
Square obtains NY State cryptocurrency license - petethomas
https://www.reuters.com/article/us-cryptocurrencies-square/square-obtains-ny-state-cryptocurrency-license-idUSKBN1JE1U6
======
tedmiston
The Square Cash app has had this feature for a few months now. It looks like
it just has not been available to residents of New York, Georgia, Hawaii, or
Wyoming.

[https://techcrunch.com/2017/11/14/square-cash-is-letting-
som...](https://techcrunch.com/2017/11/14/square-cash-is-letting-some-users-
buy-and-sell-bitcoin/)

[https://techcrunch.com/2018/01/31/square-cash-expands-
bitcoi...](https://techcrunch.com/2018/01/31/square-cash-expands-bitcoin-
buying-and-selling-to-all-users/)

~~~
deltateam
Odd feeling when your state has the same restrictions as countries on the OFAC
list.

~~~
microcolonel
Sometimes it feels like NY will pass _and keep_ almost any law, as long as it
hurts somebody who has no powerful friends.

~~~
deltateam
your observation does not lack accuracy

------
m3kw9
I feel like these higher profile cryptocurrency projects are just still
following thru because they’ve been approved at the peak of its hype and fully
funded back then.

~~~
DINKDINK
The ICO-scam mania is waining, systems that run those ICOs are cooling
(Ethereum), but the need for a system of sound, programmable money remains.
This is why Square is pursuing Bitcoin.

~~~
ENGNR
Ethereum is the robust base layer for a whole bunch of stuff. ICOs are an ok
use case for Ethereum today, but when plasma is ready (months not years), the
transaction capacity will explode and fees could go to zero within a plasma
chain. There will surely be a huge increase of real useful applications,
including in the payment space

I think Bitcoin might be useful for storing and holding wealth, whereas
Ethereum is much more active protocol, for active communication and
interaction

~~~
r32a_
Bitcoin has the lightning network which is already in production and in use
today with a few little applications running on top of it.

[http://satoshi.place/](http://satoshi.place/)

~~~
DINKDINK
* [https://satoshis.place/](https://satoshis.place/)

------
spunker540
I think Square has a huge incentive for cryptocurrencies to catch on because
almost all their payments and hardware incur credit card fees, licensing fees
etc. Not to mention complex and outdated settling mechanisms.

------
yebyen
Apparently according to TFA this is the ninth such license that was awarded?
Wikipedia page needs an update, they still only list the first five:

[https://en.wikipedia.org/wiki/BitLicense](https://en.wikipedia.org/wiki/BitLicense)

(I was only aware of the one that I knew Coinbase held.)

~~~
otoburb
Somebody just updated it[1], ironically from NY state.

[1]
[https://en.wikipedia.org/w/index.php?title=BitLicense&action...](https://en.wikipedia.org/w/index.php?title=BitLicense&action=history)

~~~
yebyen
I wonder how Reuters got all the way up to nine!

> With the Square approval, DFS has now approved nine firms for virtual
> currency charters or licenses, while denying those applications that did not
> meet DFS’s standards. DFS has also granted licenses to Xapo, Inc., Genesis
> Global Trading Inc., bitFlyer USA, Coinbase Inc., XRP II and Circle Internet
> Financial, and charters to Gemini Trust Company and Paxos (formerly itBit
> Trust Company).

from the Wiki citation [21]

[https://www.dfs.ny.gov/about/press/pr1806181.htm](https://www.dfs.ny.gov/about/press/pr1806181.htm)

looks like two are charters, not sure how that's different than a full
BitLicense.

------
benarent
One interesting product decision with Square Cash and Robinhood Crypto
services is that customers can't transfer off as BTC ( to another exchange /
hardware wallet) . When I asked Robinhood they said it was so customers didn't
user BTC for illegal activity as they hadn't built out specific anti-money
laundering measures.

~~~
dawhizkid
I don't think that is true for Square Cash. I can withdraw to a different
address off Square - I needed to verify by DL first though.

~~~
benarent
Yeah. I found it.
[https://squareup.com/help/us/en/article/6307](https://squareup.com/help/us/en/article/6307)
The menu is pretty hidden.

------
SilasX
Wow, "BitLicense" cryptocurrency licenses (in NY) are thing now:

[https://www.dfs.ny.gov/legal/regulations/bitlicense_reg_fram...](https://www.dfs.ny.gov/legal/regulations/bitlicense_reg_framework_faq.htm)

~~~
yebyen
I would never have become a Coinbase user except for all of the press when
they got theirs, while I was living in NY.

Centralized exchanges are not really my thing, but legal compliance is pretty
alright by me, and NY is a notoriously difficult regulatory climate. When I
heard that Coinbase might be sending my information to the IRS, it was
actually a relief.

(Given: I have managed to make not very much on crypto for someone who has
been involved in the ecosystem for a while.)

------
glitchc
How are they going to handle this? Will they be holding coins a la an exchange
or will they host multiple full nodes and post txes to the chain?

------
BloodyHands
> New York State legalizes a scam

news at 11

------
asdsa5325
It's a shame that Square is getting caught up in this scam. It makes me no
longer want to do business with them.

~~~
deltateam
Square is a payment processor and all payment processors are presented with an
opportunity to use existing blockchains as the rails for a cheaper money
transmission system. Blockchain networks have the capability to be cheaper
than the offerings of the SWIFT system, ACH and VISA networks, for the payment
processor.

Given the state of the technology today, taking advantage of these cost
savings in the most network-aligned way requires massive liquidity. Square
creating a liquidity solution helps them and grants their customers something
they want.

~~~
glitchc
I'm not buying the cheaper argument. Which part of transacting on the Bitcoin
network is cheaper exactly? Mining is cost-intensive, and transaction fees are
at least an order of magnitude higher than Visa. Equating SWIFT to Visa is
also disingenuous as the former is meant for cross border settlements where
the restrictions are regulatory (AML), not technology. Switching to Bitcoin
doesn't mean Square or any other institution can simply ignore AML laws.

I see this mainly as a service they wish to provide to a segment of their
customer. I also expect it to be a loss leader and shut down over time.

~~~
dick_sucker2
No chargebacks?

~~~
glitchc
Is that meant as a positive or a negative, as chargebacks help the consumer,
as does non-repudiation. The general public wants these features in our
exchange mediums.

~~~
dick_sucker2
It forces arbitration with the business in the case of a dispute. Wouldn't
payment processors and businesses want that?

~~~
s73v3r_
Consumers don't want that.

~~~
DINKDINK
You can build a system that allows charge backs on a system that doesn't allow
charge backs but you cannot build a system without charge backs on a system
that does allow charge backs.

These escrow products already exist for customers on Bitcoin.

------
zitterbewegung
I thought that the sentiment at Square was hostile to cryptocurrencies . They
stopped accepting bitcoin and also patio11 was skeptical about
cryptocurrencies but those views could have been his.

~~~
paulie_a
They stopped accepting bitcoin for good reason, not hostility. Why would
anyone ever want to pay in bitcoin with the massive transaction fees.

~~~
yebyen
It has gotten better (I actually am of the impression that the transaction
volume has gone down, and that's largely to credit for the fact that fees are
back down, perhaps because of Lightning and/or Segwit; but regardless of the
reason why, there is nobody left who is paying $15-30 in fees for each BTC
transaction on the chain today)

This great visualization[1] showed up on my feed yesterday, you can see that
most of the BTC transactions' fees are being measured in single-digit USD
cents again. It compares BTC to BCH, and you have to wait a while to see
what's happening, but I think it's a fairly unbiased and basically informative
view of how the two on-chain transaction scaling strategies actually work.

(Spoiler: the number of BTC transactions is still massively outpacing the
number of BCH transactions, in case you didn't guess that.)

[1]: [https://bitcoinsubway.cash/](https://bitcoinsubway.cash/)

[edit: http_ _s_ _]

~~~
paulie_a
What has changed in the past 3 months? A co-worker of mine decided to throw a
few bucks into the crypto craze and the fees were about the same as what he
wanted to buy.

~~~
yebyen
The TX (on-chain transaction) fees have absolutely changed in the last 3-6
months. Before Jan 1, the average TX fee had peaked at about $55USD. In
February you could get a transaction on the chain for about $2. Since that
time, they've implemented the Lightning network, which is a way to transact
over a channel rather than putting every transaction on the chain. I don't
know enough about that feature to explain how it works, but that should be
easy enough to find information about if you're asking what technologically
has changed... but in terms of raw numbers and actual prices, you can find
that information too:

[https://bitinfocharts.com/comparison/bitcoin-
transactionfees...](https://bitinfocharts.com/comparison/bitcoin-
transactionfees.html)

At the present time, a transaction can be reasonably assured to be mined in
the next 1-6 blocks by adding a fee of $0.20 for next block (or down to $0.10
for within ~6 blocks.)

[https://bitcoinfees.info/](https://bitcoinfees.info/)

This is not the only fee you pay when buying and selling, but it can be...
exchanges like GDAX permit you to pay a fee to place a market order (buy/sell
from the current limit ceiling or floor), or pay no fee to place a limit order
(wait for the market price to cross your own preferred price), and those
different kinds of exchanges will all have different fee structures, but most
markets supporting limit orders I think should not charge fees. This kind of
buy/sell fee is basically always a percent, maybe with a flat fee floor (eg.
$1 min fee.)

The market order fee is really probably pretty insignificant unless you're
actively trading all the time, in which case you'll definitely want to avoid
paying them. On Coinbase, for example, you only buy and sell at the market
price with a roughly percent-based fee structure, and the fees are low.

Ostensibly you can understand what's changed to be that, now that there are
no-fee options available for high-volume traders, all of the high-volume
traders are using those options so there is more room on the chain for small-
time simple consumers to pay a low fee and keep things simple, doing their
transaction in the traditional way. I don't want to run a Lightning node, but
I can still benefit from the existence of that protocol through lower fees,
because it means there's simply a lot less traffic on the chain.

I don't have numbers to back any of these assertions up about how it happened,
other than the actual links I provided regarding the average fee value paid...
but all of this reasoning about 'how' is hypothetical and I'm probably wrong
about something.

