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Bitcoin Prevents War

President Trump probably made a nice bundle on the missile manufacturer Raytheon stock recently after dropping their products on Syria. In 2015, Raytheon was named in Trump’s portfolio in an FEC filing for having made less than $200. Today, the cash amount probably exceeds that number, and we will probably see the profit from this stock in the next Trump FEC filing.


These records and research of the US Government Office of Ethics are searchable and public as required by good governance to limit and deter conflicts of interest just like this one. Though civil servants are required to show these records, our individual taxes paid are not traceable. The technology needed currently exists to distribute each of our payments and make them fully accountable.

Imagine that you could publicly track your tax payment to a slush fund and then into one of the $1.4 million price of each Raytheon missile. You could accurately calculate the money each operation costs, what department of the government issued it, even the base and soldier that released it. Imagine you can access this information as an American citizen but having the ability to keep it private from others, just like many of our other services like Social Security, and only allow those with full clearance to see everything while only revealing limited information to the public instantly. If funds are registered on the Blockchain, you would be able to do this easily. In fact, we could trace which towns and states paid for each of these missiles. Would this stop the war? Perhaps, as our ability to discourse on the internet would be backed by information. Now, we can accurately answer the question of “if we can fund these missiles how come we cannot feed hungry people?”

Groups of people could organize, exchange ideas, and quickly trace each payment when they visit their elected officials and when they pay taxes. Imagine Facebook and Twitter as a public utility. Voting could be done on the blockchain, too. Corruption could be a thing of the past as no dollar could be siphoned off as it is now due to traceability and the opacity of current governance models. Transparency is the future of governance as we build out these tools and this is the promise of decentralized technologies.

Imagine what we could do with $2.99 trillion and the level of genuine democratic engagement created by this transparency.

Japan Recognizes Bitcoin as a Method of Payment, Accounting Operations to be Finalized

2017 has seen a monumental shift in Bitcoin volumes as Chinese exchanges have banned withdrawals for their customers. Due to this, trailing countries in terms of Bitcoin volumes have stepped up to restore and maintain the price levels of the Bitcoin ecosystem. This was facilitated due to the increase in adoption levels and the kind of encouraging regulations that were put in place to promote digital currencies. Topping the list of countries that are committed to this cause are Japan and South Korea. Recently Japan has passed a bill to officially recognize Bitcoin and cryptocurrencies as a method of payment on par with fiat currencies. This can be heralded as a very important instance where Bitcoin has seen the light of mainstream adoption. Let’s look into the details of the bill and what might be the further implications.

How Bitcoin became a method of payment

In February 2016, Japan’s Financial Services Agency (FSA) which is the country’s financial regulator, looked into proposals to recognize bitcoin and digital currencies as equivalents to conventional currencies. This means, if approved, the revisions imply that Bitcoin would be getting the status of fiat currencies. In March, the Japanese cabinet passed a set of bills that deemed virtual currencies to have asset-like value. Owing to their transferable nature, they can be used to make payments like gold.

The accounting problem


While cryptocurrencies are legalized and would be effective as payment methods starting from April, there is a catch here for Bitcoin businesses and transactions. The Japanese Government has not come up with a regulatory or accounting framework to monitor the transactions. The set date for proposing and finalizing an accounting framework is due in six months  leaving cryptocurrency businesses in a limbo as any further movement on their part might turn out to be adverse for their business.

What this would mean for Japan and for Bitcoin


Japan has already moved into the Top 4 countries list of cryptocurrency exhanged and bought by volume. The Japanese government has made the first move towards mainstream adoption of cryptocurrencies when they abolished the 8% sales tax on Bitcoin purchases. With this move, things look positive for Bitcoin proponents as the adoption has already paced up in Japan to  catalyze the growth of the cryptocurrency and set up a foundation for other countries to build their regulation on.

It’s Time to Adapt to Blockchain – New Concerns for Policy Makers

Examining the innovations that are occurring worldwide, it is clear that there are a few inescapable trends, and one of these is blockchain. For a while, it was merely seen as the technology that powered Bitcoin, but now it is being embraced by many top industries at once. And it’s not just the private sector that sees the value in blockchain – several governments are starting to think long-term and imagine what their country would look like with a digital currency. With these massive changes will come lots of new questions over how bitcoin purchase is going to be regulating in both the private and public sector.

Blockchain’s Shady Past

ÏMuch of the reason it was doubted blockchain would have any lasting effect on the world was because of its long-term association with criminals. The secrecy and decentralization of blockchain make it the perfect tool for laundering or dealing in illicit goods, and some bad press cemented this association into the minds of the public.

The blockchain is primarily based on the idea that by keeping a public record that is impossible to tamper with, the entire system becomes more reliable. It is decentralization taken to the absolute extreme, which is why techies harbor such strong beliefs about its potential.

It Begins With Financial Services

The first industry to see the potential blockchain technology had to change their business was the financial services industry. This was largely due to the buzzword status that Bitcoin reached after being invented in 2009. Many touted this as the payment system of the future and there are numerous stories about those who made their fortune investing in Bitcoin early on. For years, banks have offered centralized records of someone’s finances. The brand of the bank is what allowed to the customer to trust them not to lose their money.

The big point here is that all financial transactions are based on mistrust. Any sort of trade carries the risk that someone will dishonor the agreement and that it will be difficult to mediate the dispute. By having a clear registry of every trade for all to see, this can be easily avoided. Basically, any industry that could benefit from tamper-proof records is going to benefit from blockchain technology. This sort of trustworthiness is the effect that those creating policy will want to focus on.

There are two large benefits to transparency. First, it becomes easier to track the flow of money and prevent any illicit activity from occurring. But on a longer time horizon, transparency makes it possible to make better decisions regarding other policies. Think about the effects that databases must have had on the ability to create good policies, and blockchain should be able to bring about a similar change.

But There’s a Catch

With the decentralization of these systems, the argument is quickly becoming “how far is too far when it comes to decentralization?” As little as we can depend upon the banking system to be responsible, we can’t leave the next system completely unregulated either.

A recent National Post article reports on the findings of economists that if the proper policies aren’t put in place, all the savings from the advent of blockchain could just turn into more outsized earnings for banks. This is a legitimate worry with any technological advancement, but it does ignore the simple fact that value transfers work according to what people are willing to pay for a service. If banks find a way to decrease the settlement time and maintain trustworthiness, then the customer will have the choice to pay more for that or stick to the old system.

The real worry here is that a whole new form of antitrust violation will occur in which more established companies will be able to prevent new companies from participating in certain markets by keeping their private blockchain networks closed to competitors. The National Post article voiced this concern as well and it is a potential issue in the future that could echo past litigations with Microsoft and Google.

The Rest Will Follow

Now that blockchain is receiving all this attention, other industries have begun to see the light. With enterprise firms like Microsoft, IBM, JPMorgan Chase, Nasdaq and Visa all vying to make big investments in this area, it is clear that this is going to be a strong year for blockchain. As it expands into retail transactions, large-value transactions (like real estate) and private equity, the proper regulations need to be put in place to prevent any unwanted instability in large economies.

In the public sector, there is speculation that we could have a central bank-issued currency in this medium much sooner than 10 years. Countries like China, the UK, and Canada are all toying with the idea. The potential changes that could occur here are staggering. In the last financial crisis, the tools available to the Central Bank were limited, and it wasn’t always clear who was in possession of what derivatives.

The use of a central bank digital currency would solve both of these problems by taking back control of the financial system. Right now most of the policies that are executed are done so through the banking system. This creates a certain amount of lag and decreases the efficacy of the policies. Decentralization of the currency means that the government and banks both have equal access to customers, which would change the system forever.

The Future of Blockchain

The World Economic Forum estimates that over $1.3 billion has been invested in blockchain in the last few years, and this number is going to grow exponentially as more companies enter the fray. Policymakers are going to have to walk a fine line between enabling the advancement of this technology and putting smart regulations in place. If there are too many regulations, then private systems will see it as impossible to cooperate and work completely separately from the system. This would go against the goal of finding a way to make the entire economy more stable, prevent excessive rent-seeking from companies, and move the entire economy to a more secure system.

Russian Federal Tax document confirms ‘Bitcoin is Legal’, the boost for this year’s high?

2016 has showcased one clear trend in Bitcoin trading prices, bullish move at the start of every month. No matter whether the underlying reasons are fundamental or purely technical, this move has been observed at the start of every month in the later part of the year. For over 6 months Bitcoin has traded consistently over $500. But this year’s high (till date) was marked at the start of December and the reasons around it are pretty interesting. The Indian currency demonetization has been a steady factor to take the market out of choppiness. But we believe the final push came from Russian adoption of Bitcoin that has circulated quickly among market players. Let’s look into the details of how Bitcoin has fared in Russia:

The Love Hate relationship:


Russian Rubble’s trading against Bitcoin has seen prolific volumes in the past giving hope to better adoption in the country. Russia has struggled since the fall of the Soviet Union to build confidence in the ruble. This is majorly to curb the once-common practice of Russians demanding payment in U.S. dollars and other foreign currencies. The cryptocurrency supporters were happy in 2014 when Russia announced about regulating Bitcoin. But later the Finance Ministry went on to ban Bitcoin much to the disappointment of the supporters. Though they have not imposed the legislation strictly, the local Bitcoin market was significantly affected.

National Cryptocurrency and Blockchain Network:


Although Russia has stayed away from Bitcoin, it is considering the possibility of introducing a national regulated cryptocurrency. Though it would be a cryptocurrency, Russians are planning to make it a bit centralized as against bitcoin. A Russian regulated cryptocurrency should not be a non-emission currency but it will have its issuer with rights and responsibilities. Also, an anti-trust agency within the Russian government is testing a blockchain-based document management system. Named as “Digital Ecosystem” the project involves creating a completely digitalized document ecosystem. The project aims at developing tools that can increase the speed, reliability and quality of interaction during document exchange.

Legalizing Bitcoin:


A document by the federal tax authority in Russia has revealed its first official stance on the legal status of cryptocurrencies which turned out to be positive. A summary of the document was shared by Artem Tolkachev, director at Deloitte for legal services for technology and head of the Russian Blockchain Community. It outlines that bitcoin doesn’t necessarily fall under any jurisdiction. It is so often deemed a ‘money-surrogate’ by Russian officials calling for its ban. But there are no specific laws for surrogate money and predictably, a cryptocurrency hence tendering its status to legality. While this is being considered as a loophole, no mention of any cryptocurrency ban in the latest official document can certainly been taken as a positive indication.