Bitcoin, the popular alternative currency first introduced in 2009, has earned a legion of devoted fans and as many avid detractors. But, until recently, most of its activity was taking place online.
Not anymore.
According to a report from American Banker, face-to-face Bitcoin trading is booming in popularity and increasing the currency’s exposure. The demand for in-person Bitcoin exchange has so far spurred the creation of dedicated weekly meetings, larger conferences and professional trading services that curate small gatherings.
But what is the driving factor behind this transition? Is it a sign that Bitcoin regulation will come soon? Or does it indicate something deeper about the nature of the currency – and the Bitcoin phenomenon – itself?
Why Bitcoin Is Moving Offline
One of the biggest reasons for this development, the media outlet says, is that a safe, reliable online Bitcoin exchange hasn’t emerged. Popular players like Dwolla and Mt. Gox have been hindered by regulatory issues. Meanwhile proposed alternatives like the recently announced Coinsetter aren’t yet available.
Writer Jon Matonis said he is often asked by colleagues where the best place to buy and sell Bitcoin is, but that he changes his answer based on the needs of the individual. He advises serious traders to use both an international and domestic exchange, and casual users to use local, in-person trading services, as exchanges may have complicated registration processes.
Trading Bitcoin In Person Is A Social Outlet
So far, major Bitcoin trading events have been held in Los Angeles and New York. There, veteran Bitcoin traders and novices have met to talk, trade, and in some cases, enjoy refreshments. But, the report said avoid Bitcoin fans aren’t waiting for big events. Bitcoin trading sites that facilitate more personal meet-ups allow Bitcoin fanatics and newcomers an outlet to talk about the changing currency, even if they don’t conduct trading.
American Banked cited LocalBitcoins.com as one example of a person-to-person matching service that is encouraging Bitcoin trading. It’s already operating in 142 countries and 1,700 cities. The company has also opened up branded franchise exchange shops in select locations. LocalBitcoins estimates it facilitates up to 1,500 transactions a day and has 15,000 active users.
Bitcoin Is A Commodity, Not A Currency
Matonis suggested that it might benefit regulators not to think of Bitcoin as a currency at all, but rather a “math-based commodity” due to the fact that traders are the ones determining its value.
“In the general classification of commodity, Bitcoin’s trade is similar to any other collectible item, such as antique diamonds, celebrity autographs, moon rocks, Buddha figurines and baseball cards,” he wrote in the report.
Like these commodities, the report suggests, the currency’s value is intangible. And like unwanted baseball cards, their popularity and value could disappear tomorrow.
For more information on in-person Bitcoin trading, read the full report here.
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