The bit­coin gen­er­a­tion

Rise of the vir­tual cur­rency, bit­coin

Vocable (All English) - - Édito Sommaire - JON SWARTZ

It’s as good as gold for them!

Ac­cord­ing to a study by the Univer­sity of Cam­bridge, there are now more than three mil­lion users of vir­tual cur­rency world­wide. Bit­coin, whose value was zero when cre­ated in 2009, has sky­rock­eted re­cently. While some be­lieve it is a fi­nan­cial ‘bub­ble’, there are many vir­tual money fans who swear by it. Who are they and what mo­ti­vates them?

SAN FRANCISCO — Nearly half of Amer­i­cans are un­sure of the le­gal­ity of bit­coin, a new study sug­gested last month, yet a loyal group of its ad­vo­cates em­brace it as a sym­bol of fi­nan­cial and philo­soph­i­cal free­dom.

2. "I be­lieve there is a strong chance that it may some­day revo­lu­tion­ize sig­nif­i­cant parts of our fi­nan­cial in­fra­struc­ture," says Aaron Hanson, a soft­ware engi­neer from Chicago.

3. Hanson uses bit­coin wher­ever he can — to buy food at an em­panada restau­rant, air­line tick­ets, his hon­ey­moon in Africa this year — list­ing it along­side tech­nol­ogy and in­di­vid­ual free­dom as his three beliefs in life.

4. Austin Craig, a prac­tic­ing Mor­mon who at­tended Brigham Young Univer­sity, went a step fur­ther: He lived en­tirely on bit­coin dur­ing the first three months of his mar­riage and chron­i­cled it in a doc­u­men­tary, "Life On Bit­coin". 5. "Mor­mons are de­scen­dants of pi­o­neers who carved their livelihood out of the wilder­ness," he says, de­scrib­ing the cryp­tocur­rency's ap­peal to mem­bers of The Church of Je­sus Christ of Lat­ter-day Saints. "There is a strong el­e­ment of rugged in­di­vid­u­als, self-suf­fi­ciency."

6. Wel­come to the mind-set of a typ­i­cal bit­coin owner. For many, it is a life­style, some­thing to be val­ued more than gold for fi­nan­cial in­vest­ments and shield­ing per­sonal in­for­ma­tion from the pry­ing eyes of a dis­trusted govern­ment.

7. Most Amer­i­cans (78.5%) are fa­mil­iar with the cryp­tocur­rency, ac­cord­ing to a sur­vey of 1,000 Amer­i­cans by LendEDU, a per­sonal fi­nance com­par­i­son site. But 48% aren't sure it's le­gal and 11% con­sider bit­coin own­er­ship il­le­gal in the U. S.

8. Still, 40% were open to us­ing bit­coin in the fu­ture, says Michael Brown, re­search an­a­lyst at LendEDU.

9. For those with any doubt about the dig­i­tal cur­rency, they need look no fur­ther than its true be­liev­ers, who have em­braced bit­coin as a way of life and help drive its prices to record highs, caus­ing some an­a­lysts to warn of a bit­coin bub­ble.

10. The dig­i­tal cur­rency, whose fi­nite quan­ti­ties are cre­ated by com­puter pro­grams, trades out­side the tra­di­tional fi­nan­cial sys­tem, an at­trac­tion for peo­ple who have doubts — or at least seek an al­ter­na­tive — to main­stream in­sti­tu­tions.

11. "There’s cer­tainly a lib­er­tar­ian feel" to the beliefs of bit­coin users, says Me­lanie Shapiro,

CEO of To­ken, an iden­tity-ring maker in New York. "But we’re tech­nol­o­gists, and tech­nol­ogy pro­vides free­dom" from cen­tral­ized govern­ment sys­tems.

12. Their long-term pas­sion and prin­ci­ples have paid off hand­somely: on Tuesday (19 Septem­ber), bit­coin closed at $4,009 per to­ken — twice its price in July, and sig­nif­i­cantly more than when Shapiro and her hus­band bought it for $2 in 2011.

DIG­I­TAL GOLD?

13. The cur­rency, which sur­faced in early 2009 from some­one us­ing the name of Satoshi Nakamoto, has slowly evolved from cult cu­rios­ity to wide­spread life­style choice, with el­e­ments of po­lit­i­cal and re­li­gious fer­vor.

14. What be­gan as a cur­rency cham­pi­oned by lib­er­tar­i­ans ad­vo­cat­ing de­cen­tral­ized cur­rency or crim­i­nals try­ing to avoid law en­force­ment has been em­braced by ven­ture cap­i­tal­ists and in­vestors. It's not main­stream yet — too many peo­ple are wary of its high risk and com­pli­cated tools — but it's get­ting there.

15. “It is the first global, highly liq­uid form of cur­rency,” says Mike Jones, CEO of Sci­ence, a busi­ness in­cu­ba­tor that owns and trades cryp­tocur­rency. "Much more so than gold. It is about open­ing fi­nan­cial markets glob­ally."

16. "It is dig­i­tal gold," says Over­stock CEO Pa­trick Byrne, whose on­line re­tailer was one of the first to ac­cept bit­coin pay­ment.

17. There is a "dooms­day sen­ti­ment" among many bit­coin users, who horde the cur­rency along with non­per­ish­able food and drinks in the event of an emer­gency. Byrne's Salt Lake City-based com­pany has stock­piled sev­eral mil­lion dol­lars worth of cryp­tocur­rency, $12 mil­lion in gold and a 30-day sup­ply of food

to feed all of its 2,000 em­ploy­ees there. Byrne is con­vinced the U. S. dol­lar will dra­mat­i­cally weaken, as has cur­rency in Venezuela, be­cause of a crip­pling debt, thus strength­en­ing bit­coin and other dig­i­tal cur­rency.

18. That, in part, is mo­ti­va­tion for bit­coin fa­nat­ics — but not the en­tire story, fi­nan­cial an­a­lysts say. "Devo­tees are mo­ti­vated less by fi­nan­cial than their pas­sion for dis­tribut­ing power to the masses," says Jawad An­sari, man­ag­ing di­rec­tor of in­vest­ment firm Boustead Se­cu­ri­ties.

(Kin Che­ung/AP/SIPA)

Open­ing cer­e­mony of a bit­coin re­tail shop in Hong Kong.

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