What do Greece and Latin America have in common?
They keep showing up in headlines about bitcoin.
In fact, an International Business Times article yesterday titled “What Greece can learn from bitcoin adoption in Latin America” digs into the question that many have been asking for weeks: Can bitcoin help the cash-strapped citizens wade through the debt crisis? After all, Latin America had its own debt crisis in the ’80s.
In reality, if you walk down the streets of Athens or any other city in Greece, you’d probably get a similar response: “What is bitcoin?” (It’s also pretty likely you’d get that same response asking people on the street in the U.S.).
But now that Greece has tumbled into its own financial crisis that’s caught the world economy’s attention, there might be more people asking in the future how bitcoin can act as a reliable alternative to traditional currencies — at least as some sort of insurance policy.
“Living first-hand through the Argentinian economic turmoil following the 2001 default, we could only wish we had bitcoin as a solution to protect our income from inflation and devaluation,” BitPay Business Development Manager Pablo Magro told the International Business Times. “Now that bitcoin exists, we hope that Greek workers and merchants can use it to protect their income through this crisis.”
The consensus of most articles about bitcoin as it relates to the Greek debt crisis is that there’s only a slim connection to how bitcoin could actually play a role in helping the citizens since bitcoin wasn’t popular before the crisis hit. But what the Greek debt crisis has done is at least get more people across Europe talking about bitcoin and how it could play a more mainstream role in protecting people when access to a government-sanctioned currency is limited.
The biggest stumbling block for bitcoin, of course, is getting anyone, especially the Greeks, to part with their precious euros to buy them —especially since they can’t use them anywhere. So, while an interesting conversation to have, it’s hardly a practical one.
But that doesn’t stop the bitcoin news from being made. Here’s the week that was bitcoin.
Finally, bitcoin did it. It hit over the $300 hump during the weekend leading into the big Greek debt crisis decision. In fact, bitcoin hit $300.32 in the morning hours of July 12, and by the afternoon, it was at $313.77. That price eventually dropped Monday, and by midday, the price of bitcoin was just over $289.
That’s higher than last week’s figure. Thursday afternoon’s (July 9) bitcoin price was worth just over $271. Of course, there have been plenty of debates about how much the Greek debt crisis actually influenced the price of bitcoin, but most who’ve debated the subject can agree on one thing: It increased awareness of bitcoin on a global scale.
Even Charlie Shrem, a founding member of the Bitcoin Foundation who was sentenced to prison for money laundering to the Silk Road online illegal drug marketplace, has been fielding questions from inmates about investing in bitcoin. Hey, it passes the time.
Really, you can’t make this stuff up.
#GreekCrisis continues and Greek inmates now asking me how to buy Bitcoin while in prison. #Bitcoin@rogerkver@ErikVoorhees
— Charlie Shrem (@CharlieShrem) July 12, 2015
(Does anyone else find it even a little ironic that Shrem has access to the Internet — the same Internet that hosted the Silk Road that landed him in prison — while in prison?)
Bitcoin had a good run last week. Prices were back to just above $276.
That’s marginally better than its stuck-in-the-middle price in the mid-$250 range. It remains to be seen whether it can sustain any sort of longevity at the $300 level anytime soon.
A bitcoin startup has brought the first two-way bitcoin ATM to Greece.
Now, those in Athens have access to the ATM that can conduct euro-to-bitcoin transactions — and bitcoin-to-euro transactions, too. That means, for the cash-strapped Greeks who have bitcoin but not cash, they can use this ATM to get more. This ATM is said to have a daily withdraw limit of €1,000, which was significantly higher than the €60 limit from traditional ATMs.
And we know how many people that is (hint — not many.)
“It’s very good for people in the Third World, who are now dependent on Western Union and services like that. Someone in one part of the world could put in money, and a family member could take it out in Africa, for example. That is one of the objectives: remittances,” Joaquin Fenoy, Bitchain’s CTO, said in an interview.
Yes, Jersey City, New Jersey, is getting into bitcoin.
But that doesn’t mean the residents there are overly familiar with bitcoin. In fact, the local news report on the subject spent most of the article asking, “What’s a bitcoin?” Nonetheless, this is another win for bitcoin. Michael Singh, founder of Kointron, the company who installed the ATM, said the company is working on getting more ATMs deployed.
“We need this for mass adoption,” Singh said about the ATM. “We need this to be as safe, efficient and quick as possible.”
Someday bitcoin may be the iTunes of the financial world, but for now, Eric Van der Kleij, a British entrepreneur and prominent person in London’s fintech scene, called the blockchain “the real frontier.” He said its move into more mainstream financial worlds is like how Napster’s tech changed the world.
Of course, for bitcoin, hopefully, it doesn’t have the same fate as Napster.
“In the world of music you had Napster as the unregulated challenger to the establishment. What they did is prove that technology can enable peer-to-peer file sharing to take place without the establishment controlling it. What that industry did is they wisely embraced that technology to reduce their costs, and you now have the iTunes Store, Spotify. That transformed the model of music distribution,” Van der Kleij said in an interview.
A new book called “The Law of Bitcoin” hit the shelves this month. The book is aimed at helping provide legal advice to those handling bitcoin.
“Written by knowledge leaders in the fields of law and cryptocurrency, ‘The Law of Bitcoin’ addresses such topics as the intersection of cryptocurrencies and criminal law, taxation, anti-money laundering and counterterrorist financing regulations, securities law, consumer protection, negotiable instruments, currency law and financial regulation,” a report of the book reads.
With all the cases around money laundering and bitcoin, perhaps this read can keep a few more bitcoin enthusiasts who want to test the digital currency away from a jail cell.
Most bitcoin advocates have agreed on one thing: Bitcoin would be better served with a bit of regulation.
That, at least, would help it gain more mainstream adoption. But a new state bill that’s making its way through California — one of the states looking to regulate bitcoin — is having some trouble getting support. Members from the Electronic Frontier Foundation suggest that it’s too early to regulate the digital currency.
“Virtual currencies are still developing, and this bill threatens to both stunt the growth of this innovative industry and hamper the enthusiasm driving consumer interest. Also, privacy and free speech are central issues in the virtual currency space, which the bill fails to adequately consider,” the EFF’s filing reads.
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