The Bitcoin Center New York City opened for business this month. Credit: Miles Dixon
On a Monday evening in early January, a group of businessmen chatted enthusiastically at a Midtown Manhattan bar. The men weren’t talking about sports, women or vacation plans though — they are discussing Bitcoin, a digital currency that has accelerated in popularity during the past few years.
“My wife asked me last week, ‘What do you love the most, me or Bitcoin?’” one of the enthusiasts joked.
“If there is anyone's ego I want to put money on it's Kanye West’s,” another businessman said, talking about Coinye West, an alternative cryptocurrency that was supposed to launch this month but was stopped by the hip-hop star’s legal team.
Bitcoin was invented in 2009 by an individual or group – no one knows for sure – using the pseudonym Satoshi Nakamoto. The digital currency can be bought, sold or traded for services rendered.
“Bitcoin is intended to be something like a currency based on mathematics and cryptography, that works without any sort of central bank,” Columbia University computer science professor Steven Bellovin explained. He said that the first form of digital cash goes back 30 years, but that all attempts at digital currencies until now lacked a central authority to avoid double spending.
“Bitcoin has a different way to solve the problems of double spending, something called a public block chain: a sort of distributed, decentralized repository that records every transaction made with Bitcoin,” he said.
Bellovin calls it clever mathematics but points out concerns, including the risk of a person’s computer being hacked, the volatility of the value of Bitcoin – which started at less than a penny per “coin”, peaked at $1,200 per coin, and as of print time stands at $900 per coin. There is also a programmed limit of 21 million Bitcoins.
Despite the concerns Bitcoin has grown more popular in New York City. In January, the world’s first Bitcoin Center opened in New York City at 40 Broad St., just a short distance to Wall Street.
“I think Bitcoin is an honest currency compared to all the other ones. We’ve created $19 trillion out of thin air the past six years,” Bitcoin Center co-founder Nick Spanos said. “People store their labor and their life’s work in these pieces of paper, and then someone on a whim can make as much as they want.”
The Bitcoin Center is an educational institution dedicated to promoting awareness of Bitcoin and other cryptocurrencies. There are events and educational classes everyday, including free introductory lessons about Bitcoin, and leases out booths to people with businesses that accept Bitcoin payments.
Other New York City businesses have also started accepting Bitcoins. RentHop, an online apartment search marketplace, started accepting the currency in December.
“My goal is that I see this as a potential to lift real estate out of the stone age,” said Lee Lin, a RentHop co-founder. He said one of the perks of Bitcoin is that it doesn’t have fees like typical bank transactions.
And for those who want to whet their whistle using bitcoin, Old Man Hustle, a bar in the Lower East Side, started accepting Bitcoins as payment last year.
Michael Jarmuz, owner of the bar, said some of the people spending Bitcoins are just trying to impress their dates, but given its increasing value, everyone paying him in the currency “would be a dream come true.”