Jon Matonis: It's Becoming Obvious to Major Businesses That Adopting Bitcoin is a No-Brainer
Jon Matonis is the Executive Director of the Bitcoin Foundation, a prominent cryptocurrency researcher and advocate, and columnist for Forbes and CoinDesk.
We reached out to Matonis recently to get his thoughts on the foundation, BitLicenses and news about big companies such as Dell accepting Bitcoin payments.
Cointelegraph: The Bitcoin Foundation has been criticized recently for being insufficiently transparent. What do you say to that criticism?
Jon Matonis: [Editor’s note: The foundation’s head of marketing and communications first replied that Matonis and Gavin Andresen had both publicly responded to that criticism on Twitter here, here, here and here.]
We are actually perplexed by the criticism. Mostly because it is so vague. As reporters, have you asked to clarify what “transparency" even means in this context? Next week, we are launching our new website, which is way more easy to navigate. We're so excited it’s finally ready.
- Jon Matonis with Maria Jones (Bitcoin2014, Amsterdam)
CT: In your critique of the OECD’s working paper on Bitcoin, you noted the author fundamentally misunderstood the currency and thought it had to overtake legal tender to work. Why do you think so many people have trouble thinking of money as something other than legal tender?
JM: It's very difficult for human beings to adopt new ideas. Especially in areas such as “legal tender.”
By and large, most people don't know the history of money — that before government-backed paper money, "money" was anything that value could be attributed to and agreed upon by mainstream society. In our current times, we have not known any other era of "money." In the same way that credit cards have not been fully adopted by every generation, there will also be some generations that understand Bitcoin faster than others, and entire populations that may never bother even trying to understand.
CT: What was your reaction to the news last week about Dell accepting Bitcoin?
JM: This is great news for the industry. It's becoming more and more obvious to major businesses that adopting Bitcoin is a no-brainer.
Not only does it offer the company a competitive advantage as an early adopter, it also issues early rewards in loads of free press as well as increased savings from costly transaction and banking fees. Companies like Coinbase and BitPay are doing excellent work in advancing consumer and merchant adoption, and we all win as a result of their efforts.
CT: What about the other big news last week, the BitLicense regulations draft? What were some of your biggest takeaways from the NYSDFS’s proposed regulations?
JM: It appears that New York's financial services regulator wants to make New York a Bitcoin-friendly state, and we welcome the goodwill. The next step would be for DFS to take seriously the comments it receives and make appropriate changes. Bitcoin is a financial innovation that is ripe for integration with conventional financial services.
The first issue that stood out for us is the amount of time they are giving the community to respond. Forty-five days it the absolute minimum comment period required by the New York State Administrative Procedures Act. In New York, a regulatory proposal (which this is) does not expire until 365 days after being published or after the last scheduled public hearing.
If New York was truly looking for public comment, would he be opposed to extending the comment period to the full 365 days, or some other period of time? Knowing full well that many of the Bitcoin players are small startups and can't afford to just drop what they are doing (building Bitcoin businesses, raising money, etc.) to comment intelligently within 45 days. Most entrepreneurs don't even have the funds to hire an attorney right now to do just that.
Surely, New York can give the Bitcoin community the common courtesy in order to level the playing field for those startups that don't have millions in venture capital.
NYDFS is also proposing to use an antiquated system for collecting comment. Since this is for the Bitcoin community, would they be willing to take our comments in a more modernized and organized fashion? Say using GitHub?
Also, the proposed regulations single out Bitcoin businesses for different regulation than conventional financial service providers. That's not technology-neutral. As currently proposed, it also appears to sweep in software providers, which would be a perplexing and huge expansion of jurisdiction for the DFS. It would also create a new, Bitcoin-specific anti-money laundering program in New York, even though federal regulators already have a program in place that they feel is sufficient.
For Bitcoin-based financial service providers, these proposed regulations treat Bitcoin as an "impermissible investment," which means these businesses would absurdly have to convert their Bitcoin revenues into fiat money. If other states were to adopt the idea of a special "BitLicense," that would increase already heavy burden of opening a US-based Bitcoin business. Innovators will move offshore.