Since it picked up the cryptocurrency. And as big tech races to control your living room, we will hear from the brain behind amazons alexa. First, to our lead. After Senate Republicans passed their version of tax reform in the u. S. , we spent the week exploring the ways the proposed legislation could affect the tech industry. Take a listen. It was a round of applause on capitol hill for gop senators as they passed their version of a tax bill. Pushing the Trump Administration closer to its first piece of signature legislation. Donald trump if they sent it to my desk, i promise all of the people in this room, my friends, so many friends in this room it is a great state i promise you i will sign it. I promise. I will not veto that bill. Reporter Tech Companies have spent big to make sure their interests are heard. Big tech stands to benefit from the legislation in a few ways. The latest bill would slash the corporate rate from 35 to 20 . Although according to goldman sachs, the tech sector already benefits from a 24 effective rate. Then there is the hordes of cash stockpiled overseas. Big tech stands to benefit with this new tax legislation that allows them to defer taxes on foreign earnings until they bring them back to the u. S. At rates of 7. 5 to 14. 5 , down from the current 35 . Donald trump if we get this past, which i really believe we will, we have to as a country, it is going to bring back, i would say 4 trillion back into this country, which right now cannot come back. In our view, it should be a deemed repatriation. This means it should be a required tax, and so, you are not asking the people that have had earnings from their International Subsidiaries if they would like to bring back money. Reporter the current bill would make it a voluntary repatriation, though the question stands whether bringing back this offshore money will go into anything other than buybacks or m a. Lastly, Telecom Firms could win big if enhanced deduction for the Capital Expenditures make it into the final bill. Theoretically allowing them to upgrade the fiber backbone of the nation. For now though, the waiting game goes on until the final bill hits the president s desk. Emily as you just saw, the Trump Administration wants Tech Companies to bring back their overseas stockpiles of cash and in turn keeping Companies Like apple from fleeing tax havens like ireland where apple reached a deal over 15. 4 billion on unpaid taxes, to pay those back. Bloomberg gadfly columnist shira ovide joins us now. Lets start with the actual rate. It is a lower effective rate, but the effective rate is already fairly low. How much of an impact is this going to have . Shira i mean, look, every business wants lower taxes. I think that has been clear in all of the debate about the tax legislation this year. That companies in tech and outside of tech are very happy to have a lower tax rate, even as as you said a lot of companies are not paying the 35 statutory rate because of tax breaks and other reasons. Emily so what about repatriation . How much money is this actually going to bring back . 4 trillion . Shira im not sure where he got the 4 trillion number. There are several million parked offshore that are considered permanently reinvested. Therefore not taxed at 35 . But you have seen the ways Companies Like apple have basically done self repatriation. Apple has 250 billion parked overseas, but they have also borrowed 100 billion in the last few years to do things like buying back their shares, issuing dividends, things like that. And you can look at that as a way to repatriate money without paying the tax, which is what apple might be able to do under this proposed legislation. Emily now there had been concern about stock option legislation that was not in the house bill and was dropped from the senate bill. Where are we with that . Shira basically a startup communitys worst nightmare. Saw ventureenture fred wilsonlike from union square, who basically spoke out and said this was a version in both houses for a while that looked like it was going to force start up companies to pay taxes on tax options and restricted stock effective immediately, even before they were able to sell those shares. That certainly would have put an undue burden on a lot of corporate workers here in silicon valley. Emily what you make of the deal apple has made with ireland . They have come to terms on an agreement, the terms of an escrow fund to pay back taxes they say they owe. Shira this dispute over irish taxes with apple is going to carry on for many, many more months. Basically, if you remember last year, the e. U. Antitrust authorities said to ireland, you have improperly given apple a tax break that has allowed the company to avoid Something Like 15 billion worth of taxes over the years, and you have to go get that back, ireland, from apple. And there is basically a dispute about what to do with the 15 billion while apple, ireland, and the e. U. Fight about that money. Emily how do you expect this to play out . Shira it is going to be in litigation for a long time. Even if apple has to pay 15 billion, oddly for a company of apples scale, 15 billion is not a big burden. Emily that was bloomberg gadfly columnist shira ovide. This week, prominent tech investor shervin pishevar, who has been accused of Sexual Misconduct, said he is taking a leave of absence from his duties at Venture Capital firm and Transportation Company hyperloop one. Five women who met him in a professional context said they were sexually assaulted or harassed by him. Current and former colleagues of a sixth woman say he groped her at an uber holiday party. Pishevar has sued the definers, a Research Firm founded by republicans, for spreading false information about him. The definers has responded to the suit, saying they had nothing to do with his accusations, and the suit should be dismissed. In a statement, pishevar wrote as the legal case progresses, it is my priority to ensure the family is not adversely affected. I am confident i will be vindicated. This week, google won dismissal of a california action lawsuit saying the company systematically paid male employees more than females. San Francisco Superior Court judge mary weiss wrote the definition does not purport to distinguish between female employees who may have a valid claim against google versus those who do not. She allowed the women to file an amended complaint. The new complaint will make clear that google violates the equal pay act by paying women less than men for substantially equal work. Coming up, just days away from it cboe debut, bitcoin kept climbing this week. How Bitcoin Futures could impact the online Trading Platform coinbase, that is next. And if you like bloomberg news, check us out on the radio. You can listen on the Bloomberg Radio app, bloomberg. Com and in the u. S. On sirius xm. This is bloomberg. Emily bitcoin continued to climb this week. The largest cryptocurrency by market value was selling for less than 1000 at the start of the year. In recent days, several exchanges have come out with news on offering Bitcoin Futures. We caught up with coinbase Ceo Brian Armstrong on wednesday. Coinbase is an Online Platform that allows users to buy or sell bitcoin by connecting with their bank accounts. It has almost tripled its user base this year, now standing at 13 million accounts. Brian well, there has certainly been this new influx in new interest in Digital Currency. Part of that has been driven by institutional money getting really interested in the space. So we have seen most of the large derivative exchanges out there cme and a number of others starting to say, they are going to list Bitcoin Futures. That has driven a lot of interest. It is a big signal that traditional Financial Institutions are now starting to move into Digital Currency. Emily with the cboe, sme, nasdaq, what does it mean for you . Does it create new challenges . Brian number one, it is a big endorsement of the Digital Currency space as a real asset class that more and more players are going to trade. But i think for us specifically what it means is we offer spot market data to a number of providers or we are discussing it with them. We run the largest Institutional Exchange in the United States called gdax for Digital Currency. The other thing is that we are offering a custodian product where a lot of Institutional Investors need a way to store Digital Currency on behalf of their lps and their clients. We launched a product for coinbased custody. Those of the ways it might influence our business. Emily are you at all worried your clients might decide to work with traditional main street wall street Companies Rather than coinbase . Brian well, i mean, i think it is certainly an option. There will be more people involved in the Digital Currency space. We are not going to be the only ones, and i think that is a good thing. There is just going to be a diversity of players out there. There will be a lot of winners. Digital currency is moving so fast that i do think a company dedicated to it with 200 people who have built up this Industry Knowledge over the last five years will have a competitive , sustainable advantage. Emily we have to talk about customer service. You have been experiencing a glitch, as you have with prior surges. Why does this happen . Brian yeah. I mean, it is in a word, hypergrowth. We have hired from about 40 Customer Support agents to about 220 or so this year. By the end of next year, we will have another 400 or so. Emily in addition to the 200 that you already have . Brian yeah, and we also launched phone support this year. We are going through a period of growth that is almost never seen in business. You know, it is really difficult , to be honest, to keep up with this amount of demand, and we are not servicing our customers to the level they deserve at the moment. That is really frustrating to see, but it is my job from the top to ensure we will get there. Emily can you explain why that happened . Is it a glitch, is it a crash, what is happening technically . Brian oh, no, it is just a huge influx of new customers. So our volumes, whether you look at it as our trading volume, new signups, everything, it has gone about 8x since june of this year, which is just unheard of. It is difficult to plan for that kind of capacity. Emily it is literally that you dont have enough humans behind the scenes to receive all of these complaints . Brian correct. Emily in addition to hiring new people, is there anything else that you can do . Brian certainly, we can always improve the product. Right . I mean, improving the product is the way to reduce the number of Customer Support tickets that are coming inbound. The team is working really hard on that. The key metrics we are looking at is up time, average time to customer response, the core metrics we are looking at to make sure we are meeting our customer demands at this time. Emily do you have any concerns that this will decrease trust among your customers . Or is that new customers you will lose your customers as a result . Brian honestly, i do have that fear. Yeah. It is really difficult to go through a period of this rapid growth and maintain the same level of service. We have been watching those metrics, and they are not where we want them to be. Growth is a really high quality to have, but it doesnt mean it isnt a big problem. I think especially in Financial Services, we are held to a higher bar then say the twitter fail whale. We are storing peoples money , and people are right to call us to a higher standard. Emily the irs has been asking for more information about your holdings and profits. What are you hearing from your clients about this . Brian yeah, well the irs sent us a subpoena for a large number of customer records in fact, all customer records over a several year period, which was pretty unprecedented. We did push back on that strongly. We took it to court. The judge, i think, gave us a big vote of confidence, and they reduced the scope of the request by 97 . It wasnt down to 0 , which is where we think it should have been for something that broad, but it was certainly a partial victory. I think if you look longterm, look, we want to help people pay all of their taxes on Digital Currency gains. What i think this should look like is Something Like fidelity or Charles Schwab where everyone gets 1099 statements. The irs gets a copy, the customer gets a copy. It should be that simple. We are working with the irs now , thankfully, to make sure we come up with some kind of a solution where everybody pays their taxes. This is one of those new areas Technology Keeps finding a new box that doesnt fit into the existing framework quite perfectly, and we need to work with everybody out there to make sure we get there. Emily given the uncertainty currently as you work this out, are you giving any advice to your clients about how to report their gains to the irs . Brian obviously we try to stay away from any tax advice since that is not what we do, but we do provide a report to our customers, a cost basis report that they can send to their accountant. That is the solution we have in the interim until there are 1099s. Emily lets talk about what is happening with some of these other cryptocurrencies, ethereum and lightcoin you can trade on coinbase. What do you see happening with ethereum versus bitcoin . Brian they evolved down different paths. Bitcoin used to be 90 of the market cap of Digital Currency, and it has come down quite a bit. I think it is Something Like 50 or 60 . Bitcoin is ending up, in my mind, being a little like digital gold, if you will. It is kind of the oldest Digital Currency. It is the one people flee to in times of uncertainty. But it has not scaled to become, for example, a Payment Network with the transaction put through people might want. So ethereum has kind of grown to do that, and ethereum is now doing more transactions per day than bitcoin. Ethereum also has this really new, innovative concept of smart contracts. It is much more programmable than bitcoin. Bitcoin, you can think of it as a function calculator. Ethereum is almost like a Program Language where you can write any software and run it on a globally decentralized computer. That is kind of a mindbending concept. Lets say ethereum is much higher input per second and is much more programmable. Emily you have launched a new app called toshi, which seems sort of like an app store for ethereum. Explain what you are trying to do. Brian the analogy i like to use is the internet. When the internet started, it was really difficult to use. And then a browser came out on top of the internet with netscape, and it made it easy for anyone to build an app and also access the internet. We are doing the same thing with toshi. Toshi you can think of it as a browser for the ethereum network. We are trying to make it easy for any developer to build an app and users to use. Honestly, we are a little bit inspired by things like wechat in china and pay tm in india, even that one in kenya. Mobile money is a big deal outside the United States. I think people in emerging markets could actually use Digital Currency to start to get access to Financial Services through Something Like toshi. Emily so when it comes to the price, how do you see bitcoin versus ethereum playing out . I mean, do you see the bitcoin spike continuing . Do you see ethereum surpassing bitcoin . Some have suggested it will. Brian i dont like to give investment advice, but in Broad Strokes the way i think of it, bitcoin does have a certain amount of guaranteed scarcity builtin. There is only ever going to be 21 million coins. If something is more scarce, the price can be driven up. Ethereum has taken a different approach, which is that there may be a moderate inflation curve, almost like the u. S. Dollar. It might target 2 to 3 inflation per year. They are actually Still Deciding what it is going to be. Ethereum is not trying to be gold, which is what bitcoin is. It is trying to be more like a Payment Network, something more programmable. That factors in to what the price will be. One other really broad thing you could look at is, where are the users going . You know, and where are the developers building the new apps . I personally see more Developers Building Apps on top of ethereum today, so that is one other factor which could point to what it might be in the future. Emily we talk about this a lot on bloomberg. Is bitcoin a fraud . Is it not . Are we in a bubble, or are we not . If it is