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Weekly Bitcoin Update – 20 July 2014

A recap of the week’s biggest Bitcoin stories from the perspectives of the best sources for e-currency news around the web

Industry

On July 18th, Dell announced that they would accept Bitcoin payments for all their products through their online marketplace. Previously, Dell had solely accepted the purchasing of gift cards with Bitcoin. The computer hardware company, whose brands include Alienware and the XPS line of laptops, announced a partnership with the third party payment processor Coinbase. The company’s co-founder, Fred Ehrsam, credited the Dell team for being “instrumental in getting the Coinbase integration up and running in such a short timeframe.” The project was completed in just fourteen days.

The North American Bitcoin Conference has come to the city of Chicago, John Keilman of the Chicago Tribune reports. The event will be staged by Triple Zero Media and entry passes, hotel stays, and refreshments can be acquired with Bitcoin payments. Conference guests include venture capitalist Ezra Galston of Chicago Ventures, who will speak to Chicago’s digital infrastructure. Galston values Bitcoin as “a purely market driven currency,” which he finds to be “very beautiful.”

A week after politicians in the United States and elsewhere announced they would accept Bitcoin donations, Fredreka Schouten and Christopher Schnaars of USA Today wrote that political candidates are not accepting digital currency donations. The article cites House of Representatives member Jared Polis, D-Colo., as the only candidate to accept such gifts since they were approved in early May by federal regulators. Polis has “collected nearly $3,671 worth of Bitcoin” according to the report. However, last week, Stan Higgins of CoinDesk reported that Dan Elder, a US House candidate from Missouri, was accepting only Bitcoin donations, which refutes USA Today’s claims.

According to a recent Bloomberg Global Poll, financial professionals believe the value of Bitcoin will fall again in the future. Olga Kharif of Bloomberg points out that those 55% of those surveyed found the trading rates of Bitcoin to be unsustainable and “bubble-like.” While a large amount of enthusiasm exists within certain groups for Bitcoin, such as technology entrepreneurs and venture capitalists, Kharif finds that finance industry leaders such as Jamie Dimon and Warren Buffett don’t have a lot of confidence in the future of the digital currency.

Bitcoin has been referred to as a “naturally occurring Ponzi” scheme in a World Bank policy research working paper, Nermin Hajdarbegovic of CoinDesk reports. The author of the working paper focused on Ponzi schemes, Kaushik Basu, stated the speculation surrounding Bitcoin’s value and the possibility that it may increase in the future made “the value-rise a self-fulfilling prophecy” that “fits the standard definition of a speculative bubble.” Basu did clarify that Bitcoin was not a deliberate Ponzi scheme, for the bubble came about as a result of speculation.

Google has added Bitcoin currency conversion to its search engine, Amit Chowdhry of Forbes writes. The addition of the tracking tool will make it easier to follow Bitcoin fluctuations, as one can now insert an amount with a currency with the command “to Bitcoin” and retrieve an amount. Google had previously integrated Bitcoin to its currency tracker in Google Finance and joins Bing.com, Yahoo!, and Bloomberg as major sites that have made Bitcoin data more accessible to its users.

A South African company has made Bitcoin a payment option on its website. According to Jessica Eaton of The Wall-Street Journal, PayFast, a payment processor with 30,000 merchant customers, became the first of its kind in South Africa to make Bitcoin a payment option. To facilitate the integration, PayFast has partnered with BitX, a digital-currency exchange based in South Africa. PayFast Managing Director Jonathan Smith stated he was “very excited to see what effect this large scale enablement will have on the market.”

Policy

The state of New York has unveiled its Bitcoin license rules. As related by Jose Pagliery of CNN Money, “BitLicenses” would move the digital currency closer to “a legitimate form of money.” The new rules would lead to background checks for all Bitcoin trading businesses as well as open them to inspections from regulators. The requirements would apply to businesses involved in Bitcoin circulation. In other words, only those organizations that buy, sell, and store the digital currency will be affected. Users who spend their money online or in physical shops that accept Bitcoin need not worry as much about the new regulations.

While the new “BitLicense” regulations may been designed with a positive end in mind, the rules have not been without criticism in digital spaces. Kyle Torpey of CryptoCoin News notes that not only has the Bitcoin community as a whole reacted negatively to the news, but BitLicense also turns creator Satoshi Nakamoto into a criminal after forty-five days. While Nakamoto could come to New York to register his creation and avoid such charges, Torpey finds that possibility to be unlikely.

Jon Southurst of CoinDesk writes that Australian lawyers and Bitcoin groups are calling for more clarity with regard to Bitcoin regulation. Ronald Tucker of the Australian Digital Currency Commerce Association (ADCCA) held a Bitcoin awareness-raising seminar last week that was attended by both Bitcoin business representatives and Australian government stakeholders. At the event, the ADCCA made a pitch for allowing the Bitcoin industry to self-regulate with the assistance of a government liaison.

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