California Assembly Moves Forward With Idiotic Plan To Make All Bitcoin Startups Apply For A License

from the this-won't-end-well dept

Back in March, we wrote about a really bad bill that had been proposed in California by Assemblymember Matt Dababneh, called AB 1326. As we noted, it would basically destroy the ability of new startups in the Bitcoin space to build their businesses in California. Specifically, it would require any startup in the broadly defined "business of virtual currency" to first need to get licensed by "the Commissioner of Business Oversight" and then comply with a long list of other regulations -- including regular audits by the Department of Business Oversight. Well, unless you're a big bank or financial institution. Then you can carry on and experiment with Bitcoin all you want.

In short, the bill would reverse decades of how Silicon Valley has lead the world in innovation -- by switching from a world of rapid innovation and permissionless innovation, to one in which any startup even contemplating doing anything with Bitcoin would have to go plead their case to clueless regulators in Sacramento. It's hard to see how anyone could possibly think this is a good idea for innovation or the California economy. And yet... the assembly's committee on banking and finance has now voted the bill out of committee, sending it on to the appropriations committee and then on to the floor of the legislature.

Of course, perhaps it's not so surprising that the committee on "banking and finance" would approve this bill -- considering it gives a free pass to big banks and financial services companies while hindering startups, entrepreneurs and innovators. However, any of the many startups in California that are doing some amazing and interesting things with Bitcoin should speak up now, because California is about to tell them to move out of the state entirely.

Filed Under: ab1326, bitcoin, california, california assembly, innovation, matt dababneh, permission, regulations, virtual currency

Zynga Trying To Patent Virtual Currency

from the copy-everything dept

Back in September, SF Weekly put out an article pointing out that super popular Facebook gamemaker Zynga's strategy has been to copy anyone else's popular game, change the name, market the hell out of it and take over the market. The company has been famous for its somewhat underhanded tactics over the years. That said, I don't think there's anything wrong with copying what's been successful (within the law, obviously) and trying to improve the overall experience. Where things get questionable is when it seeks to stop others from doing the same thing. We've noted in the past that Zynga has tried using copyright and trademark law to block others from the market, which is pretty sleazy given its own style of creating games.

Now it looks like it may be looking to do the same with patent law as well. Jarrett Streebin points us to an article highlighting a patent application from Zynga that certainly appears to be trying to patent a rather common form of virtual currencies. You can see the full patent application, which (amusingly) was published the day after that SF Weekly article.

Now, this is only a patent application, so one can hope that the USPTO comes to its senses and rejects it (though, it's been approving a lot more lately). However, it's still a pretty questionable move -- especially given that two of Zynga's investors, Brad Feld and Fred Wilson, are some of the most vocal anti-software patent advocates out there. It would be a shame if their money is being used to create more bad patents.

Filed Under: patents, virtual currency
Companies: zynga

China Tries To Ban Virtual Gold Farmers

from the good-luck-there dept

The "dark underworld" of online economies is the supposed "gold farmers" often found in countries like China, where people are working in sweatshop like conditions, "playing" video games to generate as much currency or valuable virtual goods as possible, that the gold farm operators can sell for real cash. However, the Chinese government claims it's cracking down on the practice, though it's not entirely clear how they'll stop it from going on. In fact, it's not even clear why the government is trying to stamp out the practice. At best, the claim is that it wants to avoid "possible impact on the real financial system." While any time you have "alternative" currencies, that's certainly a possibility, it's hard to believe that World of Warcraft gold would have any serious impact on China's economy any time soon.

Filed Under: china, gold farming, virtual currency