Experts elucidate Bitcoin currency
April 8, 2014
The new-age digital currency Bitcoin has been making waves in recent weeks, grabbing headlines since Newsweek’s legally contested outing of Bitcoin’s alleged founder Satoshi Nakamoto and the roughly $400 million implosion of the world’s largest Bitcoin exchange.
The NYU School of Law hosted a symposium on the often misunderstood currency in conjunction with NYU Law’s Classical Liberal Institute and Federalist Society.
Bitcoin, an open-source, non-government-backed currency, has rapidly expanded. In the space of a few years, Bitcoin has transformed from a fringe element into a currency and services market worth around $6 billion.
NYU’s conference on the mercurial currency featured two panels. The first panel, “Bitcoin’s Legal and Policy Issues,” was moderated by Bloomberg News reporter Carter Dougherty and led by Jerry Brito of the Mercatus Center at George Mason University, John Collins of the Senate Homeland Security and Government Affairs Committee, Brian Klein of Baker Marquart and the Bitcoin Foundation, and Reuben Grinberg of Davis Polk & Wardwell LLP.
Topics ranged from Bitcoin’s role in prediction markets to Bitcoin’s complicated legal compliance and regulatory environment. The discussion also highlighted the potential for money laundering and the financing of terrorism facilitated by the virtual currency’s anonymity.
Brito said Bitcoin’s role in prediction markets is a more accurate alternative to polling, which could potentially be used to predict the outcome of political events and product launch outcomes.
“[The Bitcoin prediction market] allows people to bet on the result of an event and, more importantly, aggregates the belief of a market that the outcome of an event will take place,” Brito said.
The second panel, “Bitcoin’s Business and Economic Issues,” was moderated by CNBC’s Sara Eisen and included Nicholas Colas of the BNY ConvergEx Group, Steven Englander of Citigroup, Marwan Forzley formerly of Western Union Digital, Antonis Polemitis of Ledra Capital and Alex Waters of Bitcoin startup CoinApex.
This discussion centered on Bitcoin’s potential to become a major world player in transactional services and to move the worldwide currency dynamic away from government-backed money like the U.S. dollar.
While the panelists agreed that a Bitcoin holds no intrinsic worth, Polemitis said that as more people use Bitcoins, the currency becomes more valuable and has the potential to create new markets.
“If you can imagine even one usage case for Bitcoins … that’s going to create a market, that’s going to create a price,” Polemitis said.
Klein said although Bitcoin is still a nascent technology, it is advancing faster than the government is able to regulate.
“Bitcoin operates at [an] incredibly fast speed,” Klein said. “It’s like the Internet.”
First-year law student Max Raskin, who helped organize the conference, is a proponent of Bitcoin.
“Because Bitcoin sits at the intersection of technology, finance and political economy, it attracts a wide array of individuals with different perspectives and motivations,” Raskin said. “And I wanted to bring this multifaceted discussion to NYU Law.”
A version of this article appeared in the Tuesday, April 8 print edition. Rahul Krishnamoorthy is a staff writer. Email him at [email protected]