Menu
Bitcoin gets new friends, but still a bit player

Bitcoin gets new friends, but still a bit player

The digital currency is gaining in legitimacy with new supporters

Bitcoin scored several big wins this week, including endorsements from U.S. federal officials and Virgin Group founder Richard Branson, signalling its progress toward wider acceptance.

Bitcoin has battled concerns about volatility, criminal use and potential government crackdowns, but people continue to invest in the virtual currency. It may still be a way from mass market acceptance, but developments over the past few days show it gaining support beyond enthusiasts, Libertarians and black market traders.

On Monday, federal officials including the acting assistant attorney general at the Department of Justice argued that Bitcoin could benefit the financial system and global commerce more broadly. But the anonymous nature of the currency, which makes it attractive for black market transactions, must be watched, they said.

Some see Bitcoin more as an investment -- if a potentially risky one -- than a legal tender. On Friday a bitcoin was worth more than US$800 on the Mt. Gox exchange, up from just $30 earlier this year. Bitcoin is managed and traded on a peer-to-peer network and is meant to be free of regulation by any central financial authority.

The recent positive attention Bitcoin has received increases its legitimacy and means more people now see it as a real currency, said Jordan McKee, an analyst with the Yankee Group, who has been tracking Bitcoin's evolution.

Take British billionaire Richard Branson. The Virgin Group founder's space travel startup Virgin Galactic will start accepting payments in bitcoins, Branson announced Friday, a currency he referred to as "one of the world's most innovative businesses looking to the future."

"For people who can afford to invest a little in bitcoins, it's worth looking into," said Branson, an investor in the currency himself.

There's also a documentary in the works about Bitcoin and the "deep web," by "Bill & Ted's Excellent Adventure" actor Alex Winter. "Guns, drugs and murder, and a new global currency created by hackers that exist outside the control of government and banks," Winter says of the movie on his Kickstarter page.

Bitcoin will even have a role during the U.S.' post-Thanksgiving shopping orgy known as Black Friday, making it part of American consumerism at its best. Through an event organized by the Bitcoin community, a hodgepodge of online merchants like CheapAir, Gyft and Mixed Tees are participating in the shopping extravaganza by giving exclusive deals to shoppers if they pay in bitcoins.

All this traction is great for Bitcoin, but it still has a ways to go before it becomes mainstream. The ways people pay for goods now are pretty well entrenched, Yankee's McKee said.

"Nearly every form of electronic payment rides the rails the [credit] card networks have forged," he said, adding, "it's unlikely anything will circumvent this system anytime soon."

It's a wonder Bitcoin is still around at all, after a series of shutdowns of exchanges, account seizures and massive selloffs. Tokyo-based Mt. Gox, one of the largest exchanges, temporarily shut down in April after a huge drop in the currency's price.

Some groups have still not gotten back on their feet. Tradehill, another large Bitcoin exchange, said in August that it would be suspending its trading, citing banking and regulatory issues. Trading has not been resumed, judging by its website.

Still, the number of stores accepting the virtual currency continues to rise. Bitpay, which provides a service that makes it easier for merchants to get paid in bitcoins, says it's now used by 12,000 merchants worldwide.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com


Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags Internet-based applications and servicesVirgin Groupvirtualizatione-commercesoftwareinternetBitcoin

Featured

Slideshows

Kiwi channel comes together for another round of After Hours

Kiwi channel comes together for another round of After Hours

The channel came together for another round of After Hours, with a bumper crowd of distributors, vendors and partners descending on The Jefferson in Auckland. Photos by Maria Stefina.​

Kiwi channel comes together for another round of After Hours
Consegna comes to town with AWS cloud offerings launch in Auckland

Consegna comes to town with AWS cloud offerings launch in Auckland

Emerging start-up Consegna has officially launched its cloud offerings in the New Zealand market, through a kick-off event held at Seafarers Building in Auckland.​ Founded in June 2016, the Auckland-based business is backed by AWS and supported by a global team of cloud specialists, leveraging global managed services partnerships with Rackspace locally.

Consegna comes to town with AWS cloud offerings launch in Auckland
Veritas honours top performing trans-Tasman partners

Veritas honours top performing trans-Tasman partners

Veritas honoured its top performing partners across the channel in Australia and New Zealand, recognising innovation and excellence on both sides of the Tasman. Revealed under the Vivid lights in Sydney, Intalock claimed the coveted Partner of the Year 2017 (Pacific) award, with Data#3 acknowledged for 12 months of strong growth across the market. Meanwhile, Datacom took home the New Zealand honours, with Global Storage and Insentra winning service provider and consulting awards respectively. Dicker Data was recognised as the standout distributor of the year, while Hitachi Data Systems claimed the alliance partner award. Photos by Bob Seary.

Veritas honours top performing trans-Tasman partners
Show Comments