gavin Andresen, Jon Matonis, Patrick Murck, Charlie Shrem und Peter Vessenes. Es ist das erste Mal, dass eine Regierungsbehörde behauptet, Bitcoin beschlagnahmt zu haben. Die erste Kryptowährungskonferenz in Europa findet in Prag (Tschechien) statt. Dazu müssen Sie in einen Bitcoin-Miner investieren. Der Hackernoon Newsletter kuratiert großartige Geschichten von echten ... Testimony of Patrick Murck General Counsel, the Bitcoin Foundation to the Senate Committee on Homeland Security and Governmental Affairs “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies” November 18, 2013 Executive Summary Bitcoin is a decentralized store of value and open-ledger payment network that operates securely, efficiently, and at low cost without the ... Der 21 Bitcoin Computer ist nicht der typische USB Bitcoin Miner. Über USB können Sie es jedoch an Ihren Computer anschließen. Es ist jedoch keine sehr gute Wahl in Bezug auf $ / Hash-Rate. Wir haben es gerade in diese Liste aufgenommen, da es technisch immer noch ein USB-Miner ist. Wir geben Ihnen keine Vorwürfe, wenn Sie nicht beeindruckt sind! USB Bitcoin Mining war nur profitabel, als ... Jerry Brito – Mr. Bitcoin goes to Washington: Jerry Brito (@JerryBrito)’s post on The Technology Liberation Front blog describes today’s “Virtual Economy” conference in

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Bitcoin London 2013 Conference Recap

Patrick Murck (Chief Legal Officer, Transparent System), Neha Narula (Director, MIT DCI), and Lindsay Lin (Counsel, Stellar Development Foundation) participate in a panel discussion moderated by ... For more info concerning bitcoin paper wallet, please visit site here: http://www.cryptocoinwalletcards.com/ Tags: asic bitcoin miner, asic bitcoin miner ava... Recently, the organization Harvard in Tech, the official Harvard alumni group for technology, hosted a panel of experts on bitcoin and the blockchain. We were thrilled to attend the event, where ... Check out our next GSummit event! http://bit.ly/11ZTXxl Learn more about what's going in gamification by reading our blog: http://bit.ly/11ZU2Ry Recorded at ... http://bitclub.network/colin949 My facebook:https://www.facebook.com/patrick.mcleod.3194 bitcoin bitcoin price prediction bitcoin price prediction 2018 bitco...

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