Video Of The Week: The NYS DFS Bitcoin Hearings

Comments (Archived):

1. I’ve been listening to these pretty much all week, and was fascinated. My own assessment is that these hearings were balanced overall.I like your 4 waves of Bitcoin evolutionary segmentation, characterized by:Phase I Developers (2009-2010)Phase II Criminals (2011-2012)Phase III Speculators (2012-2013)Phase IV Innovators (2014+)And I’m starting to feel that maybe a “tidbit” of light regulation may not hurt, given the wild west nature of the environment. The US has an interest in keeping the Bitcoin exchanges in the US, so they can keep a better eye on them. If they are all scattered in rogue or far away countries, it will be even more difficult to enforce bad behavior.

   1. that’s a nice way to slightly modify my “phases” to make it simpler to understand

      1. I’m curious about the idea of a public ledger requirement for alternative currencies that was proposed in one of the questions. It sounds reasonable on its face. But would it have a chilling effect on potential new entrants? Or would the increased safety (or at least perceived safety) attributed to that degree of regulator involvement result in increased consumer usage of Bitcoin and mitigate that concern to some degree? I can see the validity in both arguments.Either way, these are great conversations to have and I think will serve to educate the masses on what a lot of us tech folks see in Bitcoin’s potential.

         1. “public ledger”, is a feature.

         2. Bitcoin has a public ledger but the only thing you see for sender and receiver is a bitcoin address

      2. I did it by memory, because it resonated with me. sorry for the slight imperfections in rendering it.

         1. You have improved it!

   2. Criminals are early adopters. May be a new trend.

      1. Always has been that way

         1. “VCs tracking criminals internet habits”, possible headline in the not too distant future or already happening? 🙂

      2. Very interesting observation. Goes along with the thought of fraud being part of the evolutionary process. It makes sense that early adopters would be those who stand to gain the most and particularly by doing so before the controls are in place. The exploitation can go a number of different ways I suppose. In the best way by helping to shape outcomes for the greater good.

         1. It makes sense that early adopters would be those who stand to gain the most and particularly by doing so before the controls are in place.We don’t have any data on when said early adopters who stand to gain the most have done the same things only to spin their wheels and do something that never goes anywhere. This is my “tell me about all the ideas that HP turned [1] down that came from “Woz’s” that never went anywhere at all don’t just tell me about the one that got away where they fucked up and now look stupid” (you can’t in other words).[1] Or IBM’s miss steps with the PC in 1981 that gave Microsoft so much power. and hatched the clones.

   3. II and III are usually the most fun to watch and sometimes morph into something real. Greenspan was such a Rand advocate that he felt fraud was an evolutionary component of an economic cycle.

      1. But Fred’s point was that these 2 parts were fading away, as we go forward.

         1. They won’t go away but they will decrease as a percentage of the overall economy

            1. yes, that’s what you said in the hearings.

            2. You have a new version of the old”Dilution is the solution to pollution.”?

      2. I believe that as well

         1. People are never able to anticipate the actions of bad actors because they don’t think like bad actors. So they aren’t even able to anticipate how and why others act like they do and design things to prevent it from happening. [1] [3] How things can and will be exploited. And how things will be gamed.Email and academics are an example of this. Never occurred to the academics involved at the early stages that lack of authentication or some other protection would lead to the problems of spam so nothing was ever designed into the protocol (or the product) to prevent spam and abuse. Now it’s to late because no way to switch everyone to a different way of sending email. [2] Early domain name allocation was another example of a failure along those lines. Gee why would someone want to register a domain name that they didn’t intend to use? I (says the academic) would not do that.[1] Loosely related how women don’t understand why men like to look at naked women because they aren’t men so they simply don’t have the seat of the pants feel for what is going on in a man’s brain.[2] This is not the same as the IP space running out that is more like the highway that was designed for a certain amount of cars where there is not a reasonable way to anticipate (or use land) to create an unlimited number of traffic lanes. That said people have hoarded the IP space and gamed that for their benefit because it now has value. Anything of value will be hoarded and gamed. Even Keurig cups at the bank.[3] Free gas debacle after superstorm sandy. Sure just roll up the trucks and give out free gas and everyone will just queue up and not take more than they need (anyone remember 70’s gas rationing?).

            1. > Now it’s to late because no way to switch everyone to a different way of sending email.My guess is that it’s not too late: Current SMTP e-mail (I will save some time not looking up the RFC numbers); I’ve got thenumbers because my first e-mail softwarewas some GUI nonsense so I took out anafternoon and wrote my own e-mail, POP3,client software — worked great for years. Except when there are attachments, I prefer it to Outlook.The e-mail standard has ‘header lines’.a blank line, and the ‘body’ lines. Everything,the header, body, even the picture, video, music, etc. attachments, is just simpletyping.Each header line starts with a tag endingwith a colon, say,To:Subject:etc. Well, can put in lots of new tags ifyou wish. Client e-mail software just ignores tags it doesn’t recognize.So, ‘new’ e-mail with authentication,capabilities, encryption, signing, etc.?Sure: Just create some new headertags. Old e-mail software will ignorethe new header tags, but new e-mailsoftware can make use of them.This is not nearly the first such ideawith e-mail header tags.HTTP is similar — header lines, ablank line, and the body. So couldplay some new games there, too.See what kinds of things can dowhen don’t have a gorgeous youngblond in your lap?

      3. Not sure what it has to do with Rand, but Eric Falkenstein thinks so too: A Batesian Mimicry Explanation of Business Cycles.

2. Watched the first part of the Antonopoulos reaction and agree with him. You guys need to trumpet that quote from the regulator saying it is okay to kill a thousand startups to catch one money launderer.

3. Watched the first aspect of the Antonopoulos response and believe the fact with him. You people need to trumpet that quotation from the regulator saying it is okay to destroy a million start-ups to capture one cash launderer.Features about Number Tracer

4. Any panel discussions on bitcoins role in international trade? Bitcoin value proposition is not buying a loaf of bread, its buying a load of barges.

   1. Interesting–why?As a protocol of exchange you are saying that the size and complexity of the transaction is a mark of the protocol’s value?

5. William sent me this video reaction from Andreas AntonopoulosJust watched a few minutes of that.He gives arguments about things banks have gotten away with and then says: “they (he means regulators, legislators “the man” who only acts in his self interest) have been absolutely impotent in some of the biggest heists in the history of humanity that started in 2008 I think that’s craven hypocrisy and I think it’s absolutely disgusting what they are doing here is using the publicity around the bit coin brand in order to promote their own careers as prosecutors as regulators as law enforcement officials and in order to get more funding from the state so they can terrify small users with their extreme pronouncements in these hearings and get some media coverage but at the same time they aren’t actually doing their job and their job is to protect consumers from fraud and the biggest fraud going on at the moment is on wall street and has been going on now for 5 years and they haven’t done anything to stop it they’ve thrown a few impotent fines that haven’t even covered the profits of these organizations made from money laundering so I think it’s craven hypocrisy to go after bit coin but this is exactly what we’ve seen with the regulators” Get out the shovel for that guy. [1] This is like a child’s argument. [2] “You let Bobby play football and that’s dangerous so why can’t I play hockey!!!”His entire argument (from the few minutes I watched because I didn’t have the patience to watch anymore of that silliness and simpleton logic) seems to be like a child complaining that it isn’t fair that he has to follow rules because mommy and daddy aren’t enforcing rules with the older kids. And they are getting away with shit so the parents have no right to tell the younger kid what to do.What does one thing have to do with another? Totally subversive rally up the masses talk.[1] This is like the pied piper guy your daughter meets in her first year of college that seems so wise about the world and spins her head around with his infinite wisdom about things she has no clue about. Which is why he seems so wise. Then she follows him blindly as if he is the second coming of knowledge about the world.[2] (Along those lines I also don’t like Obama’s reaction to pot by saying “it’s not any worse than alcohol”. )

6. I keep getting hung up on this post because of the youtube placeholder image… All I can focus now on is the Winkelvii.

7. the law enforcement session is required viewing for all entrepreneurs. prosecutors are there to prosecute. get compliant and stay free.

8. I’ve watched these. Fred Wilson is the man.

9. Ok, i didnt watch it. But i joined the discussion 😀

10. Fred unlike the others you seem to “improvise” your testimony [ a good thing..]. How did you prepare for this?

    1. I do not believe in preparing per se. I believe in having a prepared mind. On this topic I have been preparing since early 2011

       1. I’m saving the quote for later: “I do not believe in preparing per se. I believe in having a prepared mind.”

11. I am watching “madbitcoins” video u posted as I type. The title is apt. Personally, I think watching the hearings is a much better use of time. Andreas makes some very valid points, but he goes off the rails a bit in my opinion.

12. First session more reasonable, reasoned, andthoughtful than I would have expected.On the “3-5” person virtual currency company and “money laundering”: There was anassumption that there would be a conflictbetween innovation and stopping money laundering. This looks mostly wrong: E.g.,if some guys are using virtual currencies todo money laundering on a medium to largescale, then no doubt they are making moneythat they are supposed to report on theirtax returns. If their earnings are significantlylarge, then make them subject to the regulationsintended to stop money laundering, Also, even if they are doing money laundering ona small scale, then likely they are in violationof old regulations and laws and could be stopped using the old means to stop smallscale money laundering; that virtualcurrencies are new doesn’t have to meanthat new regulations specific to virtualcurrencies are needed to stop small scale money laundering.Net, let the small scale guy in virtualcurrencies go ahead. If he is doing money laundering on asmall scale, then catch him using oldmeans; for large scale, have himregister and catch him with new means,

13. I really like how you, Fred, are the only one who didn’t read out a written statement, yet it was the most convincing statement. One can sense immediately that you really have a deep understanding of cryptocurrencies and the underlying dynamics. You should play a central role in creating the regulatory framework of bitcoin / cryptocurrencies.

    1. I agree with the first part of your statement. But do you think Fred really would want to spend his time playing a role in legal frameworks? Look what happened to Jamie Dimon (who he mentions in this testimony)…