Bitcoin 2021 Conference

Short personal summary of @TheBitcoinConf. Bitcoin’s new narrative is ‘Bitcoin represents global economic empowerment’ Thank you @jackmallers

Welcome to the B4B Blog

Providing tools, tips, and techniques for promoting Bitcoin for global economic empowerment. I claim no expertise. I read fast and write slowly. I hope you will find something useful. There are some older posts here from my deep dive into the Lightning Network. You can also follow me on Twitter @cstack.

CCSS Checklist for Corporate Crypto Security

Enterprises looking to hold or transact with crypto currencies such as bitcoin, need to implement appropriate levels of governance. Bitcoin is a money-just as your finance departments have control and compliance standards over the handling of corporate cash they also need to implement standards appropriate for handling Bitcoin.

CCSS, crypto currency security standard, is an excellent start for organizations jumping on the bitcoin bandwagon.

CCSS offers three levels of security. We highly recommend that organizations begin ticking off the Level I set of standards.

The standards are divided into several categories including: key creation, wallet creation, key storage, key usage, audit, and several others.

Here’s a link to the website and the full set of CCSS standards.

Multi-Key Technology Circa 1500 AD

The Byzantine Monks of Mt. Athos have a multi-key security system protecting their invaluable religious relics.

It is a 4-Key system with each unique key being held by a different monk.

CBS 60 Minutes recorded this amazing behind the scenes footage of the multi-key system in actual use.

They’re under lock and key. It’s not a new security system, but it works. Normally it takes more than one monk to unlock the ancient door, because no one monk is allowed to have all four keys at the same time. It is sort of a medieval version of the nuclear launch control.

Nothing new under the Sun.

1 Bitcoin = 6,400 BigMacs – A New Record High

The bitcoinppi measures the value of bitcoin by its purchasing power of a worldwide available and uniform item – the Big Mac hamburger. This makes the bitcoin purchasing power index agnostic to monetary policy. The bitcoinppi hence lets you express bitcoin’s value in a central bank independent way. Much similar to how bitcoin operates technologically as a currency and payment network.

The BigMac Index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.

Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of dozens of academic studies. For those who take their fast food more seriously, we also calculate a gourmet version of the index for 55 countries plus the euro area.

Every Business Needs a Bitcoin Plan Now !

Michael Novogratz, former Goldman Sachs partner recently stated to Bloomberg:

  • Bitcoin is a store of value, like “digital gold,” and will unlikely be used as traditional currency for the next five years, the former Goldman Sachs partner and hedge fund manager Mike Novogratz told Bloomberg.
  • The Bitcoin bull expects the digital currency’s price to keep rising as more people pile into the idea of adding it to their portfolios.
  • He expects several banks and credit-card companies to catch up to PayPal’s recent decision to allow customers to transact in cryptocurrencies.
  • “It’s no longer a debate if crypto is a thing, if Bitcoin is an asset, if the blockchain is going to be part of the financial infrastructure,” Novogratz said. “It’s not ‘if’, it’s ‘when’, and so every single company has to have a plan now.”

Business Insider, October 26, 2020

An Opinionated Review of Binance, Coinbase, and Kraken for US Corporations

In preparation for our upcoming November 12 webinar on crypto governance for corporations, we have tested the three primary US dollar crypto exchanges readily available to US corporations. Any corporation interested in utilizing Bitcoin, Ethereum, or other cryptocurrency needs a fiat on/off-ramp – some service to swap US dollars for crypto. For large volume purchases, an OTC broker may be preferred, but if you are primarily interested in climbing the crypto learning curve and getting your business feet wet you need an on-ramp between the US dollar and crypto. Binance.US, Coinbase, and Kraken all provide both individual and corporate accounts, transfers back-and-forth between your bank, and serve as a trading platform or exchange.

The total application process has taken about 30 days during which we applied for corporate accounts at each of the three exchanges. While there were certainly some similarities in process, there were more differences than we had anticipated.

Much of the experience in applying for a corporate account is driven by US regulations around KYC, or know your customer and AML or anti-money laundering. While the motivation behind each of these sets of regulations is completely understandable, many of the details and implementations truly defy common sense. The regulatory goals include identifying the risk of fraud, criminal activity, money laundering, and terrorism – all laudable goals. In practice, however, much of the practical implementation results in little more than red tape and ridiculous delays. 

It makes perfect sense to verify customer identity and legitimacy. The way this is accomplished however does seem slightly idiotic. The majority of the KYC/AML process involves submitting documents to the bank or exchange. I would estimate that over half of the documents requested could easily be created in any word processing application or even by a Photoshop beginner. Any halfwit criminal could easily provide most of the documents requested. End of rant!

Worth noting is that not all exchanges are available yet in all US States. As this information is constantly changing you need to check which exchanges are available in your State of choice.

Rather than keep you in suspense the winner was Coinbase, with Kraken a close second, and Binance.US a distant third. Neither I nor my company Flashstarts have any interest in any one of the three companies. I have been following the crypto economy for the last decade and I began this review with a preference for Binance due to their charismatic CEO. More recently, Coinbase took what I believe to be a mistaken step towards political neutrality by declaring the business to be apolitical. So Coinbase was a begrudging winner. Now onto the details.

All three applications were started and submitted on Tuesday, September 21, 2020. We succeeded in funding our Coinbase account on October 23, 2020. We finally gave up on our Kraken and Binance.US applications because of the delays and hurdles.

The application processes generally fell into three categories: personal identity verification, corporate information and records uploads, and finally bank account integration.

Personal identity consisted of basic email verification, and driver’s license/passport uploads, and then an attempt at facial recognition.  Binance facial recognition was particularly problematic.

Coinbase responded to our application on September 26 with some additional questions. Our Coinbase application was approved on September 28 – one week after submission.

Kraken responded to our application on September 23 requesting additional information. Due to a variety of reasons (some of the delays were on us), and a lot of back and forth for several weeks we eventually abandoned the application.

Binance.US responded to our application on October 9 with requests for additional information including some truly unique head-scratching requests like copies of actual customer invoices showing our source of funds, asking how we ‘interact with crypto’, the purpose of the account, and an organizational chart. We have not responded.

This was not a scientific study – only one company’s experience at a single point in time. Once you assemble all the basic information the process is time-consuming but not difficult. So I suggest you do what we did and apply for corporate accounts at all three services. Redundancy and backup planning is an excellent goal in all things crypto!

More feature specific, detailed, and less opinionated reviews are available here:

As a side note, I have personal accounts at all 3 exchanges and am generally satisfied. The greatest area of difficulty has been US bank integrations. Much of the difficulty it seems is on the bank side, not the exchange side. I have had integrations that worked for a while and then stopped, one that never worked, and one that only occasionally works. I will also note that Coinbase has had the most frequent outages – where the service is unavailable. Not a big deal for me, because I am not actively trading, but worth noting.

If you would like to hear more about our experience and learn more about implementing crypto and crypto governance in your business please join our free webinar on November 12, 2020.

Bitcoin Basics

You don’t need to be a techie to use Bitcoin. The world of cryptocurrency is rapidly growing and one day in the near future, it will be as common as traditional currency. It has already been adopted by mobile payment giants like Venmo, Paypal, and Cash App meaning anybody can conduct transactions now. In terms of investing, Square and Microstrategy have added Bitcoin to their assets in an effort to stay ahead of the curve. As Bitcoin grows in popularity it’s crucial that you know the basics so that you can make smart decisions whether your investing or spending. Below, we’ve answered your biggest questions about Bitcoin:

“We see bitcoin as potentially the greatest social network of all.” – Tyler Winklevoss

What is Bitcoin?

In the simplest terms, Bitcoin is a shared public ledger of transactions. It was launched in 2009 by an anonymous individual who goes by the name Satoshi Nakamoto. Since Bitcoin is a daily new form of digital currency, there are very few regulations surrounding it and it is both open and open-sourced. This means that you can program with or on top of the code that runs the system.

How is it stored?

The cryptographic keys of Bitcoin are stored in either hot or cold wallets. Hot wallets are found on desktop or mobile devices that are connected to the internet. This includes applications like Venmo and Cash App. Cold wallets are physical paper or hardware wallets that are offline, making them more secure than hot wallets, which have the risk of being compromised by hackers. Devices like USBs and actual pieces of paper with private and public device keys written out both allow for more security.

What are the benefits of bitcoin over traditional currency?

As it is fairly new to the financial landscape Bitcoin offers many benefits that traditional currency lacks. For example, it is accessible 24x7x365 since it is not connected to a banking system and transactions are fairly fast. The system allows for privacy but not anonymity and transactions are automatically embedded into the database. Some of the biggest pros of using Bitcoin are that it is disinflationary making it a great investment, and it is transnational allowing users to send it around the world without intermediaries.

Where can I use bitcoin?

Recently PayPal and Venmo adapted Bitcoin into their systems now making it readily available for anyone to use on mobile payment applications. Large companies are also starting to accept Bitcoin from major retailers to fast food chains. Flashstarts also accepts Bitcoin now. You can use the code below to now transfer Bitcoin payments to us.

Having a basic understanding of Bitcoin is just the beginning. As we look to the future, Bitcoin is expected to have a major impact on how we conduct daily transactions and make business deals and investments. We also have an upcoming crypto governance webinar on November 12th at 2 pm EST where we will review how to set up a wallet and lay out fundamental guidelines for handling cryptocurrency for your organization. Register here!

“I do think Bitcoin is the first [encrypted money] that has the potential to do something like change the world.” – Peter Thiel (Co-Founder of Paypal)