Bitcoin lost more than half its value last month but there’s more interest in the cyber-currency than ever. While Bitcoin stories used to be restricted to tech and science sites, they’re now a fixture of the financial press and even consumer news sites.
Last week, for instance, brought a fresh spate of news that suggest more people are treating Bitcoin as a serious form of money rather than a science fiction experiment. Here’s a roundup (if you want to meet people backing Bitcoin, come to our free meetup in San Jose on May 16):
Bitcoin is becoming more liquid
Gift card site Gyft has started accepting Bitcoin as payment. The significance here is that average consumers now have a forum to use their Bitcoins on a wide variety of familiar consumer brands. As Techcrunch noted, other merchants’ Bitcoin announcements (like that San Francisco cupcake shop) are largely marketing gimmicks; the Gyft news creates a real source of practical liquidity.
This development also coincides with the arrival of mini-machines that convert cash to Bitcoins and the first ATM for the currency in San Diego.
Real investors are starting to take Bitcoin seriously
Last month’s collapse, which saw Bitcoin fall from $266 to $105 in a single day, rattled speculators and undermined faith in the currency’s viability.
But that hasn’t deterred investors — including big and respected ones like Andreessen Horowitz — from putting more money into new BitCoin ventures. This week, the WSJ reported that Fred Wilson’s Union Square Ventures is investing $5 million in Coinbase, a service that provides an online wallet and easy conversion between BitCoin and traditional currencies.
BitCoin is getting easier to understand
BitCoin discussions were once the province of quants, libertarians and cyber-geeks. Now, people are explaining how the currency is made and how it works in easy-to-understand stories. Last week, for instance, Forbes reporter Kash Hill kept a day to day diary of how she lived on BitCoin (albeit with difficulty) in San Francisco for a week.
Meanwhile, Wired’s Robert Macmillan offers a cogent account (including a video) of how his office now has a Bitcoin machine quietly mining away while using less power than the coffee maker. (For an excellent general primer on BitCoin, see my colleague David Meyer’s “Yes, you should care about Bitcoin, and here’s why” from last month).
The government wants a piece of Bitcoin
Despite its newfound respectability, Bitcoin is still catnip for criminals, hackers and market manipulators. This notoriety led the financial crimes division of the Treasury Department to issue guidelines about Bitcoin and money laundering.
Now, Commissioner Bart Chilton of the CFTC — the agency that regulates futures contracts – says he’s thinking of regulating BitCoin. Chilton cited the currency’s volatility and said the government should make sure it’s not a “house of cards.”
Regulation will be tricky, however. As I explained last week, Bitcoin’s status as a currency, not a security, means it’s beyond the purview of the SEC. And while the CFTC might regulate some types of Bitcoin transactions, its overall power is limited.
“Only derivatives. We can regulate any Bitcoin future, option or swaps. I’ve not said we could regulate the actual currency–although for all I know some might have reported such. The currency could be regulated by Treasury or the Fed,” Chilton said in response to an email query.
Meet the engineers and entrepreneurs behind Bitcoin
On Thursday, May 16, GigaOM is hosting experts — including CEO’s who use Bitcoin everyday as well engineers from Facebook and Google — to explain where Bitcoin is going next. The meet-up, which costs exactly zero Bitcoins thanks to our friends at Reddit Capital, is taking place at the San Jose Tech Museum from 6 to 9 — with time for cocktails and networking.
No comments:
Post a Comment