Law Firm Froriep Joins Bitcoin Association Switzerland

We are pleased to announce that Froriep joins us as not only as a member but also as a legal partner. In other words, if we'll ever get into legal hot water, we now have someone fighting on our side. Of course, all BAS members are welcome to use their services. If you're worried about high charges, it's comforting to know that it's best practice in this industry not to charge for the first, brief introduction meeting during which the lawyer checks if he can be of any help at all.

Froriep, founded in 1966,  is a Swiss law firm with offices in Zurich, Zug and Geneva as well as an international presence in London and Madrid. The firm boasts a large cultural diversity within its team of professionals, not to mention an always-present entrepreneurial spirit. The law firm has in-depth knowledge of blockchain technology, crypto-currencies and crypto-tokens. Here is what they have to say about themselves:

“Together with our co-operation partner, the patent attorney and law firm Rentsch Partner, we are at the forefront of technology law. Through our Blockchain and Crypto Practice Group, Froriep together with Rentsch Partner have a number of legal experts in this field that advise clients on a regular basis regarding the applicable legal framework to such technologies and help clients with structuring their ICO. We join the Bitcoin Association to demonstrate our commitment for the cause and the community at large.”


Some people take pride in being self-made, though it can mean different things to different people. Building a company from scratch, brewing your own beer at home or writing and publishing a book.

But it’s rarer to find someone who not only has earned their fortune by the sweat of their brow, but who has also produced the money in that fortune. With the advent of cryptocurrencies, the entire idea of “making money” has been turned on its head, as has the idea of money itself.

And as Dostoyevsky said, “Money is coined freedom”.

So if you come up against a situation where you need to pay for something – like the membership fee to the Bitcoin Association of Switzerland, for instance – and you are loathe to “pull the money” out of your own pocket, you could always “make your own” i.e. mine it and pay with it.

Yes, it might sound funny, but why not? After all, there is no better way get to the bottom of something than to “get your hands dirty” and learn first-hand.

This was the approach that Lakeside Partners decided to take. After making the decision to get into the blockchain and crypto space, the obvious next step was to set up a mining operation in-house. Nothing extreme, mind you – but enough to get a handle on how things work and pay the annual membership fee for the Bitcoin Association Switzerland (we famously only accept Bitcoin for membership fees).

Admittedly, this wasn’t Lakeside Partners first foray into cryptocurrencies: earlier this year, their sister company inacta AG assisted in bringing Bitcoin payments to one of the most popular specialty shops in Zug - House of Wines. Lakeside Partners is also the company behing Europe’s largest blockchain startup contest.

Let's close this blog post with a quote from Ralf Glabschnig, one of the partners at the firm: "When we do something, we want to do it whole-heartedly. We see great potential in the blockchain and crypto space here in Switzerland - and if you want to be a part of that, you have to get involved, see first-hand how it works. And of course, joining the Bitcoin Association is part of that."

Naturally, the Bitcoin Assocation Switzerland is happy about every new member joining our ranks, whether you’ve mined the coins all by yourself, or bought them in exchange for crypto or old fashioned currency. Just as Ralf said above: "if you want to be a part of that, you have to get involved".

Op Ed: Proof of Work, not Proof of Stake

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I slept here last night.

Couldn’t have put it more precisely. The thing was a drag. Since the speech at the Arnhem conference the nights had been very short. Ironically, I only found the video by looking at comments below Craig Wright memes. I wondered why they would pop-up after such a long period of silence? After viewing the footage, I immediately started looking for people discussing it online. There buried somewhere, I found an invitation link to a chat. The chat turned out to contain a contributor who went by csw…

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I stepped out of work meetings a few times to use my phone. The man was hard to reach, the number he gave me was off the grid. He finally phoned back and apologized for having been busy with his piloting lessons. We arranged the handover at lunch time.

I excused myself from the business lunch at the strip mall and went over to the Salt Lake City University Park Marriot. A white Porche Cayenne pulled up and I immediately spotted the Utah number plate “BITCOIN”. The plate excited me but the car was ugly looking, not my preference really. That must be him then. I entered the car and we only briefly greeted since he immediately asked if I had been videoing him in his car just before. I denied, and he told me that there were just some people doing that before while pointing somewhere. He made a notion towards the number plate, evidently it was not the first time this had happened. I found this strange; around my parts of the world no one even knew what Bitcoin is at the time so how would a passerby even have noticed? Then again, we don’t do custom plates so it’s not a thing to look at number plates, plus in the Mormon state there seem to be lots of skilled IT people, so they might have had a head start on all of this.

We changed topic and he proposed to go for lunch just after we had executed the deal. Since I picked up the package personally he insisted on giving me back the shipping fee and pulled out a whole stack of QR codes on colored paper. He mentioned those being the safest for giving change and Bitcoin handouts to people. He must have had a system where he had a prepared address list at home as he only gave me the private key and didn’t do anything to fund it right in that moment. Instead, he wrote down a number and an amount on a piece of paper.

We perused to lunch in one of these bagel, doughnut & muffin places on a busy intersection the Americans like to call deli. I remember him mentioning that in real life, he only had socially engaged with bitcoiners once before and didn’t seem to be interested in pursuing it much further. It came a bit as a surprise, as he was quite prominent in the Bitcoin scene and had made a big effort to convince Ron Paul that Bitcoin is to be taken seriously. His plan had worked out, it seemed.

Later in the year, I received a PGP signed message confirming that he personally handed me the series I bought on that day.

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I had spent all of 1999 down-under as an exchange student. One of my dear friends from that time called me to have a chat. He mentioned an article he had just come across that was about a new, private, digital currency. He reckoned it would appeal to me, since we have had lots of discussions about the internet and its potential implications during our student’s exchange. We've had this crazy idea we called the 3DRelationshipGrid, where you could have seen how many hubs you'd had to pass to e.g. know Michael Jackson.

He couldn’t explain the new currency comprehensively, but promised to send me the link. I read the article once and I don't have any recollection of understanding how Bitcoin worked back then. I was more intrigued by the cheekiness of creating something like this, a private form of money on the internet. I also recognized that the designer tried to make a system which determines how many of these coins can be created and that the number of units in circulation would approximate an asymptotic curve, which means one that is inching closer towards a finite value but will never actually reach it.

In retrospect, I find it very fortunate that this call from my dear friend was my first contact with Bitcoin. It was a well-informed article for a mainstream media outlet, especially when considering that this was a very early period of Bitcoin. I always figured most people have heard of Bitcoin through news of crashes, heists or economists predicting its epic failure.

128327 7.246E-02

I gave this funny money very little chance of survival, but had the feeling it might be investment worthy. My experience with Ultima Online had taught me that intangible assets can have real market value. Items and gold had regularly been sold on Ebay.

That day I wrote back to my friend:

I think it is investment worthy. I will report back. I have sent 100 EUR to Mt.Gox to buy Bitcoins. It takes 2-3 days and I can’t watch the exchange rate rise. Dreadful to watch and not being able to buy. Mining is not worth it, as my graphics card doesn’t seem to be compatible.

I seem to have managed to complete this first trade on Mt.GOX, since my email history shows that I sent myself an encrypted .rar-archive of the wallet.dat file. The conversation with my friend went on about investing in mining and at one point we wanted to invest a few thousand in these 6990 to mine at his place. Orders were placed but the merchants were sold out globally so we got refunded.

Later that summer, bitcoin would rocket to astonishing 35$. Probably the effect of a first media hype triggered by the fact that Bitcoin crossed 1$ earlier in the year. In Q4 it corrected to 5$ and I learned that this had already been the 3rd or 4th bubble. Then, I got distracted and focused on other things.

260265 7.353E-03

I had arranged for two meetings in advance of the Bitcoin 2013 EU Conference in Amsterdam.

The first one was in a coffee shop called e-help and several aliases have signaled to turn up. It ended up being quite a crowd. Among them, I remember Vitalik & Mihei from Bitcoin Magazine, David Bayley from yBitcoin, Peter the Scottish Avalon miner, Dimitry and husband and BFL Josh.

About 65% of the attendants had a pending order with BFL, thus Josh decided to leave the establishment early. During the remainder of the conference, he hid like a weasel and was only briefly seen on the periphery of the venue to attend to important meetings (probably some sort of firefighting for BFL-orders being TwoWeeksTM late).

Some of the remaining people started smoking Indica and we continued to discuss involvement and future plans. Nobody wanted to over-do it that night and we all left for our hotels in due time. After all we had missed the first day of the conference already.

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The conference was crowded and I was excited by the talks and panels ahead.

The second meeting was arranged with the gentleman from New Liberty Dollar, for just after his presentation at the conference. He had messaged me on the 24th, that his flight only allowed him to get to the venue after his slot at 10:10am. The organizers were apparently not responding to his request to reschedule, which frustrated him. Joseph was a tall guy with a long pony tail and a noticeable hat. We greeted by shaking hands and mustering each other’s faces, establishing proper eye contact. They say that the first half second you see someone the unconscious bias is formed. In his case, my bias went towards liking Joseph who spoke with a firm but soft and friendly voice.

The conditions of the deal were agreed upon. We would exchange one of my coins picked up in Salt Lake City for 5 of his coins. These were minted to commemorate Bitcoin and featured a QR-code on their surface. Decoding it leads to a homepage which shows you the value of the coin in Bitcoin or any other currency. I grasped that the idea was to have an ounce of silver with a face value of 0.25 BTC. At the time of creation that added up to about the price of a troy ounce of silver. Gold or silver coins denoted in USD or other fiat currencies normally appreciate in value against the denominated units. In this case the design was to get the opposite effect. Thus, it demonstrates what a hard asset BTC is, as it appreciates against silver. The coins I received had a special stamp on them to honor the 5 year anniversary of the Satoshi white paper, which was released on the 31st of October 2008.

My motive for the trade originated in being intrigued by how many people in the Bitcoin community were thinking about what money actually is. Which requirements we would define, if we designed our own. It had truly never occurred to me before to even think about it. The economics section in the paper was something for old farts. Who actually cares how money is created, where it comes from or who controls it as long as you have enough? If you haven't got any, there are far more important things for you to do than philosophize about it. So on that day, for the first time in my life, I consciously engaged in barter trade.

It was noon and Joseph and I decided to go for lunch together. We went to a Kebab place just across the street from the conference. After ordering, we sat down at one of these tables that are just too small and too low for tall guys like us. I asked Joseph about the New Liberty Dollar and how it compares to the Liberty Dollar. It turned out that he knew Bernard von NotHaus personally and also helped him with his legal work. At the time, Von NotHaus was seen as the Rosa Parks of the Libertarians. He was found guilty of money counterfeiting by a jury and that came as a surprise, since he had always advertised the Liberty Dollar as an alternative to the US Dollar, a new money so to speak, not a copy of a currency he considered flawed. The idea was to have an actual metal based currency again, which people could use if they chose to. As the Liberty Dollar got more and more successful, it must have been a threat to some powers, as the FBI raided Von HotHaus and confiscated all the metal. Since the alleged money counterfeiting was so absurd, the judge didn’t want to sentence him, which left him in limbo between conviction and an actual sentencing for years.

I gathered the New Liberty Dollar was a kind of protest against von NotHaus’ detention and the strike against the alternative currency. A reclamation of rights, so to speak. We went back to discussing Bitcoin and earlier electronic currency systems. It turned out that Joseph had far more knowledge about these things than I. The names of some of the systems I had heard of before, but he seemed to know a lot more about their history and more importantly much more about the motivation for their creation. We discussed for a while and concluded that no human being should ever be hindered from transacting with another human being. If one has no choice which money one uses in a transaction, one is not free.

Satoshi wanted to make that conclusion truth. A genius scheme was elaborated and launched with comparatively little effort. But who was he, Satoshi? A group or an individual?

I am not sure, why Joseph opened up to me, why he gave me a glimpse of who it could be. He must have trusted me for some reason. Apparently, he had met someone at a hacker camp in the Netherlands in 2005, who had shown him notes of such a system which he would consider to be Bitcoin today. Joseph had taken notes during their discussion and might have been shown some documentation by the other person. When he mentioned that he might still have image material of the person at the event, I told him, he should consider destroying that. The only piece of identity he did give away, was that the name he had been offered, Satoshi Nakamoto, clearly couldn't have been the official name of the person he had been talking to. I figured, it must have been either a woman or a non-Japanese person.

Years later, Joseph would confirm that a leaked story was actually written by him. The resemblance to what he had told me at the time was astonishing.

The conference ended the next day, after many interesting speeches and encounters. As of today, I am still in contact with some of these people. Some have gone to take part in noticeable Bitcoin endeavors.

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News of a person named Craig Steven Wright started coming up. I only caught it on reddit; apparently there was a story about a guy who got interviewed by video chat at the Bitcoin Investor Conference in Las Vegas. The girl who had interviewed the man, indirectly had outed him as Satoshi. The video showed that she was indeed asking many very specific questions and thus indirectly had led to speculations. In December, after two magazines (1, 2), most likely tipped off by outside sources, had posted that Mr. Wright most likely was Satoshi. Shortly thereafter, his home and offices were raided by the Australian Tax Authority accompanied by the Australian Federal Police.

The whole story was weird, but I wasn't that interested in it until in spring the next year Gavin Andresen, the former lead developer of Bitcoin, wrote a blog post confirming the Australian in fact being Satoshi. Later, other people confirmed it as well, among them my encounter Joseph from the conference in 2013. Some, like Gavin, even attested they had seen cryptographic proof. It was later announced that the proof would also be made public sometime in the future. I was quite positive this proof would happen, since Joseph had acknowledged that this was the man he had met in 2005.

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I made sure to have popcorn ready, so to speak. I had to work, but there wouldn’t be a reason stopping me from peeking into reddit every 1-2 hours. The blog post appeared with a statement and instruction to verify the proof. It was weird, as the free text kind of implied that Craig Wright did not actually want to provide that proof. He had mentioned previously that he did not want to come out and that other people had pressured him do it. My reading up on the person the past week, lead me to believe that the man was getting extorted, had huge tax issues, potentially financial issues at large and that there might even be more factors involved that forced him to act. The title referencing Sartre was strange, but I didn’t pay much attention to it at the time.

A few minutes later the internet was full of experts claiming that the proof was false, old signatures were copied and variable names didn’t check out in the script. Reddit was glowing and the truth was swiftly established. The guy was an utter fake, a confidence trickster at best.

After another failed attempt to provide proof through moving coins, things quickly went silent. I thought about that story a lot. Why would someone pull such a stunt? Why “scam” people without asking for something? Why did Joseph acknowledge him? Well-respected business men and community members with a reputation on the line had been in on this? It seemed so stupid and it felt to me, this couldn’t be the end of the story.

I kept searching social media for quite some time after the hoax was over. A very strange leak was shared. Apparently, the Tulip Trust did not allow usage of the keys and a board meeting of said trust was to be held in September. Very vague stuff about the trust being an alleged vessel for the early Satoshi coins. I couldn’t find more on that and pursued other interests.

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I found some pastebin links on reddit. I read lots of them. I learned that a guy, I figured one working for Craig Wright with nChain, managed to organize a Q&A session a while back. He seemed to be the speaking organ for Craig Wright as all questions were answered through his account. There were miles of records of these conversations that had been going on for quite a while. Mostly very technical stuff, but also some personal. There were references that he started leaking documents, basic stuff like his many university diplomas for degrees he wasn’t supposed to have according to some sources. Finally, one conversation was about getting CSW to join the chat himself…

A while back on TV, Craig Wright had made it crystal clear: This was the last TV-Appearance ever, he didn’t want help or money and generally wanted to be left alone. Appeal to authority disgusted him. He generally seemed to be a rough character, and most likely he was extraordinarily tense during that period. He vanished with a final note on his blog, stating he can’t do it due to being too weak. After the obvious shit-storm that followed, things turned very silent.

So why had he agreed to do a Q&A in the first place? Most likely he couldn’t stand the idea, that so many allegations against him, Craig Steven Wright, stood unanswered. In addition, someone must have convinced him that support from other people than nChain employees might help, if he truly wanted to make his ideas work and finish what he had presumably started. After all Bitcoin was only as good as the size and quality of its economy and community.

After I got administered to the chat I found myself in the lobby. I scrolled up to see what was being discussed and was surprised to find that the on-boarding of Craig Wright in the chat had apparently worked and that he was still there. I felt like a stupid fanboy, when I went through many of his comments and more interestingly the files he submitted. There were 10 pages of files and photographs. Scans of his diplomas, screenshots of emails linking him to Dave Kleiman, photographs showing his linkage to the Japanese culture, invoices, court documents, tax stuff, archived code, personal pictures, documents about his past in online gambling and most importantly snippets of the stuff his team seems to be working on today.

It all matched pretty well with the article published on 30th of June 2016 I found later in the week. Journalist Andrew O’Hagan accompanied Craig Wright for 5 months, including the time the whole drama had happened. I must have missed it when it came out as it also covered the time after the debacle. The journalist specifically mentioned that when asked, he chose not to publish first, as he thought the real value was in the aftermath. As I sucked it in, it became clear that there might be a plausible story after all…

The person controlling the csw account seems to want to make a move which leaves very little surface for future attacks and extortion. Breadcrumbs are thrown out there, in hope for people to pick them up and be smart enough to connect the dots. It seems Craig Wright attempts to restore his credibility as Craig Wright whilst maintaining plausible deniability that he was behind Satoshi. He likes mystery and shows a flair of citing all sorts of myths, legends and literature. Among them is Sun Tzu who wrote the famous book on The Art of War 2500 years ago.

The whole story and the itch I was sensing drove me to make a very blunt move. Without even introducing myself I straight out confronted csw with a few questions in the lobby. Specifically, I wanted to inquire about his attendance to the hacker conference back in 2005. The response was basically: “no comment” with a whiff of “you idiot”. I reckoned to get booted from the chat immediately after such a stupid move, but to my surprise that didn't happen.

It gave me the creeps when I checked the users-page and found my old acquaintance Joseph to be an active member of this chat with one of his uploaded files being a flyer to a hacker’s conference in the Netherlands later in the year. What was going on here? What are the alleged imposter and team actually working on?

My research leads me to believe that there should be papers, patents and code coming out for the following:

  • Turing completeness of Bitcoin. It means Bitcoin could be so much more than it is today. To the very extreme, that could turn many alt-coins worthless. Endless possibilities, almost.

  • A dealerless system, which means that shards for a key can be produced in a way that there is no risk anyone has a copy of the original key. These shards can then be used to sequentially sign M/N. If that became true, it also means a pretty big deal, especially when working in Bitcoin natively. Craig Wright mentioned during his appearance in Arnhem that it should provide the basis for storing bitcoin much smarter and safer.

  • Drastic scalability on chain. The team believes that on chain scaling is the solution to Bitcoin’s scaling problems.

  • IP to IP transactions, fixed but apparently very similar to the original implementation.

  • A native Bitcoin market, fixed but apparently very similar to the original implementation.

  • A potential attack vector against SegWit miners.

So is Craig Wright Satoshi? No.

Was Craig Wright Satoshi in his former life? In his own words:

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My gut feeling tells me, that some of the people involved in all of this, are actually close to Bitcoin’s roots, to the ideology and forces it was created by; true market capitalism, true economic sovereignty.

At this point, the reader might be disappointed by not being offered more tangibility. Be told that, if Craig Wright would have been Satoshi and he would have shown you any sort of cryptographic proof, he should be the most heavily challenged developer out there. I ask you all to intellectually challenge Craig Wright’s work. No matter what you or I believe about Satoshi, Craig Wright is in fact a highly qualified individual to work on Bitcoin. He has never asked anything of you, except maybe to just bugger off. joins the Bitcoin Association Switzerland

The 2016 founded is the latest in a row of innovative crypto startups to join the Bitcoin Association as a corporate member. The company combines IoT sensor devices with blockchain technology to provide data integrity for transactions involving physical goods and streamlines supply chain management in many sectors. 

Their sensors record environmental conditions while the physical products are in shipment. When a  change of ownership occurs, the collected data is checked against the specific smart contract in the Ethereum blockchain. This contract validates whether the transaction meets all of the standards promised by the sender to the client and the regulator and then triggers appropriate actions such as  notifications to the sender, confirm payments or release the goods. A great article about this promising startup appeared a few weeks ago in the Handelszeitung.

The Bitcoin Association is happy to support the fast growth of the Swiss crypto currency and blockchain ecosystem and invites every startup to join our ranks to collaborate with our shared community.

EverdreamSoft joins the Bitcoin Association Switzerland

Even though EverdreamSoft was already a few years old when the BAS was founded, it took a few years more until our paths kept crossing as highlighted with today's release of our latest Bitcoin Meetup video.

We're all the happier to announce that the company has become a corporate member of the Bitcoin Association Switzerland! It's a pleasure having them onboard and we're looking forward to a special game card to commemorate the occasion ;-).


How to participate in the local Bitcoin community

  • Get to know the community members in person by attending one of our regular meetups in Zurich or Geneva:

  • Join our Telegram chat group with 180+ members to always be up-to-date about the latest things happening in Switzerland and Bitcoin. If you'd like to join ask @rogerdarin on Telegram to invite you.

  • Follow us on Twitter

  • Join the Bitcoin Association as a member

  • Support the Bitcoin Association Switzerland with a donation to our Bitcoin address: 32kpHBZCHDUsC1xDCFMB6kAGHcgPaU9bkm

The Bitcoin Association Switzerland is an important pillar of the global Bitcoin ecosystem.
— Satoshi Nakamoto

Lamassu Inc at the Zurich Meetup

While many others were taking the day off at the international worker's day, 1st May, the Bitcoin Association Switzerland (BAS) hosted Josh and Zach Harvey from Sofia, Bulgaria, to talk about their company Lamassu, why they started a Bitcoin business in the first place and what it's like to be in the midst of an exciting movement.

Founded in 2013 by Josh and Zach Harvey, Lamassu Inc. is one of the first Bitcoin ATM producers and oldest Bitcoin companies still operating today. Their Bitcoin machines are highly popular with over 200 machines deployed all over the world.

With over 70 attendees their talk was very well received and the brothers shared a lot of interesting insight and tidbits from their business with our community. If you want to learn more about Lamassu and get the gospel from the horse's mouth, you can find a beautiful video of their talk on our YouTube Channel

EY Switzerland joins the Bitcoin Association

As part of Ernst & Young Switzerland's digital self-transformation, the advisory firm announced in November 2016 that their customers can pay invoices from EY Switzerland in Bitcoin. In addition, all EY employees will receive a digital wallet and a Bitcoin ATM will be placed prominently in the main building.

It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, smart contracts and digital currencies.
— Marcel Stalder, CEO of EY Switzerland

Being the first of the Big 4 to get into Bitcoin, the next obvious step for EY was to support our local Bitcoin community by joining the Bitcoin Association as a corporate member. We are very happy to welcome EY to our fast growing community. 

If you're interested to join us, check out the Join-Website for more information.

Our Regulatory Comment on the new Fintech-Regulation

One of the main activities and major reasons for the founding of the Bitcoin Association Switzerland is building a positive regulatory environment for crypto currency startups in Switzerland. The State Secretariat for International Financial Matters invited us to comment on the latest proposal to improve regulation for fintech startups in Switzerland. The plan is to allow startups that previously would have required a full banking license to handle client funds under a more appropriate, light-weight regulation (known as "banking license light"). Luzius Meisser, founder and board member of the BAS, wrote a comment in the name of our association, with a lot of support by the Swiss Fintech community. You can access the comment (in German) here:

PDF zur Stellungnahme der Bitcoin Association

In particular during the pioneer phase of a new technology, small regulatory differences can make an enormous long-term difference. Switzerland is in the pole position for becoming a major hub for blockchain technology, but there are still a few hurdles that stand in the way. Some of them will be removed by the proposed relaxation of the banking law, but there is still plenty of work to be done. Fortunately, the State Secretariat of Economic Affairs (SECO) has recognized this and calls for comments on what regulation stands in the way of digitalization in Switzerland. If you are aware of concrete laws that inhibits your business idea and that should be changed, let us now so we can coordinate on a common comment for SECO's "digital test".



Alexis Roussel, CEO of Bity SA, warns about centralized money advertised as Crypto Currency on Swiss TV

Alexis Roussel, cofondateur de Bity, était mardi l’invité du journal de Léman Bleu où on lui a demandé de réagir à la création médiatisée du Bilur, système centralisé et monnaie privée indexée sur le pétrole : « Quand on regarde ces nouvelles monnaies qui apparaissent, et dans ce cas précisément, on ne peut pas parler de crypto-monnaie : il ne s’agit pas d’un système ouvert, il y a un intermédiaire fixe qui décide et qui est le garant de la quantité de pétrole disponible.

Un des fondamentaux du bitcoin c’est justement qu’il existe par lui-même sur un réseau et qu’il n’y a pas besoin d’un intermédiaire pour garantir sa valeur […]. [Bitcoin] est un réseau ouvert, ça veut dire que quelqu’un qui est à l’autre bout de la planète et qui n’a pas de compte bancaire mais qui a un téléphone (et la majorité de la population, maintenant, a un téléphone), peut avoir accès à des services financiers numériques sans attendre l’autorisation d’une banque. Cela ouvre des possibilités gigantesques. »

Welcoming new board members

At the annual general assembly of the Bitcoin Association Switzerland on the 28th of March 2017, our members appointed two new board members who both both stand out through their contributions to the local Swiss Bitcoin and Fintech ecosystem and community.

Roger Darin as Community Manager

Roger has been helping us since January 2016 with co-organizing events and putting endless hours of work in editing the videos for our YouTube Channel Since early 2017 he is also managing the social media presence of the BAS on Twitter and LinkedIn.

BAS Community Manager Roger Darin

BAS Community Manager Roger Darin

Roger is also connecting our association with the wider Swiss finance and technology scene through his involvement in SICTIC and the SFTA. As the probably best connected person in the local Fintech scene, we’re very honoured to have him on our board.


Isabella Brom as Treasurer

Isabella works as IT advisor at Ernst & Young, where she is the driving force behind EY's Blockchain and Bitcoin projects. Most prominently, she lead the launch of a EY-branded Bitcoin wallet application in combination with placing a Bitcoin ATM in the Zurich EY offices and enabling her firm to accept Bitcoin as payment for their services.

Isabella demonstrating the EY Bitcoin ATM in Zurich

Isabella demonstrating the EY Bitcoin ATM in Zurich

Isabella’s engagement in the Digital Switzerland initiative connects us further with the broader Swiss ecosystem and enables us to bring Bitcoin to the corporate world.

Swiss Move to Reduce Blockchain Regulation

Swiss parliament Together with 23 co-signatories from all major parties, Swiss member of parliament Franz Grüter filed a parliamentary motion to reduce regulatory burdens of blockchain startups by restricting the legal definition of "client deposit". Today, firms that handle client money - regardless of whether in Swiss Francs, Bitcoin, or any other currency - get very quickly classified as banks, even if their risk profile fundamentally differs from that of typical banks. Being classified as a bank comes with regulatory and capital requirements that are practically impossible to fulfill for startups. That might be the primary reason why there is not a single operationally active cryptocurrency exchange in the style of bitstamp or bitfinex in Switzerland despite having an otherwise lively ecosystem of crypto startups. Luzius Meisser, founder of Bitcoin Association Switzerland comments: "This motion is a strong signal to blockchain startups all around the world that the Swiss parliament wants Switzerland to be at the forefront of fintech innovation."

The main part of the motion states (translation): "The federal council shall be instructed to define the term "client deposit" from banking bill art.1 and the banking act art. 2 more narrowly, to the extent risk allows. The current broad interpretation by financial regulator Finma obstructs innovative blockchain startups whose business models get qualified as banking even in cases where the intention behind the law - namely depositor protection - would not require such a qualification." The full version (in German) can be found on the Website of the parliamentary group for digital sustainability.

Franz Grüter comments in Zentralschweiz am Sonntag that he wants to prevent Finma from trampling the seedlings of a promising new ecosystem with the boots of bureaucracy. Andreas Glarner from law firm MME emphasizes the importance of creating a free, yet carefully regulated, environment in order to continue attracting blockchain startups from all over the world. Switzerland is already well positioned with initiatives like the Cryptovalley in Zug, a city that recently made international headlines by deciding to accept Bitcoin payments.

As a next step, the parliament will vote on the motion. However, the vote has not been scheduled yet and can happen in the autumn session the earliest. Having a citizen legislature, the Swiss parliament meets less often than that of other countries. (As a nice side-effect, it also tends to make fewer and more concise laws.) If passed, it would be up to the federal council to take concrete measures, some of which might again be voted on in parliament. In practice, the motion might already have am indirect positive impact today by sending a strong signal to the Swiss financial markets regulator Finma - which is explicitely mentioned in the motion - to interpret the existing rules less restrictively.

Federal Council report: No special regulation needed

In a report published today, the Swiss government answers questions raised in two parliamentary postulates. The report concludes that Bitcoin is covered by existing laws and that no new regulation is needed. This is excellent news and in full accordance with our views. Furthermore, the report confirms that Bitcoins are neither a good nor a service - which is relevant when deciding whether VAT applies when selling Bitcoins (it should not). Furthermore, the report says that the only thing Bitcoin currently lacks to be money like other currencies is low volatility. As volatility is decreasing, is should thus only be a matter of time until Bitcoin officially gets the legal status of "money". A side remark regarding miners: On question the report leaves unanswered is whether miners should be classified as financial intermediaries. Probably, the federal council sees this as a detail to be left to FINMA. In our view, miners do not require such a license because miners never take possession of the Bitcoins they process. So unlike with banks, there is no risk of embezzlement and thus no necessity to protect consumers from that. Also note that technically, most miners do not process transactions - it is the mining pool that does that for them. Instead, miners should be legally seen as someone selling computing power to a mining pool.

Miner's "luck smoothing" excuse does not hold up to scrutiny

The enormous computing power of the GHash.IO pool sparked another debate about 51%-attacks. Pools with such a large share of the total hash rate threaten Bitcoin's decentralized nature and make Bitcoin depend on the benevolence of the dominating pool - in this case GHash.IO. Obviously, it is not in the self-interest of miners to all mine in the same pool, as it undermines Bitcoins value. When asked, why they do so anyway, one frequent answer is "luck smoothing". In this post, I want to dispel this argument.


Shares of Mining Power according to

The following table was obtained through a Monte-Carlo simulation and shows the variance of mining returns as a function of pool size. For example, when mining in a pool that controls 50% of the computing power, you can expect a daily variance in returns of 0.6% and a monthly variance of 0.03%. Thus, you will get very smooth returns as good luck and bad luck are in balance.

Should you decide to mine in a pool that only controls 3% of the total hash rate, you will see daily fluctuations as high as 20%. In other words: when you earn 1 Bitcoin per day at average, you will often see returns below 0.8 Bitcoins or above 1.2 Bitcoin - but it can also get as low as 0 if the pool is very unlucky that day. However, when looking at the variance at a monthly level, daily fluctuations tend to cancel each other, leading to a monthly variance of 0.68%.

Price Variance vs. Mining Return Variance 

Bitstamp Price 50% Pool 25% Pool 12.5% Pool 6.25% Pool 3% Pool 0.8% Pool 0.1% Pool
Daily 2.2% 0.6% 2.4% 4.8% 9% 20% 80% 900%
Monthly 49% 0.03% 0.08% 0.16% 0.25% 0.68% 3% 23%

Let's compare this to the variance of Bitcoin prices. Unlike the variance of mining returns which gets smaller when looking at longer periods, the variance of the exchange rate goes up. The reason for this is that mining returns do not depend on the returns of the previous day (i.e. they follow an AR(0) process), whereas today's price builds on yesterday's price such that changes add up over time. Thus, when looking at daily returns, mining in a 25% pool adds fluctuations of 2.4% and price changes account for another 2.2% - givnig you 4.6% in total. However, the time horizon of a miner is not (and should not be) a mere day. Electricity bills come in monthly and obtaining new hardware is a process that spans over many months. Therefore, a more realistic timeframe to look at is one month. And here, the variance of the exchange rate dwarfs the variance of mining returns. When mining in the largest pool, you will get a total variance of 49.03% in USD terms. When mining in a 3% pool, you will get a total variance of 49.68%. Wanting to optimizing such a small difference is complete nonsense.

PS: Ziepheiw did some additional calculations that also incorporate difficulty adjustments. They do not matter much. Also, this post is being discussed on reddit.

Marc Faber points readers to Bitcoin

Swiss investment guru Marc Faber publishes a monthly market commentary. Along with the June commentary, he sent his subscribers a report on Bitcoin, titled "Dispelling the Myths of Bitcoin" and written by Lee Robinson from Atlana wealth. I already was in contact with Faber last autumn suggesting that he should send my report on Bitcoin to his readers - which he unfortunately did not even though he indicated interest. The report he finally attached is an interesting read, containing an excellent collection of quotes (e.g. "Every informed person needs to know about Bitcoin because it might be one of the world’s most important developments." by Nobel price winner Leon Louw) and showing various charts copied from the internet (e.g. this Bitcoin Ecosystem Snapshot). It lists three scenarios and attaches long-term values between 5'714 USD and 119'000 USD per Bitcoin. For the latter, the author randomly assumes that Bitcoin can capture 1% of the global money supply - not a very profound analysis. Nevertheless, I find it notable that Marc Faber finally decided to inform his readers about Bitcoin (without endorsing it). It is a symptom of raising awareness among investors and a good sign for the future.

Finma comments on Bitcoin

Finma comments on Bitcoin In a recently published guide titled "how consumers can protect themselves from financial market actors that operate without permit", the Swiss financial market authorities commented on Bitcoin. Generally, it does not contain any surprises. They see risks for consumers in its irreversibility, anonymity and volatility - which are valid concerns. They also note that money laundering laws and banking laws might apply when running a business such as a Bitcoin exchange. This is in line with our view that Bitcoin should be treated like other currencies.

One could criticize their focus on risks alone - neglecting potential advantages of the mentioned properties and Bitcoin in general. But that's their mission. Regulatory agencies are created to mitigate risks - and not to identify opportunities.

The MtGox debacle would not have happened in a free market

As other places reported, MtGox failed spectacularly and ceased operations today. Some will blame this on a lack of regulation. Nothing could be further from the truth. The main reason for this failure being so spectacular is a long history of lacking competition. Even though MtGox repeatedly faced problems like days of suspended trading, customers did not have many viable alternatives. In many countries, the legal costs of setting up a financial service website like a Bitcoin exchange are prohibitive. The Internet thrives on people being able to experiment - otherwise, sites like, or would never habe been created. I personally have repeatedly met motivated enthusiasts who wanted to setup their own Bitcoin exchanges. Unfortunately, regulation is holding them back. Had they been able to create their exchange websites, MtGox would have seen much more competition much earlier - giving customers the opportunity to diversify and reducing their exposure to a single operator.

However, in an ironic twist, the very regulation that seeks to protect customers potentiated their risks by preventing them from effectively diversifying. The financial services industry is in an ongoing vicious circle of market failures that make politicians enact more rigorous regulation, which stiffles competition, which again leads to more market failures and regulation.

- Written by Luzius Meisser, President of Bitcoin Association Switzerland