UK Setting Itself Up To Be More Friendly To Bitcoin Startups

An anonymous reader writes While various states in the U.S. (most notably: New York) are trying to regulate every last aspect of Bitcoin, making it very difficult to innovate there, the UK appears to be going in the opposite direction. It's been setting up much more open regulations that would allow for greater freedom for Bitcoin startups to innovate without first having to ask for permission. In fact, the British government decided that what is most appropriate is to work with the digital currency community to develop a set of best practices for consumer protection and create a voluntary, opt-in regime. Hopefully other governments take note.

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[Canth7]

How exactly would you describe an elegant solution to the nearly 40 year old Byzantine generals problem and not call it an innovation?

There is no way the UK is so...

[EzInKy]

...insecure as to back an unproven currency! OP most be a just another cad trying to suck real value into something of no value.

GCHQ has realized they can track Bitcoin, I bet

[gweihir]

And hence, Bitcoin actually makes it easier to monitor money-flows, as they already have all Internet traffic. Getting the data from Banks, especially foreign ones, may be a tad more effort and the Bank knows.

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[Zocalo]

I suspect they, and similar agencies, realised this a long time ago; the kind of big data meta analysis of blockchains necessary to establish patterns in the flow of digital currency is what GCHQ, NSA and the like should excel at doing and the use of BitCoin etc. by groups they would be interested in is well documented. Once you start identifying which wallets are regularly transferring large amounts of funds to other known wallets, you can then start looking at who else they are dealing with and building

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[JaredOfEuropa]

Good for them. I'm still struggling to see what the benefit for me would be? I have little need for making anonymous payments, and international transfers are reasonably fast, cheap and convenient these days. One benefit is not having to give online merchants my full credit card details, but for local purchases iDeal (the Dutch banks' online payment solution) is better, and for international orders I can almost always use PayPal for that. Beats mucking around with out of date block chains and/or crooked ex

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[JaredOfEuropa]

How is it not anonymous? A wallet is just as anonymous as a numbered account, with the difference that no entity has a record of who owns which wallet (unlike bank accounts). Oh, I am sure clever law enforcement agencies are able to combine data and tie a wallet to a specific person, but for day to day cases, no one knows who owns wallet XYZ, and I do not need to present any proof of identity to get my own wallet. So: anonymous.

The transactions are public. But that has nothing to do with anonymity of the

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[CaptainDork]

When Mt Gox folded, Bitcoin got REAL anonymous.

Bitcoin's use

[DrYak]

I'm still struggling to see what the benefit for me would be? I have little need for making anonymous payments,

Anonymity isn't what crypto currencies provide. In fact, far from the opposite: Their whole structure is based on publicly broadcasting every transaction, that then everyone in the network store in its local copy of the common ledger (= into the blockchain). At best your can call it "pseudonymous" (wallets are identified by a base32 hash. it's not obvious at first look which real person is behind a wallet, just like the username on a forum doesn't immediately looks tied to an identity).

The main argument for

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[CaptainDork]

Anonymity isn't what crypto currencies provide.

Whew!

Thanks for the schooling. I thought sure Bitcoin would be used in the sex slave and drug markets.

Best target

[DrYak]

I thought sure Bitcoin would be used in the sex slave and drug markets.

These two (and assassins-for-hire) are probably the use case where the governments would be accepting to throw the necessary resources to do the kind of big-data analysis necessary to track down the culprits.
(Follow the money trail. i.e.: follow the life of bitcoins along transactions, until a real-life event can be mapped to a transaction [e.g.: bitcoins were used to order some product online which was delivered at an adress. Or bitcoins were exchanged for cash at an exchange and were wired to a bank acou

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[Lennie]

Actually iDeal is exceptionally good in comparison to a whole lot of other countries.

Innovate ?

[Crashmarik]

Well in the U.S. context that would mean being able to operate outside the existing laws for banking and electronic funds transfer
https://www.fdic.gov/regulatio... [fdic.gov]

Personally I am a little leery of bankers innovating after 2008

Bank Of England looking at this for a while

[auric_dude]

News Release - Quarterly Bulletin pre-release articles: âInnovations in payment technologies and the emergence of digital currenciesâ(TM) and âThe economics of digital currenciesâ(TM) http://www.bankofengland.co.uk... [bankofengland.co.uk] and The economics of digital currencies http://www.bankofengland.co.uk... [bankofengland.co.uk]

This makes sense due to Bitstamp

[Anonymous Coward]

This move makes sense for the UK. AFAIK Bitstamp, which is the largest EU based BTC exchange, is headquartered there.
They have A LOT of traffic.
Making UK btc friendly also means that they can tax some of that revenue in exchange for the "easiness" to operate under UK law.
Hence more money for government.

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[CaptainDork]

... BTC exchange ...

Because those are bullet proof.

Makes Sense

[monkeypushbutton]

London is a global financial hub. What better place for BitCoin to get mainstream acceptance?

Trust Us!

[gsslay]

In fact, the British government decided that what is most appropriate is to work with the digital currency community to develop a set of best practices for consumer protection and create a voluntary, opt-in regime.

Because self-regulation has always worked so well in the banking sector.

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[Canth7]

This isn't the banking sector - as you can well imagine, no banks are touching Bitcoin directly. The point here is that if regulations are introduced hastily, it'll kill off the innovation. Whether or not everyone thinks that the world has plenty of currencies and doesn't need another isn't really relevant - Bitcoin is a game changing invention that should get a chance to grow into a larger role before regulations crush the entrepreneurial efforts.

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[CaptainDork]

Why?

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[rleesBSD]

The only bank that could be involved is the one taking the $Mega deposit after SHA256 been busted. Agent K to agent L: "Do you think we should have waited for a little bigger build out? Hey, could you rub a little more suntan lotion on my shoulder?"

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[hitchhacker]

Most bitcoin public keys are sitting behind two levels of hashes: SHA256 and Ripemd-160. So both would need to be broken to even get the PUBLIC key. The elliptic curve cryptography would also need to be simultaneously proven flawed in order to spend the coin. The blocks in the blockchain, however, just use SHA256 to chain themselves together.. so there might be some advantage to the miners if this was flawed though it might only enable double-spend attacks which would be detectable.

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[rleesBSD]

Hmm ... that jives with the rumors about bitcoin being heavily mined by entities with three letter abbreviations.

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[hitchhacker]

So the NSA went through all this effort... to double spend bitcoin?

"Hopefully other governments take note."

[CaptainDork]

Why "hopefully?"

Is this a biased story?

Bitcoin startups

[ArcadeMan]

Here's my startup: please click the links in my signature and get free bitcoins and dogecoins for yourself!