People and payment companies are starting to take Bitcoin seriously.
The decentralized virtual currency is overcoming its stigma as a fringe currency for illegal transactions and is stirring up consumer scrutiny of the practices of large payment providers. The payments industry is changing rapidly, but today the movement isn't about payments it's about data.
Products such as Google Wallet or the Starbucks Card app entice consumers with targeted offers based on records of what consumers purchase. Merchants, in turn, benefit by selling more merchandise and increasing revenue. Companies such as Google have an insane amount of information about individuals and consumers don't seem to realize the intrusion.
Bitcoin gained rapid attention in part because of its focus on anonymity, which prompted a more mainstream debate on privacy. People have begun wondering whether receiving targeted digital coupons is worth giving up their privacy. It conjures up thoughts of George Orwell's dystopian "1984."
When the popular blogging platform
"PayPal alone blocks access from over 60 countries, and many credit card companies have similar restrictions," Andy Skelton, an engineer with WordPress' parent company Automatic, wrote. "Some are blocked for political reasons, some because of higher fraud rates, and some for other financial reasons."
PayPal has just responded to this criticism. During a
"I've been spending a lot of time looking at it," Marcus said. "For us at PayPal, it's just a question of whether Bitcoin will make its way to PayPal as a funding instrument or not, and we're kind of thinking about it."
Chris Larsen, who most recently headed the peer-to-peer lending company Prosper Marketplace, is another voice from mainstream financial services taking a hard look at Bitcoin. In his current role as
Amazon.com doesn't support Bitcoin payments, but merchants that use Amazon's fulfillment service to ship products can
To privacy advocates, does all of this sound like an improvement? It isn't.
Systems run by these large companies might give consumers a sense of security, but these companies still collect consumer data. Many of them must adhere to certain regulatory guidelines set by the Financial Crimes Enforcement Network (FinCEN) for money services businesses.
These regulations might soon affect all Bitcoin businesses, based on
Many Bitcoin enthusiasts and other libertarians and anarchists argue that the government or some other entity will use surveillance of transactions to harass people or lock them up.
Such views aren't so extreme considering examples such as Target Corp., which
As much as we value our privacy, overall our society is becoming more accepting. It's increasingly common to see tattoos peeking out from beneath a banker or venture capitalist's suit. Everyone can find a group of people to accept their every strength and weakness, virtue and vice, addiction and apathy. The use of big data might not be so bad if it is used responsibly.
Bitcoin isn't cool because it's anonymous. It's intriguing because it's faster and cheaper and creates a kind of one-world currency. It's fascinating that a small group of programmers possibly just one person created a currency that has exploded in popularity so fast that even the federal government feels the need to respond.
As OpenCoin CEO Larsen says, the digital currency is cool, but it's more about the power of the payments platform, the simple movement of money as our world becomes more globalized.
WordPress' decision to accept bitcoins stems from its role as one of the precious few outlets for individuals to speak freely.
"We don't think an individual blogger from Haiti, Ethiopia, or Kenya should have diminished access to the blogosphere because of payment issues they can't control," WordPress' Skelton wrote when the company began accepting bitcoins.
As much as the outcry for anonymous payments sounds like a plea for privacy, it is also a plea for inclusion.
