An executive order signed by President Barack Obama has US enabled authorities to become the first to confiscate cryptocurrency holdings without warning.
Thursday, April 2, 2015
US Presidential Order Allows the State to Confiscate Crypto Holdings ‘Without Prior Notice’
An executive order signed by President Barack Obama has US enabled authorities to become the first to confiscate cryptocurrency holdings without warning.
Wednesday, April 1, 2015
‘ChangeTip SCAN’ Offers New Way to Exchange Dollars for Bitcoin
ChangeTip just announced a product called ChangeTip SCAN that offers a new way for people to convert dollars to Bitcoin.
Last Chance: Share your Bitcoin story and win 5 BTC with CT and Share the Bitcoin
There’s still time for you to win 5 bitcoins by sharing your Bitcoin story with CoinTelegraph and Share The Bitcoin – but hurry, the competition to win our biggest prize yet closes April 6!
Symbiont Bridges Bitcoin and Ripple with Counterparty Gateway
Symbiont.io has bridged the gap between Bitcoin and Ripple by introducing a Ripple gateway for Counterparty.
Crowdfunding Game Development with Crypto Transforms Players into Shareholders
Crypto underwriters Lamb&Cooper are exploring a new era of game development and funding.
BitPay Announces World’s First Bitcoin Miner Powered by Car Braking
With bitcoin’s price volatility causing a lot of cryptocurrency start-ups to pivot, the world’s leading bitcoin processor BitPay has already jumped the gun ahead of its competitors and launched a new
APR 1 DIGEST: BitLicense Scrapped, Kim K and North Korea Squabble over ‘KimCoin’ Naming Rights
Ben Lawsly retracts BitLicense, North Korea launches "KimCoin," ShapeShift Integrates Winklecoin, Bitcoin creator unveils real identity, and more top stories that happened on April 1.
This Crazy Idea May Have Prevented Mycelium Entropy Tampering (Op-Ed)
From Canada to Hong Kong to Spain, this past week saw multiple Mycelium Entropy devices arrive to their new owners in a less-than-shiny condition.
NEM Launches, Targets Old Economy with Proof-of-Importance
After a year in the making, the cryptocurrency NEM (New Economy Movement) has officially been launched. CoinTelegraph had the chance to site down and discuss the ambitious project with one of the lead
Tuesday, March 31, 2015
Three Methods for Simple Bitcoin Business Accounting
This is a guest post from Digital Currency Council Member Marty Zigman.
Recently, I gave a webcast presentation to AICPA members to help accounting professionals understand Bitcoin and how to treat it on the general ledger. If you are an AICPA member, the webcast is available for your viewing. In this article, the key points from that presentation are outlined and will help accountants fundamentally understand and approach business based Bitcoin transactions.
Bitcoin and General Ledger Treatment
There are three key processes that ultimately produce different accounting practices and general ledger treatment when Bitcoin is involved. These three processes coincide with Bitcoin’s adoption phases as follows:
- Payment Method
- Foreign Currency
- Base Currency
Bitcoin as a type of “Payment Method”
Within the context of modern accounting systems, examples of payment methods include cash, checks and credit cards. Very simply, they define the medium used to exchange money.
Today, the most common business use for Bitcoin is to treat it as a payment method. Much of the reason for this is because a) the price is relatively volatile and b) acceptance by employees, suppliers and partners is relatively limited. Services such as BitPay or Coinbase have effectively made it easy to accept bitcoin in a business. Instead of the business actually receiving bitcoin during customer payment, these services deliver traditional government-issued (fiat) currency.
Under this method, Bitcoin acceptance is easy to understand and it follows accounting practices widely used in business today (e.g., consider payment by services such as PayPal). Traditional accounting systems should have no problem under this practice. Generally, define a new payment method in the accounting software, relate it to the bank account that the funds will settle, and then follow the procedures that the Bitcoin service provider prescribes for accepting bitcoin in the business.
Bitcoin as a type of “Foreign Currency”
The next adoption wave will happen if bitcoin price volatility stabilizes and it becomes more widely accepted. Some leading-edge businesses already work in this fashion. Under this method of accounting, bitcoin is treated as a foreign currency; just as one would treat accepting Euros in a USD-based organization. To do this well, the business accounting system will need to understand foreign currency and related exchange prices. Traditional accounting platforms are designed with “currency data types” to accommodate only two decimal places. I was one of the early advocates to logically shift the bitcoin decimal place to the right by six digits and base bitcoin in micro bitcoin (µBitcoin) thus allowing it to work in common general ledger accounting systems.
Not all accounting systems allow for new foreign currency definitions — hence, if the business software is designed only for local currency, this method of accounting will not work. In addition, some accounting systems “hard code” their foreign currency references, and accountants may find this to be a limitation in their client or internal systems.
Under foreign currency accounting, a business bases its transactions in a local currency but may denominate transactions and/or accept foreign currency to conduct business. This practice is well understood in larger organizations — especially ones that transact in international trade.
Under this method of accounting, without respect for local tax regulations that demand different regulatory reporting requirements, bitcoin transactions effectively trigger both realized and unrealized gains and losses based on changing market currency exchange rates and timing differences between when transaction obligations are recognized and ultimately settled.
Finally, when bitcoin is treated as a foreign currency, the accounting software will price every single transaction relative to the base currency. With this price information in hand, a tax accountant can reconstitute the records offline to meet regulatory reporting requirements; such as the recent IRS guidelines that demands that bitcoin be treated as a property.
Bitcoin as a type of “Base Currency”
In the final adoption wave, while it may be far off, it is conceivable to see businesses deem bitcoin as the base currency and thus treat all other currencies as foreign — even the home currency. While this is simply an enhancement of the Foreign Currency treatment previously discussed, this method may be valuable for organizations that are fundamentally global and trade with customers, employees, suppliers and partners anywhere and everywhere. While, this accounting treatment will produce a different orientation and obviously introduces interesting reporting questions, if many organizations elect this method, it does represent a way to measure whether bitcoin has indeed achieved wide global acceptance.
Is Bitcoin integrated with the General Ledger today?
Companies that run NetSuite are set up to transact globally and with BTC4ERP, they have the full range of options to configure their accounting practices based on the way they see bitcoin used in their business. I witness some companies who simply seek a bitcoin price feed into their accounting system to help them with their own manual methods of accounting. Others indeed treat Bitcoin transactions as foreign currency and rely on the automatic bookkeeping and transaction coordination provided by my service. If bitcoin gains wider acceptance, I suspect we will see these accounting treatments on a wider range of accounting systems.
Sidekik: Decentralized Video Streaming and Storage
The Sidekik app, which is accepting bitcoin in its crowdfunding campaign, is intended to bring real-time accountability to law enforcement by streaming video and audio of encounters with police to Maidsafe.
The goal is to protect the integrity of evidence.
The app, which began its second stage of crowdfunding March 9, will do far more than just video and audio streaming. An army of attorneys is being built who will compete to be your representative if you happen to need them during an encounter with police. Sidekik seeks to connect attorneys with potential clients when they need legal representation the most.
The Sidekik team says there is an inherent power imbalance between law enforcement and civilians during these encounters, as “the vast majority of people do not know their rights well enough and tend to crumble under the pressure.”
Essential evidence also tends to be scarce, too often turning court testimony into a your-word-against-mine scenarios, which the Sidekik team believes tilts the balance of justice in favor of law enforcement.
The app is designed to gather as much relevant information as possible, including GPS location, audio and video, while calling licensed attorneys via video to deal with the encounter lawfully.
Concerns about data storage lead Martin to Maidsafe, a decentralized storage company currently in closed beta.
The value of decentralized storage
During an interview with Bitcoin Magazine, Martin expounded on the need for secure cloud storage of this sensitive information and the company’s relationship with Maidsafe.
“The concern is totally valid about having data centralized, any data,” Martin said. “It’s not just about being able to store video and making it so that whatever entity cannot hack into one server and destroy that video. It’s about a lot more than that; it is about contact lists, it’s about people’s confidential information.
“People get notices all the time from different companies that they do business with, such as credit card companies or maybe their schools, saying ‘Hey our servers got hacked, your Social Security number, your birth date, your name, someone has it,'” he said. “With Maidsafe that really is a thing of the past, there’s no more hacking that one server and grabbing all that data.”
Martin said he met Page Peterson of Maidsafe at Libertopia in San Diego last November and had his CTO Jessie Wallace talk to her about how Sidekik could use Maidsafe for the massive amounts of data that will be coming from the app.
“We’ll be storing the data on multiple secure servers, but those are centralized,” Martin said. “So we are also going to be working with Maidsafe … This is a perfect merger with them in terms of features. This way, there will not be one single place where the powers-that-be can go to and say ‘We don’t want that video released to the public.’”
What if the officer takes the phone?
The Sidekik app can also be configured to require a pin from both the user and the attorney to stop the phone from recording and streaming data once it has started.
Even if the officer takes and destroys the phone, Sidekik believes enough evidence would be gathered and stored in the cloud to show the nature of the encounter in court.
Stage of development
The first phase of funding ended late last year, enabling the development of the graphic user interface of the app, as well as feasibility studies and a blueprint of the full development of the complex software app.
Phase two, which would be funding the full development of the app, began earlier this month, and a variety of perks are available for crowdfunding supporters at Indiegogo. Those who contribute with bitcoin receive the same rewards for a contribution of 10 percent less.
To develop the app, Sidekik is working with Zco, one of the largest app development companies in the world.
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