Bitcoin’s status as “money” and as a financial instrument saw some interesting news this week after a Miami judge dismissed a money laundering case because Bitcoin is not money and in the same week a European Stock Exchange added its first regulated Bitcoin exchange-traded instrument (ETI). Bitcoin web-wallet and exchange Coinbase, Inc. has also expanded its global reach by adding support for customers in Australia (who can now buy, sell and trade bitcoins) and at the same time started trading in Ether (ETH, Ethereum’s cryptocurrency).

Accepting bitcoins has gotten easier for merchants now that NetCents has added bitcoin as a payment capability to its processing network covering 194 countries. And Visa Europe Collab, an innovation lab within Visa, Inc.’s Eruopean branch, began working with Bitcoin-technology company SatoshiPay to provide micropayment capabilities using Bitcoin transactions for the Internet of Things industry (allowing easier machine-to-machine payments using debit/credit cards to transact with bitcoin payments).

All of this makes it a week of finances and financial-technology news for Bitcoin.

As for the market value BTC landed at $657.89 USD (BitcoinAverage.com) and has stayed between $650 and $665. The value has fallen a little bit to the current $657 from the high of $665 last week only to fall into the same price bracket as two weeks ago (around $655). So far this has shown fairly little volatility, but enough to keep it interesting.

Image via Pixabay

Money laundering case dismissed by judge: Bitcoin is not money

In an interesting turn for the “is Bitcoin money?” question a judge in Miami, Florida dismissed a money laundering case on account that for the purpose of the case, Bitcoin did not count as money.

This case, first reported by SiliconANGLE writer Duncan Riley in May 2016, included that the defense argued exactly this against the money laundering charge held on Michell Espinoza, accused of illegally selling and laundering $1,500 worth in bitcoins to undercover detectives who claimed they wanted the coins to buy stolen credit card numbers.

In the end it appears that the judge agreed with the assertion and ruled that the case could not go forward because bitcoin was not a standard monetary instrument.

“This Court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, that Bitcoin has a long way to go before it is the equivalent of money,” the Miami-Dade Circuit judge Teresa Mary Pooler said in her ruling. “While Bitcoin can be exchanged for items of value, they are not a commonly used means of exchange … Bitcoin is a decentralized system. It does not have any central authority, such as a central reserve, and Bitcoins are not backed by anything. They are certainly not tangible wealth and cannot be hidden under a mattress like cash and gold bars.”

“This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning,” she added.

The question of Bitcoin’s status as money (or a monetary instrument) has been debated in multiple countries and the outcome differs depending on the government organization involved. Certainly bitcoins can be exchanged for terrestrial (or fiat) money, hold and exchange value and can be used as units of exchange; but criminal laws function on carefully worded definitions and in this case the judge felt that the definition of money did not match Bitcoin.

Bitcoin gaining confidence as a financial asset means that more companies will be willing to work with it as an underlying unit of exchange, and although a European stock exchange is not Wall Street, it’s another example of Bitcoin adoption. Image via Wikimedia.

Europe gets its first regulated bitcoin exchange-traded instrument

Europe’s Gibraltar Stock Exchange will be adding its first regulated Bitcoin exchange-traded instrument (ETI) with the “BitcoinETI” listing, according to SiliconANGLE writer Duncan Riley. ETIs allow investors to exchange trade in an underlying security and participate in its performance, and in this case that security is Bitcoin.

Well-known Bitcoin web-wallet and exchange service Coinbase, Inc. is acting as custodian of the ETI’s bitcoin. The listing is issued by iStructure PCC PLC in a joint venture between the Gibraltar government and developers Argentarius ETI Management Limited and Revoltura Ltd. (iStructure PCC PLC subsidiary).

While an ETI is only an investment opportunity for the most wealthy individuals and firms, it still shows an increasing confidence from the financial industry in Bitcoin as its own financial instrument.

Photo via Pixabay

Coinbase expands to Australia

The Land Down Under just got a little bit more interesting for Bitcoin users as Coinbase, Inc., Bitcoin web wallet service and exchange, expanded its services to Australia. Customers in Australia can now buy bitcoin and ether with credit and debit cards.

According to Coinbase, ETH/BTC trades are now available on the company’s professional digital currency trading platform GDAX for customers in Australia.

To get started, customers simply need only click on the “Trade” page on Coinbase.com or tap “Buy” or “Sell” on the company’s iOS and Android apps.

The addition of Australia raises the number of countries that Coinbase has reach with to a total of 33.

Coinbase adds Ether support for buying, selling and storage

Last month, Coinbase, Inc. changed the name of its professional digital currency exchange to GDAX (mentioned above) and the exchange also added the ability to exchange Ether (ETH), the Ethereum blockchain token cryptocurrency. This week, Coinbase added the ability to buy, sell, send and store ether alongside bitcoins.

“There has been a lot of activity in Ethereum recently: the largest crowdfunding in history (The DAO), the subsequent attack on The DAO, and a resulting hard fork,” Coinbase said in a blog post. “Ethereum is still in an early and experimental phase, and as it matures will likely evolve to serve a different purpose than Bitcoin.”

The addition of ETH to Coinbase’s cryptocurrency stable did follow interesting news about Ethereum and The DAO (Distributed Autonomous Organization). The DAO suffered an attack in June that led to the theft of $55 million in Ether. Since then Ethereum committed to a hardfork to recover the stolen ETH in the DAO.

Since the attack against the DAO and the hardfork to recover the stolen funds volume has been up for ETH to USD. Chart via CryptoCompare.com.

The result of this news has also led to an increase of overall trade volume for ETH making it a good market for exchanges.

NetCents opens up payment gateway across 194 countries

Vancouver-based NetCents (NetCents Technology, Inc.) payment gateway announced the beta opening of a payment gateway allowing customers to accept bitcoin deposits in 194 countries. NetCents is a payments technology company that offers consumers and merchants online services for managing a variety of payment methods via its processing platform. The platform is connected with the Automated Clearing House (“ACH”) through the Royal Bank of Canada (“RBC”, “Royal Bank”).

“194 countries (global) is a huge milestone for the company and marks the beginning of a new chapter. NetCents, aside from PayPal, has the largest footprint for credit card deposits. We offer our users a universal, efficient platform for secure payment solutions,” said Clayton Moore, chief executive officer and founder, NetCents Technology, in a press release. “We are focusing on boarding merchants with our streamlined, digital currency API, easy integration, and ecommerce platforms to remain at the forefront of the digital payments revolution.”

NetCents sees a trend where customers are beginning to abandon traditional means of payment processing for digital means. In 2015 alone non-cash payments reached a record high of $389.7 US billion (citing the World Payments Report 2015 by Capgemini and Royal Bank of Scotland).

The addition of Bitcoin payments expands that potential audience and puts NetCents into competition with merchant processors such as Coinbase, BitPay, Circle and others.

Visa Europe Collab and SatoshiPay team up to make micropayments a reality

Earlier this year Visa Europe Collab, an innovations lab inside Visa Inc.’s European branch, partnered with London-based SatoshiPay Ltd. to deliver a proof-of-concept for doing microtransactions (payments as tiny as fractions of a cent) on the Bitcoin blockchain. The plan is to provide a the financial network backbone for payments done by connected devices as part of the Internet of Things where machines would pay machines in tiny amounts for small services such as a few bytes of storage space, an hour of electricity, a little bit of data or any number of micro-cost efforts.

Microtransactions has long been a hopeful killer-app of Bitcoin as this is something traditional financial systems cannot handle due to overhead greatly overwhelming any significantly small payments. However, transactions on the Bitcoin blockchain still incur a fee and payments below fifty cents in bitcoins still lose a lot to fees. Work to resolve this has been going on for some time by bundling multiple small payments together (to dilute fees) or through experimental payment channels such as the Lightning Network.

SatoshiPay uses smart-contracts on the Bitcoin blockchain in order to provide a payment channel that bundles payments over a period of time using a micro-payments channel protocol.

According to SatoshiPay founder Meinhard Benn this allows payments as low as 1 satoshi (the smallest current fraction of a Bitcoin at a hundredth of a millionth BTC) to be made as long as enough payments are made over the time period to not be rejected by the network. Although he says that mostly it is expected that a minimum of 1,000 satoshis will generally be the floor due to practical considerations.

Benn told CoinDesk that the partnership with Visa would produce a proof-of-concept providing the ability to make extremely small purchases of bitcoins with credit cards and establish a safter method of doing so with said cards.

“During the PoC, we will establish a safer method of purchasing small amounts of bitcoin using credit and debit cards,” said Benn. “With a process for fiat payments in place, we will also integrate other payment local methods like direct debit or instant bank transfers.”

Considering payment networks for the Internet of Things

The Internet of Things connected device machine-to-machine payments and service transfer makes for a still emerging field with companies seeking to define it and their own roles. Already we have seen what markets and payment channels using the Bitcoin blockchain can do with 21 Inc.’s Bitcoin Marketplace, which would allow IoT devices to monetize their services..

What SatoshiPay’s partnership with Visa Europe Collab will show is the next step towards bridging the gap between using bitcoins and using dollars (or in this case credit).

Not all business in the market for using machine-to-machine payments will want to deal directly with bitcoins–for example, to use bitcoins you must first buy some from a payment processor such as Coinbase, BitPay, Circle or another. But with SatoshiPay’s proof-of-concept payment network the bitcoin portion will be connected to credit/debit cards and that takes away a little bit of the friction of buying/selling bitcoins themselves.

This reduction of friction means that SatoshiPay’s service would allow a company who wants to deploy an Internet of Things solution that pays for itself with micropayments would be much easier to set up and maintain.

Possible uses for this might be paying for lightbulbs that only pay for electricity when they’re on (for example lights that only come on for specific purposes such as when people are in the vicinity). Other examples include data-collection devices that could record weather conditions, pollutants, foot traffic or any number of other data points that could then individually sell that data via an API for tiny amounts of money. Individually these would not make much money, but in aggregate enough sensors and enough interest could make for a functional business model.

A business model that could only exist because of the Internet of Things and a functional micropayments transaction network such as 21 Inc. or SatoshiPay.

Featured image credit: Associated Press