Google Lets Slip That It's Exploring Possible Bitcoin Integration

Google Lets Slip That It's Exploring Possible Bitcoin Integration

Since Overstock.com began accepting Bitcoin payments earlier this month, the cryptocurrency community has been buzzing with speculation about which tech company will integrate Bitcoin next. So Jarar Malik decided to ask.

“After the whole Overstock thing, I said ‘f–k it,’” says Malik, a Bitcoin early adopter, online marketing manager and musician with a following in Pakistan. “‘Let me email the head guys at a bunch of tech companies and see what they say.’”

He started with Jeff Bezos and Tim Cook, asking if Apple Apple or Amazon had any plans for the cryptocurrency. No response. Then he tried the Google Google triumvirate Larry Page, Sergey Brin and Eric Schmidt.

When they also ignored him, he moved down a rung to Google’s Senior Vice President Vic Gundotra. And to his surprise, Gundotra wrote him back, forwarding Malik’s query to another Google staffer and starting a series of email exchanges that eventually led to one Googler telling Malik that the company is indeed pondering how it can make use of the world’s first form of decentralized digital cash.

“We are working in the payments team to figure out how to incorporate bitcoin into our plans,” wrote Google Senior VP of Ads and Commerce Sridhar Ramaswamy at one point in the email exchange that Malik forwarded to me. He promised to get back in touch “when we are a little more sure.”

When Malik posted Ramaswamy’s response to the Bitcoin forum on Reddit and immediately got an positive response from the site’s bitcoiners, Google Wallet exec Ariel Bardin followed up by asking Malik to serve as a moderator on a Google survey posing the question “What would I want to do with Bitcoin?”

I reached out to Google, and the company responded in a very different tone, but didn’t deny that the comments Malik posted to Reddit were real. “As we continue to work on Google Wallet, we’re grateful for a very wide range of suggestions,” a spokesperson writes. ”While we’re keen to actively engage with Wallet users to help inform and shape the product, there’s no change to our position: we have no current plans regarding Bitcoin.”

Malik isn’t deterred. “They’re not dismissing it,” he says. “Maybe this will force their hand.”

Although it hasn’t adopted Bitcoin into any of its products, Google has been more Bitcoin-friendly than most other major tech firms. While Apple hasn’t allowed a single Bitcoin client into its iOS app store, dozens of Bitcoin wallets are available for Android. And in 2011, Eric Schmidt said at the Mobile World Congress that the company’s co-founders once considered introducing a Bitcoin-like virtual currency called Google Bucks, which he discouraged for regulatory reasons.

But some sort of Bitcoin integration could offer a boost to Google in its digital payments competition with Paypal. And Overstock.com illlustrated the buzz that Bitcoin adoption can generate earlier this month when it received $130,000 worth of Bitcoin sales in its first day accepting the currency, mostly from new customers.

Redditors certainly seemed wild about the idea. “I would love for google to make it possible to pay with bitcoin on most shops I come across,” wrote a user named Sturmhardt. “This is HUGE guys. I’ll move over to Google+ if this turns out to be true… ;-)” wrote a user named maxilllian.

As for Malik himself, he’s holding out hope that Google will make Bitcoin as ubiquitous and easy to use as Gmail. “Google is integrated in every part of our lives,” he says. “I’d like to see them let us send payments back and forth the same way we use email…to incorporate Bitcoin into our daily DNA.”

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Quark (QRK) - Crypto Currency

Quark is a crypto-currency that allows online coin transactions. Quark uses nine rounds of secure hashing from six different algorithms to encode Quark transactions securely.

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* CPU mining
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* 2048 QRK per block (halving every 60480 blocks ~ 3 weeks)
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* Difficulty retargets every 20 blocks (maximum 10% up or 50% down)
Download the Wallet

Windows

MacOSX

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Regulators See Value in Bitcoin, and Investors Hasten to Agree

Jennifer Shasky Calvery, left, with Mythili Raman and Edward Lowery on Monday at a hearing in Washington

The virtual currency bitcoin took a big step toward the mainstream on Monday as federal authorities signaled their willingness to accept it as a legitimate payment alternative.

A number of federal officials told a Senate hearing that such financial networks offered real benefits for the financial system even as they acknowledged that new forms of digital money had provided avenues for money laundering and illegal activity.

“There are plenty of opportunities for digital currencies to operate within existing laws and regulations,” said Edward Lowery, a special agent with the Secret Service, which is tasked with protecting the integrity of the dollar.

Signs that the government would not stand in the way of bitcoin’s development, even as it has been cracking down on criminal networks that use the digital money, stoked a strong rally in the price of the crypto-currency.

By Monday evening, the value of a bitcoin unit soared past $700 on some exchanges. The total outstanding pool of bitcoin — which is created by a network of users who solve complex mathematical problems — is now worth more than $7 billion.

The Senate hearing Monday afternoon was the clearest indication yet of the government’s desire to grapple with the consequences of this growth, and the recognition that bitcoin and other similar networks could become more lasting and significant parts of the financial landscape.

“The decision to bring virtual currency within the scope of our regulatory framework should be viewed by those who respect and obey the basic rule of law as a positive development for this sector,” said Jennifer Shasky Calvery, the director of the Treasury Department’s Financial Crimes Enforcement Network. “It recognizes the innovation virtual currencies provide, and the benefits they might offer.”

Ms. Shasky Calvery and the other officials at the hearing did say that basic questions still had to be answered about virtual currencies, including whether they can actually be considered currencies or whether they are more properly categorized as commodities or securities. The distinction will determine which agencies regulate the networks and how they are treated under tax law.

Ms. Shasky Calvery said that the Internal Revenue Service was “actively working” on its own rules for bitcoin.

The hearing followed other less visible steps taken by regulators and lawmakers to bring digital money into the mainstream.

New York State’s top financial regulator, Benjamin M. Lawsky, said last week that he would hold a hearing to consider the creation of a BitLicense to provide more oversight for transactions. Earlier, the Federal Election Commission put out an advisory indicating that bitcoin could be legally accepted as political donations.

The general counsel of the Bitcoin Foundation, a nonprofit advocating the currency, said in his testimony on Monday that he was receiving a much more friendly response from both government and the financial industry.

“We have recently perceived a marked improvement in the tone and tenor taken by both state officials and bank executives,” the general counsel, Patrick Murck, said.

Bitcoin has experienced a remarkable ascent since it was created in 2009 by an anonymous programmer or collective known as Satoshi Nakamoto. The money, which is not tied to any national currency, has been popular with technophiles who are skeptical of the world’s central banks. Only a finite amount of bitcoin will ever be created — 21 million units. Users have bid up the price on Internet exchanges, betting that the currency will be more widely used in the future.

There are significant questions about the wisdom of the digital money as an investment, given that bitcoin has no intrinsic value and has proved to be vulnerable to hackers. Many money managers have recommended that unsophisticated investors stay away.

Recently, though, bitcoin has been catching fire around the world, with exchanges in China particularly active. A growing number of prominent American investors have also bought stakes, including Michael Novogratz, a principal at the private equity and hedge fund giant Fortress Investment Group, as well as the Winklevoss twins, Cameron and Tyler.

The increasingly widespread ownership of bitcoin has shifted attention away from the criminal enterprises that have used digital money, but it was a focus at the Senate hearing.

Last month, the online marketplace Silk Road, where bitcoin was the primary form of payment, was shut down and its founder arrested after authorities accused it of being used to buy and sell drugs, weapons and pornography. The chairman of the Senate committee, Thomas R. Carper, Democrat of Delaware, said that a few days after the arrest, a similar site sprang up.

It can be harder to track criminals who use bitcoin, law enforcement officials said at the hearing, because they operate across international borders and often do not use established financial institutions that report transactions.

But Mythili Raman, an assistant attorney general at the Justice Department, also said that because every bitcoin transaction was recorded on a public ledger, it was possible for investigators to trace the movement of money between accounts.

“It is not in fact anonymous. It is not immune from investigation,” Ms. Raman said.

All the officials at the hearing said that crime had been an issue during the early days of credit cards and online payment systems like PayPal, and should not be a reason to limit innovation.

“It is our duty as law enforcement to stay vigilant while recognizing that there are many legitimate users of those services,” Ms. Raman said.

The bitcoin supporters who testified at the hearing said bitcoin could bring major changes to the financial system by cutting out the middle men needed to move money around the world.

“I am here to testify because I believe that global digital currency represents one of the most important technical and economic innovations of our time,” said Jeremy Allaire, the chief executive of Circle Internet Financial, which is seeking to promote more widespread use of the currency.

Given bitcoin’s appeal to skeptics of government, many aficionados have been wary of involvement by Washington. But advocates at the hearing said that the increasing cooperation with regulators could lay the groundwork for further growth.

“As this technology moves from early adopters into mainstream acceptance, it is critical in my view that federal and state governments establish policies surrounding digital currency,” Mr. Allaire said.

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The Two Bitcoin Conferences of 2013

After the first two successful Bitcoin conferences that took place in Prague in 2011 and London in 2012, it has been announced that there will in fact be two Bitcoin conferences taking place in 2013. The first, entitled “The Future of Payments”, will take place in San Jose, California on May 17-19, and the second, named “unSYSTEM”, will happen in Vienna on 1-3 November.

The two conferences will be in a similar format to those run in 2011 and 2012; they will both take up a weekend, feature a number of speakers making presentations on topics either related to Bitcoin or of interest to the Bitcoin community, as well as offer opportunities for speakers and attendees to interact; for the curious, schedules for the previous two conferences can be found here and here, and videos of individual presentations are also available from 2011 and 2012.

The 2012 conference, organized largely by Bitcoin activist Amir Taaki, saw a significant shift in the range of topics discussed from that in 2011, featuring many speakers who were outside of the Bitcoin community entirely; free software advocate Richard Stallman, the pro-free speech Icelandic Modern Media Initiative’s Brigitta Jonsdottir, the free culture activist Jaromil and the leader of the 3D gun printing project Defense Distributed, Cody Wilson, were all among the speakers. A considerable number of Bitcoin developers and Bitcoin business owners, as well as others in the payments industry, but political activism was nevertheless a dominant message.

This time, the two conferences have radically different themes. For the 2013 conference in San Jose, the Bitcoin Foundation is pushing back in the direction of a conference organized around Bitcoin specifically and the more pragmatic issues that Bitcoin is trying to solve; the four main topics listed on the website are Bitcoin technology, Bitcoin mining, Bitcoin business and regulatory issues. Unfortunately, no list of speakers is yet given; the Bitcoin Foundation is still in the process of finding people to speak.

The unSYSTEM conference in Vienna, on the other hand, is pushing even further in the direction of activism. Of the sixteen speakers now listed on the site, only three are notable purely because of their work around Bitcoin, and the majority have nothing to do with the currency. Among these are Mitch Altman, inventor of the “TV-B-Gone” universal remote, free culture activist Nina Paley, democratic education pioneer Luis Henrique Fagundes and the Russian activist group Voina (“War”).

Richard Stallman, Brigitta Jonsdottir, Cody Wilson, Jaromil and Max Keiser, who were all present at the London Bitcoin conference in 2012, are back, as well as Amir Taaki, who is organizing the unSYSTEM conference as well. Amir Taaki is known for his work on Bitcoin development, but has also participated in more direct forms of political activism, including a recent high-profile event in which he and a number of other activists squatted an exclusive property in central London. Also from the Bitcoin community Joerg Platzer, owner of Room77, the first restaurant to accept Bitcoin in Berlin, and now the leader of a project to get a large number of restaurants in Berlin to accept Bitcoin, will be attending.

A particularly notable upcoming speaker is the Silk Road, a black market offering thousands of illegal drugs using Tor and Bitcoin for anonymity. The idea of an illegal organization speaking at an above-ground conference seems counter-intuitive, but it can be done.

The Earth Liberation Front, an eco-terrorist group, has an above-ground “press office” which is simply a media organization that reports on the ELF’s activities. The Silk Road may similarly have a liaison, or perhaps they may choose to speak by videoconference; Taaki writes that Dread Pirate Roberts confirmed Silk Road’s attendance, but details have not yet been decided.

On the whole, the split into two conferences is arguably a positive one for Bitcoin. There are many in the Bitcoin community who are intent on pursuing the success that Bitcoin reached at the end of 2012 with WordPress accepting Bitcoin and Bitcoin Central working with a licensed payment services provider in France, and attempting to get Bitcoin noticed, and accepted, by even more prominent individuals and organizations in the world of finance and payments.

To many of them, associating Bitcoin with political radicalism, particularly the sort promoted by Cody Wilson and especially the Silk Road, serves only to marginalize the currency. Others, however, are political activists first and Bitcoin users second, and want to see more of what we saw in London in 2012. Almost certainly no one will agree with the entirety of what is spoken at the conference; opinion on controversial issues like guns and economic regulation vary widely even within the sort of community that unSYSTEM is seeking to attract, and some issues may even see both sides presented outright. However, as a meeting of minds the conference will be an event from which all sides can benefit by participating.

Practical information on attending both conferences has been posted, for the San Jose conference here and the unSYSTEM conference here. Both conferences are expecting a larger number of attendees than either of the conferences that took place in 2011 and 2012, and meeting the faces behind the most popular projects and services in the Bitcoin community has always been a key attraction of these events. Everyone is encouraged to attend, and those who have something that they want to present should contact the Bitcoin foundation here or unSYSTEM at their email address. Hopefully, these two conferences will be the greatest Bitcoin conferences yet!

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