The Morning Roar: Three Big Bitcoin Stories!
The Morning Roar today is all about Bitcoin!FEC OKs Bitcoin Campaign DonationsLast Thursday the Federal Election Commission (FEC) approved the acceptance of bitcoins for political donations. The FEC also allowed that political committees can buy and sell bitcoins as an investment, as long as the digital currency is returned to dollars before being spent. However, the FEC did not approve the spending of bitcoins on goods and services for political campaigns. Politco reports on the controversial decisions:
The three Democrats on the six-member commission had previously been reluctant to move forward with rules on bitcoin and other crypto-currencies but were persuaded to sign onto the opinion because of the small dollar amounts — $100 or less — involved. “The $100 limit was key due to risks of anonymity,” wrote commissioner Ellen Weintraub on Twitter. But, ultimately, Thursday’s ruling is only guidance — and does not prevent political committees from testing the boundaries of federal law on crypto-currencies. Conservative attorney Dan Backer, who brought an earlier question in front of the commission on bitcoin, said the commission’s decision did not forbid candidates and committees from taking bigger contributions.
What does this news mean for the political process? Probably nothing of significance. At this point bitcoin is a risky method to transfer money and it recently lost some of its attractiveness when the IRS announced plans to extract taxes from gains in bitcoins. The IRS will suck more revenue from bitcoin users by taxing the cryptocurrency as a commodity instead of a currency. I know what you're thinking, what self-respecting bitcoin aficionado would even consider donating their precious digital currency to a sleazeball politician? Surprisingly, there are many in the bitcoin crowd that think political acceptance and regulation is the only way for bitcoin to reach its potential. That brings us to our next headline... Bitcoin Is Hiring Lobbyists As noted previously, there are essentially two camps of thought in the bitcoin movement. One group believes that bitcoin advocates need to "play by the rules" and gain the approval of the establishment in order to advance the reach of the virtual currency. The other group believes that a global economic crash will be what launches bitcoin into the mainstream. Instead of paying off politicians, these individuals would rather work on improving the cryptocurrency. Motherboard reports on the former group and their attempt to try to win some of the political battles bitcoin is now starting to face in Washington, D.C..
But like it or not, the Bitcoin Foundation—the closest thing to a governing body that the decentralized monetary system's got—is already ramping up its lobbying efforts. It recently hired Jim Harper from the libertarian think tank the Cato Institute to advocate the cryptocurrency cause in Washington. And he'll be paid in bitcoin.
According to the Wall Street Journal, Harper's official job description is to "identify political impediments to bitcoin adoption, and build confidence in bitcoin among governments around the world."
Presumingly, the newspaper is referring to recent political impediments like the IRS taxing bitcoin as a commodity rather than a currency, the upcoming Commodity Futures Trading Commission decision on whether the virtual coins should be traded as the former, and Attorney General Eric Holder's recent warning to Congress about how bitcoin enables criminal activity.
The new lobbying efforts may have played a role in getting bitcoin accepted for political donations, but at what cost? If bitcoin loses its purported anonymity, then what is the appeal for use to this crowd? The anti-state contingent of the bitcoin crowd would much rather avoid the immoral mess in Washington D.C. and return to the underground roots that created its original appeal.
The Motherboard article covers this anti-government side of the movement as well:
Folks in this ideological camp would rather see the anonymous payment system dive deeper underground and retain its fundamental anti-government ethos rather than be cooped by the capitalist establishment.
At the more radical end of that mindset is techno-libertarian Cody Wilson of 3D-printed gun fame, who just recently launched Dark Wallet, a virtual currency payment system designed to assure that all transactions are secure, anonymous, and difficult to trace.
Plenty of comments on yesterday's chain echoed this sentiment. "Bitcoin's greatest chance of success is by ignoring regulation rather than lobbying against it. The more anarchist Bitcoin is, the more valuable it is to investors, wrote Daniel Krawisz on the Reddit chain. He's director of the Satoshi Nakamoto Institute, which works to preserve and continue the cryptocurrency's founding principles.
In an essay last month called "How Bitcoin Adoption Works," Krawisz elaborated. "Does Bitcoin need to be sanitized and separated from its anarchist, black-market roots in order to become acceptable to the general population?" he wrote. "Absolutely not! Those making this argument totally misunderstand the way that Bitcoin adoption will proceed and are consequently wrong-headed about how to market it."
What's the next step after getting in bed with politicians? Getting in bed with Wall Street of course! Two of the most recognizable faces in the bitcoin camp are making a move to try to set up a publicly traded bitcoin fund.
Winklevoss Twins Are Close To Getting Bitcoin Fund Listed On Nasdaq That's right, your favorite trust fund babies, who were made famous for shaking down Facebook founder Mark Zuckerberg, are back in the news. Anyone who even casually follows bitcoin news knows that the Winklevoss twins have been supporters of bitcoins for a good while and have backed up their support by owning millions of dollars worth of the cryptocurrency. Cameron and Tyler Winklevoss have disclosed in a regulatory filing that they had chosen to list their Bitcoin exchange-traded fund on the Nasdaq exchange. The twins at one point owned more than $64 Million of the virtual currency and have invested heavily in the bitcoin exchange BitInstant. In February, they started their own price index to measure the price of Bitcoin, Winkdex. The Winklevoss's proposed fund, the Winklevoss Bitcoin Trust, would buy one bitcoin for every five shares. The NY Times reports how this would compare to the popular gold E.T.F..
But until recently, investors had few options for speculating on that price change. The currency, which can be bought and sold among users or “unlocked” by solving complicated mathematical riddles, has no central regulator or bank. Buying Bitcoins also comes with the hassle of storing Bitcoins, which can involve physically securing a virtual “key.” But the Winklevoss twins want to give investors an easier way into the market. Like SPDR, the widely used gold E.T.F., for example, investors would be able to invest in Bitcoin without having to actually buy and store the virtual currency. “Our goal with this whole thing was to make it as similar to the gold E.T.F. as possible,” Cameron Winklevoss said in an interview. “We’re trying to reduce the friction of purchasing Bitcoin and securing it.”
I'll never understand the appeal in holding an E.T.F fund, rather than physically holding an actual alternative to the dollar instead. Holding a bitcoin or gold E.T.F. fund denominated in dollars defeats the purposed of holding these commodities as a hedge against inflation. If the dollar were to crash, the E.T.F dollar denominated funds would be wiped clean as well and the investor would be left with nothing. If the goal is to hedge against inflation, then buy some gold or silver bullion. And if you would like to own some bitcoin, then educate yourself and acquire some bitcoin. The Winklevoss brothers appear to be setting up a scheme to skim off the top of the bitcoin speculation market.Read The Morning Roar every weekday Monday-Friday!The Lions of Liberty are on Twitter, Facebook & Google+Receive access to ALL of our EXCLUSIVE bonus audio content – including “Conspiracy Corner”, “Degenerate Gamblers” and the “League of Liberty Podcast” by joining the Lions of Liberty Pride and supporting us on Patreon!
