Daily Archives: June 26, 2017

In Mississippi, a Bill to Protect Religious Liberty Gets the Green Light – National Review

Posted: June 26, 2017 at 4:56 pm

In a victory for religious citizens in Mississippi and in a promising sign for all religious Americans the Fifth Circuit Court of Appeals ruled last Thursday in favor of a bill that protects religious-liberty and conscience rights in the realm of marriage.

The bill, the First Amendment Defense Act (FADA), allows religious organizations and businesses to operate in accord with their religions teaching on marriage and sexuality, forbids the government from silencing or firing its employees for expressing their religious beliefs, and protects employees from being forced to participate in activities that violate their consciences.

The courts ruling is also a positive sign for those hoping to enact such protections at the federal level. A federal version of FADA has been introduced in both the House and the Senate, and President Donald Trump has pledged to sign it if it crosses his desk.

The ruling means that Mississippis legislation can serve as a template for any state seeking to balance two interests: the conscience rights of those who believe that marriage is a union between one man and one woman, and the intrinsic dignity and civil rights of LGBT individuals.

The conflict between those two interests has intensified in the last two years, in the wake of the Supreme Courts decision in Obergefell v. Hodges, which saw five justices redefine marriage, for the entire country, as a union between two consenting adults regardless of gender. As a result, many Americans, religious and otherwise, who continue to hold the traditional definition of marriage have been marginalized and, in some cases, required by law to sanction same-sex marriages.

For example, in a number of recent, high-profile cases, religious business owners have been sued by customers or fined by state commissions for refusing to provide services for same-sex wedding ceremonies. So far, courts have uniformly sided against the owners, ruling that to deny service to any homosexual person is unlawful discrimination, regardless of religious belief.

Faithful Americans such as these business owners are routinely maligned by left-wing activists and politicians not to mention popular culture, as in this late-night comedy sketch that portrays religious-freedom laws as an expression of hatred many of whom argue that Christian are bigots who deny the humanity of LGBT people.

Such critiques either misunderstand or outright ignore the essential distinction between serving gay or lesbian clients and providing services for their wedding. For religious Americans, this is a crucial distinction, because the latter involves participation in an event that violates their faiths understanding of marriage.

Contrary to what most media reports suggest, the Mississippi bill would not permit anyone to deny service to individuals because of their sexual orientation. In fact, not a single religious-liberty bill has been proposed to allow such discrimination, at either the state or the federal level. To suggest otherwise is supremely dishonest, and it poisons any possibility of finding a reasonable compromise on this issue.

Whats more, bills such as FADA must be understood in the context of our post-Obergefell society, where people who hold the traditional view of marriage are often treated by popular culture as if they were no better than racists. In such a climate, it is essential that religious citizens be given legal protection, especially since the government itself has embraced a conception of marriage in contradiction to the view of a substantial plurality of the public.

The Fifth Circuits legal rationale in upholding FADA provides a helpful context for understanding the best way to balance the two sets of rights at stake in this debate. The court noted, in particular, the plaintiffs lack of standing, due to their failure to assert anything more than a general stigmatic injury or to demonstrate injury-in-fact.

With this explanation, the court seems to point to the fundamental distinction between material and dignitary harms, the first of which merits a higher level of legal protection. Dignitary harm is considered a lesser category: It can sometimes be permitted by law, for the sake of preserving other fundamental rights.

Applied to FADA, the plaintiffs failure to demonstrate injury-in-fact and instead simply stigmatic injury suggests that the right to religious freedom is fundamental enough that states can permit some dignitary harms for the sake of preserving the right. If FADA were to permit religious Americans to perpetrate material harms against LGBT individuals the court argued that the bill does not the ruling would probably have been different.

Regardless of ongoing contention over the definition of marriage, most Americans agree that we ought to be able to coexist peacefully even when we deeply disagree, and this bill works to that end. Progressives must be willing to admit that Mississippis FADA isnt a weapon of discrimination wielded by bigots against LGBT individuals. One can disagree with the bills specific policies and still acknowledge that some legal protection is needed for a minority group whose beliefs have fallen out of favor.

At the same time, those on the right who care about the future of religious freedom must continue to testify to the inherent dignity of LGBT individuals, regardless of ones view of marriage. That will enable more people to understand that religious Americans can fully respect their neighbor even as they are free to live out the tenets of their faith in daily life. Such an understanding, coupled with prudent legal defenses such as Mississippis FADA, is the best path forward for true compromise on this issue.

READ MORE: Obergefells Toxic Judicial Legacy Are Millennials Following the Success Sequence Hey Guys, Put a Ring on It: Married Men Are Healthier, Wealthier, and Happier

Alexandra DeSanctis is a William F. Buckley Fellow in Political Journalism at the National Review Institute.

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A Colorado ‘cake artist’ bakes up a big First Amendment case for Supreme Court – Charlotte Observer

Posted: at 4:56 pm


Washington Times
A Colorado 'cake artist' bakes up a big First Amendment case for Supreme Court
Charlotte Observer
With rookie Justice Neil Gorsuch on board, the high court said Monday that it would consider the highly anticipated First Amendment case in the term that starts in October. The dispute arises from Gorsuch's home state, and will provide an early test ...
Supreme Court to hear case of baker's refusal to make wedding cake for gay coupleFox News
Supreme Court to Hear Anti-LGBT Bakery CaseEater
Supreme Court To Hear Case Of Wedding-Cake Baker Who Refused To Serve A Gay CoupleRefinery29
ABA Journal -The Week Magazine -USA TODAY -SCOTUSblog
all 166 news articles »

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FAQ | Jitsi | Prometheism.net – euvolution.com

Posted: at 4:55 pm

Featured questions (hide)

How do I get the latest Jitsi source code?

You could either clone the Git repository from GitHub (see Retrieving and Building the Sources for details) or use one of the nightly source snapshots (check the Download page).

Ive discovered a bug, what can I do?

Please, report it to the developers! Take a look at the Reporting bugs guidelines page describing the steps to report bugs effectively.

Where is the user profile directory?

Jitsis user profile directory is where Jitsi keeps its configuration, logs, etc. Its location depends on the operating system.

Where do I find the log files?

The easiest way to get hold of the log files is to save them to a location of your choice using Jitsis GUI. You can do so by clicking on ToolsOptions (JitsiPreferences on OS X), then selecting the Advanced tab and opening the Logging form. Youll see the Archive Logs button in there.

Check out the screenshot for an even better description.

Important Note: When asked for logs, please make sure that you provide the full set of logs, or better yet, the zip that Jitsi generates when following the above instructions. Please do not send separate files or file snippets as those are likely to be insufficient. If you need to provide the logs for a GitHub issue, send them to Dev Mailing List and link to the thread in the archive or create a Gist and link to it. Please DO NOT paste the log as a comment.

Otherwise, if you really want to know, the log files are located in:

Where is the configuration file?

Jitsis main configuration file is called sip-communicator.properties and is in the user profile directory.

How do you spell Jitsi and what does it mean?

The correct spelling of the application name is Jitsi (jitsi also works). The origin of the name is Bulgarian (spelled ). It means wires and the point is that the application allow you to connect to many network and people just as wires do. Of course no one other than Bulgarians is supposed to know what this means and we picked the name mainly because it was short and sounded good.

Id like to see a new feature in Jitsi, can you do that for me?

Yes, developers take feature requests into account. Send an email to the development list with a detailed description of the requested feature. After we examine its feasibility and decide whether it can be included in the Jitsi distributions you would likely be asked to open a ticket in our issue tracker. It is worth mentioning though, that handling feature requests is highly dependent of the developers availability and there is no guarantee that all requests will be satisfied.

How do I subscribe to mailing lists?

Please visit the Mailing Lists page to learn more about Jitsis mailing lists.

How do I contact the project developers?

You can ask questions concerning usage of the Jitsi on the dev mailing list (Note that the mailing lists are moderated, so, unless you subscribe to them, there may be a delay before your post shows up). For all urgent queries you could also use IRC at irc.freenode.net, channel #jitsi.

How do I send a patch?

Mail patches to the dev mailing list, with a subject line that contains the word PATCH in all uppercase, for example

A patch submission should contain one logical change; please dont mix N unrelated changes in one submission, send N separate emails instead.

The patch itself should be generated from within the project root directory using unified diff format. The following example shows one way to generate it:

You should give your patch files meaningful names. For instance if you fix a socket bug in the foo class do not call your patch file patchfile.txt but instead call it foo-socket.patch.

If the patch implements a new feature, make sure to describe the feature completely in your mail; if the patch fixes a bug, describe the bug in detail and give a reproduction recipe. An exception to these guidelines is when the patch addresses a specific issue in the issues database in that case, just make sure to refer to the issue number in your log message.

Note that unless you are describing a change rather than posting one, we would probably need you to sign our contributor agreement as either an individual or a corporation

I would like to update this wiki what can I do?

Currently, only project developers are permitted to update the wiki. Please send your suggested changes to the dev mailing list.

A wiki page can be updated by appending the string ?action=edit to the current url and refreshing the page. The page will then be displayed with an extra menu line that includes a Page Edit item.

If you click on the Page Edit item, you will be redirected to a logon page. Enter your developer username and password and you should be redirected back to the original page. Click on Page Edit again to access the source content of the page (a quick reference to wiki markup syntax is also displayed).

How do I reset my XMPP or jit.si password?

You can reset your jit.si password from within Jitsi. You can do the same for any XMPP account that allows it.

In the case of jit.si, you can also change your password via the web

Why cant I connect to ekiga.net?

NB: the problems described in this section also apply to other providers such as 1und1.de

Short Answer: The ekiga.net SIP servers are configured in a way that prevent Jitsi (and many other SIP user agents for that matter) to register with the service. Please use iptel.org or ippi.com instead.

Slightly Longer Answer: The service at ekiga.net is configured to only accept SIP REGISTER requests that contain a public IP address in their Contact header. This means that registration from Jitsi would fail unless you actually have a public IP address. The Ekiga client circumvents this by using STUN to learn the address and port that have been allocated for the current session. It then uses the pair in the SIP Contact header. This kind of use was common for the first version of the STUN protocol defined in RFC 3489 which was sometimes referred to as classic STUN.

The IETF has since significantly reviewed the way STUN should be used. The new version of the protocol is now defined in RFC 5389 which, among other things, advises against the use of STUN as a standalone NAT traversal utility:

Today STUN represents one of the tools used by complete traversal mechanisms such as SIP OUTBOUND (RFC 5626) or ICE (RFC 5245). Neither of these includes sending a STUN obtained address in a Contact header.

So, where does Jitsi currently stand on all this? At the time of writing, we support the ICE protocol but only use it with XMPP. Use with SIP is likely to come in the near future. The reason we havent implemented it yet is that most SIP servers currently open to use over the Internet, use a technique called latching. When such servers detect you are connecting from behind a NAT, they would start acting as a relay, receiving media from your peers and then forwarding it to you (and vice versa). While this is by far the most reliably way of traversing NATs, it does indeed imply some scalability constraints.

ICE on the other hand would only fall back to relaying if no other way was found to connect the two participants. This is why it is considered as a more optimal solution and why its also on our roadmap.

Note however that the constraints on ekiga.net would continue preventing Jitsi from connecting even when we do implement support for ICE.

Why do I see ICE failed errors when trying to make calls.

Jitsi implements a number of NAT traversal methods as described here. In many situations we will be able to setup a call directly between you and other users but in order to be able to reliably establish calls, your XMPP or SIP provider has to provide relaying capabilities such as TURN, Jingle Nodes or . If looking for services that support these you can try jit.si or ippi. Also note that both you and your partner need to have unhindered outgoing UDP access to the Internet or at least to your VoIP service provider. You DO NOT however need to map any port numbers on your home router. At best this is going to have no effect.

Does Jitsi support STUN? (and how about TURN, UPnP and Jingle Nodes?)

STUN, together with TURN, Jingle Nodes, IPv6 and UPnP, is one of the techniques that Jitsi uses as part of the Interactive Connectivity Establishment (ICE) protocol to handle NAT traversal for calls made over XMPP.

For its SIP calls, Jitsi currently relies on servers to relay media (a technique also known as Hosted NAT Traversal or latching, which would be the case of the majority of the SIP servers used on the Internet today. Note that in terms of reliability Hosted NAT Traversal gives the same results as use of ICE. It even works better in some ways because the connection is setup immediately and no time is waisted for gathering candidates and making connectivity checks. The only downside of HNT is that it may put a strain on SIP providers requiring more bandwidth. This could become a problem especially in environments with a high number of all IP high quality video calls.

It is likely that ICE support for SIP calls would also be added to Jitsi in 2014 especially since this would also help with WebRTC compatibility.

Standalone support for STUN is NOT going to be part of Jitsi. Check out the ekiga entry for more information on the shortcomings of STUN as a standalone NAT traversal utility.

I have a few questions regarding ZRTP, SRTP and VoIP security in general. Where can I find some answers?

Check out our ZRTP FAQ.

Why does my call stay in the Initiating Call status and I can never connect?

A common reason for providers not to respond to calls is that they simply dont get the INVITE request Jitsi sends to them. This can happen if you are using UDP. The Jitsi INVITE requests may often exceed the maximum allowed packet size (MTU) for your network or that of your server. In such cases packets may be fragmented by your IP stack and fragmentation for UDP does not always work well in certain networks. This is what happens when a client supports multiple features ;). To resolve the issue you can do one of the following:

How does on-line provisioning work?

On-line provisioning is the feature that allows Jitsi to connect to an http URI every time it starts and retrieve part or all of its configuration there. On-line provisioning is often used by providers to remotely configure the clients they maintain. It can be used to set any property in Jitsi such as the codecs used, the features that users can manually configure and even protocol accounts.

When requesting its provisioning information Jitsi can transmit any of a number of parameters to the server, like for example: the OS it is running on, user credentials, a unique ID and others. This way the provisioning server can fine-tune the parameters it sends to Jitsi.

For more information, please check our on-line provisioning manual

Are my chat sessions protected and if so, how?

Jitsi supports the OTR encryption protocol. OTR stands for Off-the-Record Messaging and once youve set it up (i.e. clicked on that padlock icon in a chat window and verified the identity of your contact) it allows you to make sure that no one other than you two can read your messages, not even your service provider. You can find more on the OTR mechanisms here:

http://en.wikipedia.org/wiki/Off-the-Record_Messaging

Should logging be disabled by default when using OTR?

By default Jitsi stores all chats so that if you need any information from them it would always be available. If you would like to disable this behavior you can currently do so by opening Jitsis Options/Preferences, selecting the General pane and then unchecking the Log chat history option near the top. It is also possible to disable chats for specific contacts, to erase their history. An indicator in the chat window makes it aware at all times whether history is on or off while chatting with someone.

OTR protected chats follow the same pattern and some users have expressed concerns that this might be incompatible with their security expectations. Our position on this is that Jitsis role is to protect your communication. We also strive to offer usability. The current defaults represent these objectives: most people would prefer for their private communication not to be readable by third parties and most of the time people use Jitsi from personal devices where they are in control of the access policy.

In some cases users may wish for their communications not to be stored locally. This can be the case when using Jitsi on devices that others may also have access to. In such cases users need to be able to easily see whether history is being logged. They would also need to easily turn this off and potentially even erase previous history.

Note however that this subject is entirely different from the encryption one. They are separate measures meant to protect you against separate attacks or problems. We dont believe that the need for one would necessarily imply the need for the other. We are hence committed to also keeping that separation in the user interface.

Force SIP Message support.

Some SIP servers (Asterisk in particular) do not announce the MESSAGE support, despite supporting it. If you enable the account property FORCE_MESSAGING, Jitsi will attempt to use MESSAGE for chats, despite your configured SIP server not explicitly announcing this support to connected clients. For example, if your SIP account is john.smith@example.com, go to property editor type that in the search field and look for something like

net.java.sip.communicator.impl.protocol.sip.acc0123456789.ACCOUNT_UID with the value SIP:john.smith@example.com

The property to add in that case would be:

net.java.sip.communicator.impl.protocol.sip.acc0123456789.FORCE_MESSAGING with the value true.

How to add/edit configuration properties.

You can do so by clicking on ToolsOptions (JitsiPreferences on OS X), then selecting the Advanced tab and opening the Property Editor form. There you can search edit/delete or create new properties.

Is there an an Android version of Jitsi?

Yes, but it is still in an early alpha stage and further development has been put on hold until further notice. A lot of the user interface is not yet implemented. You can find the apk on the Download page.

Is there an iPhone/iPad version of Jitsi?

No. Due to the restrictions imposed by the platform it is highly unlikely this answer is going to change.

The cc-buildloop target of ant fails with the following error message: Could not create task or type of type: junitreport.

On some Linux distributions such as Debian, the ant package is actualy subdivided into multiple packages. So when you chose to install junit and ant with the distribution specific package system, dont forget to install ant-optional too.

The cc-buildloop target of ant fails with the following error message: No test with id=IcqProtocolProviderSlick.

Have you created your own accounts.properties file in the lib directory? Youll need to define two ICQ test accounts at least, and preferably some test accounts for the other supported protocols.

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Ethereum is crashing by 20% right now after confidence in bitcoin rival shaken – CNBC

Posted: at 4:52 pm

Bitcoin rival ethereum plunged Monday despite a major exchange's efforts to shore up confidence by announcing a credit for customers who lost money during last week's flash crash.

Ethereum, also known as ether, traded 20.9 percent lower at $239.63 Monday afternoon, according to CoinDesk.

Last Wednesday, ethereum briefly plunged in a flash crash from above $300 to 10 cents on Coinbase's GDAX exchange. On Friday, the exchange said it would credit customers who "experienced a margin call or stop loss order" on GDAX during the flash crash.

GDAX reported Monday afternoon, ET, a temporary halt in trading for all products, which was resolved within an hour.

Ethereum one-day performance

Source: TradingView, Coinbase

Ethereum is still up about 2 percent for June, and 2,500 percent for the year, according to CoinDesk data. At its peak, ethereum had surged more than 4,000 percent for the year.

An unsubstantiated rumor Sunday that ethereum's founder Vitalik Buterin had died also reportedly hit ethereum's price for a brief period. Ethereum fell from around $329 to a low of $284 Sunday before recovering, according to CoinDesk. Buterin tweeted a picture of himself Sunday evening, ET, to dispel the rumor.

William Mougayar, author of "The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology," said he did not believe the rumor was the main factor behind ethereum's decline.

"We need to see a full 24 hour cycle in order to fully assess what is actually happening," he said in an email to CNBC. "These cryptocurrencies are traded globally, especially with a large amount of activity coming from China, so I'm waiting to see what happens around 6PM EST this evening."

Digital currency investors also pointed to the reversal of last week's exuberance stemming from the launch of several ethereum-based projects, which ended up clogging the network. The inability of ethereum to handle the orders raised worries that digital currency may soon face a debate over an upgrade model, similar to a heated controversy over bitcoin's future that has weighed on that currency.

Two different methods for upgrading bitcoin, SegWit2x and BIP148, are set to go into effect July 21 and Aug. 1, respectively. Initially the systems were incompatible, threatening to split bitcoin in two and likely reducing its value. However, a developer announced earlier this month a way to make the two methods compatible, helping bitcoin recover from lows of the month.

Bitcoin traded nearly 5 percent lower Monday around $2,452, still up about 5 percent for the month and 153 percent higher for the year, according to CoinDesk.

In a blog post Monday, digital currency investor and Union Square Ventures partner Fred Wilson said the decline in ethereum was profit-taking after a massive run higher in the last six months.

"My gut says we are headed for a selloff in the crypto sector," he said in the post. But he said he remains optimistic about the future of cryptocurrencies over the next five to 10 years.

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Barclays spoke to regulators about bringing bitcoin ‘into play’ – CNBC

Posted: at 4:52 pm

Barclays has been in discussions with regulators and financial technology or fintech firms about bringing cryptocurrencies like bitcoin "into play", the bank's U.K. chief executive told CNBC on Monday.

Ashok Vaswani revealed that the banking giant has met with Britain's Financial Conduct Authority (FCA) watchdog to talk about how to make bitcoin safe in response to a question about whether Barclays could support bitcoin.

"We have been talking to a couple of fintechs and have actually gone with the fintechs to the FCA to talk about how we could bring, the equivalent of bitcoin, not necessarily bitcoin, but cryptocurrencies into play," Vaswani told CNBC at the Money 20/20 fintech conference in Copenhagen, Denmark.

"Obviously (it's) a new area, obviously an area we've got to be careful with. We are working our way through it."

Vaswani did not expand on to what extent Barclays could be involved with bitcoin. Barclays has recently been involved in the digital currency space. Last year the bank partnered with social payments app Circle. The start-up, which received a license from the FCA last year, allows users to send money to each other in messages, and supports bitcoin. Barclays provided Circle with an account to store sterling, as well as the payments network to transfer money.

Banks have typically been very cautious of being associated with any companies involved with bitcoin due to the cryptocurrencies bad reputation as being used to buy illegal items on the so-called "dark web".

But the world's largest cryptocurrency by market cap has seen rising retail investor interest, as well as a major rally since the start of the year that has seen its price hit record highs. Even though the price has pulled back in recent days and there is still volatility, regulators are becoming interested in bitcoin, which is lending legitimacy to the digital currency.

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Can Bitcoin’s First Felon Help Make Cryptocurrency a Trillion-Dollar Market? – Fortune

Posted: at 4:52 pm

After spending a year in prison, Bitcoin pioneer Charlie Shrem has a new job and a new mission: Strengthening the ecosystem of blockchain assetsand, just maybe, helping build the future of the Internet.

My word is gold, says Charlie Shrem, glass of absinthe in hand, light winking off a pinkie ring he wears that is embossed with a Bitcoin symbol. And I make sure everyone gets paid.

Bitcoins first felon is in his favorite mode: full-on bluster. Were in Sarasota, where he lives, perched on stools at Pangea Alchemy Lab, a faux-speakeasy tucked behind a curtain in the back of a sandwich shop. The bartender is a bearded anarchist who, after making our drinkshe drips water from a sort of four-armed decanter onto sugar cubes suspended on slotted spoons above glasses of French absintheasks if Ive read Debt: The First 5,000 Years , by the anthropologist David Graeber. Shrem has been offering plenty for the bartender to eavesdrop on, a discourse that features words like Bitcoin, blockchain, digital currency.

Before his fall from grace, Shrem was living the high life as a Bitcoin millionaire . Now, at 27, he once again has something to prove. Ten months after his release from federal custody, he has a new job, and hes looking to mount a comeback.

Its happening just as digital currencies are in the midst of an epic explosion. Bitcoin and its ilk are now worth $107 billion, six times their value at the beginning of the year. Its either the beginning of a global financial realignmentor a bubble of historic proportions. These days as much as $6.6 billion in digital tokens changes hands every day, and even mainstream players such as Goldman Sachs ( gs ) , Visa ( v ) , Capital One, Nasdaq, and the New York Stock Exchange have invested in the underlying technology.

Shrem saw value back when Bitcoins were worth only a few dollars eachthey now trade above $2,600and there was hardly anything to spend them on. In 2011 he cofounded a startup, BitInstant, that became one of the biggest early cryptocurrency companies. At one point, it was processing about a third of all Bitcoin transactions, before flaming out in 2013. You talk to 10 people, says Shrem, I guarantee you at least seven of them will say they got their first bitcoin from BitInstant.

Shrem is a natural-born impresario, a promoters promoter, and he was one of the first public faces of the cryptocurrency phenomenon. In 2013, when GQ needed a spirit guide to the shadow realm of digital currency, it relied on Charlie Shrem. He was featured in the documentary The Rise and Rise of Bitcoin. He was a speaker and proselytizer at industry conferences. And he cofounded the Bitcoin Foundation, the first nonprofit advocacy group for digital currency.

But Shrem crashed as fast as he rose. In March 2015 he went to federal prison after pleading guilty to helping a customer acquire Bitcoins to resell on the underground marketplace Silk Road, where Bitcoin was used to buy drugs.

Today Shrem is a free man again, and his world has dramatically changed. Bitcoin was the only digital currency when he was first in the game. Now its less importantnot because it has imploded, as critics long predicted it would, but because it has given rise to hundreds of new digital assets.

He is embracing the transformation. There wont be one supreme digital currency, he and others agree. A kind of crypto-pluralism is taking hold. In early March, when I first catch up with Shrem, Bitcoins share of the total market cap of all cryptocurrencies is about 85%. By June 12 it is 41%, an all-time low. To be clear, Bitcoins price hasnt fallen; in fact, it has soared (see chart below). But many leading rivals have soared even faster.

Shrem is a connector, not a coder, and hes positioning himself to play a key role in this newly diverse ecosystem. He has already stumbled once in his comeback, with one venture crashing almost instantly, before landing a job at Jaxx, a startup that allows users to hold separate balances of different virtual coins in digital wallets.

Shrem embodied the chaotic, legally questionable early days of cryptocurrency. But he says hes different now. He claims hes no longer operating mainly for himself and instead wants to use his talents to strengthen the crypto-community.

Charlie Shrem is nobodys image of a traditional financier, but thats precisely the point with alternative currencies: Their early leaders were the sorts of people who would never pass muster at, say, Morgan Stanley . That may just make Shrem the perfect messenger, as digital currencies transition from an off-the-grid form of exchange favored by people who reviled any established system into something that is fast becoming an established system of its own.

The promise of bitcoin, when it came into the world in 2009, was to be a universal currency, electronic cash that could be sent around the globe in minutes and that would work as well in New Delhi as it did in New York. Its scarcity is predetermined by the code: New bitcoins are introduced into the system at regular intervals through a process called mining. The word is misleading, since this form of mining consists of solving the complex math problems necessary to confirm transactions on the network. Successfully solving the problems triggers the creation of more digital currency.

Bitcoins pseudonymous creator, Satoshi Nakamoto, built a decentralized system that no one would own but anyone could participate in. A constantly updated copy of the ledger recording all Bitcoin transactionsthe blockchainwould be stored on the computer of anyone running the software. Although the ledger was open to all, Bitcoin transactions were meant to be anonymous.

Blockchain technology is groundbreaking because it allows transactions to be processed without recourse to a central authority, such as a payments company, government, or bank. Businesses and services can be decentralized, cutting out costly middlemen and removing single points of failure.

But only eight years after its launch, Bitcoin is showing strain. A civil war has been raging over its future. Due to limitations in its code, the Bitcoin network can process only seven transactions a seconda trifling quantity for any system that aspires to serve the masses. (Visa handles thousands of transactions per second.) As the load has increased, the time it takes to confirm transactions has risen sharply, and users have been at odds over how to solve the problem. The bickering threatens to divide the currency into two competing versions of Bitcoinor condemn it to obsolescence.

Not only is Bitcoin slower than some of its younger rivals, its also more limited. Yes, Bitcoin allows the transfer of value. But many of the new systems can be used for much more. Ethereums creators , for instance, have built a potentially more versatile network by incorporating a scripting language that allows developers to create smart contractsagreements written into the software that can dispense funds and perform other functions automatically in response to preset triggers.

All of which means Bitcoin faces a threat from younger, more nimble rivals. Their names are legion: Litecoin. Zcash. Monero. Dash.

Dasha portmanteau of digital cashis one of the biggest. It got its start in January 2014, one of many cryptocurrencies that emerged following Bitcoins then-immense rise in price. Many of these, known as altcoins, were used exclusively as vehicles for pump-and-dump schemes. Somebodyoften an altcoins creatorwould pick a coin to pour funds into, and hype would build. Novices would pile in, the price would spike, and the major investors would dump it, sending the price plunging downward.

The old Charlie Shrem was not above taking advantage. He claims he turned $50 into $15,000 on one altcoin (but also got badly burned on an altcoin intended to be a national cryptocurrency for Iceland, which shed half of its value in a single day).

Dash was one of the most popular altcoins. Originally known as Darkcoin because it promised untraceable transactions, it saw plenty of pumping and dumping. But its creator continued to refine the software and add new features. In March 2015 it rebranded as Dash, so people wouldnt mistake it for a single-feature coin, says Ryan Taylor, who leads its core team. Gradually Dash gained legitimacy. The total value of its currency has grown at triple-digit rates every year. Part of that is due to Bitcoins flaws. To attract customers, Taylor says, a new payment method needs to be faster, easier to use, and more secure than the alternatives. Bitcoin and most other digital currencies fail on all three metrics, he argues. Theyre certainly not faster or easier to use than credit cards, says Taylor, a former financial services consultant at McKinsey.

Dash has functions to address those weaknesses. It offers an instant send feature that Taylor says is as fast as using a credit card. To protect against fraud or theft, Dashs next versiondue out this yearwill include features such as moderated transactions, in which funds are released only upon the receipt of goods or services, and vault accounts, which give their owner 24 hours to stop an impending withdrawal of funds. The goal is to create a medium of exchange that can be used for everyday commerce.

Dashs clearest innovation, though, may be its governance system. All prospective projects must be submitted for a vote by people who hold at least 1,000 coins. The advantage of such a system, according to Olaf Carlson-Wee, the CEO of Polychain Capital, a hedge fund that invests exclusively in blockchain assets, is that it allows a decentralized network to make decisions rapidly, avoiding the sort of conflict now engulfing Bitcoin, which has little structure and no way to compel anybody to, say, adopt a new version of its software.

As Dash took off this spring, Shrem decided to get involved. He proposed creating a prepaid debit card. Youd load in, say, three Dash coins, which would then be converted into dollars (or euros or whatever). The cardholder could then use the card at any business that accepts a debit card. This could open the floodgates for hundreds of millions of dollars in digital currency to enter the mainstream economy. People only want to hold Dash if they can easily convert it to something of use, Taylor agrees.

There are several Dash-funded debit cards available, but Shrems would be the first that could be used in the U.S. His plan garnered overwhelming support within the Dash universe. Reputation plays an important role on the network, Taylor says. When someone like Charlie comes along, people take it seriously.

Charlie Shrem grew up in Sheepshead Bay, a predominantly Russian and Jewish neighborhood in deep Brooklyn. His parents are Orthodox Jews, and his father worked for a jewelry retailer, while his mother cared for Shrem and his two sisters.

Shy and awkward, Shrem blossomed upon discovering a knack for computers. He taught himself to code and became a presence in online hacker forums. In 2009, while attending Brooklyn College, he cofounded a daily deals site for electronics called Daily Checkout. He found he loved sales.

Shrem has claimed, with characteristic hyperbole, that he was one of the first 10 people in the world to know what Bitcoin was. That is likely exaggerated. By the fall of 2011, however, he was sufficiently established in the Bitcoin community to be credible as the CEO of a startup (albeit one he launched from his parents basement).

That startup, BitInstant, helped people acquire digital currency and move it between Bitcoin exchanges. Eventually it allowed customers to convert cash into bitcoins at banks such as Wells Fargo ( wfc ) and Bank of America ( bac ) , and (via partners including MoneyGram) at 700,000 locations across the U.S., Russia, and Brazil, including Walmart , 7-Eleven, and CVS stores.

Shrem, who was partnering with a 23-year-old Welsh coder named Gareth Nelson, handled the business end. He raised $10,000 from his mom and $120,000 from an angel investor named Roger Ver. But one person who declined to invest warned him that BitInstant had no safeguards to prevent money laundering.

That was fine with Shrem. It was fine, too, with a substantial portion of BitInstants clientele, users of Silk Road, who needed to exchange dollars for Bitcoins in order to buy drugs on the underground market. There was even a middleman, Robert Faiella, a plumber in Florida who had a sideline obtaining Bitcoins for Silk Road users.

Shrem soon figured out what Faiella was up to. But rather than shut him down, Shrem helped Faiella source money for drug transactions. BitInstants cash-processing company and Shrems partner wanted to put a stop to it. But Shrem simply encouraged Faiella to disguise his identity with a new username and email address.

The flow of money went on unimpeded. By the time Shrem finally cut him off, in late 2012, Faiellawho later pleaded guilty to operating an unlicensed money-transmitting business and was sentenced to four years in prisonhad laundered nearly a million dollars through BitInstant.

The libertarian defense for Shrems conductwhich he himself has advanced at timeshas two parts: first, that individuals have the right to do what they want with their money and their bodies as long as they arent harming anyone else; second, that at the time he began helping Faiella, the U.S. government hadnt determined how to classify or regulate Bitcoin. If the government hadnt even decided whether it viewed Bitcoin as money, the argument goes, how could one be laundering it?

The Bitcoin community in those days was united in its sense of righteous mission. Because the digital currency abjured central banks and other authorities, many of its first devotees were libertarians, anarchists, and black marketeers who wanted to do business away from the governments watchful eye. They were gleeful at any sign of Bitcoins impending triumph over the financial system, enraged by any show of incompetence or malice by the government or big banks. The free flow of capital, community members believed, is a human right.

Shrem embraced the outlaw stance. When a payment processor, under pressure from partner banks and Mastercard , cut all ties with Bitcoin companies, leaving customer funds stranded, it was BitInstant that hacked together a solution to let them withdraw their money.

By August 2012, when I first met him, Shrem was a 22-year-old CEO, a cocky, motormouthed capitalist and proud pothead. I interviewed him and his lieutenants in an office they dubbed the Bakery because of all the marijuana-fueled bull sessions that took place there after hours. One former employee, Rachel Yankelevitz, told me, Charlies main qualification for coworkers was if they could smoke weed or drink with him and chill together.

Shrem had swaggering ambitions. His company would soon be processing 30% of all Bitcoin transactions, and he wanted BitInstant to become the Apple of Bitcoin, as he told me at the time.

That fall, BitInstant raised $1.5 million in funding, most of it from Cameron and Tyler Winklevoss, who had started a venture capital firm. They had become interested in digital currency, and BitInstant helped them buy their first bitcoins. The twinswho later disavowed Shrem upon learning of his arrestwould go on to scoop up a reported 1% of all the bitcoins in existence.

After raising funds, BitInstants future looked bright. Because so much of the crypto-economy depended on fast money transfers in and out of the system, Shrems company became a barometer of the industry. During the Cypriot financial crisis in early 2013, when it appeared that the bank accounts of regular citizens would be taxed at 6.75% as a condition of a European bailout deal, Bitcoin suddenly looked like a safe haven, and its price shot up from $50 to $266a previously unimaginable high. Shrem became a millionaire almost overnight.

Then the wheels came off. First a dispute with the investors led to the ouster of Shrems two best friends at BitInstant. Something went out of him with their departures. He was often distracted. Hed spend the night partying, then sleep in and show up late.

The site, meanwhile, was straining under the surge in users, leading to waves of customer complaints. An upgrade to the platform became mired in technical problems and legal concerns. It became clear BitInstant had been operating without state money transmitter licenses (which, it became clear, some states would require to serve their residents), and the cost of obtaining them would be prohibitive.

It was all too much. BitInstant shut down in July 2013. Alex Waters, the companys chief information officer, says Shrem squandered the opportunity to make BitInstant a world-beating company and screwed over a lot of people. Customers were irate.

Shrem himself appeared at first to have gotten away unscathed. He was living on his own and enjoying his freedom. He and his girlfriend (now fiance), Courtney Warner, took a vacation to Morocco, where he says he tried opium. He flew to Argentina on a mission for the Bitcoin Foundation. His life was a whirlwind of partying and dealmaking. I have to take a lot of people out to clubs, buying bottles, buying dinners, he told a reporter in late 2013. His business now was not BitInstant but himself. He began to earn speaking feesand all the while he kept talking like BitInstant was going to be rebuilt better than ever. He was very arrogant, Warner says of her fianc during that time.

In January 2014 it all caught up with him. On his way back from a speech in Amsterdam, he was arrested. He eventually pleaded guilty to aiding and abetting an unlicensed money transmitter, and was sentenced to two years. I screwed up, he told the judge at his sentencing. Shrem had wanted to raise the issue of whether the law he had broken was just. But his lawyers discouraged it.

Other Bitcoiners had run afoul of the law, but Shrem was the first to serve time. This fact makes him, depending on your view, either a criminal who got his just deserts or a martyr. A lot of people say that I took the first shot for Bitcoin, Shrem says. The first person to walk through the door always gets shot, and then everyone else can come through.

Shrem entered prison in March 2015. He had put weight on his slight 5-foot-4 frame, medicating himself with vodka in the nervous months before he was incarcerated. Now, in the minimum-security federal prison camp in Lewisburg, Pa., he detoxed and began frequenting the prison library. He found himself pondering the question of value. What made currenciesof any formworth anything? As luck would have it, the prison economy provided the answer.

The prison had its own currency, one based on proteinmainly packets of mackerel in soybean oil. Good-quality protein is very hard to come by in prison, Shrem says. Tuna is good, but tuna doesnt have texture. Mackerel is meaty.

Inmates serving long sentences, he says, would stockpile mackerel, using it as a store of value, like a savings account. But those pouches of mackerel expire in three years. People started transacting these mackerels that were expired, Shrem explains. They called them money macks. The money mack had a value of about a dollar, whereas eating macks had a value of about $1.50. And they had exchangers. The money macks had no valueexcept that everyone said they had value.

Gradually he came to believe, as some monetary theorists do, that the acceptance of certain forms of moneyshells, colored beads, pieces of paperis largely a social convention, dependent upon what technologists would call their network effect.

But it was clear that certain features could make one type of currency more suitable than another. Money macks were an ideal form of money for inmates. They were scarce, Shrem says. The only way you could get money mackerels was from edible mackerels that expired. And the inflation rate of edible mackerels was set. You had 500 inmatesevery inmate could only buy 14 mackerels every week in the commissaryThats how many mackerels at any time, at maximum, could come into the system. Theres no arbitrary printing of mackerels; theres no flooding of the market with this food. Its like Bitcoin. There was no Federal Reserve of mackerel that was printing whenever they wanted.

Bitcoin, he knew, has qualities that make it a powerful currency, store of value, and payments network. But expecting it to do more than that was asking too much, he decided. Thats when its going to fail, he says. Trying to do smart contracts, and social media, and a distributed file-storage system, and all these different things on top of the Bitcoin blockchainits like trying to have your browser do everything for you. Better to let a thousand crypto-flowers bloom, each one focusing on what it does best.

Many of the hottest blockchain assets today are not digital currencies like Bitcoin or Dash, but so-called tokens, distinguished from true cryptocurrencies by their lack of a blockchain. They run instead on existing blockchains, primarily Ethereums, and tend to be built for specific applications, such as a peer-to-peer marketplace for computation (Golem), a crowdsourced prediction market (Augur), or a blockchain-based advertising platform (Brave).

Where digital currencies are generally mined, tokens are usually distributed in crowd sales known as initial coin offerings (ICOs). (After that, they trade on public exchanges.) These crowd sales serve both to raise funds and to give potential investors their first chance to grab a piece of whatever service is being built. Dozens of ICOs have already been launched, raising more than $230 million last year, followed by more than $450million just in the first half of 2017. (For more on investing in tokens, and their uncertain legal status, see Why Tech Investors Love ICOsand Lawyers Don't .)

The tokenization craze constitutes nothing less than the second business model of the Internet, contends Carlson-Wee, whose hedge fund is backed by Andreessen Horowitz. Imagine if Facebook had issued a token to its users, with its value deriving from the content and connections generated on the social network. Early users might have scooped up large quantities of the token at rock-bottom prices, while those who joined later, as the networks value became widely apparent, might find themselves able to afford only a few. But all of them, by holding this digital asset, would be able to participate in Facebooks growing success.

This, of course, is not the case. The $435 billion value of Facebook is shared only among Mark Zuckerberg and other stockholders. Most other Internet platforms operate on the same principle. Their owners extract massive value from interactions between users.

With blockchain-based systems, by contrast, theres no longer a division between users and owners, Carlson-Wee says. The tokens are a wealth-sharing mechanism, a way that everyone from hedge funders to consumers can take positions inand place bets onthe future of the Internet.

Shrems reentry into civilian life was a two-step process. He was transferred to a halfway house in Harrisburg, Pa., in March 2016. Shrem says living not merely with embezzlers, fraudsters, and drug dealers, as he had in Lewisburg, but also with murderers, bank robbers, child molesters was worse than prison. He cried his first night there. During this time, Shrem worked as a dishwasher at a restaurant for $8 an hour. Gainful employment was a condition of residency at the halfway house. Playing around with magical Internet money didnt qualify. They were very specific, Shrem says.

If being a dishwasher humbled him, it was still more humbling to realize how much the Bitcoin community had changed in his absence. Familiar landmarks were gone. When he tried to visit one of his old haunts, an online exchange where hed once speculated in altcoins, he found the site no longer existed. Even the lingo had changed.

Shrem set about catching up on what hed missed. In prison the library had been his sanctuary: He would stay in there for hours. He says he read 137 books while incarcerated. Now he took the same approach with the blockchain industry. Marco Santori, a cryptocurrency attorney at the law firm Cooley, likens Shrems reeducation to that scene in Austin Powers where hes unfrozen after 40 years or whatever it is, and he just watches 40 years of history straight through to try to get his bearings.

That didnt stop Shrem from stumbling out of the gate. Having seen that token sales were the new frontier, he became the chief technology officer of a startup called Intellisys Capital, which he predicted was going to revolutionize the investment world. The idea was to raise funds for a portfolio of middle-market companiesand, later, blockchain startupsby issuing $25 million worth of tokens in an ICO. It seemed like a really cool idea, Shrem says.

The problem was that their token would almost certainly be classified as a security under U.S. law. To avoid legal trouble, Intellisys decided to bar American and British citizens from participating in the sale. But the plan had drawbacks: They would have to rely on partners to vet prospective investors for them.

Shrem became the face of the venture. He was back in pitch mode, touting Intellisys to the press and the public. He described the funds planned first investment, a 20-year-old waste-management company in Michigan, as a proof of concept.

But as the date of the token sale was pushed back, from mid-January to the end of February, Shrem began to get cold feet. Selling a security could bring all kinds of scrutiny to a man already convicted of a financial crime. I still get these nightmares Im in prison sometimes, he tells me in March. He was becoming increasingly nervous.

Fortunately for him, fate intervened. The ICO, held at the end of February, was a bomb. We had a bunch of technical problems, says Shrem. We raised a few hundred thousand dollars, and then we refunded everyones money. Shrem decided to walk away. It was easier to take the hit to his reputation than live in fear.

Thats one of the paradoxes of cryptocurrency: Each new development seems to bring both great promise and great peril. ICOs are the next big chapter, after crowdfunding, in the democratization and decentralization of finance, says Brock Pierce, a managing partner at a San Francisco venture capital firm, Blockchain Capital, that invests in cryptocurrency startups. His firm recently raised $10 million by issuing its own blockchain token, becoming the first venture capital firm in the world to do so. (The token sold out in six hours.)

But many of the ICOs conducted so far have played fast and loose with regulations, he says, operating in a gray area. I dont like the way that people are going about doing it, says Pierce. That the SEC hasnt yet cracked down means nothing, he says. Good entrepreneurs with the best of intentions, who want to innovate and change the world, are going to end up in jailor with fines.

Shrem agrees. I try to explain to people that in any other industry its okay to try new things and break shit, but in fintech, because youre talking about peoples money, its a lot more difficult, he says. Especially in the Bitcoin and blockchain space. The government is always watching.

For now, though, the ICO market is surgingdespite fears of a bubble and scamsand mainstream investors are entering. In May, billionaire venture capitalist Tim Draper, long bullish on Bitcoin, announced that he would take part in an ICO for the first time. The crowd sale, planned for July, is for the token powering Tezos, a smart-contracts platform that Draper says will be more secure and more democratic than Ethereum.

Draper says he expects in the future to see tokens for everything from health care to insurance to commodities. Tokens, he says, are both a brave new frontier and a Wild West.

The failure of Intellisys cost Shrem. I expended social capital on it, he says. And Ill have to get that back. In March he tells me that he wants to make a comeback, but it has to be the right sort of comeback. I need to show that I didnt just get lucky one time with BitInstant, he says, but that I know what Im doing.

He had moved to Sarasota with his fiance and was living with her and his future mother-in-law in a rented pink townhouse. He was spending his abundant off-hours relaxing on the beach, eating in nice restaurants, boating, Jet Skiing. He was mellower and more patient than in the past. He decided that if an opportunity came to get in on the ground floor of something amazing, he would seize it. That turned out to be a full-time job as Jaxxs head of business and community development. The companys values appealed to him: Jaxx users are in control of their own funds. It goes toward my vision of you being in control of your own money, you being in control of your own freedom, he says.

March was the first profitable month for Jaxx, which lets users (now more than 100,000) exchange one virtual coin for another. Now its founder, Anthony Di Iorio, who cofounded Ethereum, wants to expand to other countries, such as China, and Shrem will be a key part of that process. He is in charge of turning relationships into revenue, working with developers to add their cryptocoins to Jaxxs stable. Dozens of new partnerships are in the works.

But they have to be the right coins. Having helped Bitcoin grow from a stripling to a giant, Shrem is confident he can tell which crypto-projects have real promiseand which dont. He thinks if he can help build Jaxx, hell be a major industry player again.

His timing may be good. According to Carlson-Wee, the real Cambrian explosion of tokenized assets is still a couple of years away. Thats when he expects to see technology that would let Bitcoin, Ethereum, Dash, and other blockchain networks communicate. As it stands, theyre isolated from one another. (The concept has spawned another name in the argot: parachains, a reference to the idea of bringing parallel blockchains together.)

Parachains would allow applications and smart contracts built on one system to interact with another systems assets. An Ethereum smart contract could be triggered by the balance in a Bitcoin wallet address, for instance. This would help overcome the network effect of the oldest cryptocurrency. Just as Bitcoin faces an uphill battle against currencies like the U.S. dollar, so new cryptocurrencies are at a disadvantage to Bitcoin, which has the broadest name recognition and biggest user base.

Forging bonds between blockchains would allow users to flow easily from Bitcoin to Dash to Ethereum to Zcash, strengthening the entire ecosystem and making all of it more valuable. As long as youre keyed into any cryptocurrency, youll have access to every cryptocurrency, Carlson-Wee says.

Bitcoin was created to be the money of the Internet. Its successors may build a new kind of Internet, a Web 3.0 of interconnected blockchains running countless applications. Charlie Shrem is determined to be in the middle of it all.

Brian Patrick Eha is the author of How Money Got Free: Bitcoin and the Fight for the Future of Finance .

A version of this article appears in the July 1, 2017 issue of Fortune. Weve included affiliate links in this article. Click here to learn what those are.

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Senate Anti-Terror Bill a Threat to Bitcoin – Investopedia

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Terrorists are beginning to appreciate how useful bitcoin can be for quick, cheap and near-anonymous money transfers across the world. The cryptocurrency has been used by the Islamic State and jihadists in the Gaza Strip, according to a recent report by the Center for New American Security (CNAS).

To fight this threat along with drug trafficking, money laundering and other illicit uses of cryptocurrencies Senator Chuck Grassley introduced the "Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017" in May. According to a statement, he hopes the bill will "update our money laundering laws for the 21st century." The bill could allow for civil asset forfeitures of bitcoin and other cryptocurrencies, and require users to declare cryptocurrency assets exceeding $10,000 whenever they cross a U.S. border.

The Iowa Republican has been joined by California Democrat Dianne Feinstein, Texas Republican John Cornyn and Rhode Island Democrat Sheldon Whitehouse. Welcome as such bipartisan cooperation is, however, questions remain about whether Senate Bill 1241 is necessary or even productive.

According to the CNAS report, "there is no more than anecdotal evidence that terrorist groups have used virtual currencies to support themselves." For the time being, established systems of money transfer such as hawala networks suffice. In order to curtail a potential threat, experts argue, the government risks stifling innovation that is actually underway.

Testifying before the House Financial Services Committee on June 8, Coin Center executive director Jerry Brito said that blockchain technology the cryptographic innovation that underpins bitcoin and other cryptocurrencies is "perhaps as important as the web," while acknowledging that "like the web, illicit actors are attracted to it." For Brito, however, the way to combat those actors is to reduce not add to the regulatory burden on cryptocurrency companies. Quoting the CNAS report, he told lawmakers:

"One particular challenge in this area is the requirement for a virtual currency firm to obtain licenses in all states in which it operates and maintain compliance consistent with both federal and applicable state standards where they are licensed to operate. With only a single federal registration for virtual currency firms, compliance costs would be more manageable for smaller firms, and regulators would be better able to oversee firms."

Kathryn Haun, a lecturer at Stanford Law School, also told the committee that a federal compliance standard would help. She said that digital currency companies in the U.S. are some of the most cooperative financial services firms around, producing better Suspicious Activity Reports than big banks despite having much less in the way of compliance resources. In her decade working as a federal prosecutor, the best turnaround she ever saw on a subpoena was from a digital currency company. Jonathan Levin, co-founder of Chainalysis, pointed out that cryptocurrency intermediaries already register with FinCEN, the Treasury Department's Financial Crimes Enforcement Network.

When digital currencies become a problem, the culprits almost always use unregistered, overseas exchanges, where Haun said "nearly 100% of ransomware and hacking campaigns take place." She argued that law enforcement needs "more statutory authority to go after uncooperative entities overseas." (See also, Bitcoin Price Drops After "WannaCry" Ransomware Taint.)

Grassley's bill would not do what those experts suggest. S. 1241 would include digital currencies under the legal definition of monetary instruments and the companies that deal with them under the definition of financial institutions, which could result in anti-money laundering reporting requirements for those transporting more than $10,000 in digital currency across the U.S. border.

The problem, as Blockchain Alliance counsel Alan Cohn points out, is that it's difficult to distinguish between owning and transporting digital currency. "In theory, a person always carries their digital currencyor the ability to transact their digital currencywith them, including as they cross a border," he wrote recently, adding that this is also the case with mobile banking and credit cards. (See also, How to Buy Bitcoin.)

The bill may also open cryptocurrencies up to civil asset forefeiture, meaning that law enforcement could seize funds suspected of being tied to criminal activity.

Cryptocurrency enthusiasts are not, by and large, pleased. A Reddit post accusing Congress of "GOING FULL 1984 ON BITCOIN" and calling the bill's sponsors "certifiably insane" garnered 5,427 points in 11 days, with 90% upvotes. Cohn, in a more measured assessment, wrote, "Congress should consider the impacts of singling out virtual currency users, the majority of whom are not using virtual currency for illicit purposes. A better and more risk-based approach should strike a balance between discouraging illicit use while still encouraging innovation."

According to Brito, the Senate's bill is being misinterpreted. It would not in fact require cryptocurrency users to declare assets at the border, Brito wrote recently; rather it would require Homeland Security and Customs and Border Protection to submit a report to Congress "detailing a strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States." Depending on the contents of that report, the ultimate result could be the same, but commissioning a report may fall short of "full 1984." Brito does not address the potential for civil asset forfeitures.

That's not to say he loves the bill. Rather, he sees it as a potential headache for those seeking a stable regulatory environment. The bill is not in fact new, but was introduced in "essentially identical form" in 2011. Two years after that, FinCEN's regulations made clear what cryptocurrency businesses qualify as money service businesses. Much of the vocabulary around cryptocurrency regulation has also been established since 2011: "virtual currency," "convertible virtual currency," "centralized virtual currency" and "decentralized virtual currency" are well understood. "Digital currency," the term S. 1241 uses, is not. If the bill were to become law, in other words, it might not change much just confuse people.

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Make Or Break August 1st Event Is Coming For Bitcoin Investors – Seeking Alpha

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This article aims to explain the chain of events that happened and going to happen in bitcoin space. Let me start with few basics so that for the benefit of non tech savvy long term investors. Though some of the terms mentioned below are technical, it is highly desirable for long term investors to understand to make their conviction about bitcoin more stronger.

Bitcoin transaction basics A bitcoin transaction tells the bitcoin blockchain network that the owner of the bitcoin has authorized the transfer of bitcoin to another owner. The new owner can now spend these bitcoins by creating another transaction that authorizes transfer to another owner, and so on, in a chain of ownership. So in nutshell bitcoin transactions are nothing but creating a chain of ownership as the value of bitcoin is moved from address to address.

Exponential growth of bitcoin transactions If we look at the 2 year graph on the number of transactions on bitcoin we would get a better understanding. In 2010, the number of transactions per block was below 50. In 2015, the number of transactions registered in a block was in a range of 650 to 800 transactions. Till then it has grown exponentially and in May 21, 2017, the number of transactions in a block reached an all time high of 2218.

SegWit-An Idea by Dr. Pieter Wuille Every transaction in bitcoin network contains an input address from where the value is coming, an output address to where the value is going and a digital signature to verify the authenticity of the transaction. This digital signature associated with each transaction is taking 65% of the space in a given transaction. Another problem by associating digital signature with transaction data is that the signature can be tampered to change the transaction id and later claim for refund. Dr. Pieter Wuille suggested solution to this problem by segregating the digital signature from the transactions data.

What segwit does? Segregated Witness is the process by which the space in each block is "indirectly" increased by removing signature data from Bitcoin transactions. When blocks are made smaller, this frees up the capacity to add more transactions to the chain. SegWit enabled code ignores the data attached to a signature by striping off the signature from within the input and moving it to a structure towards the end of a transaction. This would increase the 1 MB limit for block sizes to nearly 4 MB, in which 3MB data is exclusively for signature part. Once the solution is implemented every block can accommodate more than 3 times of transactions compared to existing blocks

Alternative for segwit When the segwit idea of segregating signature from transaction data floated around another theory came into picture. The idea as to increase the standard block size from 1MB to 2MB or more without segregating the witness or signature.

Segwit2Mb- The combined solution Segwit2Mb is the project that aims to resolve the above conflict between different political positions among miners and developers regarding segwit activation vs an increase of the on-chain blockchain space through a standard block size increase. Segwit2Mb combines segwit as it is today in Bitcoin version 0.14 with a 2MB block size hard-fork activated ONLY if segwit activates (95% of miners has to agree with the proposal). The hard-fork will happen at a future date once the segwit is activated.

NewYork Agreement In May 2017, developers and miners together joined and reached an agreement at Bitcoin Scaling Agreement at Consensus 2017, there after called as NewYork Agreement. As an outcome, they unanimously agreed to immediately support below two parallel upgrades to the bitcoin protocol, which will be deployed simultaneously and based on the original Segwit2Mb proposal:

Activate Segregated Witness at an 80% threshold, signalling at bit 4 Activate a 2 MB hard fork within six months

As mentioned above, the consensus percentage required for Segwit was reduced from 95% to 80% in the New York agreement. This mandatory activation of segwit deployment comes under Bitcoin Improvement Proposal 148 (BIP 148)

What can happen to Bitcoin during this process When segwit happens, it does nothing to Bitcoin as a coin. It will remain as it is because it is bacically a user activated soft fork or UASF, without any split. When standard block size increase, the coin will split into two, one running with existing 1MB block size and the new one forked out with 2MB block size. This is planned to happen after 6 months of segwit activation.

Sounds great right? But the trick lies in the first part. To understand this, we should understand what happens during segwit activation. miners have to signal that they are ready of segwit. If the total hash rate of miners who agree to segwit reaches majority, then the nodes following the original chain will reorganize and begin to follow the segwit activated UASF chain.

The newly segwit activated BIP148 nodes will begin to orphan Bitcoin blocks not signaling Bit 1 (1 means agreeing with segwit) at its UASF forking point. In such an event, there is a chance that a significant number of financial transaction records will disappear from nodes that rejected segwit activation. Mining community calls this as "wipe out"

A contingency plan against UASF (BIP148)- A hard fork by prominent mining community Bitmain as front runner, majority of the mining community have the opinion as the UASF chain presents a risk of the original chain (the chain which rejects segwit) being wiped out. If there is no contingency plan, all transactions that occurs on the original chain after the UASF forking point will face the risk of being wiped out. According to them this has disastrous consequences for the entire Bitcoin ecosystem. They maintain the stand that UASF is an attack against users and enterprises who disagree with activating SegWit right now without a block size increase.

UASF is an attack against users and enterprises who disagree with activating SegWit right now without a block size increase, which is a very important clause in the Hong Kong agreement made by the global Bitcoin community in February, 2016.-bitmain

To protect their interest, they plan for a User Activated Hard Fork, or UAHF. They will do the hard fork at 12 hours and 20 mins later than UASF to maintain the original segwit not active chain. This hard forked block will accept block of which the size is less than 8MB and miners will soft-limit the block size to less than 2MB.There will be a soft fork rule added into the protocol to limit the sigops (signature part) per transaction within 20K.

BTC 148 & BTC Legacy If this two events happens, here would be two types of Bitcoin tokens, "BTC 148" for coins on the soft forked chain, and "BTC Legacy" for coins on the chain that did not activate segwit. As an investor we don't need to worry as each bitcoin would effectively be copied to both chains. If you hold bitcoin right now, you will hold both "148 BTC" and "Legacy BTC" after the split.

"In the event of a hard fork of the Bitcoin protocol, it is likely that Coinbase will temporarily suspend the deposit and withdrawal of bitcoin from the platform pending our assessment of the technical risks posed by any fork, such as the possibility of replay attacks, network instability, or other factors. Customers should take note that they will not be able to withdraw bitcoin from or deposit bitcoin to Coinbase for a period of up to 24 hours or more following the fork. In the event of a hard fork of the Bitcoin protocol, Coinbase may suspend the ability to buy or sell on our platform during this time."

- Coinbase

Advise for long term investors 2 year wait for such an event is going to end by August 1st. Better keep calm and don't trade from July 31st till August 3rd.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Make Or Break August 1st Event Is Coming For Bitcoin Investors - Seeking Alpha

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Where’s the Missing Mt. Gox Bitcoin, Now Worth $2 Billion? – Investopedia

Posted: at 4:52 pm

Mt. Gox was one of the earliest and most public downfalls of the Bitcoin era. In early 2014, Mt. Gox stood atop the field of Bitcoin exchanges as the largest, until it declared bankruptcy following a devastating theft or disappearance. The exchange lost 850,000 Bitcoins with a value of about $450 million in February of 2014, alongside an additional $27 million in cash. 200,000 of those Bitcoins were eventually found, but that leaves 650,000 Bitcoins which have mysteriously disappeared. In the time since, many analysts, former Mt. Gox investors, and others have speculated as to where the missing currency is. This is particularly important as Bitcoin's price has soared in recent months: the missing Bitcoins could be worth as much as $2 billion at this point.

According to reporting by Cyberscoop, the investigator working on behalf of Mt. Gox's creditors, Chainalysis, "definitely" knows the location of the missing coins. This comes via congressional testimony made by the company's co-founder. This information emerged in the midst of a June 8 hearing by the House Financial Services Subcommittee on Terrorism and Illicit finance. The hearing centered on the national security implications involved in cryptocurrencies. Witnesses in the hearing were drawn from Chainalysis and Elliptic, both firms that have run investigations into cryptocurrency security. When Rep. Warren Davidson, R-Ohio, inquired about the reason the missing Bitcoins couldn't be traced considering that the transactions were tied to the Blockchain. "I was particularly struck by your opening remarks that we can detect the activity," he said. "It seems that if we have this ability...then we should be able to find the missing Mt. Gox coins. Why can't we?"

According to Jonathan Levin, co-founder of Chainalysis, "we actually did find those...the destination of those coins is definitely known." Davidson did not follow up on the location of the coins and Levin did not share that or other information about where the coins currently are, who has them, and how that will impact the ongoing cases involving Mt. Gox.

According to Jerry Brito, the executive director of Coin Center, "just because you know where they are may not mean you can get them back." Mark Karpeles, the CEO of Mt. Gox who was briefly jailed in 2015, has stated that "many popular rumors about Mt. Gox about the stolen Bitcoins not actually existing or being stolen by me are absolutely false."

It's possible that the hearing involved a miscommunication. Investigators have long known many of the specific transactions in which the coins were stolen. That does not necessarily mean that the location of the coins is currently available or that they are recoverable, however.

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Chart analyst sees a troubling similarity between the rise of chip stocks and bitcoin – CNBC

Posted: at 4:52 pm

Rich Ross, technical analyst at Evercore ISI, is getting bearish on the whole market, but not too bearish, predicting a pullback of 3 percent on the S&P 500 and 5 percent on the NASDAQ-100.

The call is based partly on complacency, partly on the time of year, and partly on what he sees are disturbing trends in other asset classes:

"While global equity trends remain strong and prices near record highs; volatility is at the lows; the put/call hit its lowest level of the year; and crude, the dollar, yields and inflation expectations continue to collapse as we enter a period of thinner trade, heightened volatility and typically weaker equity returns," wrote the analyst.

What's most shocking in his new report is the analysis about the sector Ross believes will lead the downturn.

The analyst notes an eerie similarity between trading on the main Philadelphia Semiconductor Sector index (known as "the SOX") and Bitcoin, and indeed the charts do show a remarkable similarity this year, rising modestly from mid-January to mid-March, and taking off in mid-April.

"I reiterate my sell call on Semi's and continue to see a test of 1,000 on the SOX (-8 percent) as the group continues to display the textbook signs of a reversal in trend and a technical symmetry with Bitcoin, which is down -9% overnight and poised for another -17% to 2,044," Ross wrote.

SOX index (black line) vs. Bitcoin (bar chart)

Source: Evercore ISI

He's not completely negative on the whole market. He has an aggressive call to buy biotech and sell semiconductors against them.

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Chart analyst sees a troubling similarity between the rise of chip stocks and bitcoin - CNBC

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