How do you apply digital currency to mainstream products?
Aug 8, 2011, 12:29 PM | Updated: Oct 10, 2012, 7:28 am
A new online digital currency is capturing the attention of Seattle geeks.
The Geekwire Podcast invited guests Mike Koss and Peter Vessenes, from Seattle’s Startpad.org, to explain how the new currency works.
“Bitcoin is a digital currency,” says Vessenes. “The really interesting thing about it is that it’s totally decentralized. There are no government agencies, no bank stands behind it.”
Vessenes says there are about 6 million Bitcoins currently issued, and many people are engaged in the trade of Bitcoins for goods and services.
“Probably where most of these transactions happen is through the Bitcoin.org forums. You could buy any kind of digital goods you wanted for Bitcoins right now,” says Vessenes.
The problem Vessenes sees with the new currency is translating that trade from digital goods and services to real-world, mainstream products.
“I think fundamentally right now, one of the big problems is: What do you use it for in daily life?” says Vessenes. “I’m working on like – ‘Can farmers take bitcoin?’ I think these kind of real world situations are more interesting.”
Vessenes and Koss say they tried to let a man pay rent to them by way of Bitcoin, but that when the man tried to explain the arrangement to customs, he was turned away.
“He had $600 in cash in his pocket, but that was it, and he tried to explain Bitcoin to the customs agents, and they really didn’t understand it. [They] ended up interrogating him and sent him home.”
Vessenes says those interested in entering the Bitcoin market can buy a coin, just like buying a bagel.
“The way most people are obtaining their Bitcoins is just through some sort of economic transfer,” says Vessenes. “Fundamentally, how you get a Bitcoin would be just like how you buy anything else.”
But Vessenes says the market can be very volatile, with Bitcoins ranging in value from its introduction price at six cents and climbing up to $30. The current value is around $9.
“It’s hard to get a sense of the real value.”
