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Bitcoin app rejected by Apple (bitcoin.org)
206 points by hfinney on May 7, 2011 | hide | past | web | favorite | 94 comments

Duh. It's a way of purchasing things outside of Apple's store. They can't get their 30%, so they won't allow it.

Edit: seriously, that's an incredibly solid reason why they wouldn't accept it. I considered making one briefly until I realized this. I'm not even remotely surprised this happened.

Gavin Andresen of Bitcoin will be live on This Week in Startups this Tuesday at 1:00pm PDT talking more about these challenges and benefits of Bitcoin if anyone is interested.

Thanks for heads up. Time to buy some bitcoins before media pushes the value up again...

Trying to release a Bitcoin app on Apple's app store may preclude cautionary tales of how not to get noticed. Bringing something like this into the mainstream could otherwise be hazardous to a protocol and community that are just beginning to bloom. Perhaps this mobile market isn't ready for such a powerful application.

Bitcoin was covered on CNN recently. The days of "don't talk about Bitcoin" are already over.

Keeps inflating the exchange rate at least.

Why not just build this as a web app instead of a native iPhone app?

Well, you could, but that would leave your wallet (containing all your BitCoins) at a remote server, removing much of the point of Bitcoin. It would be just another Paypal basically (although you would be able to send the money between different "Bitcoin-PayPals" without a fee).

It would also make it much harder to send Bitcoins to other devices/people. With a native app you could for example detect other Bitcoin clients in near proximity via BT/same Wifi to make it much easier to transfer money, with the web you're stuck typing a long cryptic address.

Check out MyBitcoin. Something like this is actually very useful. The wallet on the remote server can (and should) just be a temporary transfer; send to mybtc or a similar service on sale, transfer out to a private wallet once a day, etc. Then, when you want to buy something, mail to your mybtc account, and then to the vendor you want to buy from. Only one extra step and still much more convenient than typing in a btc address.

I wonder if a bitcoin via email protocol/system could be implemented. Perhaps a special mail client could be built directly in the bitcoin client for such a purpose. Then the bitcoin web app would just communicate between individuals bitcoin clients via the email protocol. Just a thought. I really want to see Bitcoin succeed.

you could store the data in localStorage, avoiding the remote data problem. Now if only there were a way to sync local storage across devices...

Local Storage is limited to 5MB. Bitcoin requires much more than that --- on the order of 500MB.

This is because it needs to verify the block chain history, in order to provide cryptographically secure transactions.

Not at all. The Java bitcoin client doesn't store the entire block chain. http://code.google.com/p/bitcoinj/

You don't even need to know the current block to send transactions, if I remember right (haven't dived in deeply enough yet to be 100% certain). The block solver (miner) is the only one who needs to know the chain, as they choose what transactions to include, and your transaction may not even be included (ie, if fees are too low), but may in a later block.

You need to know the current block chain in order to know that nobody is fooling your client.

In other words, you need to know the current block chain in order to be sure you really did just receive 100BTC from Website X, and that it wasn't just a trick.

Only partially. You only need to know N blocks after a transaction to be N-certain a it is valid - that it's included in a block at all and propagated through the network implies the transaction is valid. If it weren't, other clients wouldn't accept the block.

You can never technically be completely certain a transaction isn't fake. You could be looking at a non-standard branch of the network, and you have no way of knowing it. So randomize your connections, wait for a few more blocks at reasonable difficulties, and you can be sure enough without having to work from the origin.

And (again, not 100% certain) I think you only need to store the hashes of each block to prove the chain is valid, and demonstrate a certain amount of work has been done (the difficulty of each). Each block solution builds only on the previous hash. That's just relatively tiny numbers, the entire list of block solutions would likely fit within 5MB with room to spare.

He uploaded the source: https://github.com/udibr/bitcoinApp

Alright. Android it is then.

Bitcoiner was just released on the Android market though I haven't had the chance to dive into it yet. Can anyone comment on it's merits?

It looks like it could do with some polish but I've not tried it yet..

This really should not be a surprise to anyone. If Bitcoin is not already illegal (and I have reason to believe it is due to most states' money transmitter laws), it's almost guaranteed that it will be soon.

I doubt Bitcoin will be made illegal. By itself, the Bitcoin network is just a mechanism for passing around signed messages and calculating hash values. It would be difficult to outlaw that without running into constitutional free speech issues.

Where Bitcoin might run into trouble is the trading of bitcoins for dollars or commodities. Depending on how bitcoins are classified legally, there may be additional regulations that sellers or buyers of bitcoins need to adhere to. However, because bitcoins are so different to any existing currency or commodity, I think we'll need to wait for a court to decide whether they fall under any existing regulation, if at all.

While I am sympathetic, this is the same sort of argument that was made in the past with napster and the trend of later laws has been to hold "enablers" liable (at least when it comes to copyright). Given what happened with egold I would not have much faith that the US (and western world) legal establishment will tolerate something like bitcoin. But who knows, maybe we'll get a judge who is willing to make fine distinctions from technical arguments, or is more favorable on free speech vs the interests of those who currently control the flow of capital.

Follow up:

egold plead guilty to "operation of an unlicensed money transmitting business". While I'm not familiar enough to say definitively if bitcoin could avoid this same statute in the US, I'd guess not.

Napster had a centralized search engine. Later P2P networks, like Bittorrent and Gnutella are decentralised, and no-one has yet declared those technologies illegal.

Even more so than Napster, E-Gold was very centralized, and thus an easy target. Bitcoins are an entirely decentralized network like Bittorrent or Gnutella, which have not been declared illegal.

Where Bitcoin might run into trouble is the trading of bitcoins for dollars or commodities.

But even if trading was made clearly illegal in the U.S. all that we need is a company abroad under benign legislation that allows you to buy/sell bitcoins and that accepts credit cards.

You're right that you obviously can't make it illegal to perform mathematical calculations over big numbers. Also, you can't make it illegal to interpret the result of the calculations or giving them a context.

But I think you can't make it illegal to trade bitcoins either: if everything else fails we can always have bitcoin trading parties where the participants can exchange bitcoins to money and money to bitcoins with no third party in the middle.

It is likely to be illegal; banking without a licence, not revealing the ownership, etc.

Look at E-Gold's fall: http://www.wired.com/threatlevel/2009/06/e-gold/

How do those apply to bitcoin?

E-Gold was a private organization that allowed people to open anonymous accounts backed by gold. I can see how this could be construed as a bank.

Bitcoins are not backed by anything, and are not managed or owned by any organization. I don't think you could classify the Bitcoin network as a "bank", any more than you could classify any random crowd of people as a bank.

Isn't the "bank" on your hard drive?

E-Gold was a commercial enterprise with only 20 employees and no legal team. Very easy to take down. It will be hard for the feds to take down a P2P network, although very easy for them to police e-commerce sites that accept it.

A P2P network means nothing to a country infamous for filesharer penalties up to trillions of dollars.

Bitcoin transactions are public, right? It's not exactly hard to find out who's using them...

You can have separate addresses (accounts) for every transaction, which makes tracking much harder (not impossible). Oh, you can also launder your bitcoins. :-) See https://en.bitcoin.it/wiki/Anonymity

The transactions are pseudonymous - a public key of each participant is recorded, and world readable. The public key doesn't have to be connected to a real world identity. An attacker could analyse the transaction history to infer the identity controlling a given key, depending on how it was reused/managed.

But this can actually be pretty difficult to manage correctly.

While "best practice" is to generate a new btc address for each transaction, there are still ways to attempt to profile users even if they use that rule. For instance, if someone knows you like an esoteric thing, and they know you have a lot of bitcoin, they can look at people buying things from public addresses (most shops or established bodies have permanent addresses for receiving) that are associated with esoteric thing, and say it's likely that you were purchasing at least some of that. They can do other filtration and process-of-elimination things to find out who is using what, or where something comes from.

Additionally, if the wallet of one who you've traded with in the past is compromised, even if they were using single-transaction addresses, the attacker may be able to fill in some missing links in the chain, especially if the wallet's owner has recorded anywhere a translation from btc address to useful memo/accounting data. Imagine if UBL used btc and the Feds got his wallet; everyone downstream would be hunted with some serious prejudice.

I should clarify that in bitcoin, the entire transaction chain from the time the block is generated until the last time it is used is recorded forever. Once you send from an address to another address, that transaction is ingrained in btc for the remainder of its existence, and every coin you receive has a long history that shows all of that. While the names are long hashes and not things like "TERRORIST KINGPIN -> INNOCENT BUT NOW SUSPECT GUY", there are some ways to put something like that together, and they're not all obvious.

There is no doubt that bitcoins will fall under one or another regulations.

One argument would be that bitcoin is an illegal pyramid scheme.

Another would be that bitcoin is means circumvent the tax system (all barter and local currency systems, for example, have to pay taxes).

I'm sure many other arguments could be found.

I'm sure many other arguments could be found.

Like, "Bitcoin is anti-American" or "Bitcoin will be used by heroin dealers who will sell your daughters into prostitution"

If bitcoin is a means to circumvent the tax system, then we'd have to apply whatever tax regulation that results to all other forms of currency. Social Security is an illegal pyramid scheme because it wasn't sold to the American public that way.

Let's start applying the law equitably before we stomp on innovation.

Well, it is already being used by drug dealers (see Silk Road). In fact, if you have bitcoins it's probably easier to exchange it for illegal drugs than for food.

Maybe so, but at least you can exchange it for food: http://www.bitmunchies.com/

No the US dollar is the legal pyramid scheme and the point is that nothing can compete with that part of the dollar.

That is, any "money" is both a medium of exchange and a store of value. It's OK to compete with the dollar as a medium of exchange but if you compete as a store of value, then you've wandered into some heavily guarded turf...

Actually there's a lot of doubt. Bitcoins are not a pyramid scheme, and whilst they could be used as a method to circumvent tax, any skilled accountant can already suggest a dozen other means to achieve the same thing.

Bitcoins are probably most at risk from being classified as a type of security, which would put them under the scope of a large number of financial regulations. It wouldn't make them illegal, but it would make them more difficult to trade.

However, in general I'm optimistic about Bitcoin's chances. I certainly don't believe it is inevitable that they will be regulated out of existence.

So essentially you're saying they can't make bitcoin illegal, just make it completely illegal to use in any practical manner. That sounds like making bitcoin illegal.

That's not what I said at all.

Regulation does not necessarily mean "make it completely illegal". Food is regulated, but that doesn't mean the government has made it illegal (or even difficult) to eat.

In some countries (eg UK) prostitution isn't illegal. It's just illegal to ask for money for sex, its illegal to imply you'll pay someone for sex, etc. that sounds like what the government could do to bitcoins. As a result prostitution is de facto illegal.

Yes, the government could do that, but it's not guaranteed they will. My point is merely that regulation does not necessarily mean making something completely illegal.

I don't see much point in this kind of rationalization. We know that it's probably not technically illegal to run the bitcoin network. I'm sure they'll find some way to postulate that btc as a currency is technically illegal, but even if they didn't, you have to know that everything that is big in government and the power scene right now is going to collude to take btc out of the picture as far as possible. They are going to marginalize and destroy it as much as they can.

The government hates it because it's difficult to track the money; they'll claim it's used for terrorism, money laundering, and other forms of illegal funding, and as you know, once such a claim is solidified in the public psyche it doesn't really matter what statute the actual legal charge is based on. They'll also hate it because it makes taxation much more difficult. You may argue that cash does the same, but cash still originates and terminates in the government's officially sponsored banking system and it bears official government markings that are used to track its movement. Cash has also been (intentionally) corralled into disuse by the major financial players (governments, banks, huge businesses).

The banks will hate it because it cuts them out of their usual money-shifting shenanigans, which are both obscenely profitable and generally amoral, if not in principle, then in practice due to gouging and misrepresentation.

Bitcoin allows easy and practically free e-commerce. Bitcoin allows for extremely innovative new banking interfaces and practices. Bitcoin is at least practically if not technically unbound by the onerous regulations and rules that bankers have installed for themselves to help control which people are allowed to play with them. Banks aren't going to like that kind of competition at all.

Bitcoin is in for it as soon as any kind of normal usage begins to occur. It is silly to pretend otherwise. I have extremely high doubts that btc will be allowed to stand; the only way I can see that happening is intervention from US intelligence services, requesting that btc be allowed to continue to operate without molestation because of that agency's specific plans for the platform.

I don't subscribe to the theory that the US government is a nigh-omnipotent entity that always gets its way. There are plenty of things the US government doesn't like that it has to live with, such as strong cryptography, pornography and P2P networks.

I also really dislike the fatalistic attitude that those in power will always get their way, and that we should never try to change the status quo because we will always fail.

I don't think that the government gets whatever it wants and I don't think the people will always fail against the powers that be. However, I don't think there would be enough interest in bitcoin to make it outlast the interest the government would have in killing. The government and banks really hate this kind of stuff, it's not just a passing "that'd be nice to get rid of" thing.

Perhaps, but that doesn't mean that we shouldn't try. I'm also unsure how much of an interest the government has in killing it.

Bitcoins are not inherently anonymous, and in some ways it makes things easier for law enforcement, because all transactions are public and accessible without the need for a warrant. The hard part would be matching a Bitcoin address to an individual or organization, but maintaining anonymity against a determined investigator is hard, and requires a high degree of technical expertise to pull off. I don't think Bitcoins actually make things any harder to find criminals.

Rather than reinventing this discussion poorly, I encourage everyone to read the paper first: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857

By that argument, EVE Online's PLEX should be illegal as well, as it is transferrable and exchangeable for something of monetary value (a subscription).

Again we're running into the geeks-trying-to-understand-the-law problem -- they always expect the law to be as sensible and self-consistent as geometry. But the law has no patience with reducito ad absurdum, and judges and lawmakers are quite happy to declare that X is legal and Y is illegal even if in some sense Y is really analogous to X.

As far as alternative currencies go, my understanding is that they're illegal under US law but you can get away with them on a small scale. The moment they reach a large scale or start getting used for money laundering, though, expect to start having legal problems, because the US Federal Government has reserved to itself the right to print currency.

Apple is wise to stay out of it, with the potential for legal trouble outweighing the potential profit from app sales.

"Again we're running into the geeks-trying-to-understand-the-law problem -- they always expect the law to be as sensible and self-consistent as geometry."

Well, there's only one solution then—we need to get more geeks in office.

Edit: Real geeks, not the "I own an iPad" that passes for geekery in Washington.

Who says that things that aren't a problem need to be made illegal because something analogous is?

If they choose to make BitCoin illegal, due to anti-laundering laws, etc, should your iPhone game not be allowed to use credits either, even though it's so small nobody would bother abusing it?

It's not a problem requiring a solution, it's merely an observation. If a bunch of over-logical geeks were to sit down and try to draft a new set of laws which were completely unambiguous and free of arbitrary cutoffs and nonequivalent treatment of equivalent situations then they'd never even get past questions like

"Precisely how far from the end of my nose does your right to swing a fist end?"

Without arguing with your specific wording of "completely unambiguous and free of arbitrary cutoffs etc.", I think the implicit point you're making that a group of highly intelligent people couldn't sit down and come up with a significantly better new set of laws "from scratch" is wrong. I think they could, if that were their only aim, vastly improve laws and government with a noticeable improvement on average quality of life in the world. The obvious problems and the reason this won't likely happen soon are politics, power, trust, etc.

I think the chances of finding a group of highly moral, highly impartial, highly intelligent to work together to set up a new system of laws "from scratch" with no other goals than to produce a better system of laws and improve the average quality of life is practically nil.

Although the US system is far from perfect, I think Jefferson, Hamilton and Madison did a pretty darn good job of all that.

Nah, they'd do an analysis and say that it ends at exactly 1 cm away from the end of one's nose or whatever.

Then people would complain that it wasn't fair, because they intended to stop at 1 cm, but actually stopped at 0.99 cm and that should be close enough. And then someone would try to drag relativity into play and question what reference frame we should be measuring that 1 cm in and things would go downhill from there.

Right, because while you and I are able to see absurdity of that, these super intelligent geeks you have in mind wouldn't be able to.

He's going with the "geeks are blind to common sense" fallacy.

Actually, I'm going with "rules aren't precise because people disagree strongly over stupidly minor details so we have to abstract them to reach consensus."

Why are "alternative currencies" illegal under US law? AFAIK the only thing that's illegal is refusing to accept US$ as payment if you accept something else. For example, people can spend foreign money (GBP, Euros, etc) inside the non-international parts of airports. Also, people can transfer their USD to foreign currency and vice versa over the internet and at banks. Is there something different about bitcoin than say zimbabwe dollars? If anything, they're probably safer. As an aside, USD are accepted many places outside of the US in lieu of the local currency. I imagine there would be similar laws in those countries, but yet it's acceptable there.

Jct: They're not. Ithaca Hours. Berkshares. Timedollars. Lots of legal models. What's illegal is making the tokens look like the real thing. Why else would he do it in such an illegal way as to incur the wrath of the government. I think Liberty Dollars was a Judas Goat effort to bring the government down on the whole alternative currency movement.

This is true to varying degrees under different regimes. Of course you're never going to have perfect and consistent justice, but if you're interested in avoiding a police state it's a good idea to keep the law self-consistent and regularly enforced. Otherwise, everyone's a criminal and the state will take the opportunity to put its enemies in prison.

There is a difference a token that is convertible for one, given thing and a token which is convertible into anything and traded with the intention of making transferable into anything.

And, yes, while IANAL, I know a lot of the law turns on the intentions behind a given act rather than the act-in-itself. This seems counter intuitive to geeks but its not likely to change soon.

Why would it be illegal if bitcoins are never exchanged for dollars?

I know it's totally utterly contrary to human nature, but if everyone got up tomorrow and left their wallets at home and took things from stores with the consent of the owner and went to work, but received no pay, and stood in line at the soup kitchen and did not take from stores if they felt they had not contributed to the society, would that be illegal too?

Think about it for a while. Sometimes we lose sight of what money actually is.

It could actually be illegal if it would turn out to be a scheme for evading tax payments. For example I think you can not simply start exchanging goods for services and quit paying taxes because you don't make money - somehow you have to make a statement to the tax office.

Try this on for size: if someone offers to trade me a week of their time for a week of my time (do NOT do this, please, as it makes little sense for me and even less for you), and I say yes, then I have a legal obligation to a) declare the fair market value of your time as income I received for services and b) file a form with the IRS saying that I paid you something of value equivalent to my usual consulting rate for the week. You then get taxed at your usual rate on that implied income, despite no dollar changing hands. (That would almost certainly be several thousand dollars in taxes.)


Not sure why you were downvoted, but you nail it. It's all an illusion.

If this is illegal, then I think there's a freedom of speech issue here given that essentially the protocol is just sending messages (with no copyright infringement or anything like that) to peers...

Edit: of course, you could say the same about other digital transmission of currency, but it seems different due to bitcoin not being tied directly to any "real currency". Then again, IANAL.

"just sending messages"

With this message, I hereby transfer to jnhnum the sum of $12.54 out of my checking account.

(Translation, since that's probably a bit subtle to just throw out there: In the process of abstracting money transfers as "just sending messages" your abstraction has leaked critically important details. There's more to money transfers than "just messages", and it is precisely those differences that are why you will not be finding $12.54 from my bank account in your account as a result of this "message" that I have just sent. Your abstraction is not a good one for any purpose, practical or rhetorical.)

Citizens United (the decision that allowed corporations to make unlimited monetary contributions to political organizations) was justified by the first amendment. A check or promissory note is a message, transferring money, and is a form of speech. Where you spend your money is protected free speech.

Your criticism is logically backwards. Transfer of money is not just a message. It is a message, plus some other things that make it also a transfer of money. You can't reduce it to just a message being passed. It is a message, it is not just a message.

It wasn't a criticism, it was a support of bitcoins. The point is that the Supreme Court supports the notion of money transactions as free speech.

Also, conspiracy is just two dudes talking.

When does money start to become "real currency"? Numbers on an ATM machine are only representative of the physical currency that I can extract from a bank. A message on an IM window could essentially mean the same thing: "Thanks for helping me move my couch, I'll get that $20 over to you by tomorrow". So at what point does the rubber meet the asphalt and how will Apple enforce this down the road?

We don't have 'money' anymore, we have currency. USD is not money, it's currency and fiat currency at that. US Dollars are backed by an obligation to give you more US Dollars in the future.

If you had liberty dollars then you'd have money.

To directly answer your question, money becomes currency when you transfer representations of value instead of value. (eg. A piece of paper obliging the barer to receive something of value)

Pennies, especially pre-2000 pennies would be considered money as the store of value is the metal not the face value.

Wikipedia defines money as:

"Money is any object or record, that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context."

This is in line with most actual usage of the word. Bottom line, you're just playing silly semantic games. It is useful to understand the differences between different types of money, but claiming that something is "not really money" based on your own private definition of money does not add to the discussion.

Actually I juxtaposed the definition of money and currency. The distinction is important. Money is a superset of currency and I got that wrong.

Most people think that playing the lottery is an investment strategy for retirement, I would not trust what most people think when it comes to economics. Little semantic games are hugely important to people. Look how pissed everyone gets when MS describe the MSPL as 'open source'.

Actually, my own private definition does add to the discussion, when enough people connote a word to have a different meaning it changes the definition of a word, all based on their own little private definitions of words.

Your views on semantic contexts are 'fantastic'. I'd suggest you look that one up on the OED if you want to understand the definition I'm using, most people would get it wrong.

Liberty dollars again? Man, if they hadn't gotten raided I'd be suspicious of affiliate link scams.

Illegal like bittorrent and file sharing? We have seen how effective that is.

Nothing could be better for bitcoin than the gov't asserting that it's money in court.

Unless Ron Paul gets elected in 2012... He is in favor of abolishing the federal reserve and a champion of liberty.

The trouble with living inside of a walled garden is that new innovations can be blocked rather easily.

This is why having just one app store sucks, and I'm not just referring to Apple here. It could've been Google or Microsoft, too (MS intends to have one in win8 too). But why should any of them be the moral police for everything?

I was thinking of Mondonet and mesh networks today. What if they could reject such mesh network apps from their stores because the Government asked them behind the scenes to do so? That wouln't be very good for us.

App stores are irrelevant if your phone allows you to install non-market apps. As far as I'm concerned, Google can censor the hell out of their Market, because I can just sideload whatever I want.

Frankly, I think that's actually the best way to do things. Have a curated/censored app store for the normal folks/applications, and a method to install arbitrary apps that Google may not want to advertise in the Market. Now if AT&T would allow sideloading, it would be perfect, but every other Android phone I've seen has had this level of freedom.

On the very same topic udibr states it's not clear whether it will be accepted by Google for Android as they removed tethering apps quite recently.

Technically the tethering apps weren't "removed", they're just hidden for phones on US wireless carriers. (They show up fine on my rooted Nook Color). While this shows the appalling degree of control we've ceded to the carriers, they shouldn't have any particular reason to block bitcoin apps.

Google doesn't have to accept it for people to use it on Android.

Data point #57 or whatever why I need to get more into Android and Android dev. A bit less of a nanny state.

Android isn't a panacea. Make sure you get a pure Google phone.

great on my 10.1 Galaxy tablet, which also makes phone calls ;-)

Heh, yeah have no fear. The likes of the carriers and companies such as Motorola will look after your long term interests, they're not evil at all like that dastardly Steve jobs and his minions at Apple.

> he replied that he "does not have time to elaborate"

Cmon Apple, you can do better than that.

Not surprising at all. Everyone knows that Apple.is the most evil company out there.

Apple pisses me off for real. Google should see this as an opportunity to once again show iOS is a too limited platform. It's not like Bitcoin will die at this stage, and Androids already passed iPhone - another reason to not get an iPhone.

Oh, "for real?" Well, then I'd better listen to what you have to say.

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