Friday, December 28, 2012

Fear Not Deflation

By Jon Matonis
Sunday, December 23, 2012

We should not be afraid of deflation. We should love it as much as our liberties.  --Jörg Guido Hülsmann

Deflation in the context of bitcoin has been cited frequently in the popular press as a detriment to its widespread adoption. For example, famed Keynesian economist Paul Krugman ridiculed the bitcoin cryptocurrency saying "it reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression."

Krugman could not be more wrong. Deflation is not a problem in the traditional monetary system and it will not be a problem in the bitcoin economy.

As over 99% of bitcoin's possible 21 million coins will be mined by 2031, the fixed mild inflation will effectively cease and a period of non-inflation will commence. Although the supply of cryptographic money will be relatively static with the exception of attrition through permanently lost coins, I will refer to the monetary phenomenon as deflation because as bitcoin's asset value increases compared to political numéraires, its effect on price expression will be seen as deflationary.

Contrary to the central banking and political class insistence that deflation must be prevented at all costs, an economy with a monetary unit that increases in value over time provides significant economic benefits such as near zero interest rates and increasing demand through lower prices. Let's look at some remarks from leading thinkers on deflation.

In responding to an article in The Economist, Doug Casey points out that "in a free-market economy, without central banks and without fractional reserve banking, both inflation and deflation as chronic events are really not possible." Casey states:
"Deflation is actually a good thing, because in a deflation prices drop and money becomes more valuable, so deflation encourages people to save money. Deflation rewards the prudent saver and punishes the profligate borrower. The way a society, like an individual, becomes wealthy is by producing more than it consumes. In other words, by saving, not borrowing. And during a deflation, when money becomes more valuable, everybody wants money. They want to save. Whereas during an inflation, you want to get rid of the money. You want to consume. You want to spend. But you don’t become wealthy by spending and consuming; you become wealthy by producing and saving."
Jörg Guido Hülsmann is a German economist and author of Deflation and Liberty, an important monograph that demolishes the myth of monetary intervention to prevent the cleansing effects of deflation. Hülsmann writes:
"Deflation is not inherently bad, and that it is therefore far from being obvious that a wise monetary policy should seek to prevent it, or dampen its effects, at any price. Deflation creates a great number of losers, and many of these losers are perfectly innocent people who have just not been wise enough to anticipate the event. But deflation also creates many winners, and it also punishes many 'political entrepreneurs' who had thrived on their intimate connections to those who control the production of fiat money.
Deflation puts a break--at the very least a temporary break--on the further concentration and consolidation of power in the hands of the federal government and in particular in the executive branch. It dampens the growth of the welfare state, if it does not lead to its outright implosion. In short, deflation is at least potentially a great liberating force. It not only brings the inflated monetary system back to rock bottom, it brings the entire society back in touch with the real world, because it destroys the economic basis of the social engineers, spin doctors, and brain washers."
Former president of the Mises Institute, Doug French, writes in the essay In Defense of Deflation:
"Lower prices increase demand; they do not reduce or delay it. That's why more and more people own flat-screen TVs, cellular telephones, and laptop computers: the prices of these goods have fallen, and people with lower incomes can afford them. And there are more low-income people than high-income people."
In A Plea for (Mild) Deflation, George Selgin rightly distinguishes between malign demand-driven deflation which is an unfortunate secondary effect of a central bank-manipulated, inflationary malinvestment phase and benign deflation which is the result of an increase in productivity:
"The Great Depression dealt a near-fatal blow to such common-sense thinking about prices and the price level. A new generation of economists became so obsessed with avoiding the bad kind of deflation that they all but forgot about the good kind. Followers of Keynes advocated inflationary policies, which have been the norm ever since. Having paid penance for the Great Depression by suffering through six decades of inflation, it is time for us to revive old-fashioned logic concerning the potential benefits of deflation.
Recognition of the possibility of benign deflation should have a salutary effect on the thinking of the world’s central bankers. By helping them to overcome their fear of falling prices, it will encourage them to deal a deathblow to the worldwide scourge of inflation. But that is only the beginning. Once the possibility of benign deflation is fully appreciated, zero inflation itself will come to be recognized as an overly expansionary policy—that is, as a mere steppingstone on the way to something even better."
Fear not deflation. Ultimately, the market will reach an equilibrium between investment and savings because in the absence of an equilibrium the benefits of a savings-only strategy would evaporate. Proper economic growth through sound investments will lead to a productivity-driven deflation.

Friday, December 21, 2012

U.S. Secret Service Bans Certain Gold and Silver Coins On eBay

By Jon Matonis
Saturday, December 15, 2012

eBay was contacted by the U.S. Secret Service sometime last month to remove the Liberty Dollar precious metal coins. Citing consistency with eBay's general policy of not listing counterfeit items, eBay spokesperson Ryan Moore confirmed the ban with Coin World.  The following email was sent to affected sellers when the systematic removals began:
"The United States Secret Service has requested the removal of all Norfed Liberty dollars on the eBay site as counterfeits. … Please do not relist this item(s). We appreciate that you chose to list this coin on our site and understand there was no ill intent on your part. Your listing fees have been credited to your account."
Real is fake and fake is real. That's pretty much the monetary world that we live in now as we are coerced to trade and pay taxes in the designated and one 'legitimate' State currency. Certainly, the U.S. Secret Service wouldn't want anyone purchasing pure (.999 fine) gold and silver medallions mistakenly thinking that they might be getting official and real money issued under the authority of the United States.

Deriving its authority from Title 18 of the United States Code, Section 3056, the United States Secret Service is one of the nation's oldest federal investigative law enforcement agencies and it was originally founded in 1865 as a branch of the U.S. Treasury Department to combat the counterfeiting of U.S. currency. In addition to its mandate of protecting the president, vice president, and others, the U.S. Secret Service is responsible for maintaining the integrity of the nation's financial infrastructure and payment systems:
"The Secret Service has jurisdiction over violations involving the counterfeiting of United States obligations and securities. Some of the counterfeited United States obligations and securities commonly investigated by the Secret Service include U.S. currency (to include coins), U.S. Treasury checks, Department of Agriculture food coupons and U.S. postage stamps."
Rather than the beginning of a second wave of gold confiscation, this action to remove coins at eBay and other sites is aimed directly at NORFED Liberty Dollars issued from the now defunct mint of monetary architect Bernard von Nothaus who was convicting of counterfeiting in 2011. For those that haven't followed every twist and turn of this landmark case, I would recommend the amicus curiae brief filed by GATA, the brilliant piece from Lew Rockwell, and the possible implications of the von Nothaus case on other attempts to start a new currency.

The State's nervousness with alternative money creation extends far beyond the lookalikes and the replicas. It goes to the heart of creating a new monetary system evidenced by the targeted shut down of systems that achieve significant market adoption or present an embarrassing dilemma. At issue in the von Nothaus motion to set aside his conviction is the larger constitutional question of whether the government has the power to outlaw the private coinage of money.

Presiding over one of the most egregious assaults on monetary freedom in history, District Court Judge Voorhees still has not set a date for the von Nothaus sentencing. In announcing the verdict, U.S. Attorney Anne M. Tompkins declared:
"Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country. We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government."
"It's a loser's game to suppress private money that is sound in order to protect government-issued money that is unsound," writes Seth Lipsky in the Wall Street Journal.

For budding monetary entrepreneurs that may be seeking legitimacy to avoid von Nothaus' fate, Robert Murphy of the Mises Institute points out the folly of searching for legal loopholes because "if any attempts to circumvent the dollar actually got off the ground, then the government would find some legal pretext to shut it down." If a competing system posed a genuine threat to its monopoly on money, the government would find a way to prosecute it, "meaning no entrepreneur would spend the resources and time trying to launch an alternative system."

Decentralized and digital currencies without a single point of failure are starting to show some resiliency to arbitrary and capricious shutdowns.

Political freedom can only be preceded by economic freedom which is preceded by monetary freedom. And, critical elements of monetary freedom are currency competition and the right of private coinage. We need more entrepreneurs that rely on the free market, not the law, as their weapon of legitimacy.

For further reading:
"Thoughts On The Liberty Dollar Debacle", Brandon Smith, undated

Saturday, December 15, 2012

Bitcoin’s Greatness Not Realized By Succumbing To Regulation

By Jon Matonis
Sunday, December 9, 2012

Last Thursday's news that French company Paymium and their exchange division, Bitcoin-Central, partnered with a licensed and regulated Payment Services Provider (PSP) ignited a heated debate within the bitcoin community. Eventually, Bitcoin-Central tempered their overly-enthusiastic initial announcement.

"It feels like these French dudes are bringing saltpeter to a rave," declared Daniel Stuckey, a writer at Motherboard ridiculing the company for dismissing the founding concepts of bitcoin.

Not singling out the Paymium effort, there is a powerful undercurrent rejecting the notion that bitcoin exchange companies should seek approval to operate within the existing regulatory framework at all. That undercurrent has some validity. That is if larger forces at work don't settle the issue before then. However, it is the jurisdictions that they elect to operate within plus the specific exchange types that determine the level of required compliance. Legal counsel willing to challenge the status quo is sorely needed for the days ahead.

Floating-rate, rather than fixed-rate, exchanges are going to require the holding of customer funds in national currencies. Exchanges for actual delivery, rather than cash-settled futures exchanges quoted only in bitcoin, will also require holding customer funds in national currencies. Customers with large balances simply aren't going to use exchanges that don't identify their legal jurisdiction, delineate funds, and adhere to some type of recourse for insolvency and stolen funds. So, certain jurisdictions and their financial regulators tend to get involved. This is also the case with Mt.Gox being based in Japan.

Here's the real issue -- regulation in this context is only a bad thing if it leads to crony capitalism or if it suggests that "still-in-beta cryptographic play money" bitcoin requires regulation similar to a national political currency.

While an individual's bitcoin transactions may still be semi-private, the auditable address links on the block chain and identity requirements for entering or exiting the exchange will remove any doubt as to how much bitcoin was spent or earned. Also, the case can be made that, despite bitcoin's basis in mathematics and being devoid of ideology, graph theory analysis of the block chain can be significantly improved by having more 'regulated' data points thus cumulatively degrading the privacy of all bitcoin transactions. Bitcoin address logs for a bitcoin exchange are like IP logs for a VPN.

Yes, debit cards with a bitcoin logo are cool and they can facilitate easy movement of funds associated with bitcoin balances. But legacy debit cards are institutionalized vehicles of identity and they promote half-way measures. Any role for current financial institutions in the societal wealth transfer to cryptocurrency will come from embracing bitcoin on its terms. If banks want to participate in a meaningful way, they will have to adapt to Tor exit nodes, coin mixing services, escrow provisioning without identity, and underwriting private insurance on balances.

Bitcoin's great promise lies in its potential ability for both income and consumption anonymity. It is this feature alone that allows users to maintain the same financial privacy as physical cash today and it is this feature that will also lead to liberating advancements such as a thriving and interconnected System D, unhampered and undiluted freedom of speech, and superior asset management that can truly be said to be off-the-grid.

Those who support the antithetical overlay of  bitcoin on the current financial system ensure us that it will only be temporary and that we must build bridges. That would be nice but it's a fairy tale. It reminds me of the Marxist theory of historical materialism and the Marx-Engels ideology that if we only tolerate the bourgeois state during the transitional advancement to a higher phase, we will see the complete "withering away of the state."

True revolutionary transformations just don't evolve that way. Linux didn't first co-exist within the Microsoft DOS and Windows environment and then decide to spin-off into a competing operating system. File sharing under the BitTorrent protocol didn't conduct a Hollywood outreach program and explain what the technology would mean for the film and recording studios.

One doesn't request freedom, one claims freedom. As Bitcoin Forum member btcbug stated about bitcoin's acquiescence to legality, "It's kind of like a bunch of slaves breaking out and then running straight back because they were so brainwashed they didn't even recognize freedom." However, the sad reality is that most of the slaves don't really want to be free which is exemplified by voting for ever-increasing State services that have to be funded through confiscatory levels of taxation and inevitably that means diminishing financial privacy.

Get real people! This is about more than just "agreeing to disagree" when it comes to stricter regulation being a good thing. Bitcoin without user-defined anonymous transactions is a neutered bitcoin. Paper cash comes with more financial privacy. In circular logic fashion, the pro-regulation adherents must then answer to their success, "what have we really accomplished?"

For further reading:
"Necessary conditions for the long-term success of Bitcoin", ShadowLife, November 7, 2012
"Problems with State Money Transmission Laws Generally", Letter from Aaron Greenspan, November 7, 2012
"FaceCash Founder Claims New Financial Regulation is Unconstitutional", Elise Craig, February 2, 2012

Bitcoin Presentation at DeepSec 2012

Thanks to all my friends at DeepSec in Vienna. It was great to meet you in person during the November 27-30th, 2012 conference.

The Evolution of e-Money (DeepSec) from Jon Matonis

Tuesday, December 11, 2012

Prediction Market 'Bets Of Bitcoin' Available To U.S. Customers

By Jon Matonis
Thursday, December 6, 2012

Launched in August 2011, Bets of Bitcoin is an anonymously-operated prediction market using the cryptographic money bitcoin. Users from anywhere in the world can place bets on the yes or no outcome of future real world events, such as will gold surpass $1,800 per ounce by December 31, 2012 or will the existence of extraterrestrials by confirmed officially by the U.S. government before the end of the year.

The openness and accessibility of the betting site has become more important now that the Commodity Futures Trading Commission (CFTC) has taken legal action against non-anonymous Dublin-based Intrade for unlawfully soliciting and permitting U.S. customers to buy and sell options predicting whether specific future events would occur. Ridiculed as useless and obsolete, the CFTC appears to have raised the bar on doublespeak as they persecute markets with actual integrity and simultaneously reinforce the corruption in the so-called 'officially-sanctioned' markets.

Intrade bowed to pressure from regulators on November 26th and announced that it was closing its doors to U.S. bettors. In a stunning justification of global policing power and indicating a particular annoyance with prediction markets, David Meister, the Director of the CFTC’s Division of Enforcement, explained why even foreign operators can and will be regulated:
"It is against the law to solicit U.S. persons to buy and sell commodity options, even if they are called ‘prediction’ contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt. The requirement for on-exchange trading is important for a number of reasons, including that it enables the CFTC to police market activity and protect market integrity. Today’s action should make it clear that we will intervene in the ‘prediction’ markets, wherever they may be based, when their U.S. activities violate the Commodity Exchange Act or the CFTC’s regulations."
Prediction markets like Bets of Bitcoin and Intrade have been popular for betting on the outcome of political elections, winners of Hollywood Oscars, winners of sporting events, and even scientific breakthroughs. According to Wikipedia, certain kinds of prediction markets may also create controversial incentives.

Other real-money prediction markets operate in Gibraltar, New Zealand, and the United States. There is also an innovative binary options broker based in Cyprus that was denied U.S. regulation when sought.

Regardless, regulation by CFTC or any U.S. regulatory body should not even be the objective of prediction market sites. Without anyone being victimized, regulating the ability of individuals to play games or trade on predicting future events violates free speech. Prediction markets have become a valuable research tool and "one big thing these markets can do is allow researchers to test the hypothesis of the 'wisdom of crowds'," says Rajiv Sethi, a professor of economics at Barnard College.

The binary option and derivatives trading site Nadex was recently turned down for regulation when it attempted to include political event contracts in its already-regulated range of markets for financial contracts.

Instead of seeking regulatory approval, Bets of Bitcoin focuses on financial privacy and anonymity so that it's irrelevant where the customers are geographically located. Anyone can create a bet statement and new bets are vetted by moderators to eliminate unwanted bets or bets whose outcome can't be easily determined or is easily manipulated.

Granted, Bets of Bitcoin differs from Intrade in several other ways, most notably in the way that the instruments are constructed. Intrade offers a full trading platform so you can get in and out of positions even before the expiration date whereas Bets of Bitcoin offers an allocated payout of losing bets based on weighted time of entry and shares commission with the bet creator. Liquidity is of course better on Intrade since it has been around much longer. The largest bet currently listed on Bets of Bitcoin involves a total of ฿258.55 (equivalent to $3,490.43) on whether the price of gold will or will not exceed $1,800/oz by December 31, 2012.

Online gambling is still illegal in the United States through federal laws and many state laws, but operating with "play money" like Bitcoin rather than "real money" could enable relationships with U.S. players to be cultivated. Due to regulations in the U.S. that restrict what U.S. residents can do with their cards, Intrade would not permit the use of U.S.-based credit or debit cards. However they did require customers to agree that it is legal for them to participate in the prediction marketplace.

Intrade says that non-U.S. customers will continue to have access to the company's real-money prediction markets and they promise that "in the near future we'll announce plans for a new exchange model that will allow legal participation from all jurisdictions - including the U.S."

Why wait? In the meantime, test your predictive skills at Bets of Bitcoin and turn your wisdom into bitcoins.

Saturday, December 8, 2012

Digital Currency: A New Worry for Tax Administrators?

By David D. Stewart and Stephanie Soong Johnston
Monday, October 29, 2012

Controversies surrounding presidential candidates are old hat in any given election year, but 2012 could very well be the first time that hackers, presidential tax returns, and a mysterious digital currency called bitcoin all had starring roles in one of the oddest politically motivated tax capers in recent memory.

In early September it was reported that a group of hackers claimed to have broken into PricewaterhouseCoopers's Franklin, Tennessee, office in late August and copied Republican presidential candidate Mitt Romney's sought-after tax returns to thumb drives.

The hackers then said they had sent the thumb drives to local Democratic and Republican offices, along with ransom notes demanding that $1 million -- all in bitcoins -- be paid by September 28 to one of two accounts to destroy or release the cyberkey required to access the files contained on the thumb drives. (For prior coverage of the hacker incident, see Tax Notes, Sept. 10, 2012, p. 1253, Doc 2012-18670, or 2012 TNT 174-2.)

That deadline has since come and gone, and the incident was declared a hoax by many. But the news certainly accomplished one thing: shining the spotlight on bitcoin, a decentralized, peer-to-peer Internet currency that has been growing in popularity and prominence in the digital age -- and in doing so has raised a series of legal questions, especially in the area of taxation.

A 'Bit' of History

The currency was created in 2009 by Satoshi Nakamoto -- likely a pseudonym for the programmer or programmers responsible for developing the system. It is distinct from virtual currencies used in online gaming communities. Virtual currencies, such as World of Warcraft gold, function within the universe of the game but may be bought and sold using real-world currency. The function of virtual currencies is limited by their utility to other game players. (For discussions of the tax implications of virtual economies, see Tax Notes Int'l, Jan. 15, 2007, p. 149, Doc 2007-997, or 2007 WTD 10-8; and Tax Notes Int'l, Nov. 21, 2011, p. 579, Doc 2011-22984, or 2011 WTD 224-18.)

Bitcoins function as a unique currency with its own free-floating exchange. It has no government and no central bank and is intended to be used worldwide. Think of it as the Esperanto of currency.

Coffees from San Antonio-based BitBrew can be purchased
only by using the bitcoin system.

Users can also send and receive bitcoins using unique Internet addresses and store their bitcoins -- each of which is broken down into 100 million units known as satoshis -- in a virtual wallet. The stored bitcoins, which offer some degree of anonymity to users, can then be used to buy everything from coffee and T-shirts to LSD tablets and drug-fueled energy drinks.

Tax Analysts sought out members of the bitcoin community as well as tax experts to identify what the implications are for tax administrators. Some believe that the system could be used to facilitate tax evasion, while others contend that the open nature of the transactions would deter such evasion. All believe, however, that bitcoins raise significant questions. For tax administrators, the challenge is how to approach a system that is outside the traditional streams of commerce and finance. For users, the challenge is how to navigate an ambiguous regulatory climate in which guidance is difficult to come by.

Monday, December 3, 2012

Payments Startup Balanced Innovates In Wrong Direction

By Jon Matonis
Monday, November 26, 2012

Under the maxim that there's no such thing as bad publicity, only publicity, the Balanced startup team will not mind this analysis of their uninspired approach to payments innovation. The explosion in collaborative consumption is indeed transformative, but Y Combinator-backed Balanced is a step in the wrong direction precisely because it extends and supports the legacy infrastructure rather than offering a true peer-to-peer payment solution.

Receiving an investment of $1.4 million from celebrity Ashton Kutcher, SV Angel, Airbnb CEO Brian Chesky, Reddit CEO Yishan Wong, and others, Balanced aims to empower the P2P marketplace movement by providing a two-sided payment platform for online marketplaces.

Balanced and Stripe both rely on the credit card giants for source of buyer funds; however, the target customer for Balanced is the marketplace whereas the target customer for Stripe is the merchant. Primarily, all other differences stem from that difference. Their main innovation appears to be the notion of offering disparate existing functionality on a locked-in platform.

In managing the funds collection and funds transfer, Balanced will maintain funds in an escrow account for the marketplace to settle with merchants and the marketplace will be responsible for any chargebacks and collecting information from merchants. To facilitate large-value transactions and to assist in returns and merchant chargebacks, Balanced intends to add an option for bank ACH credits and debits as a payment choice in the near future.

Available only to US-based marketplaces and sellers, Balanced charges 2.9% plus $.30 per transaction. They also charge $.25 per next-day ACH deposit to the seller.

Just imagine if this extraordinary flood of software development talent could be deployed in the decentralized digital currency space where it would lead to reduced transactional friction, shorter clearing times, massively lower processing fees, optional buyer anonymity, and finality of merchant payment.

Yann Rachere, the Finance Director of Anthemis Group in Geneva, Switzerland, thinks that the "current frenzy is temporary" because ultimately "P2P marketplaces need scale to succeed." He also emphasizes that controlling payments is a key component of the strategic plan for achieving scale as eBay and Etsy demonstrate. Control of the payment infrastructure and individual payment choices allows for competitive differentiation among online marketplaces. This is valuable.

On the positive side, I like that Balanced considers themselves an escrow agent in an agora setting. This is the lynchpin area for peer-to-peer marketplaces because it deals with trust -- either your real identity trust or your avatar identity trust. If one can learn anything from futuristic and successful peer-to-peer marketplaces like Fancy, Silk Road and bitcoin-OTC, the lesson is that reputations matter and exploiting the reputational component opens up breathtaking advancements in payments and P2P exchange.

On a reddit post, Stephen Gornick hints at the possible redundancy of the Balanced offering and the potential for bitcoin solution integrators:
"Each of Balanced's customers is a potential Bitcoin merchant. Zaarly is using Balanced to provide payments handling for its peer-to-peer task market. Instead of Zaarly having to build its own, it can used Balanced's API. With Bitcoin there is a little different flow. You can't pull funds from a Bitcoin user. Bitcoin is push only. But Balanced also handles the payout component. And that is a push transaction. Balanced could just as easily offer Bitcoin payments as it could ACH.
But Balanced shows what is needed by the marketplace -- a path that a Bitcoin variant could follow. Balanced is offered in the U.S. only. A bitcoin-variant could operate globally."
Bitcoin, without an intermediary, already solves P2P marketplace payment issues with a decentralized P2P digital currency that is both fair to buyers with optional anonymity and fair to sellers with finality of payment. What a global online marketplace operator needs more is reputation management APIs and bitcoin payment modules for a broad range of e-commerce shopping cart platforms. Certainly, that is functionality that a payments handling platform could provide. Reputation is how you decide who to business with -- Bitcoin is how you pay and get paid.

For example, leading marketplace and shopping cart software that is open source includes Magento, OpenCart, osCommerceSpree, and Zen Cart. Extensions for multi-vendor support are usually available so building a proprietary marketplace platform for both buyers and sellers is not always necessary. Companies that are advancing the integration of the bitcoin payment choice into these popular e-commerce platforms are WalletBit, Paysius, and BitPay. Also, newcomer BitWasp is an open source anonymous marketplace built to leverage the features of bitcoin and lower the barrier to entry for launching an agorism-based marketplace on Tor or I2P. All could easily incorporate the escrow and reputation functionality.

Sadly, even though Balanced see themselves in an escrow role for buyers and sellers, that is where it ends because they still depend on transactions and chargebacks flowing through the monopolistic credit card networks. Balanced is merely a pass-through for the money. They do not leverage their potential as a reputation aggregator for buyers or sellers in an online marketplace and unlike Wordpress they ignore a vast swath of the world where banks and credit cards are simply unavailable.

I would like to conclude by saying that I wish Balanced much luck in their success, but I can't. I really hope that I never see any of these types of startups again. Overall they are detrimental to global payments innovation and they reinforce the paradigm of declining transaction anonymity coupled with increasing bank fees and restricted merchant segments. At best, they point out the ridiculous pricing and chargeback structure of the quasi-government credit card systems. At worst, they suck investment capital away from more promising projects and distract mind share from where it is most needed.

Update: Balanced has opened a github discussion on the topic "Support Bitcoin as a Payment Method."