Digital currency bitcoin is gaining a grassroots movement in the Bayou City, and I spent the evening with some of the people leading the charge.
At a coffee shop and wine bar off of Westheimer Road, 15 bitcoin enthusiasts chatted, swapped advice and networked with people interested in the concept.
Bitcoin, according to the Oxford Dictionary, is a digital currency that operates independently from a central bank. However, it’s important to note that the U.S. government establishes it as a piece of property, and not a currency, and subject to federal taxes. There are also bitcoin companies stock being traded on Wall Street.
So then what is it? Kevin Moore, president of Texas Coinitiative — a local nonprofit focused on educating the population on the benefits of bitcoin — says it’s more complicated than a simple definition.
“What we view of bitcoin and what we try and relate it to, it’s a currency, it’s a stock, it’s a property, it exists in all three of those facets. It can be all three of those and none of them, depending on how you use it,” Moore said.
The bitcoin community in Houston is excited. On June 27, the U.S. Marshals will be auctioning off more than 29,000 bitcoins seized during the Silk Road bust that brought bitcoin into the national spotlight. To clarify, 29,000 bitcoins translates roughly to $16.57 million. The value of bitcoin fluctuates with the market, and so, as of June 26, it was hovering around $571 each. While this auction is more pricy than most can afford — the minimum entry fee is $200,000 — the fact that it’s happening is significant, says local bitcoin entrepreneur Sheldon Weisfeld.
Weisfeld, the CEO of Houston-based CoinVault ATM, an ATM system meant for bitcoin, said this auction validates bitcoin in the eyes of the government.
“This sale clearly legitimizes the government’s respect that there is a real value proposition that bitcoin represents,” Weisfeld told me.
To Weisfeld and the others in attendance, this auction translates to a bright future. It shows the U.S. government is willing to play ball in the bitcoin community.
State and local governments are getting behind it as well. On June 2, the Texas Alcoholic Beverage Commission allowed bitcoin to be used in the sale or purchasing of alcohol. The next step is convincing bars and merchants that it’s a smart move to make.
The issue lies in educating the public on the benefits of bitcoin. Moore says a lot of the controversy surrounding bitcoin is because people don’t know what it is.
“It’s a form of trade, that’s all it is,” Moore told me. “And what bitcoin is, compared to any other new technology, it’s a way for things to become easier, period.”
The Texas Coinitiative is working with the businesses in Houston to educate them on the benefits of accepting the new technology and expects to see businesses signing up over the next few weeks.
The larger picture, however, doesn’t lie with bitcoin and a bar. One beer is 0.0088 bitcoin, and despite the fact that it’s all done digitally, it will still be difficult to convince a patron to switch from the dollar. However, where Jon Fry, a tax accountant who’s relatively new to the Houston bitcoin scene, sees potential is in international trade.
“It’s really opening up the possibility of giving small and medium sized businesses the ability to expand internationally at core cost,” Fry said. “I don’t think we’re there yet, but long-term value proposition, it really has a potential to bring a lot of businesses values in Houston.”
Joe Martin covers health care and technology for the Houston Business Journal.