It’s no secret – Money & Tech are trying to sell you on cryptocurrency. And they’re also trying really hard to explain just what that means.
Money & Tech is one of several start-up companies and entrepreneurs partnering with the live-work space 20Mission. The company hosted old guard Missionites and techies alike at an event Tuesday night dedicated to promoting and explaining Bitcoin, an online currency currently valued at about $640 a virtual bit.
Money & Tech founder Jered Kenna said he was one of the first Bitcoin investors, buying in when one Bitcoin was worth only pennies per virtual coin. He is also the landlord of 20Mission, where he (naturally) accepts payment in Bitcoin.
His digital assets have accrued considerable monetary worth – but he insists that the currency’s real value is that it makes the world a better place. Yes, he believes that. So do the experts – one called himself an evangelist – who presented with Kenna on Tuesday. Like evangelists, Bitcoin believers all have the exuberant affect that either makes one join or flee.
On Tuesday, the 50 or so non-experts at least stayed.
“Sometimes I go days without checking the price,” Kenna said. “The problems it will solve don’t depend on the price.”
And what are the problems it will solve? First, it is an alternative to banks, which means freedom from money transfer agencies that take a share of the funds they transmit. Moreover, enthusiasts explained, it is a payment system that doesn’t require buyer or seller to trust a third party with their financial information.
Artist and muralist Laura Campos liked both of these attributes. “I’m sick and tired of banks, but I can’t carry all my cash with me all the time,” she said. “[Crypto currency] is kinda like a savior.”
Businesses and charities at the Bitcoin Beginners Fair explained that dollars can be converted to Bitcoins and vice versa, through exchanges or by buying Bitcoins - just like a traveler purchases other currencies.
The units of currency are stored in the owner’s digital wallet, a secure online or offline digital vault containing the unique codes that define each piece of a Bitcoin. These are protected by a password-like key that the owner uses to gain access. The virtual coins can then be exchanged between wallets to make purchases.
The process is facilitated by payment processors like Bitpay, which keeps track of which wallets own which Bitcoins. It promises to streamline the process of exchanging Bitcoins, and allows vendors to accept Bitcoins from customers but be paid in the currency of their choice.
Despite the currently staggering value of a single Bitcoin, the pool of Bitcoin holders and users is fairly small. This is why enthusiasts such as the event organizer Rebecca Ahn are working so hard to spread the word about the currency.
“The people in Bitcoin are very active with each other, and there are many resources for people who are already in. But there really aren’t good efforts to bring people in the community in a way that isn’t super technical,” Ahn said. “The more merchants accept it, the more people will feel like there’s a use for it.”
Tom Longson is also working to make Bitcoin easier to grasp – literally. He founded GoGoCoin, which makes it possible to store Bitcoin values on a card, much like a Visa gift card. “Bitcoin is this intangible thing, and we’re trying to make it slightly tangible,” he told listeners during his presentation. “It’s gone from something that is nothing to something that is something.”
Ahn says she is hoping more local businesses will adopt the still unfamiliar currency. Transaction fees for Bitcoin average around five cents per exchange, according to Longson. This would significantly decrease transaction costs for business owners who accept debit or credit cards.
So what’s the catch? Bitcoin is a new approach to currency. And that means that, as presenter Thaddeus Dryja said, “it’s pretty much the Wild West out there.”
Being free of bank or government control also means that Bitcoin transfers are irrefutably final and that holders must look out for themselves when they initiate a transaction. If your currency ends up in the wrong hands, “You can call the police, but they won’t care,” Dryja said.
Bitcoin is also a little tricky when it comes to taxes. Dryja, a Ph.D. candidate who has devoted his studies to exploring Bitcoin, explained that the IRS considers the cryptocurrency as property, which means that any change in value must be reported as capital gains or capital losses.
Kenna, a former Marine who was deployed in Afghanistan and who is planning to move to South America with his Colombian girlfriend, feels particularly strongly that low-income immigrants can benefit from the ease and economy of transferring Bitcoin internationally. 20Mission hopes to soon have sessions in Spanish as well as English.
“We’re using Bitcoin as a vehicle to explain this concept of digital, peer to peer transactions,” Ahn said. In at least two cases, Ahn and Kenna have succeeded. Emil Reiman, a lifelong Mission resident, walked in to the fair knowing next to nothing about how the currency worked. He had heard of Bitcoin but half-dismissed it as another passing fad.
“I thought it was going to go away, but it’s still here,” he said. Two and a half hours later, he was already making plans to redeem the freebie Bitcoin fragments handed out to guests and from there, to acquire more.
Their latest recruit, according to Bitcoin entusiasts? The hot dog vendor on Mission and 20th St. appears ready to make a cryptocurrency wallet. We’ll check back to see if that happens.