Could Bitcoin be the Future of Internet Betting?

Hartley Henderson has published a prospicient article at Off Shore Gaming Association, "Could Virtual Currency be the Future of Internet Betting?". The author has identified a man known as R.C. who emphatically endorses bitcoin as a means of payment for online gambling and casinos across almost all jurisdictions. This supports our thesis that bitcoin is the digital equivalent of a physical casino chip. Henderson summarizes his discussion:

'If I had any say, all transactions at our book would be done in bitcoins,' the man said. 'They are untraceable and totally out of the control of any government. And most importantly they are an investment which someday I’m confident will rival silver prices.'

The author then asks R.C. specifically what makes bitcoins a better option than cash for online gambling:

"As you know, money transfer is vital to the sports betting, casino, and online poker industries. Bitcoin is an amazing solution. Through a combination of math and cryptography - it is a completely decentralized currency/commodity. That means no entity is in control, it is managed by all the nodes of the network, collectively. You can think about it like bitTorrent, if you are familiar with the file sharing protocol; purely peer to peer with no central management. 

Through this cryptography and decentralized design, each node on the network is a 'bookkeeper' of which bitcoin addresses own which coins. You cannot fake or forge a transaction or create coins outside of the system. Each node has a record and will not accept forgeries. So, even though there is a public record of all bitcoin transactions, the key is that nobody knows who owns a particular address and thus those bitcoins. So on the one hand it is completely transparent - all coins and transactions are public, but on the other hand nobody knows who owns those coins/bitcoin addresses. You can see how it could be useful to gamblers."

Peer-to-peer wagering, or social betting, is gaining quickly in popularity and Henderson makes the point that companies receiving a membership fee are distinctly different from companies that receive a commission on the winning bets:

"What R.C. didn’t mention is that in no country is peer to peer wagering illegal. There is nothing in the law that stops person A from wagering $20 with person B on the outcome of a game. What makes the transaction illegal in some countries is when an intermediary acts as the bookmaker. That is precisely why Betfair and Matchbook are seen as technically illegal by the U.S. government. Both are peer to peer wagering operations but they also take a commission on the winning bets. BTCSportsBet.com doesn’t do so. They simply have paid members."

Henderson also makes the bold case that bitcoin as a payment mechanism doesn't fall under the UIGEA because there is no money involved and there is no way the Department of Justice can effectively intrude. Our man R.C. perhaps explained it best:

"As far as UIGEA, there are no banks or processors involved. Moving bitcoins around is just like moving an image file or other data around. I would expect to see bitcoin-specific legislation before any attempt to apply the UIGEA. But even with legislation, I expect the future of bitcoin to be bright. There is no central authority to shut down. There are laws against file sharing copyrighted works, but due to the distributed nature of bitTorrent it cannot be effectively policed.

As far as pressure from the DOJ or other entity (it’s not a viable concern). Bitcoin can be classified as a commodity, or a currency, or nothing at all (it's just data). One can argue that it is like Facebook credits or World of Warcraft Gold. The government is not going after them. Also, the terms and conditions for BTCSportsBet.com states that the player is responsible for determining the legality of playing with bitcoins in his or her jurisdiction. Sign-ups are anonymous and the site does not know the origin of the players. No personal identification is requested; even an email address is optional. A player can sign up, send bitcoins, wager, and withdraw without the site ever knowing who he or she is. The properties of bitcoin allow this to happen. There can be no fraud, identity theft, or reversed transactions. All of those headaches are a massive cost to the industry - so you can see why bitcoin may be a significant factor in the future of online wagering."

Regarding the claims above, it remains to be seen if Facebook Credits will ever permit two-way exchange and, even if they did, that the U.S. regulatory authorities wouldn't move promptly to include them under the 'Prepaid Access Rule' for financial products. In the meantime, I agree that the resilient bitcoin is more suited to the monetary challenges ahead and it is another case of technology being ahead of the law.

For further reading:
"Leading Bitcoin Online Gambling Operator Opens Books", Bitcoin Money, January 18, 2012
"Could crypto-currency change how we pay?", Julian Bucknall, January 8, 2012
"Bitcoin and the Digital Currency Revolution", Dan Downs, January 5, 2012
"A Bitcoin Primer", Mike Koss, January 1, 2012

Virtual Currency Poker Leaves Real Money on the Table

Tyler York of Betable presents some amazing numbers on how real money gaming would be supremely more profitable than virtual money gaming in "Virtual currency poker leaves money on the table".

Bitcoin, the digital version of a physical casino chip, is not discussed in the analysis. But since it currently falls into that legally unclassified area of 'not-real-money', it will undoubtedly start to appear in those gaming venues that inhabit the monetary space between real and virtual. Tyler York then asks, "given the tremendous revenue opportunity, why haven’t social game companies already offered real-money play?": 

"No, not because Facebook doesn’t allow gambling.

While this was true in the past, Facebook may soon allow real-money gambling on its platform. Even so, social games are on countless other platforms where gambling is already permitted in legal jurisdictions, including Android, iOS, and Google+. These companies didn’t pursue real-money social games for any of these platforms. 

No, not because gambling is illegal in the US.

While the Department of Justice opened the door for states to regulate online gambling within their jurisdictions, the fact that the US market was closed before wouldn’t have stopped major social game companies in foreign markets. The addressable ex-US worldwide gambling market contains millions of players that would give real-money social games the audience they needs to succeed. 

The reason game companies haven’t implemented real-money play is because gambling licenses are tremendously expensive and time consuming to acquire.

While theoretically possible, the process is so painful that the vast majority of game companies don’t even consider it. The time (≥18 months) and money (≥$1M including all associated costs) are an enormous barrier to entry for most game studios. Even if a studio could afford those costs, steps must be undertaken sequentially and spending more money doesn’t shorten the period of time it takes to get a license. There is also the added layer of complication arises from the necessary corporate structuring and off-shoring that must take place to comply with gambling regulations.

These time and money costs are simply too great for the vast majority of small-to-medium sized game studios, and the compliance issues become increasingly prohibitive as you look at large game companies. These huge pains have prevented Zynga and other game companies from offering real-money play to non-US players in spite of the massive potential revenue opportunity. Game companies have been better off investing their limited resources into virtual currency revenue streams because they will monetize immediately, although relatively poorly."

For further reading: 
"The Real 'New Frontier' of Gaming", Tyler York, December 19, 2011
"Real-Money vs Virtual Currency Gaming - Design Outside the Box", Jesse Schell, DICE 2010, May 12, 2011

The EFF's Own Chilling Breeze

By Julian Noble
Wednesday, January 4, 2012

To stand up and fight to protect lawful online activity from legal threats isn’t for the faint of heart… it takes big ones.

The Electronic Frontier Foundation has a two decade history of taking on cases that set important precedents to protect rights in cyberspace. This is an organisation which has not been afraid to file lawsuits against the CIA, the US Department of Defence, the Department of Justice and other agencies, as well as major corporations like Apple and AT&T.

Recently, however, the EFF seems to be blowing some chilly air of its own and their source of gumption seems to have shrunk a little. They are no strangers to the pernicious effects of ‘self-censorship’; this is the ‘chilling effect’ where discussion, debate and activities are effectively destroyed before they even get started. It is the fear to speak freely or the fear to participate, because of vague legal threats or ill-defined laws. It is the uncertainty about where one’s rights begin and end, and the fear of crossing an invisible line. It is the providers closing or restricting customer accounts; not based on specific legal requests but based on some fuzzy margin even less well defined than the law itself.

Let’s see how the EFF explains its retreat from using one specific technology: Bitcoin, which is not inherently illegal and qualifies more than most as a frontier technology.

EFF and Bitcoin (June 20, 2011)

What then should we make of this statement from the EFF which reveals a primary motivator for avoiding a particular technology is legal uncertainty? At first glance this might make some sense, as ‘understanding the legal issues’ seems like a prudent first step, but you only need to step back into the EFF’s early history to see that their very birth was not just taking place in, but in a way inspired by an era of just this sort of uncertainty regarding electronic frontiers. Take this quote from ‘A Not Terribly Brief History of the EFF’.

"I realized in the course of this interview that I was seeing, in microcosm, the entire law enforcement structure of the United States.

Agent Baxter was hardly alone in his puzzlement about the legal, technical, and metaphorical nature of data crime."

This surely shows that the legal environment was not only uncertain – but positively muddy and misunderstood even by those tasked to investigate and enforce the law.

Arguably, law enforcement lags in their understanding of new technology just as much today. The ‘ambiguous nature of law in Cyberspace’ was almost a defining feature of the landscape, and back then, it didn’t stop the EFF from riding out into it; legal guns at the ready, if not blazing.

The EFF about-face regarding Bitcoin came shortly after a flurry of publicity regarding US Senators Schumer and Manchin raising their concerns about the use of bitcoins for illegal purchases on the silk road tor website. The senators mischaracterised bitcoin as “untraceable”. Senators seek crackdown on “Bitcoin” currency

In contrast to this sort of reaction, we have at around that time, a more measured opinion from Joseph Skocilich at US business and intellectual property law firm ‘Adler Vermillion & Skocilich LLP’
Innovation and Legal Panic—Bitcoin

"Boringly, the realistic legal issues facing Bitcoin are likely to be limited to those businesses that service the Bitcoin economy as a “money services business”, such as money transmitting, processing and foreign currency exchange. Laws which happen to be in great need of reform, as they are currently hindering innovation in the online payment industry. Simply using Bitcoin as payment for goods and services doesn’t create any legal issues beyond that of any other market exchange, where you and your business are free to accept payment in whatever form you choose."

Various organisations have been approached by the bitcoin community with offers of assistance as far as accepting bitcoin in their commercial operations, or as a low fee method of accepting donations. Some of their reactions are revealing:

A member of the SENS foundation website team cited the “possibility of BTC being made illegal in the US”. A statement from someone at Kiva.org (a technical person, not a legal rep) was particularly illustrative of the chilling effect:

"We talked to some fellow non-profits, and the lawyer from one particular organization gave us some strong reasons to not move forward. We then talked some with our lawyer, who cautioned against doing anything that could distract from Kiva’s core mission by bringing about controversy."

When the founders of Humble Bundle were approached they replied:

"Hey there, we have talked with the EFF and an attorney about this and it is very complicated to say the least. The stakes are very high and there are some extremely serious unknowns about using Bitcoins. While the concept is great, we are not prepared to be its first major test case, after listening to the advice we’ve been given."

How many such organisations have looked at the EFF’s stance on this and taken their self-censorship lead?

In some cases – there may be specific legal roadblocks with regards to adopting a new technology such as this. Charities in particular are highly regulated. Some government agencies such as the NGO Affairs Bureau in Bangladesh, require that each foreign donator fill out and sign a specific form giving authorisation for the donation, which obviously puts a damper on micropayment donations using a somewhat privacy-enhancing electronic payment system.

But the EFF’s published concerns are less specific than that.

If any of their fear is based on a perceived conflict of interest for having a financial interest – they should note that ‘holding bitcoin’ is not a prerequisite for using them as a payment mechanism. There are services which allow merchants or non-profits to receive their bitcoins in USD, avoiding any interim volatility or any position as a speculator.

Whether or not you see the value or likelihood of success for a technology such as bitcoin, it’s clear that one of the most pressing impediments to adoption is not violation of any particular law, but general legal ‘fear’. What does it say to the merchants and charities of the world, when even the EFF, the giant slayer, cites vague legal concerns in it’s refusal to even use a technology in a relatively passive manner?

For the bitcoin community, a sense of betrayal doesn’t seem entirely unreasonable here. It is not that the EFF should be expected to ‘endorse’ bitcoin – but that the EFF should be perfectly happy to use frontier technologies within the space where they are not specifically legally prohibited, and be willing to work with the community in helping users (or at least not discouraging them) as they move up close to the legal lines. Did the EFF need to eschew all encryption when defending our rights to use it?

It’s been 6 months since the EFF’s public statement of legal confusion. That’s a long time in the fast-moving technology world for a chill wind of self-censorship to swirl around. As a prominent non-profit organisation supposedly at the forefront of cyberlaw, EFF’s influence is substantial. Let us consider what it might look like if the EFF took this approach to certain other new technologies.

———————————————————–————————————
Press Release: EFF withdrawing from social networks.

For several years, EFF has been following the movement around social networking, a system of electronic communication which touts itself as providing “informal communities of peers”.

We’ve been a long time user of email and have been experimenting with social messaging technologies such as Twitter and Facebook, which are at the forefront of peer-to-peer and social systems.

However, we’ve recently removed all our Twitter and Facebook accounts, and we’ve decided not to have any social network friends or followers. We decided on this course of action for a few reasons:

1. We don’t fully understand the complex legal issues involved with social networks and electronic peer-to-peer communications.
Social networks raise untested legal concerns related to privacy, bullying and harassment, fueling of riots, impersonation and identity theft, among others. While EFF is often the defender of people ensnared in legal issues arising from new technologies, we try very hard to keep EFF from becoming the actual subject of those fights or issues. Since the legal implications surrounding the use of social networks and peer-to-peer systems in general are still very unclear, we worry that our participation in social networking may move us into the possible subject role.

2. We don’t want to mislead our ‘friends’. 
When people become a social network ‘friend’ or ‘follower’ of a nonprofit like EFF, they often expect us to be a genuine ‘friend’ or ‘follower’ in the more traditional sense. This can lead to legal misunderstandings as to the nature of our relationships with other participants in the social network. In 2011 Social media has been associated with the ‘Arab Spring’ uprisings as well as implicated in ‘fueling’ the Tottenham riots. This has led to renewed interest from governments in mapping the social network to identify collaborators, as well as mechanisms for shutting down certain social networks entirely in times of crisis. Because of this legal uncertainty, we are not comfortable with the number of ‘friends’ and ‘followers’ we have accumulated.

3. People were misconstruing our use of Twitter, Facebook and other social networking tools as an endorsement.
We were concerned that some people my have participated in these social networks specifically because EFF took part, and perhaps therefore believed the activity was safe and risk-free. While we’ve been following the social network movement with a great degree of interest, EFF has never endorsed Facebook or Twitter. In fact, we generally don’t endorse any type of product or service – and these are no exception. We appreciate the outpouring of support we have received from the social networking community, and we share that community’s commitment to privacy and innovation. We also appreciate their frustration with the privacy problems posed by existing on-line social networking systems. However, EFF will no longer be accepting or making friends. In upcoming meetings, we will also be reviewing and potentially withdrawing from the domain name system entirely – so that from the outside, we can better assist you in fighting #SOPA! To mitigate the risks inherent in electronic communications with the EFF, you can as always contact us via snail-mail at:

Electronic Frontier Foundation
454 Shotwell Street
San Francisco CA 94110-1914 USA

Donations using electronic methods such as credit card, bank wire or bitcoin are no longer accepted for similar reasons – we can best defend your use of these electronic systems if we are not seen to be ‘users’ ourselves. Cash in the form of notes is no longer accepted due to possible contamination with cocaine and the resulting legal risk that imposes. Gold bullion or cash in the form of coins can be delivered to the above address.

Reprinted with permission. This article first appeared at http://bitcoinmedia.com/the-effs-own-chilling-breeze/.

Virtual Currency in Virtual Economies: Implications for Income Tax

"Virtual Currency in Virtual Economies: Income Characterization Issues for Social Media Companies" by Jim Carr, Jason Hoerner, and Carlos Kaplan of KPMG LLP was published in the November 21, 2011 (Vol. 64, Number 8) issue of Tax Notes International.

This article examines income characterization issues related to taxation of virtual currency. Some social media companies offer digital currency (so-called virtual currency) for online players to use in virtual words, online games, and other applications. Players can use virtual currency to purchase assets or services from other players within these online worlds. Players selling such items can convert the virtual currency to U.S. dollars or other currencies through online auction sites or the social media company that issued the virtual currency (Known as “real money trades”).

The authors discuss how the characterization of income derived in connection with an offering of virtual currency is pivotal to assessing the U.S. income tax consequences of that income from a cross-border perspective and how understanding the characterization may facilitate greater planning opportunities.

I highlight some of the more interesting findings below:

Page 3: "Because of the lack of U.S. guidance, social media companies engaging in cross-border transactions with consumers face uncertainty about U.S. federal income tax consequences."

Page 4: "Other social media companies' terms of service may permit virtual currency exchanges to be operated by third parties. Players may trade the virtual currency on these exchanges with other players for real currency, usually at their own risk without any guarantees from the social media company permitting the trade."

Page 9: "There is no comprehensive definition of currency under the IRC or Treasury regulations. For a CFC [Controlled Foreign Corporation], factors to consider in the typical transaction that may be relevant for this determination could include:

● whether the player can purchase anything with the virtual currency outside the opportunity to play the MMOG;

● the extent to which there are restrictions placed on what a player can buy and/or transfer to another player;

● the right of the social media company to terminate a player's virtual currency at its sole discretion or if certain conditions occur; and

● the ability of the player to exchange the virtual currency for true cash, whether through the MMOG or through third-party exchanges."

For further reading:
"Virtual currency: regulation and taxation issues", e-commerce law & policy, November 2008

The Ten Most Anticipated Bitcoin Projects for 2012

By The Bitcoin Trader
Friday, December 30, 2011

http://www.thebitcointrader.com/2011/12/10-most-anticipated-bitcoin-projects.html

I'm not so sure that Satoshi Nakamoto could have anticipated the wave of projects that have been and continue to be inspired by his creation. At this very moment, one can only imagine the development progressing in secrecy among the hundreds, if not thousands of computer programmers, investors, financial types, marketing gurus, or otherwise, that have found their second wind thanks to the possibilities of Bitcoin.

Unfortunately, I'm not privy to the closely-guarded secrets behind most of Bitcoin's projects, however many there may be. Many developers, however, are more than happy to share their ongoing work with the community, enough to definitely get us excited about Bitcoin's prospects for next year. So, without further adieu, these are The 10 Most Anticipated Bitcoin Projects for 2012:

10) BitSynCom and the MeshNet

Though somewhat mysterious about their plans, BitSynCom recently announced a massive project to assist the growing effort to launch what can only be described as "the peoples' Internet." Called MeshNet, it would be a peer-to-peer version of the Internet, dependent on its users for owning and operating the supporting infrastructure.

BitSynCom hopes to integrate Bitcoin with MeshNet to act as a payment system to reward those who maintain the infrastructure and provide bandwidth, and to charge those who use it. The development time for such an ambitious project will likely extend well past 2012, but we may see it get legs next year, especially if SOPA comes to pass in its current form. For more information, you can watch an interview with Yifu Guo of BitSynCom, here.

9) The Bitcoin Bond

"JackH" first mentioned the concept of a Bitcoin Bond back on October 25th of this year. The idea is that a publicly traded entity could be used as a vehicle through which investors could buy a piece of the Bitcoin pie while not directly purchasing any Bitcoins. The Bitcoin buying would be the responsibility of an agent associated with the "company." It's an arrangement that would sound familiar to anyone who dabbles in gold and silver ETFs.

The main driver of the project is to mitigate the fragility of the current relationship between banks and Bitcoin exchanges, as there were several instances of banks suspending their accounts with Mt.Gox, Tradehill, and Intersango over the last few months (though it's been quiet as of late).

The latest hurdle facing "JackH" is the cost of developing the legal framework for the company, which was quoted at over 200,000 British Pounds. Yikes! Apparently Mr. H. does have interested investors, though their pockets aren't quite deep enough to come up with that chunk of change. He continues to look for cheaper lawyers...

8) Bitcoin Browser Extensions

Though several attempts have been made at a browser extension, none have really proven effective nor have caught on with Bitcoin users, and most of the development in this field came to a grinding halt when the bubble burst in June. At the moment, it does not appear that anyone in the community is working on an extension, but with the pending implementation of the URI scheme and release of a thin version of the Satoshi client, a browser extension would be the next logical step and would make Bitcoin incredibly user-friendly. Hopefully we'll see one develop in 2012.

7) Bitcoin Options and Futures Trading on the Major Exchanges

2011 will no doubt be remembered as the year that Bitcoinica took Bitcoin by storm. With leveraged trading, playing the Bitcoin markets went from tee-ball to the big leagues, seemingly overnight. 2012, however, will take things to a whole new level. Mt.Gox and Tradehill have both hinted at the fact that they will be unveiling futures and options markets as part of their development plan, with Mt.Gox possibly bringing the features online as early as next month when they are set to unveil... well, something.

6) ICBIT Stock Exchange

Giving Mt.Gox, Tradehill, and Bitcoinica a run for their money will be the ICBIT Stock Exchange. Currently in alpha testing, the exchange promises options and futures trading, as well as the ability to buy traditional stocks using Bitcoins, all of the above on margin, of course.

Having access to derivatives will help to smooth out the volatility that we currently see in Bitcoin trading, and will also give merchants and miners the ability to hedge their holdings (or future holdings). These are key components to establishing a respectable currency market, and will surely generate a lot of interest outside of the Bitcoin community.

5) Electrum Overlay Network

Still looking for an official name to distinguish itself from the Electrum client (I like Overbit, myself), the Electrum Overlay Network is looking to integrate many of the services that are currently found elsewhere, as well as some that do not already exist, and bring them under the umbrella of a single platform. Features will include:

• Client integration of BTC/fiat exchanges;
• Wallet storage for diskless or extremely low-resource clients;
• Server-side escrows (sending bitcoins to an email address);
• Integration of bitcoin laundry;
• Exchange calculators (to display the “fiat” equivalent value of BTC in clients);
• Firstbits support;
• Mining support for clients; and
• Various transport protocols (especially HTTP Push, which allows PHP websites to integrate easily with Bitcoin).

This feature-rich software will be extremely popular and likely catapult Electrum to the front of the client-race, though you never know what the next guy has in his back pocket. Speaking of which:

4) Bitcoin Client Upgrades

Though not scheduled for the 0.6 version of Bitcoin, Gavin Andresen has hinted several times at his increasingly urgent desire to release a thin version of the standard client. Motivated primarily by the poor first-time user experience that comes with the full blockchain download, Gavin's dev team will likely deliver a thin version of the client in 2012. The blockchain is already topping out at 1.2 GB, and we'd hate to see what it will look like by the end of next year. In fact, most of us would rather never see it again as long as we know the friendly miner community is keeping tabs on it. Please Gavin, make the blockchain go away!

Also sorely needed is the implementation of the Bitcoin URI scheme. Currently, most Bitcoin transactions happen through the copying and pasting of ugly-looking strings of numbers and letters (i.e. public keys) that have to be manually checked and re-checked before a transaction can take place. With the URI Scheme, the click of a link in a browser will automatically launch the client and incorporate the address into a transaction. It's much needed, and we hope to see it next year.

3) New Bitcoin Transaction Types

I touched on this topic with my post about Bitcoin 0.6, but it's important enough that it needs to be repeated. The upcoming version of Bitcoin, and there will no doubt be more than one iteration in 2012, will support new transaction types. Essentially, the new version will allow for transactions with multiple signatures, thus allowing for escrow-type contracts with third-parties involved.

Having the option for multiple signatures will also add a new layer of security to Bitcoin, where you will be able to require that your transactions be signed by two different private keys, stored in physically separated devices. This added level of security will stop potential hackers and wallet thieves in their tracks, and make credit cards look downright irresponsible. It's the reason why new transactions types are number three on our list.

2) Open-Transactions (OT)

Already in private alpha-testing on a live server, OT, the brain-child of Fellow Traveler, is going to be extremely important in 2012. Really, its relationship with Bitcoin only tells part of the story, but it's an important relationship nonetheless. Bitcoin is the oil lubricating an OT machine that will enable such a vast array of financial instruments and contracts that lawyers everywhere will beg for retirement packages before they are inevitably smacked in the face with pink-slips as their jobs are made redundant.

OT will allow for truly anonymous, off-the-blockchain, instantaneous transactions, thus silencing some of Bitcoin's harshest critics. This will be a capability so powerful that integration with TOR will almost be a necessity. Multi-asset trading and smart contracts will be OT's killer apps, though the power of OT will only be limited by the imagination.

1) Max Keiser and the LoveBitcoins.org Campaign

Announced at the European Bitcoin Conference, Max Keiser is teaming up with lovebitcoins.org with the goal of bringing 1,000,000 new users to Bitcoin in 2012.

In addition to his radio and web presence, Max (I'm assuming we're on a first-name basis) has his own segment on Russia Today called the Keiser Report, with a huge audience that is sympathetic to the Bitcoin cause.

Equally important here is the structured marketing organization starting to develop within the Bitcoin community that will be extremely important to promoting the technology in 2012.

---

2011 was a year of growing pains for Bitcoin. It was both loved and hated by the media and subject to a huge bubble that topped out with a market cap of over $200 million. Hackers and miscreants took shots at exchanges and Bitcoin users alike, yet the currency and the community proved their resilience.

Bitcoin is positioned better than ever to prove to the world its significance and utility. These incredible projects only hint at some of what's to come in 2012, which will no doubt be the year that Bitcoin comes of age.

Reprinted with permission.

Digital Currency Systems: Emerging B2B e-Commerce Alternative During Monetary Crisis in the United States

By Constance J. Wells, M.S. Aspen University Tuesday, February 8, 2011

From the Abstract:
Digital currency systems form the triumvirate nexus of government policies, money, and technology. Each has a global reach and responds to the needs of business and consumers. E-commerce depends on private and government financial institutions to enable payment transactions; the basis of e-commerce. As the United States financial crisis continues B2B enterprises may need to abandon traditional payment transaction systems and look to alternatives, in the form of Web based digital currency systems accessed via the Internet. The various types of digital currency systems generally fit into five categories: Barter Exchange Software Systems, Non-Bank Digital Currency Payment Systems, Digital Precious Metal Systems, Online Value Transfer Software Systems, and Online Stored Value Transaction Software Systems. Digital currency systems are not online banking. Digital currency systems use private electronic monies: electronic tokens, barter-exchange currencies, digital cash, and stored value e-cash vouchers. We explore the history of money against a backdrop of banking and government policies that cause cyclic monetary crisis's, how these current digital systems operate, how business can thereby benefit in their use, and why digital currency systems are such an underutilized service in the United States.

Digital Currency Systems: Emerging B2B e-Commerce Alternative During Monetary Crisis in the United States

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Why Bitcoin is a Foundational Change That Won’t Go Away and Could Change Everything

The following bitcoin article was posted at the P2P Foundation website on November 26, 2011:
Why Bitcoin is a Foundational Change That Won’t Go Away and Could Change Everything Reprinted with permission from ID3.org.