FinCEN to Set New Regulations for Cryptocurrencies ...

IRS: Bitcoin = Property. FinCEN: Bitcoin = Currency.

What does this conflict mean for Money Service Businesses? If you wanted to open a Bitcoin property exchange instead of a Bitcoin currency exhcange, and you had to litigate this, which angle would you take (knowing you are pretty much out of luck no matter what)?
http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
http://www.irs.gov/pub/irs-drop/n-14-21.pdf
Also, in the IRS PDF, Q1/A1 states:
Q-1: How is virtual currency treated for federal tax purposes? A-1:For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.
Wouldn't it have made sense for them to use the term "virtual property" from there on out throughout this document? (sense, yeah...I know. We all know.)
submitted by moloB to Bitcoin [link] [comments]

What the FinCEN BitCoin guidelines actually say

What the FinCEN BitCoin guidelines actually say submitted by pelle to Bitcoin [link] [comments]

FinCEN: Bitcoin Miners Need Not Register as Money Transmitters

FinCEN: Bitcoin Miners Need Not Register as Money Transmitters submitted by davidshares to Bitcoin [link] [comments]

FinCEN: Bitcoin Miners Need Not Register as Money Transmitters

FinCEN: Bitcoin Miners Need Not Register as Money Transmitters submitted by xabbix to Bitcoin [link] [comments]

FinCEN: Bitcoin Miners Need Not Register as Money Transmitters

submitted by AdelleChattre to Banking [link] [comments]

bitcoinmagazine.com: FINCEN: Bitcoin Users Not Regulated, Exchanges Are - Bitcoin Forum - The Unofficial Bitcoin Forum

submitted by bitcoinforum to Bitcoinforum [link] [comments]

Bitcoin ATM's and FinCen. Are you acting as an exchange when you own a Bitcoin ATM?

This only applies to US people, but wouldn't the owners of Bitcoin ATM's be considered to be running an "exchange" according to the March FinCen guidance letter? See http://cryptome.org/2013/03/fincen-bitcoin.htm.
If this is the case, the legal and regulatory hurdles to own and run an ATM would be prohibitive to most people.
Here are the relevant parts:
"An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency."
"An administrator or exchanger that ... buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person.10"
"The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies."
submitted by bitaccumulation to Bitcoin [link] [comments]

Lightning Network Will Likely Fail Due To Several Possible Reasons

ECONOMIC CASE IS ABSENT FOR MANY TRANSACTIONS
The median Bitcoin (BTC) fee is $14.41 currently. This has gone parabolic in the past few days. So, let’s use a number before this parabolic rise, which was $3.80. Using this number, opening and closing a Lightning Network (LN) channel means that you will pay $7.60 in fees. Most likely, the fee will be much higher for two reasons:
  1. BTC fees have been trending higher all year and will be higher by the time LN is ready
  2. When you are in the shoe store or restaurant, you will likely pay a higher fee so that you are not waiting there for one or more hours for confirmation.
Let’s say hypothetically that Visa or Paypal charges $1 per transaction. This means that Alice and Carol would need to do 8 or more LN transactions, otherwise it would be cheaper to use Visa or Paypal.
But it gets worse. Visa doesn’t charge the customer. To you, Visa and Cash are free. You would have no economic incentive to use BTC and LN.
Also, Visa does not charge $1 per transaction. They charge 3%, which is 60 cents on a $20 widget. Let’s say that merchants discount their widgets by 60 cents for non-Visa purchases, to pass the savings onto the customer. Nevertheless, no one is going to use BTC and LN to buy the widget unless 2 things happen:
  1. they buy more than 13 widgets from the same store ($7.60 divided by 60 cents)
  2. they know ahead of time that they will do this with that same store
This means that if you’re traveling, or want to tip content producers on the internet, you will likely not use BTC and LN. If you and your spouse want to try out a new restaurant, you will not use BTC and LN. If you buy shoes, you will not use BTC and LN.
ROAD BLOCKS FROM INSUFFICIENT FUNDS
Some argue that you do not need to open a channel to everyone, if there’s a route to that merchant. This article explains that if LN is a like a distributed mesh network, then another problem exists:
"third party needs to possess the necessary capital to process the transaction. If Alice and Bob do not have an open channel, and Alice wants to send Bob .5 BTC, they'll both need to be connected to a third party (or a series of 3rd parties). Say if Charles (the third party) only possesses .4 BTC in his respective payment channels with the other users, the transaction will not be able to go through that route. The longer the route, the more likely that a third party does not possess the requisite amount of BTC, thereby making it a useless connection.”
CENTRALIZATION
According to this visualization of LN on testnet, LN will be centralized around major hubs. It might be even more centralized than this visualization if the following are true:
  1. Users will want to connect to large hubs to minimize the number of times they need to open/close channels, which incur fees
  2. LN’s security and usability relies on 100% uptime of relaying parties
  3. Only large hubs with a lot of liquidity will be able to make money
  4. Hubs or intermediary nodes will need to be licensed as money transmitters, centralizing LN to exchanges and banks as large hubs
What will the impact be on censorship-resistance, trust-less and permission-less?
NEED TO BE LICENSED AS MONEY TRANSMITTER
Advocates for LN seem to talk a lot about the technology, but ignore the legalities.
FinCEN defines money transmitters. LN hubs and intermediary nodes seem to satisfy this definition.
Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies
“…applicability of the regulations … to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
“…an administrator or exchanger is an MSB under FinCEN's regulations, specifically, a money transmitter…”
"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations…”
"FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.””
"The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies.”
FinCEN’s regulations for IVTS:
"An “informal value transfer system” refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form.”
“…IVTS… must comply with all BSA registration, recordkeeping, reporting and AML program requirements.
“Money transmitting” occurs when funds are transferred on behalf of the public by any and all means including, but not limited to, transfers within the United States or to locations abroad…regulations require all money transmitting businesses…to register with FinCEN."
Mike Caldwell used to accept and mail bitcoins. Customers sent him bitcoins and he mailed physical bitcoins back or to a designated recipient. There is no exchange from one type of currency to another. FinCEN told him that he needed to be licensed as money transmitter, after which Caldwell stopped mailing out bitcoins.
ARGUMENTS AGAINST NEED FOR LICENSING
Some have argued that LN does not transfer BTC until the channel is closed on the blockchain. This is not a defence, since channels will close on the blockchain.
Some have argued that LN nodes do not take ownership of funds. Is this really true? Is this argument based on a technicality or hoping for a loophole? It seems intuitive that a good prosecutor can easily defeat this argument. Even if this loophole exists, can we count on the government to never close this loophole?
So, will LN hubs and intermediary nodes need to be licensed as money transmitters? If so, then Bob, who is the intermediary between Alice and Carol, will need a license. But Bob won’t have the money nor qualifications. Money transmitters need to pay $25,000 to $1 million, maintain capital levels and are subject to KYC/AML regulations1. In which case, LN will have mainly large hubs, run by financial firms, such as banks and exchanges.
Will the banks want this? Likely. Will they lobby the government to get it? Likely.
Some may be wondering about miners. FinCEN has declared that miners are not money transmitters:
https://coincenter.org/entry/aml-kyc-tokens :
"Subsequent administrative rulings clarified several remaining ambiguities: miners are not money transmitters…"
FinCEN Declares Bitcoin Miners, Investors Aren't Money Transmitters
Some argue that LN nodes will go through Tor and be anonymous. For this to work, will all of the nodes connecting to it, need to run Tor? If so, then how likely will this happen and will all of these people need to run Tor on every device (laptop, phone and tablet)? Furthermore, everyone of these people will be need to be sufficiently tech savvy to download, install and set up Tor. Will the common person be able to do this? Also, will law-abiding nodes, such as retailers or banks, risk their own livelihood by connecting to an illegal node? What is the likelihood of this?
Some argue that unlicensed LN hubs can run in foreign countries. Not true. According to FinCEN: "“Money transmitting” occurs when funds are…transfers within the United States or to locations abroad…” Also, foreign companies are not immune from the laws of other countries which have extradition agreements. The U.S. government has sued European banks over the LIBOR scandal. The U.S. government has charged foreign banks for money laundering and two of those banks pleaded guilty. Furthermore, most countries have similar laws. It is no coincidence that European exchanges comply with KYC/AML.
Will licensed, regulated LN hubs connect to LN nodes behind Tor or in foreign countries? Unlikely. Will Amazon or eBay connect to LN nodes behind Tor or in foreign countries? Unlikely. If you want to buy from Amazon, you’ll likely need to register yourself at a licensed, regulated LN hub, which means you’ll need to provide your identification photo.
Say goodbye to a censorship-resistant, trust-less and permission-less coin.
For a preview of what LN will probably look like, look at Coinbase or other large exchanges. It’s a centralized, regulated and censored hub. Coinbase allows users to send to each other off-chain. Coinbase provides user data to the IRS and disallows users from certain countries to sell BTC. You need to trust that no rogue employee in the exchange will steal your funds, or that a bank will not confiscate your funds as banks did in Cyprus. What if the government provides a list of users, who are late with their tax returns, to Coinbase and tells Coinbase to block those users from making transactions? You need Coinbase’s permission.
This would be the antithesis of why Satoshi created Bitcoin.
NEED TO REPORT TO IRS
The IRS has a definition for “third party settlement organization” and these need to report transactions to the IRS.
Though we do not know for sure yet, it can be argued that LN hubs satisfies this definition. If this is the case, who will be willing to be LN hubs, other than banks and exchanges?
To read about the discussion, go to:
Lightning Hubs Will Need To Report To IRS
COMPLEXITY
All cryptocurrencies are complicated for the common person. You may be tech savvy enough to find a secure wallet and use cryptocurrencies, but the masses are not as tech savvy as you.
LN adds a very complicated and convoluted layer to cryptocurrencies. It is bound to have bugs for years to come and it’s complicated to use. This article provides a good explanation of the complexity. Just from the screenshot of the app, the user now needs to learn additional terms and commands:
“On Chain”
“In Channels”
“In Limbo”
“Your Channel”
“Create Channel”
“CID”
“OPENING”
“PENDING-OPEN”
“Available to Receive”
“PENDING-FORCE-CLOSE”
There are also other things to learn, such as how funds need to be allocated to channels and time locks. Compare this to using your current wallet.
Recently, LN became even more complicated and convoluted. It needs a 3rd layer as well:
Scaling Bitcoin Might Require A Whole 'Nother Layer
How many additional steps does a user need to learn?
ALL COINS PLANNING OFF-CHAIN SCALING ARE AT RISK
Bitcoin Segwit, Litecoin, Vertcoin and possibly others (including Bitcoin Cash) are planning to implement LN or layer 2 scaling. Ethereum is planning to use Raiden Network, which is very similar to LN. If the above is true about LN, then the scaling roadmap for these coins is questionable at best, nullified at worst.
BLOCKSTREAM'S GAME PLAN IS ON TRACK
Blockstream employs several of the lead Bitcoin Core developers. Blockstream has said repeatedly that they want high fees. Quotes and source links can be found here.
Why is Blockstream so adamant on small blocks, high fees and off-chain scaling?
Small blocks, high fees and slow confirmations create demand for off-chain solutions, such as Liquid. Blockstream sells Liquid to exchanges to move Bitcoin quickly on a side-chain. LN will create liquidity hubs, such as exchanges, which will generate traffic and fees for exchanges. With this, exchanges will have a higher need for Liquid. This will be the main way that Blockstream will generate revenue for its investors, who invested $76 million. Otherwise, they can go bankrupt and die.
One of Blockstream’s investors/owners is AXA. AXA’s CEO and Chairman until 2016 was also the Chairman of Bilderberg Group. The Bilderberg Group is run by bankers and politicians (former prime ministers and nation leaders). According to GlobalResearch, Bilderberg Group wants “a One World Government (World Company) with a single, global marketplace…and financially regulated by one ‘World (Central) Bank’ using one global currency.” LN helps Bilderberg Group get one step closer to its goal.
Luke-Jr is one of the lead BTC developers in Core/Blockstream. Regulation of BTC is in-line with his beliefs. He is a big believer in the government, as he believes that the government should tax you and the “State has authority from God”. In fact, he has other radical beliefs as well:
So, having only large, regulated LN hubs is not a failure for Blockstream/Bilderberg. It’s a success. The title of this article should be changed to: "Lightning Will Fail Or Succeed, Depending On Whether You Are Satoshi Or Blockstream/Bilderberg".
SIGNIFICANT ADVANCEMENTS WITH ON-CHAIN SCALING
Meanwhile, some coins such as Ethereum and Bitcoin Cash are pushing ahead with on-chain scaling. Both are looking at Sharding.
Visa handles 2,000 transactions per second on average. Blockstream said that on-chain scaling will not work. The development teams for Bitcoin Cash have shown significant on-chain scaling:
1 GB block running on testnet demonstrates over 10,000 transactions per second:
"we are not going from 1MB to 1GB tomorrow — The purpose of going so high is to prove that it can be done — no second layer is necessary”
"Preliminary Findings Demonstrate Over 10,000 Transactions Per Second"
"Gigablock testnet initiative will likely be implemented first on Bitcoin Cash”
Peter Rizun, Andrew Stone -- 1 GB Block Tests -- Scaling Bitcoin Stanford At 13:55 in this video, Rizun said that he thinks that Visa level can be achieved with a 4-core/16GB machine with better implementations (modifying the code to take advantage of parallelization.)
Bitcoin Cash plans to fix malleability and enable layer 2 solutions:
The Future of “Bitcoin Cash:” An Interview with Bitcoin ABC lead developer Amaury Séchet:
"fixing malleability and enabling Layer 2 solutions will happen”
However, it is questionable if layer 2 will work or is needed.
GOING FORWARD
The four year scaling debate and in-fighting is what caused small blockers (Blockstream) to fork Bitcoin by adding Segwit and big blockers to fork Bitcoin into Bitcoin Cash. Read:
Bitcoin Divorce - Bitcoin [Legacy] vs Bitcoin Cash Explained
It will be interesting to see how they scale going forward.
Scaling will be instrumental in getting network effect and to be widely adopted as a currency. Whichever Coin Has The Most Network Effect Will Take All (Or Most) (BTC has little network effect, and it's shrinking.)
The ability to scale will be key to the long term success of any coin.
submitted by curt00 to btc [link] [comments]

Leaked FinCEN documents reveal that massive banks have transmitted trillions of dollars related to suspicious individuals and known criminals. At the same time, Bitcoin continues to receive the blame for its alleged involvement in criminal activities

Leaked FinCEN documents reveal that massive banks have transmitted trillions of dollars related to suspicious individuals and known criminals. At the same time, Bitcoin continues to receive the blame for its alleged involvement in criminal activities submitted by magnuspetrus to Bitcoin [link] [comments]

Lightning Network Will Likely Fail Due To Several Possible Reasons

ECONOMIC CASE IS ABSENT FOR MANY TRANSACTIONS
The median Bitcoin (BTC) fee is $14.41 currently. This has gone parabolic in the past few days. So, let’s use a number before this parabolic rise, which was $3.80. Using this number, opening and closing a Lightning Network (LN) channel means that you will pay $7.60 in fees. Most likely, the fee will be much higher for two reasons:
  1. BTC fees have been trending higher all year and will be higher by the time LN is ready
  2. When you are in the shoe store or restaurant, you will likely pay a higher fee so that you are not waiting there for one or more hours for confirmation.
Let’s say hypothetically that Visa or Paypal charges $1 per transaction. This means that Alice and Carol would need to do 8 or more LN transactions, otherwise it would be cheaper to use Visa or Paypal.
But it gets worse. Visa doesn’t charge the customer. To you, Visa and Cash are free. You would have no economic incentive to use BTC and LN.
Also, Visa does not charge $1 per transaction. They charge 3%, which is 60 cents on a $20 widget. Let’s say that merchants discount their widgets by 60 cents for non-Visa purchases, to pass the savings onto the customer. Nevertheless, no one is going to use BTC and LN to buy the widget unless 2 things happen:
  1. they buy more than 13 widgets from the same store ($7.60 divided by 60 cents)
  2. they know ahead of time that they will do this with that same store
This means that if you’re traveling, or want to tip content producers on the internet, you will likely not use BTC and LN. If you and your spouse want to try out a new restaurant, you will not use BTC and LN. If you buy shoes, you will not use BTC and LN.
ROAD BLOCKS FROM INSUFFICIENT FUNDS
Some argue that you do not need to open a channel to everyone, if there’s a route to that merchant. This article explains that if LN is like a distributed mesh network, then another problem exists:
"third party needs to possess the necessary capital to process the transaction. If Alice and Bob do not have an open channel, and Alice wants to send Bob .5 BTC, they'll both need to be connected to a third party (or a series of 3rd parties). Say if Charles (the third party) only possesses .4 BTC in his respective payment channels with the other users, the transaction will not be able to go through that route. The longer the route, the more likely that a third party does not possess the requisite amount of BTC, thereby making it a useless connection.”
CENTRALIZATION
According to this visualization of LN on testnet, LN will be centralized around major hubs. It might be even more centralized than this visualization if the following are true:
  1. Users will want to connect to large hubs to minimize the number of times they need to open/close channels, which incur fees
  2. LN’s security and usability relies on 100% uptime of relaying parties
  3. Only large hubs with a lot of liquidity will be able to make money
  4. Hubs or intermediary nodes will need to be licensed as money transmitters, centralizing LN to exchanges and banks as large hubs
What will the impact be on censorship-resistance, trust-less and permission-less?
NEED TO BE LICENSED AS MONEY TRANSMITTER
Advocates for LN seem to talk a lot about the technology, but ignore the legalities.
FinCEN defines money transmitters. LN hubs and intermediary nodes seem to satisfy this definition.
Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies
“…applicability of the regulations … to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
“…an administrator or exchanger is an MSB under FinCEN's regulations, specifically, a money transmitter…”
"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations…”
"FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.””
"The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies.”
FinCEN’s regulations for IVTS:
"An “informal value transfer system” refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form.”
“…IVTS… must comply with all BSA registration, recordkeeping, reporting and AML program requirements.
“Money transmitting” occurs when funds are transferred on behalf of the public by any and all means including, but not limited to, transfers within the United States or to locations abroad…regulations require all money transmitting businesses…to register with FinCEN."
Mike Caldwell used to accept and mail bitcoins. Customers sent him bitcoins and he mailed physical bitcoins back or to a designated recipient. There is no exchange from one type of currency to another. FinCEN told him that he needed to be licensed as money transmitter, after which Caldwell stopped mailing out bitcoins.
ARGUMENTS AGAINST NEED FOR LICENSING
Some have argued that LN does not transfer BTC until the channel is closed on the blockchain. This is not a defence, since channels will close on the blockchain.
Some have argued that LN nodes do not take ownership of funds. Is this really true? Is this argument based on a technicality or hoping for a loophole? It seems intuitive that a good prosecutor can easily defeat this argument. Even if this loophole exists, can we count on the government to never close this loophole?
So, will LN hubs and intermediary nodes need to be licensed as money transmitters? If so, then Bob, who is the intermediary between Alice and Carol, will need a license. But Bob won’t have the money nor qualifications. Money transmitters need to pay $25,000 to $1 million, maintain capital levels and are subject to KYC/AML regulations1. In which case, LN will have mainly large hubs, run by financial firms, such as banks and exchanges.
Will the banks want this? Likely. Will they lobby the government to get it? Likely.
Some may be wondering about miners. FinCEN has declared that miners are not money transmitters:
https://coincenter.org/entry/aml-kyc-tokens :
"Subsequent administrative rulings clarified several remaining ambiguities: miners are not money transmitters…"
FinCEN Declares Bitcoin Miners, Investors Aren't Money Transmitters
Some argue that LN nodes will go through Tor and be anonymous. For this to work, will all of the nodes connecting to it, need to run Tor? If so, then how likely will this happen and will all of these people need to run Tor on every device (laptop, phone and tablet)? Furthermore, everyone of these people will be need to be sufficiently tech savvy to download, install and set up Tor. Will the common person be able to do this? Also, will law-abiding nodes, such as retailers or banks, risk their own livelihood by connecting to an illegal node? What is the likelihood of this?
Some argue that unlicensed LN hubs can run in foreign countries. Not true. According to FinCEN: "“Money transmitting” occurs when funds are…transfers within the United States or to locations abroad…” Also, foreign companies are not immune from the laws of other countries which have extradition agreements. The U.S. government has sued European banks over the LIBOR scandal. The U.S. government has charged foreign banks for money laundering and two of those banks pleaded guilty. Furthermore, most countries have similar laws. It is no coincidence that European exchanges comply with KYC/AML.
Will licensed, regulated LN hubs connect to LN nodes behind Tor or in foreign countries? Unlikely. Will Amazon or eBay connect to LN nodes behind Tor or in foreign countries? Unlikely. If you want to buy from Amazon, you’ll likely need to register yourself at a licensed, regulated LN hub, which means you’ll need to provide your identification photo.
Say goodbye to a censorship-resistant, trust-less and permission-less coin.
For a preview of what LN will probably look like, look at Coinbase or other large exchanges. It’s a centralized, regulated and censored hub. Coinbase allows users to send to each other off-chain. Coinbase provides user data to the IRS and disallows users from certain countries to sell BTC. You need to trust that no rogue employee in the exchange will steal your funds, or that a bank will not confiscate your funds as banks did in Cyprus. What if the government provides a list of users, who are late with their tax returns, to Coinbase and tells Coinbase to block those users from making transactions? You need Coinbase’s permission.
This would be the antithesis of why Satoshi created Bitcoin.
NEED TO REPORT TO IRS
The IRS has a definition for “third party settlement organization” and these need to report transactions to the IRS.
Though we do not know for sure yet, it can be argued that LN hubs satisfies this definition. If this is the case, who will be willing to be LN hubs, other than banks and exchanges?
To read about the discussion, go to:
Lightning Hubs Will Need To Report To IRS
COMPLEXITY
All cryptocurrencies are complicated for the common person. You may be tech savvy enough to find a secure wallet and use cryptocurrencies, but the masses are not as tech savvy as you.
LN adds a very complicated and convoluted layer to cryptocurrencies. It is bound to have bugs for years to come and it’s complicated to use. This article provides a good explanation of the complexity. Just from the screenshot of the app, the user now needs to learn additional terms and commands:
“On Chain”
“In Channels”
“In Limbo”
“Your Channel”
“Create Channel”
“CID”
“OPENING”
“PENDING-OPEN”
“Available to Receive”
“PENDING-FORCE-CLOSE”
There are also other things to learn, such as how funds need to be allocated to channels and time locks. Compare this to using your current wallet.
Recently, LN became even more complicated and convoluted. It needs a 3rd layer as well:
Scaling Bitcoin Might Require A Whole 'Nother Layer
How many additional steps does a user need to learn?
ALL COINS PLANNING OFF-CHAIN SCALING ARE AT RISK
Bitcoin Segwit, Litecoin, Vertcoin and possibly others (including Bitcoin Cash) are planning to implement LN or layer 2 scaling. Ethereum is planning to use Raiden Network, which is very similar to LN. If the above is true about LN, then the scaling roadmap for these coins is questionable at best, nullified at worst.
BLOCKSTREAM'S GAME PLAN IS ON TRACK
Blockstream employs several of the lead Bitcoin Core developers. Blockstream has said repeatedly that they want high fees. Quotes and source links can be found here.
Why is Blockstream so adamant on small blocks, high fees and off-chain scaling?
Small blocks, high fees and slow confirmations create demand for off-chain solutions, such as Liquid. Blockstream sells Liquid to exchanges to move Bitcoin quickly on a side-chain. LN will create liquidity hubs, such as exchanges, which will generate traffic and fees for exchanges. With this, exchanges will have a higher need for Liquid. This will be the main way that Blockstream will generate revenue for its investors, who invested $76 million. Otherwise, they can go bankrupt and die.
One of Blockstream’s investors/owners is AXA. AXA’s CEO and Chairman until 2016 was also the Chairman of Bilderberg Group. The Bilderberg Group is run by bankers and politicians (former prime ministers and nation leaders). According to GlobalResearch, Bilderberg Group wants “a One World Government (World Company) with a single, global marketplace…and financially regulated by one ‘World (Central) Bank’ using one global currency.” LN helps Bilderberg Group get one step closer to its goal.
Luke-Jr is one of the lead BTC developers in Core/Blockstream. Regulation of BTC is in-line with his beliefs. He is a big believer in the government, as he believes that the government should tax you and the “State has authority from God”. In fact, he has other radical beliefs as well:
So, having only large, regulated LN hubs is not a failure for Blockstream/Bilderberg. It’s a success. The title of this article should be changed to: "Lightning Will Fail Or Succeed, Depending On Whether You Are Satoshi Or Blockstream/Bilderberg".
SIGNIFICANT ADVANCEMENTS WITH ON-CHAIN SCALING
Meanwhile, some coins such as Ethereum and Bitcoin Cash are pushing ahead with on-chain scaling. Both are looking at Sharding.
Visa handles 2,000 transactions per second on average. Blockstream said that on-chain scaling will not work. The development teams for Bitcoin Cash have shown significant on-chain scaling:
1 GB block running on testnet demonstrates over 10,000 transactions per second:
"we are not going from 1MB to 1GB tomorrow — The purpose of going so high is to prove that it can be done — no second layer is necessary”
"Preliminary Findings Demonstrate Over 10,000 Transactions Per Second"
"Gigablock testnet initiative will likely be implemented first on Bitcoin Cash”
Peter Rizun, Andrew Stone -- 1 GB Block Tests -- Scaling Bitcoin Stanford At 13:55 in this video, Rizun said that he thinks that Visa level can be achieved with a 4-core/16GB machine with better implementations (modifying the code to take advantage of parallelization.)
Bitcoin Cash plans to fix malleability and enable layer 2 solutions:
The Future of “Bitcoin Cash:” An Interview with Bitcoin ABC lead developer Amaury Séchet:
"fixing malleability and enabling Layer 2 solutions will happen”
However, it is questionable if layer 2 will work or is needed.
GOING FORWARD
The four year scaling debate and in-fighting is what caused small blockers (Blockstream) to fork Bitcoin by adding Segwit and big blockers to fork Bitcoin into Bitcoin Cash. Read:
Bitcoin Divorce - Bitcoin [Legacy] vs Bitcoin Cash Explained
It will be interesting to see how they scale going forward.
Scaling will be instrumental in getting network effect and to be widely adopted as a currency. Whichever Coin Has The Most Network Effect Will Take All (Or Most) (BTC has little network effect, and it's shrinking.)
The ability to scale will be key to the long term success of any coin.
submitted by curt00 to Bitcoincash [link] [comments]

Out of control CSWs permissioned BCH is a danger to himself, nChain and BCH

SV/nChain/CSW/Calvin are intent on turning BCH into a permissioned blockchain. This is a dangerous and fatal mistake.
In 2014 FinCen ruled that miners are not money transmitters. The reason FinCen decided this way is because individual miners have no power to restrict some or other transaction from entering the blockchain (as it will just be picked up by another miner). This also protects developers, because ultimately the consensus among miners is the arbiter of what goes in the blockchain, not the developers.
With their (CSW&Co.) plans to make BCH permissioned (and the fact that they seem to have attained a majority hashrate), they are jeopardizing this FinCen ruling for BCH. It means that in their instance, FinCen could rule CSW, Calvin, nChain, Coingeek and other collaborateurs "money transmitters", apply the full weight of money transmitter regulations to them and make them liable for any infraction.
Not only would it be extremely costly to attempt to comply, the matter of the fact is that CSW&Co. cannot comply, because it would have to involve mandatory indentification, KYC, AML for every address involved in every BCH transaction. It would become flat out impossible to use the chain at all.
submitted by pyalot to btc [link] [comments]

FINCEN reveals Banks moved illicit funds Offshore - Should've used Bitcoin

FINCEN reveals Banks moved illicit funds Offshore - Should've used Bitcoin submitted by abercrombezie to Bitcoin [link] [comments]

FinCEN documents leak. And they say Bitcoin is used by criminals

FinCEN documents leak. And they say Bitcoin is used by criminals submitted by elfavorito to CryptoCurrency [link] [comments]

FinCEN Files Remind Us That Bitcoin Is Still Not For Money Laundering

https://bitcoinmagazine.com/articles/fincen-files-remind-us-that-bitcoin-is-still-not-for-money-laundering
submitted by Bitcoin_Magazine to Bitcoin [link] [comments]

Bitcoin Brief - ETH Gas Fees & Dev Tax, FinCen Leak & Gov Digital Coins

Bitcoin Brief - ETH Gas Fees & Dev Tax, FinCen Leak & Gov Digital Coins submitted by a36 to AllThingsCrypto [link] [comments]

CBDC Deutsche Bank, FinCEN (x-post from /r/Bitcoin)

CBDC Deutsche Bank, FinCEN (x-post from /Bitcoin) submitted by ASICmachine to CryptoCurrencyClassic [link] [comments]

10-06 18:56 - 'CBDC Deutsche Bank, FinCEN' (youtu.be) by /u/miamivicemami removed from /r/Bitcoin within 1-11min

CBDC Deutsche Bank, FinCEN
Go1dfish undelete link
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Author: miamivicemami
submitted by removalbot to removalbot [link] [comments]

ผู้อำนวยการ FinCEN เตือนธนาคารเกี่ยวกับความเสี่ยงจาก Cryptocurrency กับการต่อต้านการฟอกเงิน - Bitcoin Addict

ผู้อำนวยการ FinCEN เตือนธนาคารเกี่ยวกับความเสี่ยงจาก Cryptocurrency กับการต่อต้านการฟอกเงิน - Bitcoin Addict submitted by thaibitcoin to u/thaibitcoin [link] [comments]

Bitcoin in september: FinCEN Files, digitale euro's en mining in Kazachstan

Bitcoin in september: FinCEN Files, digitale euro's en mining in Kazachstan submitted by moneyshouters to u/moneyshouters [link] [comments]

FinCEN Files Remind Us That Bitcoin Is Still Not For Money Laundering

FinCEN Files Remind Us That Bitcoin Is Still Not For Money Laundering submitted by a36 to AllThingsCrypto [link] [comments]

FinCEN Files: The Wonderful World of Colluded Capitalism – Mafias, Oligarchs and the Banking Cartel (x-post from /r/Bitcoin)

FinCEN Files: The Wonderful World of Colluded Capitalism – Mafias, Oligarchs and the Banking Cartel (x-post from /Bitcoin) submitted by ASICmachine to CryptoCurrencyClassic [link] [comments]

Antonopoulos: "FinCen leak ...will be used against cryptocurrencies" (x-post from /r/Bitcoin)

submitted by ASICmachine to CryptoCurrencyClassic [link] [comments]

FinCen Clarifies -- Bitcoin Futures Grow -- MadBitcoins Major Announcement! Bitcoin Brief - ETH Gas Fees & Dev Tax, FinCen Leak & Gov ... FinCEN, Court Cases, wrapped Bitcoin, and more! - Weekly ... Weekly Bits: FinCEN, Court Cases, wrapped Bitcoin, and ... FinCEN Director Notes Improved Oversight of Cryptocurrency Industry

The FinCEN Files documents show Standard Chartered processed hundreds of millions of dollars for companies it suspected were circumventing sanctions against Iran until at least 2017. Since 2010, at least 18 financial institutions have received deferred prosecution agreements for anti–money laundering or sanctions violations, according to an ... FinCEN previously issued a finding under Section 311 of the USA PATRIOT Act that identified Liberty Reserve as a financial institution of primary money laundering concern. BTC-e has conducted over $296 million in transactions of bitcoin alone and tens of thousands of transactions in other convertible virtual currencies. And, as the FinCEN Files have underscored, the world’s premier financial institutions are regularly laundering money as well. So, even though darknet market activity will probably always remain connected to Bitcoin (as we explained last year ), this week’s bombshell report is another reminder that Bitcoin’s use as a tool for criminals is ... On Thursday (May 9, 2019), the U.S. Financial Crimes Enforcement Network (FinCEN) published new guidelines showing how anti-money laundering (AML) laws FinCEN recently unveiled a new guideline showing how anti-money laundering (AML) laws apply to Bitcoin and the rest of the cryptocurrency. FinCEN is the US Financial Crimes Enforcement Network. These are the people at the US Treasury who combat financial crime. Concerns about transactions made in US dollars need to be sent to FinCEN ...

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FinCen Clarifies -- Bitcoin Futures Grow -- MadBitcoins Major Announcement!

Bitcoin Halving Competition for all the holders - Bitcoin 比特币 Live Trading Binance US Exchange 11,406 watching Live now Fidelity Bitcoin Green Light, Institutional Bitcoin Fund, ETF Relook ... Join Bitcoin Magazine's Brandon Green and Peter Chawaga as they recap this past week of news in Bitcoin. They cover the following topics! FinCEN released a c... 👉 Subscribe so you don't miss the next one: http://bit.ly/2QKVDdV Stories: Topic 1: DeFi & ETH updates: BTC down $500, DeFi down 40%+: https://www.theblockcr... FinCen Files: Großbanken in kriminelle Machenschaften verwickelt, Tyler Winkelvoss bezeichnet Bitcoin besser als Gold und Twitter mit Gerüchten um Bitcoin Ka... Bitcoin Prices are down slightly with WinkDex reporting a last of $355, a high of $356 and a low of $349. Litecoin is at $3.84 cents a coin. Which brings us to Today’s Special Announcement.

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