The World Responds to Bitcoin

Rick Dutour Geerling
May 2nd 2013

Interest in the digital cryto-currency bitcoin has peaked over the past months, not least because of its quick rise in value to 266 USD approaching April 10th, and subsequent drop to 105 USD in the 24 hours following. Whether or not the rise of bitcoin is a good thing, the world has nonetheless shown a variety of responses as it adapts to this still-maturing currency.

Bitcoin is becoming more widely used as new merchants start accepting it as a valid means of payment. In November 2012 the Bitcoin Store opened up. The site sells electronics cheaper than any of its competitors by only accepting bitcoins, thereby cutting away the transaction costs associated with credit cards and wire transfers. The store is so successful that the total revenue of March surpassed $500,000.

Besides this small-scale interest, bitcoin has also attracted the attention of large corporations, such as PayPal and Western Union, investors like the well known Winklevoss Twins and even governments. On March 18th the US Treasury Department published new guidelines on the use and regulations of virtual currencies. While bitcoin was not explicitly mentioned, it does address the registration of decentralized virtual currencies.

While it may still take some time before your local grocery store joins the bandwagon, crypto-currencies seem like they're here to stay. To quote well known programmer and venture capitalist Paul Graham: "I am very intrigued by Bitcoin. It has all the signs. Paradigm shift, hackers love it, yet it's derided as a toy. Just like microcomputers."

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