Have you heard of Bitcoins? They are a form of digital currency that have made the news here and there, but hasn’t gone mainstream. However, that might be about to change.
If you aren’t familiar with them, here’s a brief introduction:
In June 2011, I wrote, Bitcoins: The Future of Money or End of the World? There’s no question that there is a brilliant design behind Bitcoins. In fact, the design is so brilliant that despite a few obvious problems, (ahem, liquidity), I couldn’t dismiss them. They truly could be the future of money.
If you read that article and bought some Bitcoins, you could sell them today for a nice profit. However, you would have gone on a roller-coaster ride watching about 80% of your investment disappear along the way. I like to judiciously speculate and even I can’t convince myself to buy them. I tried to the other day, but after they nearly doubled in a few short days due to this Cypress mess, I couldn’t pull the trigger. (Of course, I also like to buy things at a discount, so this sudden raise in rates made it the opposite of the “bargain” that I look for.)
Yesterday Expensify announced that they are officially taking Bitcoin as a reimbursement option for expense reports. This is kind of a big deal, because as corporations start to acknowledge Bitcoins, they become a more legitimate form of currency. So despite what Bloomberg said a week ago about it not being a currency, I wouldn’t bet against it.
I talked with CEO David Barrett of Expensify about their adoption of Bitcoin and why they’ve chosen to support it. If I was a real reporter, you’d probably see a quote here. Instead I’ll just paraphrase how it went, using my own interpretation (not David’s). Reimbursement via direct deposit is great because it only costs Expensify a few cents in transaction fees. Reimbursement to other accounts, such as Paypal are really tough, because Paypal fees eat up 3-5% of the reimbursement. As Expensify deals with more international clients, they have a need for a payment system that A) can meet their needs of servicing many countries and B) can keep the fees low. Bitcoin fits with exactly what Expensify is looking for.
I think many other companies will feel the same. That’s one of the big benefits of Bitcoin. However, again the downside was support for Bitcoin. I asked Barrett about that and he was quick to point out that while Expensify is clearly an early adopter, the path for Bitcoin’s legitimacy is already paved. Companies like CoinLab have been attracting venture capital funding in it’s quest to provide support tools for Bitcoins. Silicon Valley Bank will be holding Bitcoins for CoinLab.
So now it’s time for me to ask the readers? Is it time to start putting some of your money in this extremely speculative currency that may be where the future is going? Let me know if the comments.[Final Thought that Maybe Only I Find Interesting: I didn’t realize when I was talking with David Barrett that he was the CEO of Expensify. It wasn’t until I read this this article on the Verge (which has the real quote from Barrett) that I learned it. Someone less professional than I would probably do Xander’s imitation of the Snoopy Dance at getting the same level of access to the story as the Verge. Someone more professional than I would probably have not mentioned this…]