If Bitcoin is to our monetary system what social media has become to traditional media, then this Bitcoin phenomena might be more than just a flash in the pan; it could be a unstoppable sea-change that could wreak havoc on the way we pay for things.
The good news is the jury is still out on Bitcoin, as not everyone is bullish on the the Internet-based monetary system, partly because Bitcoin has yet to prove that its system is hack-proof, which is a real concern for a virtual currency that only exists on the internet.
But just because there’s still some unanswered questions, doesn’t mean that we can afford to keep ignoring it, especially as its presence is slowly creeping into the online marketplace - like this book, which is only available for purchase via Bitcoin.
But that’s just one book, right? Well... now Amazon is joining the fray with the ability to make purchases on its site using Bitcoin and its own digital currency, Amazon coins. So now that’s not just one book, but every book, and everything else one can buy along with it.
Is Amazon’s virtual coin idea just a gimmick? Currently, it seems designed to drive sales traffic to its Kindle Fire app store, and Amazon is pushing them out to those who purchase Kindles like the coins are coupons or gift cards.
Also accepting Bitcoin:
• Blogging platform Wordpress now accepts Bitcoin for payment globally for its premium features.
• Illegal file-sharing services like Pirate Bay and others have set up Bitcoin accounts to ask for donations because 1) Bitcoin transfers are completely anonymous and 2) because running a site devoted to stealing others’ intellectual property is hard work, apparently.
• BitPremier, which allows you to buy high-end luxury goods, like this 2009 Mercedes SL65, previously owned by a celebrity, which retails at $250,000 or $1.9 million bitcoins.
• At Souvenirs from Russia, you can buy Russian-language copies of Playboy magazine with Bitcoin because why not?
• And a long, long list of other online retailers that includes online hosting services, online games, phone cards, and actual things from jewelry to toys to electronics.
Despite all this real activity, some investment advisors remain cautious about recommending that anyone park any money in an imaginary currency system. Motley Fool was more direct, calling investing in Bitcoin is a “horrible” idea.
On the other hand, others are much more bullish. The MIT Technology Review has officially declared that Bitcoin has “hit the big time,” so that settles that, especially with three major Bitcoin related businesses getting millions in VC funding - OpenCoin, which is backed by Google Ventures; CoinBase, which is backed by the funders behind Tumblr and Zygna; and BitPay, funded by Facebook’s first major funder Peter Thiel.
To top it off, PayPal’s president, David Marcus, has come out bullish for Bitcoin, too. But he hedges by saying it remains an open question whether Bitcoin will catch on with the mainstream or stay limited to “a few zealots and criminals.”
Reason Magazine worries that while Bitcoin can’t be stopped, it could be ruined. By which it means that once the U.S. government throws a few people in prison, it will ruin the fun for everyone else. And right on cue, the feds shut down Liberty Reserve, a virtual currency exchange based in Costa Rica, which did $6 billion in transactions over the past five years. A prosecutor referred to Liberty Reserve as “PayPal for criminals.”
And while Liberty Reserve isn’t the same as Bitcoin, it could be the tip of the iceberg. No one thought the US government could shut down online poker either.
What do you think? Is Bitcoin, or something like it, here to stay for brands?