Are there differences between the sale of an unopened Super Mario Bros. computer game and of the digital collage of 5,000 images? Viewed from the perspective of the doctrine of exhaustion, we can easily conclude that the two transfers have significant differences. The auction of the tangible data carrier of the Super Mario’s 1986 edition (for $660,000) 1 fits well into the doctrine. The auction of the NFT (non-fungible token) representing Beeple’s “Everdays: the First 5000 Days” (for an equivalent of an astounding $69.3 million) 2 seems to be hype with a snowball effect rather than a modern encapsulation of digital exhaustion. Some commentators, 3 including the present author in collaboration with Alexandra Giannapoulou, João Pedro Quintais, and Balázs Bodó, 4 have thoroughly introduced the incompatibility of the NFT mania with the existing copyright status quo, and so – in connection with the present book’s topic – the sale of tokenized information, which is capable of representing information related to digital artworks, is practically excluded from the scope of the exhaustion of the right of distribution. At the same time, NFTs de facto offer a “code-based digital ecosystem that has practical consequences for the copyright-relevant fields of creativeness.” 5 The sale and resale of NFTs is possible; an exchange of information and title to “own” and “trade” information related to copyrightable subject matter is technologically guaranteed. In line with that, a quasi-exhaustion regime has also emerged. As such, the NFT mania can practically evidence the need for and modern technology’s capability of offering digital marketplaces for artworks as well.
The next major wave of Bitcoin regulation will likely be aimed at financial instruments, including securities and derivatives, as well as prediction markets and even gambling. While there are many easily regulated intermediaries when it comes to traditional securities and derivatives, emerging bitcoin-denominated instruments rely much less on traditional intermediaries such as banks and securities exchanges. Additionally, the block chain technology that Bitcoin introduced for the first time makes completely decentralized markets and exchanges possible, thus eliminating the need for intermediaries in complex financial transactions. In this Article we survey the type of financial instruments and transactions that will most likely be of interest to regulators, including traditional securities and derivatives, new bitcoin-denominated instruments, and completely decentralized markets and exchanges. We find that Bitcoin derivatives would likely not be subject to the full scope of regulation under the Commodity Exchange Act to the extent that such derivatives involve physical delivery (as opposed to cash settlement) or are non-fungible and not independently traded. We also find that some laws, including those aimed at online gambling, do not contemplate a payment method like Bitcoin, thus placing many transactions in a legal gray area. Following the approach to virtual currencies taken by the Financial Crimes Enforcement Network, we argue that other financial regulators should consider exempting or excluding certain financial transactions denominated in Bitcoin from the full scope of their regulations, much like private securities offerings and forward contracts are treated. We also suggest that to the extent that regulation and enforcement becomes more costly than its benefits, policymakers should consider and pursue strategies consistent with that new reality, such as efforts to encourage resilience and adaptation by existing institutions.
Designed to compete with fiat currencies, bitcoin proposes it is a crypto-currency alternative. Bitcoin makes a number of false claims, including: solving the double-spending problem is a good thing; bitcoin can be a reserve currency for banking; hoarding equals saving, and that we should believe bitcoin can expand by deflation to become a global transactional currency supply. Bitcoin's developers combine technical implementation proficiency with ignorance of currency and banking fundamentals. This has resulted in a failed attempt to change finance. A set of recommendations to change finance are provided in the Afterword: Investment/venture banking for the masses; Venture banking to bring back what investment banks once were; Open-outcry exchange for all CDS contracts; Attempting to develop CDS type contracts on investments in startup and existing enterprises; and Improving the connection between startup tech/ideas, business organization and investment.
Technological development and the increased use of the internet have led to the proliferation of virtual communities. Some of these communities have created and circulated their own currency for exchanging goods and services. Bitcoin is currently the most popular among these virtual or digital currencies and has been in news recently because of the wild fluctuations in its "value" and also significant venture capital investment in entities associated with it.1 Bitcoin is relevant in several areas of the financial system and is therefore of interest to central banks, consumers and investors. Digital currencies are part of a broader group of virtual currencies that include credit card points, air miles, loyalty points and coupons (Chart 1). With the advent of the Internet, mobile devices and detailed consumer information, companies are increasingly using digital currencies as a marketing tool. As a result, there has been a sharp increase in the use of digital currencies, particularly for app-based coins and tokens, mobile coupons, and personal data exchanged for digital content. As these trends evolve, digital currencies have the potential to become more popular and compete with traditional currencies. This paper aims to provide some clarity in particular on Bitcoin, its role and potential future use in the financial system and the risks associated with this form of digital currency.. It will begin by providing a short introduction to the Bitcoin network as well as describe the benefits of allowing the Bitcoin network to develop and innovate. It will highlight concerns for consumers, policymakers and financial regulators. Next it will analyze the role that Bitcoin could play in the financial system. The paper will conclude by providing recommendations to address policymakers' concerns while allowing for further innovation within the Bitcoin network. An initial comprehensive overview of this kind is absent from the existing literature. This paper intends to fill that gap in the literature.
This Note discusses the relationship of Bitcoins, a cyber-currency, to the Bank Secrecy Act and discusses money laundering and tax evasion. This Note highlights the use and potentially problematic implications of Bitcoins in commerce and discusses their current regulation by the government, both within the United States and internationally, to guard against these threats. This Note addresses the regulation of Bitcoin exchanges, the exchanges' vulnerability to cyber-attacks, and the value of trust to the users of Bitcoin exchanges. This Note concludes that well known exchanges that operate both within and outside the United States generally self-regulate in order to gain the trust of their users despite the cyber-attacks on exchanges in the past. This Note also addresses the tax-reporting implications of foreign Bitcoin exchanges, looking by analogy at attempts to gain information from known tax havens.This Note argues that, given the applicability of the BSA to Bitcoin exchanges, the Bitcoin system poses serious questions relating to money laundering and tax reporting, mostly with regard to the less trustworthy exchanges known for their illegal activity. Some Bitcoin exchanges and e-wallets may also have the potential to become the next tax havens. Many exchanges voluntarily implement measures amounting to self-regulation in attempts to appear more trustworthy to wary consumers or in attempts to avoid criminal or civil sanctions. Whether this self-regulation is sufficient to achieve the goals of preventing money laundering and other criminal activity is debatable. Exchanges that have no need to appear trustworthy, however, still pose the same risks of money laundering and other illegal activity contemplated by the FBI. Moreover, ways exist in which criminals can work around the current regulatory scheme to achieve criminal goals; in that respect, the current regulatory scheme is ineffective to prevent the targeted criminal activity. This Note recommends a supplemental regulatory scheme that would target the areas that current regulation fails to address in combating money laundering, tax evasion, and other criminal activity.
Tobias Bamert, Christian Decker, Lennart Elsen, Roger Wattenhofer · 5 authors
Cashless payments are nowadays ubiquitous and decentralized digital currencies like Bitcoin are increasingly used as means of payment. However, due to the delay of the transaction confirmation in Bitcoin, it is not used for payments that rely on quick transaction confirmation. We present a concept that addresses this drawback of Bitcoin and allows it to be used for fast transactions. We evaluate the performance of the concept using double-spending attacks and show that, employing our concept, the success of such attacks diminishes to less than 0.09%. Moreover, we present a real world application: We modified a snack vending machine to accept Bitcoin payments and make use of fast transaction confirmations.
Working life requires employees to continuously update their competences, making lifelong learning an important but challenging part of professional development. This study aims to look for solutions to uncover the tacit and implicit knowledge within the enterprise by the means of social media. Our interest is specially focused on challenges on informal learning and refining and sharing of the tacit knowledge among these expert companies. We have so far collected data from two enterprises about their current knowledge sharing habits and procedures and found out the pitfalls they have experienced in their working culture concerning finding and sharing knowledge. The main challenges (apart from lack of time, which is quite obvious result today) are defects in storing information in a way that enables its easy rediscovery and the huge amount of information from which to filter the relevant pieces of knowledge. Particularly the centralized experts in an insurance company find the lack of regular vertical interaction between the decentralized claim handlers a drawback. There exists a lot of overlapping effort as they need to tell the same issues many times to various claim handlers. Taking these challenges into account new working models will be put into practice utilizing collaborative tools, like wikis and chat forums.
Amanda Talsma, Jan Sloots, Janneke van de Ouweland
Dit onderzoek is verricht voor het Lectoraat Duurzaam Financieel Management aan de Hanzehogeschool. Er wordt onderzocht welke gevolgen het gebruik van de Bitcoin heeft voor de maatschappij.
This paper investigates the semiotics of Bitcoin, an electronic cash system that uses decentralized networking to enable irreversible payments. For enthusiasts, Bitcoin provides an alternative to currencies and payment systems that are seen to threaten users' privacy, limit personal liberty, and undermine the value of money through state and corporate oversight. Bitcoin's promise lies in its apparent capacity to resolve these concerns not through regulatory institutions or interpersonal trust, but through its cryptographic protocols. We characterize this semiotics as a “practical materialism” and suggest it replays debates about privacy, labor, and value.
This manuscript builds on my existing research program that (a) broadly seeks to analyze laws, regulations, instruments, and policy levers that inhibit a market’s ability to recognize an asset’s intrinsic value, whether in terms of financial, social, or human capital, and (b) explores and advances interdisciplinary corporate governance theories by employing a heterodox economic analytic to derive its proposal to the paradox of an unregulated virtual currency market (Bitcoins) and an overly regulated crowdfunding market (Kickstarter). The manuscript functions not only as an homage to Charles MacKay’s legendary 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, which described the human, social, and economic psychology of financial bubbles — particularly the Dutch tulip bulb bubble — but also as an offering of problems and proposals that crowdfunded and Kickstarted entrepreneurial businesses, including those funded by Bitcoin currencies, present for a wide swath of societal stakeholders. To describe the problem, this manuscript (i) describes behavioral finance, (ii) details the new entrepreneurial business possibilities that virtual currencies and crowdfunded entities can explore, (iii) describes how current rules and regulations represent unnecessary constraints to traditional equity-based funding models and concerning governance models of entrepreneurial enterprises, and (iv) questions why one form of capital deployment (currencies) may provide equity-like returns and unique governance, while the other form of investing (crowdfunding), provides only soft-dollar-like returns and no governance for middle-class investors. While both virtual currencies and crowdfunding represent risks, including economic bubble risk, this Article believes that a heterodox economic analysis demonstrates unnecessary constraints on entrepreneurial businesses imposed by extant regulation, regulators, and law and policymakers. To assuage these paradoxic problems for emerging business enterprises, this Article proposes a minarchist heterodox solution of modest statutory language that requires market-based solutions that employ needed risk reduction strategies while redeploying necessary capital to private startup business enterprises. This proposal thus benefits the middle class entrepreneurs, suppliers of capital, and job seekers harmed by the current regulatory regime, while permitting for an expansion of the U.S. and global economies.
Sarah Meiklejohn, Marjori Pomarole, Grant Jordan, Kirill Levchenko · 7 authors
Bitcoin is a decentralized virtual currency whose usage has skyrocketed since its introduction in January 2009. Like cash, the ownership of bitcoins is anonymous, as participants transact bitcoins using pseudonyms rather than persistent real-world identities. In this article, we examine the limitations of Bitcoin anonymity and discover that the ability to cluster pseudonyms according to heuristics about shared ownership allows us to identify (i.e., associate with a real-world entity or user) a significant and active slice of the Bitcoin economy. Along the way, we explain a lot about how Bitcoin works.
Entrepreneurship on small scale is the only solution to the problems of unemployment and proper utilization of both human and non-human resources and improving the living conditions of the poor masses. The basic rationale of developing these industries are that they provide immediate large scale employment, ensure more equitable distribution of income, encourage decentralization of industries and eradicate poverty and unemployment. During the last three decades, many countries of the world have experienced the need and importance of entrepreneurship has been accepted as a strategy to achieve the twin objectives of promotion of entrepreneurship, particularly among the educated unemployed youth and also for rapid industrialization in the economy. The main object of this paper is to study the existing literature on entrepreneurship through Micro finance-SHG linkage in India in general and NER in particular. The analysis of this study is based on secondary sources. Efforts are also made in this paper to analyze the role of micro finance through SHGs in the promotion and development of entrepreneurship. This paper examines the different approaches of entrepreneurship and also explains the different key areas of micro enterprise development. Finally, this paper highlights the problems of micro, rural and women entrepreneurs and also suggested some specific measures based on the survey of existing literature, for the promotion of these industries in the country.
What is the legal status of a “bitcoin,” a decentralized peer-to-peer digital currency? Is the use of bitcoins even legal? Should it be? The bitcoin cybercurrency thus poses a puzzle. Unlike centralized and publicly-created metallic or paper currencies, bitcoin is a privately-created, decentralized medium of exchange and thus is not backed by any national or transnational government or by any public or private bank. As such, the legal status of the bitcoin cybercurrency is murky and unclear at best. Despite this legal uncertainty, the demand for bitcoins on the Internet continues to grow. The authors will present a legal, normative, and game-theoretic analysis of the bitcoin cybercurrency. To provide a theoretical background to our legal and normative analysis, the first part of the paper will present an analytical model of the behavior of bitcoin users. In summary, the use of bitcoins can be modeled as a Prisoner’s Dilemma. That is, because of the limited supply of bitcoins and the rising demand of this cybercurrency, the temptation to defect by hoarding this currency -- rather than using bitcoins for the exchange of goods and services -- threatens the stability of the bitcoin cybercurrency as a whole. In the second part of the paper, the authors consider the legal status of bitcoins, discuss the policy and normative arguments for and against the legalization of bitcoins, and propose several possible legal frameworks for protecting the bitcoin cybercurrency and solving the bitcoin puzzle.
Abstract We study transactions in which sellers fear being underpaid because their outside option is better known to the buyer. We rationalize various observed contracts as solutions to such smart buyer problems. Key to these solutions is granting the seller upside participation. In contrast, the lemons problem calls for granting the buyer downside protection. But, in either case, the seller (buyer) receives a convex (concave) claim. Thus, contracts usually associated with the lemons problem, such as debt or cash-equity offers, can be equally well manifestations of the smart buyer problem, although the two information asymmetries have opposite cross-sectional implications. Received December 23, 2014; accepted May 23, 2016 by Editor Uday Rajan.
In the standard definition of a commitment scheme, the sender commits to a message and immediately sends the commitment to the recipient interested in it. However the sender may not always know at the time of commitment who will become interested in it. Further, when the interested party does emerge, it could be critical to establish when the commitment was made. Employing a proof of work protocol at commitment time will later allow anyone to carbon date when the commitment was made, approximately, without trusting any external parties. We present CommitCoin, an instantiation of this approach that harnesses the existing computational power of the Bitcoin peer-to-peer network; a network used to mint and trade digital cash.
Paulo Nováis, Francisco Andrade, José Machado, José Neves
Inter-systemic contracting may be based upon autonomous intelligent behaviour. Autonomy is an important advantage of software agents. Yet, it brings along several issues concerning the legal consideration (e.g. legal personality/attribution) and the legal consequences of software agent’s behaviour. The intervention of software agents in corporate bodies and the consideration of its roles must also be referred. All this intends interactions based on contracts and relations of trust, at an individual, at a community and at a systemic level. In this regard, it does make sense to speak of the relation between good faith and trust in inter-systemic contracting. And at the systemic level there is a need to focus on special protocols intended to enhance trust in electronic commerce. Chapter 12 proposes smart contracts as a way of enhancing trust and of achieving enforcement in electronic contracting.
For the new socialist countryside constuction and creation of a harmonious society,it has become imminent stage through financial innovations to enable vulnerable groups in rural areas enjoy the equal credit opportunity as far as possible.However,there has been a blood loss mechanism in present rural financial system due to China's economic and financial development strategy in the long run.Meanwhile,the microloan,which truly serves the rural vulnerable groups,has not been developed and generalized due to various practical condition constraints.The three cases of peer-peer loans to rural abroad show that microloan to rural poor can be propelled and developed by decentralized social forces in the appropriate institutional arrangements,achieving win-win balance among lenders,rural poor borrowers,microloan institutions and P2P platform to find a new ways of supporting rural vulnerable groups by microloan.In the present with increasingly sophisticated network technologies the experience of peer-peer loans to rural can be copied and spread,so it may be an important way for rural vulnerable groups access to sustainable finance sevices.
Microfinance opportunities have been successfully expanding in Ethiopia during the past fifteen years, including in remote villages, where the majority of people are engaged in smallscale agriculture, which is little supported by modern technology. Some of the key strategies for the success include: innovative adaptation of the group guarantee lending model, successfully customized to local Ethiopian realities; decentralization of operation, including a focus on using indigenous knowledge and resources in client screening and follow-up; appropriate strategies to deal with financing small scale (rain-fed) agriculture, often subject to season changes. However, much remains to be done. The outreach in micro-credit is estimated to have satisfied only a small proportion of the potential demand, while the growth of individual enterprises and the impact on clients' income remain low. It is becoming more and more challenging to further expand the micro-credit outreach, introduce inclusive finance to reach remote villages and very poor people, as well as ensure an impact on the lifestyle of clients. This is due, among other things, to poor infrastructure, particularly the road network and other communication channels, low level business support, as well as the 'entrepreneurship challenge'. This calls for a collaborative effort of all stakeholders in rural development. The present paper examines the opportunities and challenges faced while expanding access to microfinance to poor people in remote areas.
Hernando de Soto, in The Mystery of Capital (de Soto 2000), shows that the poor of the world have, in his terminology, assets vastly in excess of their capital. In one study, de Soto’s associates surveyed neighborhoods in various poor countries, assessing the value of buildings which were not formally titled. The extrapolated value of just the informally owned buildings in the Third World amounted to $9.3 trillion – more than half the combined value of all publicly traded US companies. In identifying a crucial mystery – the failure of these assets to serve as capital for their owners – de Soto has identified a great opportunity for economic betterment.
Leibniz-Informationszentrum Wirtschaft, Hans Dieter
Nepal is one of the poorest countries in the world, with 70% of its population below the poverty line. Subsidized national poverty lending programs have failed to attain viability, mobilize savings and reach the poor in significant numbers. Informal institutions such as the ubiquitous dhikuti were ignored. During the 90s the government has created a new policy environment focusing on decentralization, poverty alleviation, economic and financial liberalization, and a differentiated legal framework for microfinance institutions (MFIs). This has paved the way for innovations such as the establishment of Grameen replicators as banks; the upgrading of dhikuti activities to savings and finance companies with doorstep services; and the transformation of the small farmer credit operations of the Agricultural Development Bank into profitable local MFIs cooperatively owned by their members. In the framework of a wider UNDP-supported program of the Asian and Pacific Development Centre in Kuala Lumpur on Microfinance for the Poor in Asia-Pacific, six MFIs were selected from Nepal and analyzed in terms of outreach to the poor, resource mobilization, viability and sustainability: two Grameen Bank replicators - one a bank and one an NGO; two NGOs sponsored under the government's Rural Self-Reliance Fund; and two cooperatives. The outreach of the NGOs was found to be insignificant while the outreach of the Grameen Bikas Bank at the regional level and of the cooperatives at the local level was sizeable. The cooperatives performed well in terms of portfolio efficiency and were found to be financially viable; the NGOs did reasonably well; while the Grameen Bikas Bank, substituting donor funds for internal resources, was lowest (though improving) in operational and financial self-sufficiency - despite a 100% on-time repayment rate. On the whole all MFIs appeared rather hesitant to utilize their newly won freedom to vigorously expand their market, mobilize internal resources, and differentiate their products and interest rates.