Bitcoin? Tech-geek pseudo-pennies, right? Illicit Silk Road trading. And remember that Mt Gox fiasco, where hundreds of millions of dollars’ worth of bitcoins simply vanished into the cyber cosmos?
But digital cryptocurrency is undergoing a radical facelift. It’s going mainstream. Judging by the recent Australian Global Bitcoin conference, there’s serious money to be made. The in-real-life sessions in Melbourne were less a venue for anonymous cyberpunks with libertarian agendas and more an invitation by born-again bitcoin multimillionaire evangelists to cash in.
It was organised by controversial figure Jamie McIntyre, the multimillionaire get-rich-quick self-help guru who once flirted with an Australian Securities and Investments Commission injunction. Over the past year McIntyre has turned to the lucrative market of bitcoins; he’s the CEO of Australian Bitcoin ATMs and says his company plans to roll out over 100 terminals (pictured above) across major capital cities in Australia, starting with Sydney and Melbourne in the next two weeks.
McIntyre says the world’s first bitcoin ATM in Vancouver turned over CAD$2.2 million in just over six weeks. “There were queues of people going to use it,” he told Crikey. “We certainly aren’t projecting that level of turnover, but even a fraction of that would make it successful enough to justify the business model.” Terminal users can transfer money into a virtual “wallet” or convert bitcoins into the local currency and withdraw cash.
Bitcoin’s mastermind, known as Satoshi Natakomo, launched his idea for a digital currency unconnected to financial institutions after the growing distrust of the global monetary order at the peak of the global financial crisis in 2009. So far around 12 million bitcoins exist, worth about $10 billion collectively (one bitcoin is worth about $490 today, but it is a notoriously volatile currency). While it represents over 98% of the virtual currency market, bitcoin isn’t the only digital cryptocurrency — other online peer-to-peer networks include Peercoin, Litecoin, Dogecoin or the new KimCoinDashian — offspring of Kanye West’s failed Coinye.
Already 25,000 merchants worldwide accept bitcoin. You can buy everything from Tesla cars to a Richard Branson Virgin Galactic flight. A property broker in Sydney has started accepting bitcoin deposits and rental payments; more than 100 merchants in Australia take the currency. Even eBay is considering a bitcoin payment option.
Bitcoin isn’t just a digital currency — it’s also a libertarian ideology, an online payment system and a commodity. Recently, the United States’ Internal Revenue Service declared bitcoin legal property, to be treated more like stock than cash.
In Australia it has taken off as a payment system and investment platform. CoinJar, a Melbourne-based bitcoin exchange startup, recorded over 22,000 separate users in Australia buying and trading bitcoin through their online wallets in just under a year.
CoinJar CEO Asher Tan says it’s “really hard to tell” how many individual Australians own bitcoin due to the anonymous nature of the cryptocurrency. But Tan says CoinJar’s user-survey data suggests most of his clients fall between the ages of 18 and 34 — and 93% are male.
Adam Poulton from the Bitcoin Association of Australia told Crikey the number of merchants accepting bitcoin in Australia has dramatically increased even over the past few months. “With Melbourne as an example, you can buy juice, jewellery, hair products … basically everyday normal things,” he said.
The Little Mule Cafe is one of the 40-odd merchants in Melbourne accepting bitcoin, but the only cafe in the CBD. Owner Hugh McIntyre admits it’s more of a stunt than a necessity. “I’m a bit of a nerd, I’ve got a computer background, so I’m keen on new technologies … It’s more of a gimmick to try and get a few more people, a bit more press,” he said.
Vera Chan, a Japanese giftware shop in Melbourne’s CBD, was the first retailer in Melbourne to accept bitcoins back in October last year. Owner Jenny Zhang hopes to see more bitcoin merchants targeting the female market. “Most places that accept bitcoin are very guy-oriented. They do books or music, but many of them are IT services related. I’ve never seen a female-oriented bitcoin shop other than my own,” she said.
So far just over a dozen purchases have occurred in bitcoin, but she told Crikey lots of people got excited by her “bitcoin accepted” sticker.
The imminent rollout of bitcoin ATMs across Australia is repackaging what still remains a foreign concept to most Australians in a more familiar way. But McIntyre says the bitcoin payment system is the real key to its future. He predicts in the short term its zero-fee international transactions will drive Western Union and PayPal out of the market and compete with banks in the long term.
Can anyone tell me who actually makes a bitcoin? Do they regulate the amount of bitcoins to be produced and sold. Or do we look at them as a sort of share in a trading company?
Observation: Every bitcoin is a solution to an equation – there’s only a fixed number of solutions, but people are still finding more (known as ‘mining’ Bitcoins). Eventually, all the Bitcoins will be ‘mined’, and they’ll merely be traded. That’s what’s new about Bitcoins – in theory, no one person or entity controls the currency at all. It’s quite clever really – the world’s first decentralised currency.
You can’t actually buy Teslas with bitcoins: http://www.cnbc.com/id/101258152
I would advise your intern to check this kind of hype before writing it.