Virtual Currency

Bitcoin for Rent – Real Estate Transaction Completed in NYC’s NoLita Neighborhood for BTC

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I’m currently at the Javits Convention Center in New York City attending the Inside Bitcoins Conference. In keeping with the spirt of the day, I want to highlight this story of a NYC resident who just completed a real estate rental transaction entirely in Bitcoin.

While I previously highlighted the fact that Alvic Property Management in NYC had announced it would accept BTC, this is the first instance I can recall of someone paying rent, security deposit and a broker fee all in Bitcoin. The total was $18,000.

From Crain’s:

The head of a bitcoin-friendly real estate firm based in SoHo late last month completed what it is billing as the first real estate transaction in the country to fully use the virtual currency.

Nick Spanos, founder of Bitcoin Center NYC, an advocacy organization that promotes the use of the currency, who also happens to be the head of real estate brokerage Bapple, said that on March 24 a tenant paid in rent and deposit to a unnamed landlord in NoLita and commission to the brokerage for a total of nearly $18,000. The lease began on April 1.

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E-Gold Founder is Consulting on a New Gold Backed Currency

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It was only a matter of time before the success of Bitcoin led to a new attempt to create a digital currency backed by gold. It seems as if that day has now arrived.

Douglas Jackson is the founder of e-gold, which was shut down by U.S. authorities a little over five years ago under accusations of money laundering. While I fully think the ultimate monetary solution will be a decentralized payment protocol that merges Bitcoin-like technology with the ability to back it with gold, silver or whatever people want, I am of the view that it cannot be done from an overly centralized authority or protocol. There are several reasons for this.

First, when you have a centralized single issuer of a currency who also is responsible for vaulting the gold within the payment system you have an enormous degree of counter-party risk. The vault itself could be seized by “authorities” in whatever jurisdiction it is located in.

Second, the human beings or company behind any currency system can themselves be pressured or threatened in order to comply with more powerful interests. The beauty of Bitcoin is that there is no “Bitcoin corporation.” It truly is decentralized and anarchic in nature. It basically puts “the powers that be” in a position that if they want to completey destroy it, they’d have to destroy the internet itself.

That said, I do believe the evolution of money is headed to a Bitcoin type system with the ability to have whatever backing is desired by the market. So at this point my questions to Mr. Jackson would be:

1) How decentralized is this currency system intended to be if at all?
2) Will there be an open source protocol available to all?
3) Are the units of currency distributed to those that own gold in a particular vault or vaults under a the custodianship of a particular company?
4) Is the currency limited to those who own gold in the currency issuer vaults, or will they be linking vaults all over the world if such vaults care to be linked.

While I love the idea, it would have to be done right or it will be doomed to fail. I’m very curious to learn more about this and I’d also love to hear reader feedback on this.

From the Financial Times:

The founder of one of the earliest virtual currencies has re-emerged with a rival to Bitcoin, more than five years after his first venture, e-gold, was shut down by the US Department of Justice

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Picture of the Day: The Bitcoin Black Swan

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Yep, this pretty much says it all. Take that Banksy.  * I have no idea who created this image and where it came from, but great job to whoever made it. Like this post? Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G Follow me on Twitter.

Bitpay Surpasses 10,000 Bitcoin Merchants, Up a Staggering 10x Year-over-Year

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Bitpay is the premier Bitcoin payment processing company and they have experienced staggering growth over the past year. This morning the company issued a press release announcing the fact it had signed up its 10,000th merchant, an increase of 10x from the number about a year ago when the company first crossed the 1,000 threshold. I highlighted the incredible growth of Bitpay back in March of this year, when it first hit 4,000 merchants and was adding 1,000 a month, a run rate that has incredibly enough continued.

I also had the pleasure of hearing Bitpay CEO, Anthony Gallippi, speak at the Inside Bitcoins Conference a little over a month ago in NYC. To read my summary of this excellent conference click here. Bitcoin has excited me so much in 2013 that I created my own t-shirts, available only for bitcoin payments through my website. So if you have a few BTC burning a hole in your pocket, you can get one by clicking on the image below. It’s an excellent conversation starter.

BTCshirts

Now here are some highlights from Bitpay’s press release:

ATLANTA — September 16, 2013 — BitPay Inc, the world leader in business solutions for virtual currencies, announces it has over 10,000 approved merchants in 164 countries using its service to accept bitcoin payments. This milestone was reached almost exactly one year after the company approved its 1,000th merchant.

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Bitcoin is Recognized as “Private Money” in Germany

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We should have competition in the production of money. I have long been a proponent of Friedrich August von Hayek scheme to denationalize money. Bitcoins are a first step in this direction.

– Frank Schaeffler, member of German parliament’s Finance Committee

The story of the German Finance Ministry stating Bitcoin is a form of “private money” has been making the rounds all over the virtual currency and technology world this morning and for good reason. This is a very, very big deal. Not just because some bureaucrat seemingly “legitimizes” the crypto-currency, but because it is the first commonsense approach from a major economy to-date.

While the U.S. government runs around like a chicken with its head cut off, issuing subpoenas and launching Senate investigations on Bitcoin, Germany is merely accepting the obvious. This is the wave of the future, you can either act like an incorrigible child and fight it, or you can accept reality and pave the way to the future. I’m pleased to see Germany, home to the most dynamic Bitcoin community on the planet, in Kreuzberg, taking a reasonable approach. Not to mention the fact I could never see a U.S. bureaucrat ever endorse Hayek or Austrian economics. The times they are a-changin’. From CNBC:

Virtual currency bitcoin has been recognized by the German Finance Ministry as a “unit of account”, meaning it is now legal tender and can be used for tax and trading purposes in the country.

Bitcoins is not classified as e-money or a foreign currency, the Finance Ministry said in a statement, but is rather a financial instrument under German banking rules. It is more akin to “private money” that can be used in “multilateral clearing circles”, the Ministry said.

“We should have competition in the production of money. I have long been a proponent of Friedrich August von Hayek scheme to denationalize money. Bitcoins are a first step in this direction,”said Frank Schaeffler, a member of the German parliament’s Finance Committee, who has pushed for legal classification of bitcoins.

Schaeffler said the new ruling showed German authorities were preparing regulations on how to tax bitcoin transactions. According to German newspaper Die Welt, the government has stated that the legal classification of bitcoin means that commercial profits that stem from using the currency may be taxable.

Kathleen Brooks, a research director at FOREX.com, told CNBC that classification by the German government gave bitcoin legitimacy to be used as a settlement currency in one of the world’s largest economies. She said this was a big step forward for the bitcoin movement.

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Welcome to Kreuzberg, Berlin: The Neighborhood with the Highest Bitcoin Concentration on Earth

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Fascinating article out today from the Guardian about the Kreuzberg area of Berlin, which has the highest density of businesses accepting Bitcoin in the world.  The associated video at the top of the article is also a must watch, as it becomes readily apparent how excited both the merchants and the customers are about using this free market currency.  I am completely convinced that the more people learn about Bitcoin and use it, the more exponential its adoption will become.  My favorite line from the video comes at the very end from Joerg Platzer, owner of the bar Room 77:

“Every day we do not start using a free currency like Bitcoin, we actually actively vote for the current system to continue.”

From the Guardian:

Like Chebli, Martens, whose Kersenvlaai (cherry cake) from her native Maastricht is rated as one of the best culinary offerings of the area, says she decided to accept Bitcoins because of the ease, cheapness and transparency of its payment system.

“It’s an easier way of digital payment than credit cards, which cost me a lot of money as a business and to which I’m forced to sign up for years,” she says.

These two tradespeople are among around a dozen in the Graefekiez, a cosy neighborhood established in the 19th century in the southern Berlin district of Kreuzberg, which currently boasts the highest density of businesses accepting the currency in the world. Its growing list of Bitcoin establishments includes a restaurant, a printing shop, a bar and boutique.

“Kreuzberg is traditionally an area in which people are very politically aware, critical towards existing systems and are constantly discussing and looking for alternatives to them, which makes it the perfect breeding ground for Bitcoin,” says Joerg Platzer, a staunch Bitcoin advocate who roams the neighborhood with a missionary zeal in search of new recruits.

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Jeep Dealer in Kansas Now Accepts Bitcoin

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Norman Vialle is leading the way as far as merchants beginning to accept Bitcoin for big ticket items.  The owner of Overland Park Jeep Dodge Ram Chrysler in Kansas City has become the first car dealer in the United States to accept Bitcoin.  Despite the recent price volatility, stories of more mainstream adoption continue to come in at a rapid clip.  From a New York property developer’s decision to accept them as rent payment, to popular online dating site OK Cupid announcing acceptance.  Now we can add car dealerships to the list.  From the Wall Street Journal:

Norman Vialle, a 53-year-old car dealer in Kansas, invested in his share of winners and losers during the Internet bubble of the 1990s. Now he is clinging to a stash of Bitcoin, even though the fledgling virtual currency has lost about 70% of its value in the past week.

“It’s volatile because it’s new, but it’s still a lot higher than it was a month ago,” Mr. Vialle says.

In addition to investing in the currency, Mr. Vialle recently began accepting bitcoins for payment at Overland Park Jeep Dodge Ram Chrysler. One of his customers is planning to pay for a $40,000 Jeep with the currency next month.

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