The Bitcoin Blockchain: Following the money
P. Carl Mullan
Author Bio
Carl has been a well-known participant and business owner in the digital currency industry since 1999. He operated the largest online digital currency directory, created the only digital currency industry magazine, and introduced prepaid digital gold currency cards all before Bitcoin had even been created! Carl survived the changing U.S. regulatory landscape along with the prosecutions of e-gold, Liberty Reserve, e-bullion, and others players. His writing and work has been quoted and used as reference documents in books, magazines, newspapers and even the Department of Justice Report on Money Laundering in Digital Currency.
Description
This book follows Bitcoin users as their value moves through the blockchain. These situations are based real life stories and provide insight into who is using Bitcoin, what advantages the platform offers and why people choose Bitcoin over conventional bank products.
Bitcoin is a new innovative version of electronic cash. The payment platform delivers a wealth of advantages for all users. For those without access to regular banking services, Bitcoin has proven to be extremely beneficial. However, just as anonymous cash notes are preferred by criminals to help conceal their activity, Bitcoin is also preferred by some of the world’s worst criminals. Every day, Bitcoin moves through the blockchain advancing freedom around the world, and every day Bitcoin also caters to anonymous criminal activity. With any electronic cash product, such as Bitcoin, it is impossible to have the good without the bad.
If you are reading the list of characters and situations below, and saying to yourself, “That could never happen, think again, it already has….” While this is a fictional tale, it is based on actual situations, people and events from today’s headlines and the author’s 15 years of digital currency experience.
The book also details some of the flawed actions of government agencies and prosecutors in their ongoing attempts to curtail illegal Bitcoin activity.
It is also necessary to understand that in today’s info-apocalypse world, those seeking to destroy another’s reputation or demonize a product, especially those in the media, will attempt to directly associate that party with terrorism, child pornography, money-laundering or drugs. This statement rings true throughout the past decade of digital currency media coverage.
Book excerpt
Denver, Colorado
Located throughout Denver’s metropolitan area, Mr. Green’s Dispensary, had operated as a legal Medical Marijuana Dispensary for many years. With the recent legalization of pot in Colorado, Mr. Green’s had become a Recreational Marijuana Dispensary, providing local customers with accessible, top quality cannabis in a friendly and professional environment.
Mr. Green’s welcomed all customers, over 21, and a red card was no longer required.
Colorado’s new legal marijuana business was experiencing some start-up financial headaches caused by old Federal Government Regulations and Uncle Sam’s tight hold on the US banking system. Unfortunately, while the State of Colorado said it was “ok” to legally sell pot, Marijuana remained illegal under federal law. Enacted in 1970 by the federal government, The Controlled Substances Act still classified marijuana as a Schedule I drug. US banks and payment processing companies were very cognizant of the federal regulations and unwilling to take a chance providing financial services to this new industry.
Apparently, almost all US states were still in agreement with Uncle Sam regarding the obvious dangers of other Schedule I drugs. However, the country’s recession and a shrinking local tax base had caused Colorado State Representatives to change their opinion of pot and begin viewing marijuana as just another harmless taxable over-the-counter intoxicant. It’s worth noting, that while many other states permit the sale of medical marijuana, no US state, including Colorado, had yet attempted to legalize any other federal Schedule I drug such heroin, LSD or ecstasy.
When providing financial services to legal Colorado Marijuana businesses, the outdated regulatory patchwork of state and federal laws, forced banks, including state-chartered ones into a tight corner. The legacy of US banking, had left the entire Colorado financial services community, fearing enforcement of federal laws which could punish them for providing services to legal marijuana businesses.
Even entrepreneurs that had tried using their personal bank accounts for the legal pot business, found their accounts flagged because of excessive cash deposits and closed by the bank’s compliance department.
The big name credit card companies which mainly operated out of Delaware, a state where pot sales are still very much illegal, would not allow their financial platforms to be used for processing these type of payments. Consequently, any legal new pot business in Colorado was left to process all sales using cash.
Additionally, since no banks would loan the new legal Colorado industry any startup capital, Georgina, the owner of Mr. Green’s Dispensary had been forced to borrow $1.2 million dollars, as a personal loan, from old friends in California.
The government was still in bed the nation’s banking industry and until the federal government changed its old 1970’s laws, there would be no bank transactions, no bank loans and no credit card processing for Colorado’s newest legal industry.
The other headache, caused by federal regulations, came from the Internal Revenue Service (IRS).
The IRS required all businesses to pay quarterly taxes by bank wire (electronically). Mr. Green’s Dispensary, which was unable to open a US bank account, found it impossible to send a bank wire. Consequently, legal marijuana businesses, without bank accounts, were being unfairly fined a 10 percent penalty on federal employee withholding taxes because the companies were unable to submit payment on time using a bank wire. Without a bank account, Mr. Green’s operation was being fined each quarter by the IRS. Additionally, Mr. Green’s had to pay the quarterly tax payments using bulk cash and that was no easy task. There was only one IRS office in Colorado, which accepted cash payments and a meeting with those IRS agents was by appointment only.
The owner and operators of Mr. Green’s were aggressively looking for financial solutions, when Bitcoin fell into their lap.
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