Kameir

I am in the process of fact-checking the ‘IMF Staff Discussion Note on Virtual Currencies‘. Only 14 pages into it there are already strange and pretty obvious factual shortcomings. So far, the most blatant one is that the International Monetary Fund characterizes the ‘Cost of Production’ for bitcoin (lowercase for the “currency”!) as high while assigning the value ‘low’ to the US Dollar’s production cost. Needless to say, this is an oversimplification but also hints at the fact that the researchers did not actually get into the math of the matter which would seem like an important fact when dealing with “money”.

Current bitcoin production cost can be calculated here. As everybody familiar with the matter knows: Bitcoins are being ‘mined’ by individuals for a profit – so there’s an actual marketplace for it. And, these miners also mine transactions – actually mostly, by now.

Below are the production costs for US Dollar bills and coins as provided by the “Federal Reserve Bank“. Of course these numbers do not account for driving these things around town in armored cars or the fact the JPMorgan alone employs 250,000 people (I assume they all use computers – not sure though). It should be easy to see that not a single miner would ever consider turning on his rig for such a poultry outcome.

The Commission Nationale de l’Informatique et des Libertés, France’s data protection authority,  rejected Google’s appeal against a French order to apply the right to be forgotten to all of its global Internet services and domains. According to the CNIL’s president also “this decision does not show any willingness on the part of the CNIL to apply French law extraterritorially. It simply requests full observance of European legislation by non European players offering their services in Europe.”

Google’s representatvies of course disagrees with CNIL’s stance. In a blog post regarding the case, the Google’s privacy chief, Peter Fleischer, wrote: “If the CNIL’s proposed approach were to be embraced as the standard for Internet regulation, we would find ourselves in a race to the bottom. In the end, the Internet would only be as free as the world’s least free place. We believe that no one country should have the authority to control what content someone in a second country can access.”
As far as CNIL is concerned, Google must now comply with its order. “Otherwise, the President of the CNIL may designate a Rapporteur who may refer to the CNIL’s sanctions committee with a view of obtaining a ruling on this matter.” Those sanctions could be severe. According to The Guardian: “CNIL will likely begin to apply sanctions including the possibility of a fine in the region of €300,000 against Google, should the company refuse to comply with the order. Under incoming French regulation the fine could increase to between 2% and 5% of global operating costs.” For 2014, Google’s total operating costs were just under $50 billion, so potentially the fine could be from $1 billion to $2.5 billion.

If Google is fined by CNIL in this way, it can then make a formal appeal to the French supreme court for administrative justice and argue its case in detail. Since important issues are at stake for both the company and the Internet itself, and the French government is unlikely to back down in its threat to impose fines, it seems very likely that Google will end up taking this route.

The first iPhone was not created by Apple released in 1998 by InfoGear Technology Corporation. In 1997, prior to the release of iPhone, Infogear entered into a partnership with Cidco of Morgan Hill, California.

The iPhone was an innovative internet appliance that featured a sliding keyboard and an LCD touchscreen that accessed an embedded web browser and an email client. It was one of the first wave of internet appliances.

On December 18, 2006, Cisco Systems re-branded an existing line of Linksys Voice over IP internet phones, as it introduced some additional models.

Linksys was acquired by Cisco in June 2003, long after the production of Infogear iPhone had ceased. Unlike its name-sake predecessor, the new iPhone devices use an existing network and proprietary protocols, such as Skype. Rebranding did not involve any feature changes or introduction of new proprietary technology.

InfoGear also developed a touch-screen tablet with stylus which they called iPad (it was never manufactured though).

As could be expected (see post from March 23rd, 2013)  a ‘guidance’ issued by the Financial Crimes Enforcement Network (FinCEN) in 2015 was used as pretense to fine a cryptocurrency project. Unwilling participant Ripple Labs and its subsidiary XRP II was fined $700,000  for “willful violations” of the Bank Secrecy Act (BSA). According to FinCEN’s press release, Ripple failed to register as a money services business (MSB) with FinCEN before selling XRP for fiat currency. XRP is a virtual currency (a term invented and (newly) defined by FinCEN!) which used to settle payments on the Ripple blockchain. Additionally, the Ripple was accused of having failed to implement appropriate anti-money laundering (AML) procedures concurrent with its responsibilities as an MSB.

Notably, the settlement agreement between Ripple Labs, its subsidiary and FinCEN took place at the same time as a settlement between the companies and the US Attorney’s Office in the Northern District of California. The Internal Revenue Service’s Criminal Investigation Division also contributed to the investigation. Ripple and XRP II agreed to pay $450,000 and settle “possible criminal charges” in connection with that investigation, with those funds being credited to the fine imposed by FinCEN.

Take-away for the sale of virtual currencies is to not accept fiat in exchange for a virtual currency unless the company has a money transmitter license. — However, reading FinCEN’s Guidance Paper on the subject of “Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies” it can be expected that any issuer of a virtual currency is to be considered a Money Services Business.

CA MBS: The Money Transmitter Division of DBO licenses and regulates money transmitters, which includes issuers of payment instruments (money orders), travelers checks and stored value.

ALSO READ: STATEMENT OF FACTS AND VIOLATIONS.

MSB Checklist

Some of the mining rewards for a new blockchain – more like a “smart-contract platform” actually – called Ethereum, are on sale at the moment. It was announced back in January at the North American Bitcoin Conference (pic below), but launched with some delays (of course). Might be a good idea to spend one or two bitcoins (about $621) on that. One BTC will get you 1,000 ether – so about $0.62/token. Although, you get 50% off at the moment. 5 BTC = 10,016 ETH