January 29, 2016 With the Iowa Caucus just three days away, last night’s Fox News debate in Des Moines was a big moment. So who won the debate according to Iowa caucus goers? Frank Luntz: What’s your reaction? I want to show the audience at home, how many of you walked in here supporting Marco…
Category: Money
IMF: Virtual Currencies and Their Underlying Technologies Can Provide Faster and Cheaper Financial Services
On January 20, 2016 at the World Economic Forum in Davos, during the panel on Transformation of Finance, the International Monetary Fund (IMF) released a paper titled “Virtual Currencies and Beyond: Initial Considerations.”
“Virtual currencies and their underlying technologies can provide faster and cheaper financial services, and can become a powerful tool for deepening financial inclusion in the developing world,” said IMF Managing Director Christine Lagarde. “The challenge will be how to reap all these benefits and at the same time prevent illegal uses, such as money laundering, terror financing, fraud and even circumvention of capital controls.”
The paper is presented as a “Staff Discussion Note.” These documents showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate, with the disclaimer: “The views expressed in Staff Discussion Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.” Plausible deniability all the way, but presenting the document at Davos seems to strongly suggest some degree of official support.
A key conclusion of the paper is that the distributed ledger concept has the potential to change finance by reducing costs and allowing for deeper financial inclusion in the longer run, states the IMF press release. This could be especially important for remittances, where transaction costs can be high, around 8 percent. Distributed ledgers can also shorten the time required to settle securities transactions, which currently take up to three days, as well as lower counterparty and settlement risks.
At the same time, notes the IMF paper, virtual currencies based on distributed ledger technology can also serve as vehicles for money laundering, terrorism financing and tax evasion. Achieving a balanced regulatory framework that guards against risks without suffocating innovation is a challenge that will require extensive international cooperation.
A conclusion of the IMF paper is that virtual currencies fall short of the legal concept of currency or money. While acknowledging that there is no generally accepted legal definition of currency or money, the authors note that both are associated with the power of the state to issue currency and regulate the monetary system.
Currently, according to the IMF, virtual currencies are unable to function as money because of the high price volatility, the relatively small size of the virtual economy, and the fact that virtual currencies are hardly being used as independent units of account in a closed-circuit economy. In fact, notes the report, the retailers who accept payment in virtual currency usually quote prices in fiat currency.
After a simplified explanation of distributed ledger technologies for virtual currencies, the paper focuses on regulatory issues.
“The potential for rapid change in the financial industry engendered by virtual currencies is a challenge for financial regulators and supervisors,” note the IMF authors, adding that the absence of effective regulations has contributed to both benefits and risks.
The IMF authors make a difference between cryptocurrencies and “legitimate” uses of the underlying distributed ledger technology: “The growing interest in blockchain technology, independent from a [virtual currency] scheme, a priori raises fewer policy concerns, because the technology would be used in a closed system administered by regulated financial institutions.”
While advocating regulation of virtual currencies, the paper acknowledges that there are unique regulatory challenges, including the fact that the geographically decentralized nature of virtual currency networks like Bitcoin doesn’t fit easily within traditional regulatory models based on local jurisdictions. Another challenge is the fact that the traceability of virtual currency transactions is is limited due to user anonymity and anonymizing service providers that obfuscate the transaction chain.
In fact, the push to increased regulation of virtual currencies is likely to be countered by the emergence of next-generation privacy-preserving digital currencies like Zcash.
The IMF paper concludes with a list of principles that could guide national authorities in further developing their regulatory responses. Besides the guidelines mentioned above, it’s worth noting that the IMF authors realize that new closed-circuit business models, where virtual money is re-used instead of exchanged for fiat, could escape regulations, and propose to extend regulations to wallet providers.
The IMF paper confirms two current trends: Virtual currencies based on distributed ledger technology are increasingly considered by top financial institutions as a necessary part of future mainstream fintech, and at the same time regulatory pressures are increasing.
Photo Mikhail Klimentyev / Creative Commons
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Mycelium’s Leo Wandersleb: Segregated Witness a Technical Necessity
The long-lasting block-size dispute has catapulted into the center of attention again. One of the most talked-about developments is Segregated Witness, of which a public testnet iteration was launched last week. The innovation as recently proposed by Blockstream co-founder and Bitcoin Core developer Dr. Pieter Wuille is a centerpiece of a scalability “roadmap” set out by Bitcoin Core.
To find out where the broader development community stands on Segregated Witness, Bitcoin Magazine reached out to library and wallet developers; those who will need to do the heavy lifting in order to utilize the innovation once rolled out.
In part 4 of this series: Mycelium developer Leo Wandersleb.
Segregated Witness
Wuille’s Segregated Witness proposal is set to offer several improvements to the Bitcoin protocol. The benefit that has received the most attention is its potential to effectively increase the block size to a range from 1.75 megabytes to 2 megabytes without requiring a hard fork. Interestingly, however, many Bitcoin developers are more excited about the other Bitcoin protocol improvements that Segregated Witness has to offer.
Wandersleb, whose Mycelium has officially committed to integrating Segregated Witness once rolled out, acknowledged the importance of the innovation.
“Segregated Witness is not a block size increase, but a technical necessity to fix completely different issues, by also producing less load on the blockchain,” Wandersleb explained. “There is, however, a realistic chance that it will take a long while before it has an effect on total transaction throughput.”
The Mycelium developer believes, however, that Wuille’s Segregated Witness proposal is the best way forward, at this point.
“The fact that all of this is possible as a soft fork, which results in only a slightly more ugly protocol than a hard fork, is amazing at this point,” Wandersleb said. “It allows anyone to delay implementing the change, making sure nobody will be left behind.”
As such, Wandersleb is dedicated to implementing Segregated Witness in the Mycelium wallet.
“We have [been] experimenting with the Segregated Witness testnet a bit; it will probably be a very reasonable amount of work to implement, and can be done on our own schedule. Moreover, delayed implementation will not result in our users losing money, beyond the potentially higher fees they would have to pay,” he said.
Moving Forward
Roll-out of Segregated Witness on the Bitcoin network is currently scheduled for April of this year. Once a super-majority of miners agrees on the solution, Segregated Witness will be activated, and can be utilized by wallet software.
As what is perhaps the most notable difference between Bitcoin Core and Bitcoin Classic, the former plans to roll out Segregated Witness through a soft fork, while the latter wants to deploy a block size increase through a hard fork requiring all full nodes on the network to switch.
Wandersleb has voiced support for a block size increase hard fork in the past, but has come around since.
“Maybe we fell for the trap of talking about the block size, rather than more abstract goals we should commit to instead,” Wandersleb explained. “The Number One priority is censorship resistance. Without that, Bitcoin would be just another PayPal. If censorship resistance is covered we can work on priority Number Two: process all the world’s morning coffees and more.”
And, commenting on the scalability road map as set out by Bitcoin Core:
“I believe that Bitcoin Core, committed to these values, should acknowledge that increasing the block size or other hard forks might possibly be necessary. Nothing more. No tiny hard fork now, but an acknowledgement that avoiding hard forks at all costs might not be enough.”
For more information on Segregated Witness, see Bitcoin Magazine’s three–part series on the subject, or part 1, part 2 and part 3 of this development series.
The post Mycelium’s Leo Wandersleb: Segregated Witness a Technical Necessity appeared first on Bitcoin Magazine.
New York Times: Bill Clinton Has Lost His ‘Magic’
The New York Times reports Bill Clinton is fading as a political superstar during this campaign.
Real Estate Latest Bitcoin-Friendly Luxury
Bitcoin users have not been shy about using the currency to make large purchases in the past. With the wide range of Bitcoin-friendly retailers on the Internet, it’s become even easier to purchase everything from land to jewelry with the digital currency.
As of January 17, 2016, in Philadelphia, you could buy a condo. The new Bitcoin-friendly condominiums went up for sale in the city’s historic Manayunk district at a price of around $365,000 – or 795 bitcoins, according to Curbed. This makes them the first condos in the city to be sold with Bitcoin users in mind.
A quick look at the Falcon Condominiums website reveals that the building was once home to The Polish Falcons Club. Now, condos sprawl throughout the structure, boasting hardwood flooring and extra-large windows with views of the city. State-of-the-art kitchens and private outdoor terraces round out the list of amenities, but could flexible payment options also be driving a new type of buyer to these properties?
It appears that those who have big money to spend are particularly interested in purchasing property using Bitcoin. In 2014, the Wall Street Journal reported on a Lake Tahoe property that sold for $1.6 million in bitcoin.
BitPremier founder and CEO Alan Silbert was behind the first large real estate transaction involving Bitcoin back in 2014. The transaction totaled around $500,000, according to HousingWire. Since then, Silbert has continued to see the market evolve directly on BitPremier.
“I think we are still too early in Bitcoin’s evolution to see substantial changes to the real estate market, but it has certainly started people thinking about disruption to the space,” said Silbert.
BitPremier, the Bitcoin luxury marketplace, is specifically geared toward consumers who want to spend their bitcoins on fast cars, vacation homes and everything in between (think private islands). Sellers who want to get rid of their luxuries can do so on BitPremier as well, making it a go-to spot on the Internet for all things related to Bitcoin trading.
“For now, the appreciation of bitcoin to date has created some wealthy Bitcoiners who want to diversify into other assets, be it real estate, commodities or whatever,” Silbert continues. “Real estate is seeing the benefit of that trend, as we witnessed first-hand with the villa sale BitPremier brokered between a property developer in Bali and an early Bitcoin adopter in the U.S.”
But Silbert sees the impact of Bitcoin spreading far beyond the real estate market.
“Every major financial institution has one or more people researching Bitcoin or the blockchain. I give everybody the disclaimer that it is a high-risk investment and they should only invest money they can afford to lose. That being said, Bitcoin has come a long way in a short period of time and the future looks very exciting.”
Krystle Vermes is a professional writer, blogger and podcaster with a background in both online and print journalism.
The post Real Estate Latest Bitcoin-Friendly Luxury appeared first on Bitcoin Magazine.
Chris Christie: Marco Rubio ‘Acts as If He’s Deaf’
New Jersey Governor Chris Christie attacked Sen. Marco Rubio Friday morning, asserting that the Florida Senator was ignoring his record in hopes that voters would forget his controversial immigration reform effort.
Taking Action to Advance Equal Pay
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Taking Action to Advance Equal Pay
January 29, 2016 at 9:43 AM ET by Melanie Garunay
Watch live at 12:00pm ET: President Obama speaks on the 7th Anniversary of the Signing of the Lilly Ledbetter Fair Pay Act
“It is fitting that with the very first bill I sign…we are upholding one of this nation’s first principles: that we are all created equal and each deserve a chance to pursue our own version of happiness.”
—President Barack Obama, January 29, 2009
Seven years ago today, President Obama signed into law his first piece of legislation as President: the Lilly Ledbetter Fair Pay Act, which empowered women to recover wages lost to pay discrimination. While the gender pay gap has narrowed slightly over the past two years, there is much more work to be done to ensure fair pay for all. Today, the median wage of a woman working full-time year-round in the United States is about $39,600—only 79 percent of a man’s median earnings of $50,400.?
Today, the President is highlighting several additional actions that his Administration is taking to advance equal pay for all workers and further empower working families:
- The Equal Employment Opportunity Commission (EEOC), in partnership with the Department of Labor, is publishing a proposal to annually collect summary pay data by gender, race, and ethnicity from businesses with 100 or more employees. The proposal would cover over 63 million employees. This step – stemming from a recommendation of the President’s Equal Pay Task Force and a Presidential Memorandum issued in April 2014 – will help focus public enforcement of our equal pay laws and provide better insight into discriminatory pay practices across industries and occupations. It expands on and replaces an earlier plan by the Department of Labor to collect similar information from federal contractors.
- The President is renewing his call to Congress to take up and pass the Paycheck Fairness Act, commonsense legislation that would give women additional tools to fight pay discrimination.
- The Council of Economic Advisers is releasing an issue brief, the “Gender Pay Gap on the Anniversary of the Lilly Ledbetter Fair Pay Act,” that explores the state of the gender wage gap, the factors that influence it, and policies put forward by this Administration that can help address it.
- The White House will host a summit on “The United State of Women” on May 23rd that?will create an opportunity to mark the progress made on behalf of women and girls domestically and internationally over the course of this Administration and to discuss solutions to the challenges they still face.
These new actions will build on the steps?President Obama has taken since day one create more equality in the workplace. In April 2014, to celebrate Equal Pay Day, he signed two executive actions to recognize the full equality of women and increase equity for all in the workplace. The first was an Executive Order prohibiting federal contractors from discriminating against employees who discuss their compensation. The second was a Presidential Memorandum instructing the Secretary of Labor to propose a new regulation requiring federal contractors to submit summary data on compensation paid to their employees, including by race and gender.
The Earned Income Tax Credit: Encouraging Work, Boosting Incomes, and Reducing Poverty
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The Earned Income Tax Credit: Encouraging Work, Boosting Incomes, and Reducing Poverty
January 29, 2016 at 11:08 AM ET by Seth Hanlon, Jacob Leibenluft
It might not be circled on everyone’s calendar, but today marks an annual event that tax policy experts look forward to?– Earned Income Tax Credit (EITC) Awareness Day.
The EITC is a tax credit that encourages and rewards work by reducing taxes and boosting incomes for low- and moderate-income workers. Today, there’s quite a bit to celebrate, as the President and Congress took an important step in December by making permanent vital expansions of the EITC and the related Child Tax Credit (CTC). But this year, we hope to go a step further – strengthening the EITC by enacting legislation that expands the credit for workers without dependent children, a policy that has significant support from both Democrats and Republicans.
If you were wondering why we celebrate EITC Awareness Day, here are a few key numbers worth knowing:
28 million
The number of working families that will benefit from the EITC in 2016, with each receiving a tax credit averaging more than $2,300.?
13.2 million
The number of low-income workers who would be directly helped by the President’s proposal to expand the EITC for workers without dependent children.
16 million
The number of working families who will benefit each year from the EITC and CTC expansions made permanent in the tax and budget legislation the President signed in December. These families will receive an average tax cut of about $900 each.
More than 9 million
The number of people the EITC and CTC lift out of poverty each year, making them one of the most successful tools in combating poverty.? The EITC and CTC lift about five million children out of poverty each year – more than any other federal program.
17 percent
How much researchers estimate that earnings will increase in adulthood for children in low-income families, on average, if they receive a $3,000 annual income boost when they are young – similar to what the EITC provides many families. The EITC is also linked to better infant and maternal health and educational achievement.
As the President said in his State of the Union Address, he hopes to work with Congress this year to expand the EITC for these workers, who are currently the only group the federal government taxes into or deeper into poverty, partly because they are only eligible for a very small EITC under current law. The President and Speaker Ryan have nearly identical proposals that would roughly double the maximum EITC for this group and make single workers ages 21-24 eligible. The President’s proposal would also expand eligibility to workers age 65 to 66 without dependent children to match long-scheduled increases in the Social Security retirement age.
7
The number of consecutive presidents who’ve signed an EITC expansion into law.?The EITC has traditionally had strong bipartisan support: It was first enacted under President Gerald Ford in 1975, and has been strengthened under Presidents Jimmy Carter, Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama.??
27
The number of states, including the District of Columbia, that have adopted a state-level EITC to supplement the federal credit and further boost working families’ incomes.?
But there’s one last number that points to the reason for EITC Awareness Day. Just 80 percent of taxpayers who qualify claim the EITC. Although this is a relatively high take-up rate, it means millions of other eligible taxpayers miss out. So as we work together to strengthen the EITC, you can also find resources about how you or your organization can help ensure hardworking families claim the credits they’ve earned here.
Seth Hanlon is a Special Assistant to the President for Economic Policy. Jacob Leibenluft is?Deputy Director of the National Economic Council.
Red Alert: Fox Debate’s Gotcha-Video Is Sign of Media Sucker Punches to Come
During Thursday night’s Republican primary debate, in order to attack and bloody both Ted Cruz and Marco Rubio, Fox News used selectively-edited video montages of both senators saying stuff. Video is the most powerful propaganda weapon ever conceived, and not only is the use of gotcha-video in a presidential debate highly prejudicial and subjective, a debate setting is not the proper venue for any sort of gotcha question. Save the cheap gotchas for interviews. Debates are about issues, the differences between the candidates, and the differences with one another that they wish to highlight. Fox’s destructive precedent of using gotcha-video needs to be strangled in the crib. The candidates, both Republicans and Democrats, should come together and put an immediate stop to the use of this misleading nonsense. Note how Fox News used its powerful gotcha-video against only two candidates, and not all seven. These were devastating moments served out in unequal portions, another example of how an unelected media attempts to choose our candidates. Now just try to imagine the video the anti-Trump Fox News had in store for The Donald. On top of everything else the embattled cable giant had planned to sandbag Trump with last night (illegal