I’m hearing so much good news about the growth & future of Bitcoin these last few weeks that I’m fully convinced that bitcoin has reached the critical mass it takes to ensure success. The mind boggles at how much good news is churning out each day in fact and how this news is going to effect the price of bitcoin… But then I start to wonder, why hasn’t the upward surge started yet?
The answer must be that only hardcore bitcoiners are hearing this stuff so far… The mainstream public is still trying to just wrap their heads around what bitcoin is, and frankly just isn’t ready to understand the significance of all these investments, laws, new services, and new vendors. That, and I probably don’t speak the language where most of the bitcoin news is being reported.
Just last week I saw Bloomberg financial news talking about bitcoin seriously, as if they actually knew what they were talking about, yet they clearly did not. Making glaring mistakes like claiming that there are still 21 Million bitcoins left to be mined is not inspiring confidence in their journalism, at least for people like me. So it’s no surprise that they aren’t reporting on the big news in the bitcoinosphere, like all of the VC money flowing into it this week.
For real news about bitcoin, I have exactly four websites constantly open in my browser. If you can keep tabs on these four sites daily, you too will become an expert on predicting where bitcoin is headed:
The Genesis Block: http://www.thegenesisblock.com
Bitcoin Magazine: http://bitcoinmagazine.com
Bitcointalk forum’s Press sub-forum: http://bitcointalk.org/index.php?board=77.0
These are the real juicy sources of bitcoin news folks; don’t settle for anything else… Excepting only the rare blog post from the likes of Forbes’ Jon Matonis and the Pirate Party’s Falkvinge. -Which of course should get reported in the aforementioned Bitcointalk.org press forum.
So what kind of news am I so excited about here? Need the cliffs?
There’s been so much awesome news in May so far that I’m going to have to break these down into four categories…
New Services open for bitcoin business:
I recently wrote about Foodler accepting bitcoin for their 12,000+ restaurant locations, but soon after I published that post, Gyft upstaged them! Now you can, while casually strolling through the mall, use bitcoins to buy anything from hundreds of major brands, just by grabbing their gift card first on your smartphone! The roster for these businesses couldn’t be any more awesome. Brands include pretty much any retailer that would have their own gift card, including Brookstone, Burger King, Gamestop, GAP, Lowes, Marriott, Nike, and even Wal Mart. I tried it out myself; it’s easy and fast to do if you’ve got bitcoins on your phone.
Alright, so you can buy food and hotels and hardware and go shopping at the mall with bitcoins now, but still not good enough for you, you say? You still can’t pay your rent in Bitcoins? Think again! Bill Pay for Bitcoins has also launched recently, which lets you make Rent payments and send scheduled payments to suppliers through their bank-like interface.
Still no BitcoinATM getting you down? Luckily there are two other Bitcoin ATM-like Machines hitting the market soon, both fully Demo’d at the Bitcoin2013 conference in San Jose last weekend. Looks like we’ll be able to buy our own bitcoin vending machines soon, in the form of the Lamassu ATM and the The Robocoin Kiosk. These both do one-way transfers (They don’t claim to be able to buy your bitcoins and give you cash) so there are no regulations or money-transfer red tape to stop them this time… Both are finished products, and in production now so we should see them hitting the streets as early as next month!
Finally, BitcoinFund is an Institutional Hedge Fund made up of only Bitcoin, which allows larger institutions such as asset managers to hold bitcoins “on the books.” This opens up a traditional market of huge investors to bitcoin that would never have a chance otherwise. We’re sure to see bitcoin’s market cap grow a lot from this news.
So in my opinion, May 2013 was the official ending to the era where things existed that couldn’t be bought with bitcoins. Because now they all can… As long as you have a smartphone.
Venture Capitalist investments:
First up, Coinbase scored a quick $5 Million funding from Union Square Ventures and will be using the cash to expand personnel and services. This is the largest Bitcoin-specific VC Investment to date and really sets the bar in silicon valley. A $15 Million USD fund has been set up by Liberty City Ventures in New York with “an emphasis” in bitcoin, but we don’t know how much of that money will be invested directly in bitcoin business.
Libertarian VC superstar Peter Thiel hopped into the Bitcoin game (Finally!) with a $2 Million investment in Bitpay. He’s actually leading a group of Venture Capitalists called “The Founders Fund” and it includes just about all of the famous VC personalities in silicon valley. This news is especially interesting when you consider that Thiel made his initial fortune co-founding Paypal!
Last but not least, Lightspeed Venture Capital throws $50k at 15 different Bitcoin-related startups EACH. They’re giving office space in San Mateo and paying out grants IN BITCOIN to all of these 15 different startups. Now that’s how you jump-start the sector!
Tech & Mining:
Some of the most satisfying news in bitcoin history is that local measurements show that the bitcoin network of computers is now over Eight (8) TIMES more powerful than the world’s top 500 supercomputers all put together! Naturally, fears of a 51% attack unilaterally dropped a bit on this awesome news.
Still not enough processing power for you? The first $1 Million USD sale of mining equipment just happened recently in a huge auction for ASIC mining hardware by the lessor-known ASIC hardware company, ASICMiner. That ought to add a bit more power to the network, if not double it. Simultaneously, ASICMiner launched their Micro-USB miners, the “Block Erupter USB” ASIC miners. Perfect for hobbyists, these things are tiny, 300 Mh/s ASIC mining kits that look like USB thumb drives and are totally powered through the USB Bus. Their price is fixed at 1.99 BTC each, but if you buy a mere 300 units, they’re on sale now!
Not to be out of the ASIC limelight for a moment, Butterfly Labs started shipping their long-awaited Jalapeno miners in better quantities too, just last weekend. They claim to be totally past the problem they had with their chip manufacturer and are ramping up to full speed now.
Bitcoin Ecommerce just became a whole lot slicker in May too. A tiny ebook-selling website called Cointagion figured out how to make buying things online easier than anyone had ever dreamed it could be. Without any setup, without any personal information, without any downloading of software at all, you can now point your smartphone & pay in bitcoin at one of those QR barcodes on any monitor anywhere to get an instant download. -Literally instant, without touching the computer AT ALL. It’s pretty revolutionary tech, and it could only happen with bitcoin.
Around the globe:
Although many countries have a higher per-capita bitcoin adoption rate than the USA, Russia and China especially have been constantly in the news lately as their state-sponsored TV networks seem almost Bullish on Bitcoin! Russia’s version of Paypal, Webmoney.ru, now accepts bitcoin and allows us to trade millibitcoins on their exchange! With that one vendor addition the bitcoin network has been opened up to tens of millions of new customers who already use this service… Possibly bitcoin’s biggest cattle drive ever.
Meanwhile in China, after the China Central TV network’s optimistic, 2-hour documentary on Bitcoin debuted nationwide, many different measurements for bitcoin user demographics have been attempted and all agree; China has the most bitcoiners by far! (Both miners and wallet downloaders.)
Canada, often referred to as “America’s hat” and usually in lockstep with the USA on economic policy and currency schemes, has made a surprising statement lately in their dealing with Bitcoin too… Their national agency that deals with money laundering, FINTRAC, has sent letters to Canadian businesses that exchange other currencies for bitcoin, and said that they are “exempt” from money laundering laws. (Presumably because these businesses were getting nervous after uncle sam took out Dwolla recently to the south of them.) This makes Canada a clear haven for bitcoin businesses no matter how bad the laws in the USA become.
All of this international news adds up to paint a clear picture that it doesn’t matter what the US Government attempts to do to bitcoin; the USA isn’t the biggest country using it and it’s adoption is even more popular elsewhere!
If I had to pick one point in time to declare a “point of no return” or a “critical mass” for bitcoin’s growth, the first half of May 2013 would be it. It is very hard to imagine a scenario now in which Bitcoin fails to reach mainstream usage… In fact the most likely would involve nuclear weapons.