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Apple clarifies stance on 'virtual currencies,' may pave road to Bitcoin trading apps

post #1 of 26
Thread Starter 
After unexpectedly yanking apps associated with Bitcoin trading in late 2013 and early 2014, Apple on Monday offered a bit more clarity on how it intends to handle virtual currencies in the future.

Blockchain
Blockchain's app was pulled from the iOS App Store in February. | Source: Blockchain via Twitter


Following the unveiling of iOS 8 during Apple's Worldwide Developers Conference keynote on Monday, the company issued a revised set of App Store Review Guidelines with a special portion dedicated to virtual currencies. It appears that Apple is ready to accept apps for review that deal in the transmission of these digital funds, at least to a limited degree.

From Apple's review guidelines:

Purchasing and Currencies
11.17 Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions.
As noted by Gliph, maker of the eponymous texting and Bitcoin wallet viewing app, Apple's updated document is one of the first times the company has officially recognized virtual currencies. Apple has traditionally denied app submissions that dealt with Bitcoin trading, though the company never stated a hardline policy against software with such capability.

In February, Apple removed Bitcoin trading and storage app Blockchain from the App Store due to an "unresolved issue," while a similar app called Coinbase was pulled last November. Gliph was allowed to remain in the App Store as long as it disabled the ability to make Bitcoin transactions.

As Bitcoin and other virtual currencies are traded peer-to-peer and exist only in the digital realm, governments around the world have been reticent to acknowledge them as a legitimate form of money. Most trading happens online and users can convert their bitcoins into more traditional paper currencies through specialized exchanges, making it somewhat difficult to regulate.

The impact of Apple's new rule remains unclear as companies like Gliph have yet to submit new apps for review. In addition, Bitcoin itself is not specifically mentioned in the update, meaning the probability of a transaction-capable app passing through the precess to the App Store is unlikely.
post #2 of 26
Opening up the Touch ID APIs for devs will hopefully lead to a second gen of BTC wallets and apps.

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post #3 of 26
It all depends on the Gov regulators.
Don't hold your breath!
post #4 of 26
I wonder how MazaCoin, a virtual currency of a sovereign nation, the Lakota, fares under this revised policy.
post #5 of 26

BeatCoins by Dre

post #6 of 26
Since BitCoin operators often do not comply with state and federal banking laws, Bitcoin is going to be disqualified.
post #7 of 26
Quote:
Originally Posted by jameskatt2 View Post

Since BitCoin operators often do not comply with state and federal banking laws, Bitcoin is going to be disqualified.

 

 

Quote:
Originally Posted by JoshA View Post

It all depends on the Gov regulators.
Don't hold your breath!

 

Exactly, There is lots of wishful thinking going on with cryptocurrency, but most people fail to understand unless the government of the world are in the middle of it it not going to fly. The fact the US Government has say it is an investment subject to all the various tax laws related to an investment makes it too complicated to deal with.

 

imagine if you had to figure out what your gains were on ever cryptocurrency purchase you did and had to figure out if the cryptocurrency was a short or long term gain or lost.

 

Also, look what happen to MT Gox, that is a case study in why it not prudent or safe to use an an uncontrolled currency.

post #8 of 26

Wow, lots of misinformation on this thread.

 

Will the US government ban barter? No, just as it will not ban Bitcoin. If anything, the US government is already in line to embrace Bitcoin, and even the IRS has issued rules on how to file your taxes for virtual currencies.

 

Furthermore, like Apple products, Bitcoin is a global technology. So, while some governments may try to regulate around Bitcoin, there is  no way it will ever be "banned" otherwise. It is a decentralized, open source protocol - how do you imagine a government can possible "ban Bitcoin"?

 

Bitcoin is already here, already in use throughout the globe, and Apple has done the right thing by lifting their misaligned policy on virtual currency wallet apps.

post #9 of 26
Quote:
Originally Posted by Maestro64 View Post



Exactly, There is lots of wishful thinking going on with cryptocurrency, but most people fail to understand unless the government of the world are in the middle of it it not going to fly. The fact the US Government has say it is an investment subject to all the various tax laws related to an investment makes it too complicated to deal with.

imagine if you had to figure out what your gains were on ever cryptocurrency purchase you did and had to figure out if the cryptocurrency was a short or long term gain or lost.

Also, look what happen to MT Gox, that is a case study in why it not prudent or safe to use an an uncontrolled currency.

Almost everything you've said here is wrong.

The IRS treats Bitcoin investments the same as stock investments, not like a currency. All that is required is accurate reporting and because every transaction is recorded in the blockchain (it is, after all a public ledger) then accurate and "compliant" reporting for tax purposes is quite possible. Right now, it's a lot of work, but with well made apps it will be less work.

Trading in Bitcoin is legal in the US and many other countries, however various countries have forbidden their banks from dealing with crypto "currencies" due to the perceived risks.

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post #10 of 26
Quote:
Originally Posted by jameskatt2 View Post

Since BitCoin operators often do not comply with state and federal banking laws....

Huh? Explain? Or provide a cite/link?

post #11 of 26
Quote:
Originally Posted by JoshA View Post

It all depends on the Gov regulators.
Don't hold your breath!

 

  And since the IRS has decided on a tax status for it, including that they're treated overall as property not currency, and using them just to purchase something could trigger capital gains, many users will decide it's not worth it and others will use them further under the radar, since for them most of the satisfaction is to be giving the finger to the government.  Not sure if there's any substantial group in the middle.  You end up with a user base of mostly renegades, which isn't in and of itself a dealkiller for the users but will kill the use in grocery stores by the grocer if the tax laws didn't already kill it for the user.
 
 Mainstream acceptance is the thing a virtual currency needs most and consisting mainly of those two kinds of users prevents that.
post #12 of 26
More reasons why Tax laws needs to change and adapt to 21st century methods. You can't tax every inch the currency moves like how it is taxed today with cash.

You should only tax when there is a real physical exchange of assets or products and services.

If they think they can tax on gains made there will be endless amounts of data to collect that will overwhelm the IRS.
post #13 of 26
Quote:
Originally Posted by Vision33r View Post

More reasons why Tax laws needs to change and adapt to 21st century methods. You can't tax every inch the currency moves like how it is taxed today with cash.

You should only tax when there is a real physical exchange of assets or products and services.

If they think they can tax on gains made there will be endless amounts of data to collect that will overwhelm the IRS.

Oh, they don't care if they have to hire thousands of new IRS agents at the public's expense. If you want to help work toward reform, the US needs to eliminate the IRS, eliminate the income tax and institute the FairTax. See www.fairtax.org

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post #14 of 26
Quote:
Originally Posted by jlandd View Post
 

 

  And since the IRS has decided on a tax status for it, including that they're treated overall as property not currency, and using them just to purchase something could trigger capital gains, many users will decide it's not worth it and others will use them further under the radar, since for them most of the satisfaction is to be giving the finger to the government.  Not sure if there's any substantial group in the middle.  You end up with a user base of mostly renegades, which isn't in and of itself a dealkiller for the users but will kill the use in grocery stores by the grocer if the tax laws didn't already kill it for the user.
 
 Mainstream acceptance is the thing a virtual currency needs most and consisting mainly of those two kinds of users prevents that.


The IRS Rulings are simply that, rulings, not concrete law yet. They are also open for public debate. Right now, yes, it is very difficult for American consumers to use bitcoin for every day items, because you have to calculate gains/losses. This will be mitigated by built-in tools in wallet apps, or redefinition of regulatory rulings. With the blockchian, this really is not going to be a deal breaker as all transactions are pubic and can be programed around.

 

As for the grocer, this is perfect for them. They can settle to USD immediately, and not have to worry at all about calculating gains/losses. Bitcoin payment processors like BitPay guarantee the USD sale amount, provide 1099-K forms, and quickbooks imports for all transactions. Taxes are no different than cash. Furthermore, they will save money by not paying the exorbitant credit card fees - ask any small business, these fees add up and severely hurt their bottom line.

 

Also, Bitcoin is not only for consumers. It is a payment network, which may hold answers to all sorts of new types of applications. It is a method of payment, which can be used for local and international B2B transactions now while not having to incur the massive costs of wire transfers fees, interest rates, or bureaucratic obstruction. Bitcoin is stable enough now where one could buy and send Bitcoin, and the recipient could and cash out in local currency, without having to fear losing everything. If anything, Bitcoin is gaining in value, so the users may actually make a small profit in this short window. At any rate, it would be far less expensive, and way faster than a wire transfer.

 

The US is leading the innovation of this technology, and this is seen through the hundreds of millions of VC dollars being invested in Bitcoin and alt-coin start-ups. Its a 21st century payment network, which allows for transactions of a 21st century, open source, stateless monetary system which does not rely on private, 3rd party trust.

post #15 of 26
Quote:
Originally Posted by SpamSandwich View Post


Almost everything you've said here is wrong.

The IRS treats Bitcoin investments the same as stock investments, not like a currency. All that is required is accurate reporting and because every transaction is recorded in the blockchain (it is, after all a public ledger) then accurate and "compliant" reporting for tax purposes is quite possible. Right now, it's a lot of work, but with well made apps it will be less work.

Trading in Bitcoin is legal in the US and many other countries, however various countries have forbidden their banks from dealing with crypto "currencies" due to the perceived risks.

Read again, I said the US treat cryptocurrancy as an investment not as a currency but people are using it as a currency when they buy stuff, you can not buy durable good or service or non durable good like consumables with a stock or investment in the US. At most you can gift an investment but you can not exchange an investment for another product today, it is not legal to do so, you have to sell the investment for legal tenure then you can make the purchase.

 

I can tell you today people are not reporting all their cryptocurrency transactions to the government and this will come to a head real soon.

 

I'll give you a real world example, if you get caught using Gold to buy things you will go to jail, You have to first sell the gold for US currency then use that currency to but the item. You all have to report the gold transaction on your Taxes and pay either the short term capital or long term capital gains on gold transaction. The reason being gold is not longer currency in the US http://www.law.cornell.edu/uscode/text/31/5103 it was changes back in 1933.

post #16 of 26
Quote:
Originally Posted by SpamSandwich View Post

Opening up the Touch ID APIs for devs will hopefully lead to a second gen of BTC wallets and apps.

I'm not against this idea, but I really hate the idea of the entire wallet being "in the device", so that if the device is lost stolen or destroyed, everything on it is gone for good. The ironic thing about Cloud storage is that this is the perfect place to store the wallet provided that you have a way to unlock it when needed. Or you know, just don't be an idiot and never actually put more than 100$ in the "device-only" wallet.

But as latter commentators mention, it is wishful thinking that any cryptocurrency will become some standard form of trade. BitCoin will never be one, because it's already tainted by it's association with Silk Road and the Mt.Gox implosion. Other currencies will likely suffer similar negative associations and also be dumped.

The thing is, it would actually make a lot more sense for Apple, Google, eBay, Microsoft or Amazon to create their own cryptocurrency to specifically solve the "currency exchange" float problem (eg every store has to set a country-specific price, and the value of the dollar makes it a high-maintenance issue.) Right now you are basically screwed if you want to buy a Korean or an American app/song/video on iTunes/Amazon/Google without a card from those countries because the app store will not let you do so without a payment card with a billing address in that country. So instead of trying to buy currency that is floating all the time, you instead cut out all the middlemen as you cash in to the points (eg gift cards) and then only cash out if you're a developer/producer/creator or retailer. Right now only Paypal actually does anything like this, and it's still dealing with currency exchange if you don't have enough currency in the account you wish to purchase in. This is probably also too much wishful thinking as VISA/MasterCard/AMEX would probably balk at being cut out of the payment system. But Video game software companies (Nexon, Sony, Microsoft, Nintendo, etc) have been doing this for years already. In fact it's a way criminals launder money, and everyone knows this.
post #17 of 26
Quote:
 I really hate the idea of the entire wallet being "in the device", so that if the device is lost stolen or destroyed, everything on it is gone for good.

 

This is not how most Bitcoin wallets work. Wallets are synced with the cloud. If your device is lost, you simply log into your wallet account on a new device. Some wallets allow you to store directly on the device. Here, you would put your pocket money (exactly as you described), no different than you leather wallet. In fact, it is even safer than your leather wallet, because you can email yourself encrypted backups of your wallet file - so if your phone is ever lost or stolen, you simple re-import the wallet file onto a new device.

 

Quote:
 BitCoin will never be one, because it's already tainted by it's association with Silk Road and the Mt.Gox implosion.

 

That's like saying US dollars are tainted due to cartels and Bernie Madoff. Bitcoin is already successful, and the fact that these types of operations are weeded from the system are a testament to its scalability, and ability to be used by law enforcement to track down and apprehend criminals.

 

Quote:
The thing is, it would actually make a lot more sense for Apple, Google, eBay, Microsoft or Amazon to create their own cryptocurrency to specifically solve the "currency exchange" float problem (eg every store has to set a country-specific price, and the value of the dollar makes it a high-maintenance issue.)

 

Absolutely NOT! A centralized currency is the worst possible solution. We have seen this already for years, WOW money, Linden Dollars. In fact, Amazon already has Amazon Coin, and Apple has iTunes money. One reason Apple may have banned Bitcoin in the first place is because it is direct competition to iTunes money, of which Apple rakes 30% off the top of each purchase. This is horrendous.

 

Centralized, private currencies fail. This is why Bitcoin exists. The reason it is volatile is because it is new, and in fact its volatile has stabilized quite a bit over the past several months. . It is far less volatile against currencies of other nations, which do not have the luxury of the US dollar.

 

There is no currency exchange float with Bitcoin. At a store, or an online marketplace, merchandise is presented and tallied in the local currency. The exchange rate is done at the time of transaction by the network, and there is no exchange rate. This makes Bitcoin the ideal currency for international travel and commerce. Yes, gaming systems have their own cash systems, those are digital currencies too, but would be absolutely useless for global commerce.

 

If criminals use those systems, so be it. Bitcoin was not created to solve morality issues such as a criminal being a criminal. Criminals will use the highest value items which have the least friction to move. Right now, that is the US dollar, worldwide.

post #18 of 26
One thing regarding Bitcoin security...

The top experts that I am familiar with say THE safest method of keeping BTC is in a printed wallet. No possible way to access it electronically by hackers.

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post #19 of 26
Quote:
Originally Posted by SpamSandwich View Post

One thing regarding Bitcoin security...

The top experts that I am familiar with say THE safest method of keeping BTC is in a printed wallet. No possible way to access it electronically by hackers.

When you spend it, you still have to transfer it to a digital wallet. The paper can get damaged too or not print out properly. Storing the coins with an online service is obviously risky as the many hacks have demonstrated including this one a couple of months ago:

http://www.theguardian.com/technology/2014/mar/04/bitcoin-bank-flexcoin-closes-after-hack-attack

"A bitcoin bank has been forced to close after hackers stole 896 bitcoin, worth £365,000"

There is a place for digital currency for small transactions but it'll never replace fiat currency and nobody with any sense will store thousands of dollars worth (assuming thousands are a significant investment for this person) on a piece of printed paper in their house or on their laptop or in a random online exchange that could get hacked at any time.

There's so many different currencies now too and no doubt why Apple will have a whitelist of approved ones. Bitcoin might not even make the list. Paypal is technically using virtual currency as it doesn't exist in physical form. You don't send them cash nor does the buyer receive cash. Bitcoin etc are also not recognised anywhere as currency so to use that term to describe them is misleading. They should be called virtual assets and not currencies.
post #20 of 26
Quote:
Originally Posted by Marvin View Post


When you spend it, you still have to transfer it to a digital wallet... 

 

This is not accurate. For example, one might hand over the wallet to another individual (face-to-face) in exchange for cash (or gold, or whatever...). If one chooses to go this route, make sure to complete the entire exchange in person, then transfer the bitcoins to your own private account first.

 

Here is information about paper wallets for people to review:  https://en.bitcoin.it/wiki/Paper_wallet

 
...There is a place for digital currency for small transactions but it'll never replace fiat currency and nobody with any sense will store thousands of dollars worth (assuming thousands are a significant investment for this person) on a piece of printed paper in their house or on their laptop or in a random online exchange that could get hacked at any time.

 

"Never" replace fiat currency? Bitcoins are "sorta" like a fiat currency, but they do contain a value since there is real work and a cost for the electrical power attached to the mining of each "coin". Federal Reserve Notes are fiat currency that has nothing of value backing them... Also, there is no central banking system for crypto-currencies.

 

The iPhone and iOS platforms could go a long way toward solving the very difficult problem of security that still surrounds this environment and I think in time it will be solved. In fact, I believe eventually the world will transition to an evolving, highly complex system of many forms of acceptable digital and physical currencies. We will have true "currency competition" and people will choose the best, most stable currencies for their needs. Relying on a single currency that is subject to blatant manipulation for political purposes is insane and the plummeting value of the US dollar is evidence of this fact. Surely I'm not the only one who has noticed the price of goods across the board has gone up over the past 4-5 years by something like 40%?


Edited by SpamSandwich - 6/4/14 at 4:58pm

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post #21 of 26
Quote:
Originally Posted by SpamSandwich View Post

This is not accurate. For example, one might hand over the wallet to another individual (face-to-face) in exchange for cash (or gold, or whatever...).

It's still risky and it's not like you'd have a physical wallet with the exact amount for every transaction so there has to be a lot of back and forth using the computer to make the right paper wallet amount. There's also the chance of someone sneakily taking a picture of your codes. This happened with a TV show:

http://www.businessinsider.com/bloomberg-matt-miller-bitcoin-gift-stolen-2013-12
Quote:
Originally Posted by SpamSandwich View Post

"Never" replace fiat currency? Bitcoins sort of like a fiat currency, but they do contain a value since there is real work and a cost for the electrical power attached to the mining of each "coin". Federal Reserve Notes are fiat currency that has nothing of value backing them... Also, there is no central banking system for crypto-currencies.

Legal currency is backed by the strength of the country's entire economy and the huge volume of transactions. The value of Bitcoin is not restrained by the compute power but by how much people think it's worth. Compute power can change dramatically too:

http://www.engadget.com/2014/06/03/graphene-cadmium-arsenide-wonder-material/
Quote:
Originally Posted by SpamSandwich View Post

The iPhone and iOS platforms could go a long way toward solving the very difficult problem of security that still surrounds this environment and I think in time it will be solved. In fact, I believe eventually the world will transition to an evolving, highly complex system of many forms of acceptable digital and physical currencies. We will have true "currency competition" and people will choose the best, most stable currencies for their needs. Relying on a single currency that is subject to blatant manipulation for political purposes is insane and the plummeting value of the US dollar is evidence of this fact. Surely I'm not the only one who has noticed the price of goods across the board has gone up over the past 4-5 years by something like 40%?

Mobile devices will make it worse because they can only support Simple Payment Verification (SPV) clients. The bigger the blockchain grows, the less feasible it becomes for devices to hold locally and that lessens the ability to verify and trust transfers. That's where a central trusted authority always has the advantage. Apple's not going to take on this responsibility. Maybe some 3rd party provider will gain the trust of the users and perform the necessary functions but I very much doubt anyone will trust 3rd parties fully.

On the subject of value changes, why does 40% in 4-5 years concern you but not 35,000% in 2 years? The latter is how quickly Bitcoin changed. In order to replace a legal currency, it would have to change another 10,000%.

Currency competition is not going to work because people don't like to play speculative games with their hard earned money. The people who do are speculators, the Wall Street gamblers who have been investing in cryptocoin startups. The wild swings back and forth are what these people live for. As soon as Bitcoin stabilizes, they'll pay off their news oulets to promote some other coin to ride that wave and try to get people to distrust everything else.
post #22 of 26

 

OH yeah. I feel REALLY comfortable surrounding my family with an arsenic compound. 

Originally posted by Marvin

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post #23 of 26
Quote:
Originally Posted by Tallest Skil View Post
 

 

OH yeah. I feel REALLY comfortable surrounding my family with an arsenic compound. 

 

Better get rid of all those integrated circuits and LED's then. 

 

Also apples.

post #24 of 26
Originally Posted by morrolan View Post

Better get rid of all those integrated circuits and LED's then. Also apples.

 

Are there any materials in existing electronics that rate a 4 on the health third of the NFPA 704?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

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post #25 of 26
I haven't even tried to get my Bitcoin mining app (MacMiner) on the app store. Still, this is good news!
MacMiner - the first native Mac Bitcoin, Litecoin and Alt coin mining app
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MacMiner - the first native Mac Bitcoin, Litecoin and Alt coin mining app
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post #26 of 26
Quote:
Originally Posted by Tallest Skil View Post
 

 

Are there any materials in existing electronics that rate a 4 on the health third of the NFPA 704?

Gallium Arsenide (used in the aforementioned LEDs and ICs) rates a 3.  So you're golden so long as you don't use them too long. ;P

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