A storefront just blocks from the New York Stock Exchange was the showcase Monday evening for the upstart currency whose promoters aim at nothing less than a revolution in the world’s financial system.
A hundred or so people had crowded into The Bitcoin Center NYC, a bare white walled room in the financial district pulsing with conversation and lined with computer laden tables. Overhead fluttered a Bitcoincenter New York City banner.
The crowd was loud, hyperactive and varied. Casually dressed students and bemused Wall Street types in suits, mingled with the young tee-shirted event staff, the curious off the street and a few with the rapt looks of true believers. Through the melee a half-dozen camera crews, video cams on poles, surged back and forth looking for subjects to interview.
At the door we were asked to fill out a form titled KYC in large block letter." Know your customer?" I asked the well-dressed man behind the counter. "Compliance requirements" came the smiling response.
Inside the show was just getting started. Billed as the "World’s Largest Direct Sellers-to-Buyers Trading Pit aka Nakamoto of All Satoshi Square Meeting", for the reputed creator of Bitcoin, and "the city’s only brick-and-mortar institution dedicated to further adoption of Bitcoin", the purpose was to show a Bitcoin market in operation and to generate as much media buzz as possible. Free energy drinks and vodka were served at the crowded table in the back.
The lights faded and the room took on a bluish neon glow as Jeffery Tucker, author, and "nationally-recognized Bitcoin evangelist" stood under a spotlight in the front of the room and began to speak.
"Bitcoin is unlike anything else in the world." Soft voiced, with a hint of a southern drawl and looking like a youngish Donald Sutherland in a bow-tie and suit he traced the history of the development of money. "Money made us less dependent on feudal lords but in the beginning of the 20th century every government nationalized money. Innovation stopped with the central bankers’ inflation."
Part libertarian promoter, part historian, part salesman Mr. Tucker envisions a world freed from the manipulated fiat money of governments. “Bitcoin blows up the entire system. Money is half of every transaction and governments are wrecking people’s lives by destroying the value of their money." Bitcoin enables direct person to person transactions, without the interference of government. “Bitcoin is not about ideology it is about revolutionizing financial markets.”
As Mr. Tucker ended a cheer went up and a guy with a sharp beard and a good suit bounded onto a platform opposite Mr. Tucker and began chanting in the sing-song voice of an auctioneer, “Make me a market. I have an offer 1000 at 630. It’s all call. Make me a bid, make me a bid.”
The crowd milled and flowed, the noise threatened to drown the price caller. There were no buyers. Several young men in orange tee-shirts and one or two in colored pit jackets moved through the crowd, talking, writing on pads and occasionally passing notes to the auctioneer. There were still no buyers. It was impossible to tell who was selling at 630. “630 offered, where’s the bid,” he chanted.
The order board projected on the wall showed two trades. “Now its 550 bid, 630 ask, 628 trades. Now 620 offer.” Suddenly an amplified shout came from the behind the speaker, “Pump ‘em up, pump ‘em up, let’s get it moving.”.
I asked a well-dressed real estate broker why he had come. “I don’t trust the dollar, maybe Bitcoin is an alternative,” he said. Another told me governments have too much control over our lives and money is the key to that control, “Bitcoin breaks that to pieces," she said. Still a third thought Bitcoin was the natural evolution of the internet. “It will end up being good for everyone, just like the net.”
The excitement and interest of the audience was real and palpable, even given the contrived action of the Bitcoin open-outcry trading pit. By the end of the trading session the price spread had narrowed considerably but it was still impossible to tell if anyone had actually bought or sold anything.
In theory Bitcoin offers an alternative to conventional currencies. It could become the medium of exchange and perhaps a trusted store value despite the price volatility on the current exchanges and the redemption problems of Mt Gox and others.
But the obstacles to Bitcoin's success are also manifold, not the least of which is the threat to governments if Bitcoin moves transactions and tax revenue beyond their reach.
Bitcoin itself exists in the virtual realm, but its exchanges and servers live in the real world, under national law.
Whatever Bitcoin’s future, it’s creation, exponential growth and the widespread interest it has generated ensures that even if it fails, it will be followed by others.
Sooner or later Bitcoin or one of its succssors will succeed.
Chief Market Strategist
WorldWideMarkets Online Trading