Bitcoin is alive and well, many argue

Mike Hearn’s recent declaration that Bitcoin is a failed experiment has been met with staunch opposition from many of the currency’s key developers. Hearn has been accused of hyperbolizing the situation because he personally disagreed with decisions made by other developers; many have also said that he is guilty of self-promotion for his new company R3CEV.

Throughout its years of operation, Bitcoin has alternately been considered the future of money and a wasted project. Hearn is the current voice behind the dissolution of Bitcoin, causing those like BitTorrent Founder Bram Cohen to tweet about Hearn’s farewell essay, “That was one whiny ragequit. He’s epically wrong on almost all technical points.” Greg Slepak published a point-by-point refutation of Hearn’s blog post; Sam Patterson similarly refuted a Washington Post article written from a pro-Hearn perspective.

The main controversy about Bitcoin’s demise stems from an original debate about block size. Blocks are virtual files that transaction data is permanently stored in, assembled in a linear sequence to form a “block chain.” The most recent block contains a very difficult mathematical puzzle that requires a correct answer in order to add a new block to the chain, thereby “unlocking” new Bitcoins. Currently, there’s a size limitation to the blocks, which limits the currency’s overall capacity.

Hearn and two others want to split the block chain in two, a move colloquially called the “hard fork,” whereas the other key developers have a different plan, alternatively titled “the roadmap.” The root of the issue, however, is more than technical jargon. Bitcoin is divided because it’s unclear as to who should govern the system. Hearn said that the virtual currency was “meant to be a new, decentralized form of money.” Yet without any centralization, Bitcoin remains a feud between opinionated elite software developers. Which out any form of governance, Bitcoin loses its opportunities at progress.

Then there are those who believe that without Hearn, a feud no longer exists. Mike Komaransky, an employee of the Bitcoin firm Cumberland Mining, tweeted, “Bitcoin Hearn Paradox- With him, consensus is hard to reach, [bitcoin] suffers. [Without] him, consensus is easy to reach, bitcoin prospers. he can’t win.”

Article via TechCrunch, 23 January 2016

Photo: Bitcoin by CoinDesk  [Creative Commons Attribution-NonCommercial-NoDerivs]


Bitcoin declared a failure

Two years ago, British software developer Mike Hearn quit his job at Google so that he could dedicate himself to developing the new online currency, Bitcoin. The currency’s value and prevalence has fluctuated considerably these past two years, but it suffered perhaps its largest blow yet on Jan. 14: Hearn announced Bitcoin to be a failure and admitted that he had sold his entire collection of Bitcoins. The value of the currency fell 10 percent within a day.

In the blog post he wrote about the failure of the system, Hearn wrote, “Bitcoin has gone from being a transparent and open community to one that is dominated by rampant censorship and attacks on bitcoiners by other bitcoiners.”

Yet the need for an effective virtual currency is still great. Venezuelan citizens grapple with hyperinflation that devalues the paper money they own and makes buying simple products at the supermarket nearly impossible. Migrant workers sending money to families in Mexico, India and Africa lose 5 to 12 percent of their earned salary to money-transfer companies. Even in the United States, citizens lose 1 to 2.5 percent in each transaction with a credit-card company.

Bitcoin failed largely because it was unregulated. Criminals and drug users exploited the anonymous nature of the currency; venture capitalists invested millions in Bitcoin start-ups that were forced to navigate the changing value of the currency. Above all, Bitcoin was dominated by an elite few, and therefore it lost its egalitarian potential to help people in countries suffering from hyperinflation or working far from home.

“It (Bitcoin) has failed because the community has failed. What was meant to be a new, decentralized form of money that lacked ‘systemically important institutions’ and ‘too big to fail’ has become something even worse: a system completely controlled by just a handful of people,” said Hearn on his blog post.

Article via The Washington Post, 19 January 2016; The New York Times, 14 January 2016

Photo: Bitcoin by Tiger Pixel  [Creative Commons Attribution-NonCommercial-NoDerivs]


Kickstarter now legally obligated to make the world a better place

The startup Kickstarter has reorganized into a public benefit corporation, a legal move that states that the startup intends to have “a positive impact upon society”. Now, the company famous for funding new and upcoming projects is legally obligated  to take into account public benefit when making decisions. Additionally, Kickstarter will be required to disclose information on its social impact. This choice to start moving away from overbearing investors and shareholders is a growing trend among startups. Derrick Feldman, President of Achieve, a company that deals with online fundraising strategies,  states that more technology companies may follow in Kickstarter’s footsteps. He explains that public benefit corporations are useful for startups that “may have wrestled with the way companies have been formed and established in the past.”

Kickstarter, on their part, considers their reorganization another step towards transparency, which they have not always been associated with in the past. In 2012, concerns were raised over where money raised for projects that don’t come to fruition goes. Kickstarter has clarified that concern in their terms of use, and they has taken measures to become more  accountable to the public. Before becoming a public benefit corporation, they were already voluntarily designated a B Corporation and was required to follow exhaustive social and environmental responsibilities. Not many companies have chosen to become a public benefit corporation, but Kickstarter has joined companies such as Patagonia and This American Life in this decision. The co-founders of Kickstarter believe that the number of public benefit corporations will join them in the future, choosing to disregard “business as usual, and the pursuit of profit above all”.

Article via CNETSeptember 21, 2015

Photo: Kickstarter HQ Look via Scott Beale [Creative Commons Attribution-NonCommercial-NoDerivs]

 


Tech companies settle antipoaching lawsuit

Antipoaching, the act of refusing to hire employees from a rival company, may not seem like the best business strategy for large tech companies like Google or Apple who are always capitalizing on the “next big thing”. However, a civil law suit was filed against several companies including Google, Apple, Adobe, and Intel for antipoaching and is now recently being settled for $415 million after movie studios Pixar and Lucasfilm and financial software company Intuit settled previously. The companies involved in the lawsuit were accused of agreeing to not hire certain employees from each other which allowed each company to retain employees they would rather not lose. While antipoaching does sometimes serve the best interests of the company as a whole, some employees looking to earn a higher salary or explore other opportunities outside their place of work feel that the antipoaching agreement hindered their abilities to move up in their fields. Earlier versions of the lawsuit also included allegations that the antipoaching agreement allowed companies to artificially keep salaries low.

Even though all of the companies involved in the lawsuit chose to settle, many of the companies continued to state that they believed they had done nothing wrong. A statement released to CNET from Adobe by one of their spokespeople explained that, “Adobe firmly believes that our recruiting policies have in no way diminished competition for talent in the marketplace…Nevertheless, we elected to settle this matter in order to avoid the uncertainties, cost, and distraction of litigation.” A similar statement was released by Intel back in January when the settlement was originally proposed.

Article via CNET, September 3, 2015

Photo: Google Headquarters – Mt View via Servizi Multimediali [Creative Commons Attribution-NonCommercial-NoDerivs]


Push to Define Bitcoin Regulation Continues

Is Bitcoin money? (Anita Ramasastry, 9 Sept 2014) – Bitcoin confounds lawmakers as they try to figure out what it is and how it should be regulated. The Bitcoin Foundation notes that Bitcoin is an innovative payment network and a new kind of money. But is it money? Some call it a new form of virtual currency. Others have lauded it as a new type of payment system. So what is it? And why does it matter? What we call it may not matter much in casual conversation, but how it is categorized does have significant implications when it comes to regulation. If it is “money” or “currency,” then existing laws and regulations may apply to businesses and consumers who issue, sell, or transact with Bitcoin. From banking laws to anti-money-laundering laws and tax regulations-whether these laws apply to the use of Bitcoin depends on how Bitcoin is classified. At present there is no consensus as to what we should call Bitcoin or how it should be defined for purposes of applying legal rules. As I will discuss in this column, courts and regulators are coming up with different theories and classifications as a way of figuring out whether this new product/payment vehicle is or is not covered by different laws. As I will also discuss, it appears that lawmakers, at times, restrict the term “money” or “currency” to refer only to government-issued money or legal tender. This conflicts with basic definitions of money, found in both economics texts and in dictionaries. If certain laws are meant only to deal with government-issued currencies, then perhaps we should revise statutory definitions to make such distinctions clearer. In the meantime, we will need to sit back and watch regulators around the globe grapple with whether or not Bitcoin is “money.”

 

Provided by MIRLN.

Image courtesy of FreeDigitalPhotos.net/VictorHabbick


Does Music Infringement Improve Sales?

Dubious news hook lets me confirm and blog my pre-existing views (Stewart Baker, 20 Oct 2013) – I’m a much bigger fan of Girl Talk, whom I’ve blogged about before, than of current copyright law, so it’s hard to resist a chance to talk about both. Girl Talk (actually a fellow named Greg Gillis) produces delightful mashups of hip-hop and classic rock that shed new light on both. Since Girl Talk relies on a claim of fair use for his sampling and doesn’t seek the original label’s authorization, he has trouble selling his albums through the usual channels. Now Michael Schuster, another Girl Talk lawyer-fan, has produced a law-review study of All Day, Girl Talk’s latest album , arguing that the songs it samples actually had higher sales in the year after the sampling than in the year before. For those of us who think copyright law is too protective of plaintiffs, the article is comforting. It suggests that current law may actually be hurting the authors it purports to help by discouraging musicians from introducing their fans to our pop-cultural heritage. Actually, though, I think the article is a little too comforting. I am always skeptical of scholarly research that reinforces academic prejudices, since scholars tend adjust their standards of proof to fit their prejudices. Hostility to copyright is pretty much the norm in academic circles, and if you read the article skeptically, it loses much of its persuasiveness. Schuster achieves his results by playing with the sample, dropping nine songs from a sample of about 200 because they completely wreck his argument. His reason for dropping the songs is that they were hits in the 30 months prior to the release of Girl Talk’s album, and hits by definition suffer declining sales after topping out. If he didn’t drop those songs, Schuster’s data would show a 50% drop in sales of the songs that Girl Talk samples. Schuster says he’s just correcting for noise in the data, and it isn’t appropriate to charge Girl Talk with the natural rhythm of pop music sales. Maybe so, but once you start making big after-the-fact adjustments to a sample of 200, you can prove pretty much anything. At best, Schuster has developed an interesting hypothesis that ought to be tested by a new experiment untainted by data cherry-picking.

Provided by MIRLN.

Image courtesy of FreeDigitalPhotos.net/tungphoto.