The North American Bitcoin Conference brought an international crowd of thousands to Miami Beach. The two-day gathering, on Jan. 25 and 26 at the Miami Beach Convention Center, featured discussions on regulating the digital currency, advice for startups and continuing to educate potential users on what Bitcoin is.
Lawyers and business experts in suits mixed with entrepreneurs and tech-savvy developers in graphic T-shirts and sneakers to debate the future validity of Bitcoin and to discuss whether it should be regulated by the federal government. While many supporters of the currency back it because it’s decentralized and not tied to financial entities, many on the business side recognize the inevitability of further intervention.
“Regulation and tax laws are not going to go away; they are an unavoidable part of the world in which we want to bring Bitcoin,” said Moe Levin, organizer of the conference. “We need to work with regulators and respect tax law for the currency to be trusted by governments and in turn to be accepted by the public.”
Bitcoin’s perception as being used mainly for illegal activity was discussed at length. Carol Van Cleef, a partner with Washington D.C. law firm Patton Boggs, said that despite the attention the currency’s received most people in the financial world only have a cursory understanding of Bitcoin.
“What the banks and the bank regulators know after two years of intense publicity is that Bitcoin is used by criminals,” said Van Cleef in a panel discussion.
Van Cleef will be among a group of witnesses and panelists at public hearings hosted this week by the New York Department of Financial Services, that will discuss regulation of digital currencies.
The hearings come directly after charges were announced on Monday against Charlie Shrem, the co-founder of the Bitcoin Foundation, and Robert Faiella, a Bitcoin trader, for allegedly working in a money laundering scheme to sell over $1 million to shoppers on the digital black market site Silk Road.
Jacob Farber, senior counsel with Washington, D.C., law firm Perkins Coie, said at the conference that there’s no denying the illegal activity done with Bitcoin, but all the negative attention won’t be a “death knell.”
“I don’t want to dismiss the problems, and a lot of education still has to happen with the regulators, but I don’t think we have to worry about Bitcoin going away here in the U.S. because somebody decides it’s too big a risk,” said Farber.
Many startup companies like Blockchain and GoCoin, who handle Bitcoin wallets and help businesses accept virtual currencies, recognize the importance of regulation but want to eventually operate exclusively in Bitcoin. Alyson Margaret, the social outreach expert for Blockchain, said she and her co-workers are actually paid in Bitcoin (although they are still tied to the dollar).
“We’re one-hundred percent behind the currency and we see a future in it, so that’s why we’re paid in it,” Margaret said. “For us it’s a benefit when any businesses want to accept Bitcoin because then we can use our bitcoins day-to-day.”
And moving forward, many at the conference agreed that educating consumers would be a necessary step in 2014. Paul Vernon, the founder of Delray Beach-based startup Cryptsy, an online exchange for alternative virtual currencies, said that the currency has to move beyond its tech savvy supporters and to a wider audience.
“Making tools that allow non-techie people to get into this ecosystem is going to be the biggest thing,” said Vernon.
Levin plans to organize the next international Bitcoin conference in London. However, he and others, like BitPay founder Anthony Gallipi, said Miami will be a player in the future. BitPay was a sponsor for the conference and recently partnered with TigerDirect, allowing the Miami-based business to accept Bitcoin.
“Miami is an amazing city for international business, you can’t do business in Miami without having European or Latin American involvement in what you do,” said Gallipi.