Here’s a familiar scenario: a man walks into a bar. His journey from the front door of Manhattan’s EVR lounge to the bartender is unremarkable, but when he finally gets the bill for his dry martini, things get weird. He doesn’t pay with dollars and cents, but with a virtual currency. The dollar amount is converted to a new Bitcoin total (a $15 EVR martini currently costs approximately 0.08 Bitcoin, according to CNN Money), and he cashes out through the BitPay app.
EVR is the first bar in New York City to accept Bitcoins as a form of payment, but it joins an already long list of vendors across the world that have jumped on the Bitcoin bandwagon. The systems early popularity isn’t terribly surprising. People are beyond frustrated with the world economy, after all, and this feels new and hip. But when you ask yourself whether this crazy digital currency really has a shot at challenging the dollar, the euro or the pound, you must admit to ignorance. Youre looking, after all, at something that youve never seen before.
To really feel what that means, consider that the system began as an academic exercise. In 2008, Satoshi Nakamoto (the pseudonym of a person who has yet to be identified), wrote a paper about how exactly one might go about instituting a virtual economy. In 2009, the theory became a reality when Nakamoto helped create the Bitcoin network. And what exactly are these things again? As Gizmodo defines it, Bitcoins are tokens that have no serial number or any possible mechanism that could be used to trace it back to a buyer or seller. There is no central authority to regulate the Bitcoin economy. You buy them with legal tender, and you exchange them for goods and services.
Since Bitcoins inception, supporting vendors have popped up all over the world, but it hasnt been an easy ride. The value of a Bitcoin is currently in a state of high flux, sinking and soaring in dramatic fashion over just the past few weeks. Some people have lost a lot of money investing in the volatile currency. But that hasn’t stopped others from believing that, eventually, the Bitcoin will be a revolutionary success.
Its impossible to say whether it will or wont. With every new business that welcomes the Bitcoin, the system feels a little more trustworthy, yes, but its an open question as to whether the general public will really get behind it. How can we know if Bitcoin is really achieving relevance? How do we know if its more like the laserdisc or the MP3? We cant. Its just too new. We’ll either see Bitcoin gain ground as more businesses join hands with EVR, OkCupid, and other commercial supporters, or itll become about as relevant as your dads 8-track collection. Unlike those old 8-tracks, though, its significantly more challenging to pull Bitcoin out of the closet, point at it and have a good laugh.
Either way, as we ruminate over Bitcoin’s surging popularity, we should remember that EVR the bar thats now trading virtual money for real martinis is co-owned by Charlie Shrem, a huge supporter of Bitcoin. Maybe Shrem is a true revolutionary, but hes also the co-chairman of the Bitcoin Foundation and the founder of BitInstant, a Bitcoin payment processor.
So what do you think? Will the Bitcoin ever be as powerful as the dollar? Would you ever consider investing in Bitcoins of your own? Have you already? Share your opinion in the comments below.