Your living room, we 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 explore 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. If they sent it to my desk, i promise all of the people in this room, my friends, so many friends in this room. I promise you i will sign it. I promise. I will not veto that bill. Tech companies have spent to spent big to make sure their interests are heard. Big tech stands to benefit in a few ways. The latest bill would slash the corporate rate from 35 to 20 . 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 from this 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 . If we get this passed, 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 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. The current bill would make it a voluntary repatriation, though the question stands whether bringing back this offshore money would 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, the waiting game goes on until the final bill hits the president s desk. Emily the administration wants Tech Companies to bring back their overseas stockpiles of cash and 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. 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 . Look every business wants , lower taxes. That has been clear in all of the debate about the tax legislation this year. Companies in tech and outside of tech are happy to have a lower tax rate, even as a lot of companies are not paying the 35 statutory rate because of tax breaks and other reasons. Emily what about repatriation . How much money will this bring back . 4 trillion . Shira im not sure where he got the 4 trillion. There are several million parked offshore that are considered permanently reinvested. But you have seen the ways Companies Like apple have done self repatriation. Apple has 250 billion parked overseas, but is also borrowed 100 billion in the last few years to do things like buying back their shares, issuing dividends, things like that. You can look at that as a way to repatriate money without paying tax, which is what apple might be able to do under this proposed legislation. Emily there had been concerned about stock option legislation that was not in the house bill and was dropped from the senate will. Bill. Where are we with that . Shira basically a startup communitys worst nightmare. Fred wilson from union square basically speaking out and saying this was a version in both houses for a while that looked like it would force start up companies to pay taxes on stocktions and restricted Effective Immediately even , before they were able to sell the shares. That 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 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 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. There is basically a dispute about what to do with the 15 billion while ireland, apple and the e. U. Fight about that money. Emily how do you expect this to play out . Shira it will be in litigation for a long time. Even if apple has to pay 15 billion, for a company of apples scale, 15 billion is not a big burden. Emily this week, prominent tech investor Shervin Pishevar has been accused of Sexual Misconduct said he is taking a , leave of absence from his responsibility. Five women who met him in a professional context said they were a sexually assaulted or harassed by him. Current and former colleagues of a sixth woman say he groped her at an uber holiday party. He has sued the definers, a Research Firm founded by republicans, for spreading false information about him. They have responded to the suit, saying they have nothing to do with his accusations and the suit should be dismissed. In a statement, he wrote as the legal case progresses, it is my response it is my priority to ensure the family is not adversely affected. I am confident i will be vindicated. Google won dismissal of the california action lawsuit saying the company systematically paid male employees more than females. San Francisco Superior Court wrote this definition does not purport to distinguish between female employees who may have a valid claim 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 its debut, bitcoin kept climbing this week. How Bitcoin Futures could impact the online Trading Platform. The online Trading Platform coinbase, that is next. If you like bloomberg news, check us out on the radio. You can listen on the Bloomberg Radio app, bloomberg. Com and 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 is now standing at 13 million accounts. Brian there has certainly been a big influx in new interest in Digital Currency. Part of that has been driven by institutional money getting really interested in the space. We have seen most of the large derivative exchanges out there 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 starting to move into Digital Currency. Sme, nasdaq, what does it mean for you . Does it create new challenges . Brian it is a big endorsement of the Digital Currency space as a real asset class that more will trade. It specifically means we offer spot market data to a number of providers or are discussing it with them. We run the largest Institutional Exchange in the United States 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 clients. We launched a product for coinbased custody. Those of the ways it might impact 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 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 going to be a diversity of players out there. There will be a lot of winners. Digital currency is moving so fast that i 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 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 in a word, hypergrowth. We have hired from 40 Customer Support agents to 220 or so this year. By the end of next year, we will have another 400 or so. Emily in addition to the 200 you are ready have . Already have . Brian yeah, and we launched phone support this year. We are going through a period of growth that is almost never seen in business. It is really difficult to be able 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 frustrating to see but it is my job from the top to ensure we will get there. Emily can you explain why that happens . Is it a glitch, a crash, what is happening technically . Brian it is just a huge influx of new customers. So our volumes, whether you look at it as our trading volume, new signups, it has gone about 8x since june of this year. It 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 these complaints . Brian correct. Emily in addition to hiring new people, is there anything else you can do . Brian certainly, we can always improve the product. Improving the product is the way to reduce the number of Customer Support tickets inbound. The team is working really hard on that. The key metrics we are looking at is average time to customer response, the core metrics we are looking at to make sure we are meeting our customer demands. Emily do you have any concerns this will decrease trust among new customers . You will lose your customers as a result . Brian honestly, i do have that fear. It is difficult to go through aeriod 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. Especially in Financial Services, we are held to a higher bar. 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 the irs sent us a subpoena for a large number of customer records in fact, all customer records over a several year period. We did push back on that strongly. The judge gave us a big vote of confidence and reduced the scope of the request by 97 . It wasnt down to zero where we think it should have been for something that broad, but it was a partial victory. Longterm, 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 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 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 everyone to make sure we get there. Emily given the uncertainty currently as you work this out, are you giving advice to your clients about how to report gains to the irs . Brian we try to stay away from any tax advice since that is not what we do, but we provide a report to our customers, a cost basis report 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 to some of these other cryptocurrencies. Ethereum 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. Bitcoin is ending up, in my mind, being a little like digital gold, if you will. It is the oldest cryptocurrency, the one people flee to in times of uncertainty. It has not scaled to become a Payment Network with the transaction put through people might want. Ethereum has kind of grown to do that and is doing more transactions per day than bitcoin. It also has a new, innovative concept of smart contracts. Bitcoin, you can think of as a simple for function calculator. Ethereum is almost like a Program Language where you can run any software and run it on a global, decentralized computer. That is a mindbending concept. But it is much more programmable. Emily you have launched a new app called toshi, which seems sort of like an apt 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. A browser came out on top of the internet with netscape and made it easy for anyone to build an app and access the internet. We are doing the same thing with toshi, which is a browser for the ethereum network. We are trying to make it easy for a developer to develop an app and users to use. We are a little bit inspired by things like we chat in china and pay tm in india, even in kenya, mobile money is a big deal outside the United States. People in emerging markets could actually use Digital Currency to start to get access to Financial Services through Something Like toshi. Emily when it comes to the price, how do you see bitcoin versus ethereum playing out . Do you see the bitcoin spike continuing . You see it 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 has a certain amount of , scarcity builtin. There will ever only be 21 million coins. If something is more scarce, the price can be driven up. Ethereum has taken a different approach. There may be a moderate inflation curve, almost like the u. S. Dollar and it might target 2 to 3 inflation per year. They are deciding what it will be. Ethereum is not trying to be gold, which is what bitcoin is. It is trying to be more programmable like a Payment Network. One other really broad thing you could look at is, where are the users going . Where are the developers building the new apps . I see more Developers Building Apps on top of ethereum today, so that is one other factor pointpoint which could to what it will be in the future. Emily we talk about this a lot on bloomberg. Is bitcoin a fraud or not . Are we in a bubble or not . If it is not a fraud, is it a bubble . What do you think . Brian i dont think it is a fraud. Is it a bubble, maybe. Digital currency has gone through a number of these. Eriodsre there is a p where there is a plateau each time and it comes up and it comes back a little bit. We are going through the most recent runup period, the fourth for us as a company. I expect it to correct at some point, but continue over time in an upward channel. Emily there is an update called segue which would speed up transactions. You guys have not implemented that. When do you plan on implementing that . Brian it is one of the things we are looking at adding. It is probably not in the next top five things customers are requesting. Emily what are the top five next things . Brian people want more assets on the platform, they want a better experience, meaning identity verification, higher limits, the sign up on boarding experience, and they are asking for these new products. Institutional customers are asking for a custodian product. People are looking at a way to trade more assets, have a better experience, and store it securely. Emily that is coinbase Ceo Brian Armstrong. Numbers that beat across the board as it tries to make the biggest takeover in tech history. This is bloomberg. Emily google is ramping up for a hiring spree. The company is recruiting thousands of reviewers to reduce inappropriate videos on youtube. They are introducing tougher restrictions on advertising and making greater use of smart technology. By 2018, google aims to have more than 20,000 people to review questionable videos on the platform. The announcement comes as youtube looks to bounce back from a string of embarrassing incidents of questionable content discovered on its site. On the earnings front, broadcom beat across the board in the Fourth Quarter and gave an upbeat sales forecast, indicating at smartphone customers are optimistic about demand. This as the chipmaker attempts the biggest deal ever with an ac