Arizona to Regulate Bitcoin and ICOs

Several bills that recognize crypto as currencies are passing by the Arizona State Legislature
10 February 2018   470

Arizona might become the first U.S. state to legalize bitcoin and other currencies as a method of payment. One of several bills already passed by the Senate Finance Committee. Moreover, the first reading of a draft law which will regulate ICOs has been scheduled. It seems that Arizona will be a place for crypto.

There are several bills that recognize bitcoin and other cryptos as currencies. Two of them, SB1091 and SB1145, will regulate income tax payments with cryptocurrency. In mid-January, one of them has already passed the Senate Finance Committee. Another one  (HB2601) will regulate initial coin offerings (ICOs). The first reading of this bill is scheduled for June 2. The second reading will take place a month later.

The state is going to be the place to be for blockchain and cryptocurrency in future. Experts believe that in the next 5 to 10 years this technology will change the world.

According to Jeff Weninger, a Republican member of the Arizona House of Representatives, the new law will make it easier for people to pay their taxes, without opening their “normal wallets”. A taxpayer will be able to pay taxes from his home even in the middle of the night.

Of course, there is an opposite opinion. The new technology will replace traditional money transfers with credit cards. All taxpayers will be put at risk because of the volatile nature of bitcoin. If the new legislation is passed the state will be responsible for exchanging the cryptos.

If Arizona lawmakers approve the bills, the state may start collecting taxes in bitcoin within two years. It will be the first state in the U.S. to legalize cryptocurrency payments for taxes.

Cloning BTC Doesn't Fix Its Flaws, Weiss Rating Believes

Researchers from Weiss Rating says that "Bitcoin is as brilliant as it is flawed", and, unfortunatelly, clons inherit its flaws
24 April 2018   18

Clones of Bitcoin has BTC's flaws. This idea Weiss Rating tries to provide in its new research.

Weiss notes that bitcoin was conceived as the basis of a fundamentally new financial system, over which no centralized structure would have control. Nevertheless, as the development of the crypto currency, its shortcomings become more and more obvious. They flow, according to the rating agency, from the "disadvantageous position of the pioneer" bitcoin.

As is often the case with the first iteration of any new technology, it is slow, expensive and has fatal design problems that are not easily overcome.

Weiss Ratings

These are main BTC disadvantages: 

  • There is no easy way to upgrade Bitcoin’s protocol (software code).
  • Transactions take up to an hour to confirm. 
  • Another major design flaw is lack of “settlement finality,” meaning that a transaction is never truly closed in an accounting sense.
  • Bitcoin has a limited supply.
  • Bitcoin cannot be used as a real currency. 
  • Bitcoin mining (based on Proof-of-Work) is very centralized, with just a handful of miners controlling the majority of the hash power.
  • Bitcoin mining requires the consumption of ever-increasing amounts of electricity.

Here’s Bitcoin’s strength, its first-mover advantage: Despite all its deficiencies, Bitcoin can boast one thing that no other cryptocurrency in the world has: global brand recognition. Most people around the world have heard of Bitcoin; they know what it is.

Weiss Ratings

Unfortunately, trying to solve one or two problems, copies of bitcoin still inherit its fundamental weaknesses: low speed, inability to scale, high costs, energy inefficiency, lack of privacy, etc.

Weiss recognizes that Bitcoin Cash, for example, is 8 times faster than the original bitcoin. Bitcoin Gold is more decentralized from the position of mining. But this is hardly enough.

This are the problems of "BTC Copycats":

  • The Bitcoin copycats still use deflationary models.
  • They still rely on unsustainable electricity consumption for securing their networks.
  • They still rely on a fee structure that gives too much power to the miners, often creating conflicts of interest between them and the end-users.
  • They’re still plagued by the difficulty of upgrading the protocol.