Bitcoin gold rush hits New York City

The Bitcoin Center New York City opened for business in January, 2014. Credit: Miles Dixon
The Bitcoin Center New York City opened for business this month. Credit: Miles Dixon

On a Monday evening in early January, a group of businessmen chatted enthusiastically at a Midtown Manhattan bar. The men weren’t talking about sports, women or vacation plans though — they are discussing Bitcoin, a digital currency that has accelerated in popularity during the past few years.

“My wife asked me last week, ‘What do you love the most, me or Bitcoin?’” one of the enthusiasts joked.

“If there is anyone’s ego I want to put money on it’s Kanye West’s,” another businessman said, talking about Coinye West, an alternative cryptocurrency that was supposed to launch this month but was stopped by the hip-hop star’s legal team.

Bitcoin was invented in 2009 by an individual or group – no one knows for sure – using the pseudonym Satoshi Nakamoto. The digital currency can be bought, sold or traded for services rendered.

“Bitcoin is intended to be something like a currency based on mathematics and cryptography, that works without any sort of central bank,” Columbia University computer science professor Steven Bellovin explained. He said that the first form of digital cash goes back 30 years, but that all attempts at digital currencies until now lacked a central authority to avoid double spending.

“Bitcoin has a different way to solve the problems of double spending, something called a public block chain: a sort of distributed, decentralized repository that records every transaction made with Bitcoin,” he said.

Bellovin calls it clever mathematics but points out concerns, including the risk of a person’s computer being hacked, the volatility of the value of Bitcoin – which started at less than a penny per “coin”, peaked at $1,200 per coin, and as of print time stands at $900 per coin. There is also a programmed limit of 21 million Bitcoins.

Despite the concerns Bitcoin has grown more popular in New York City. In January, the world’s first Bitcoin Center opened in New York City at 40 Broad St., just a short distance to Wall Street.

“I think Bitcoin is an honest currency compared to all the other ones. We’ve created $19 trillion out of thin air the past six years,” Bitcoin Center co-founder Nick Spanos said. “People store their labor and their life’s work in these pieces of paper, and then someone on a whim can make as much as they want.”

The Bitcoin Center is an educational institution dedicated to promoting awareness of Bitcoin and other cryptocurrencies. There are events and educational classes everyday, including free introductory lessons about Bitcoin, and leases out booths to people with businesses that accept Bitcoin payments.

Other New York City businesses have also started accepting Bitcoins. RentHop, an online apartment search marketplace, started accepting the currency in December.

“My goal is that I see this as a potential to lift real estate out of the stone age,” said Lee Lin, a RentHop co-founder. He said one of the perks of Bitcoin is that it doesn’t have fees like typical bank transactions.

And for those who want to whet their whistle using bitcoin, Old Man Hustle, a bar in the Lower East Side, started accepting Bitcoins as payment last year.

Michael Jarmuz, owner of the bar, said some of the people spending Bitcoins are just trying to impress their dates, but given its increasing value, everyone paying him in the currency “would be a dream come true.”



News
Entertainment
Sports
Lifestyle
Local

Earth Day New York food toolkits to help…

Hundreds of classrooms across New York City already have indoor container gardens that allow students to grow food right where they learn. But Earth Day…

Local

NYPD announces street closures for United Nations General…

The United Nations representatives are in town, and multiple city streets will be closed to traffic through Saturday, Sept. 26. The NYPD is urging those…

Local

Flood Wall Street protesters shut down lower Manhattan…

Riding the momentum of Sunday’s People’s Climate March, more than a thousand protesters filled Broadway in lower Manhattan on Monday, shutting down traffic. Flood Wall…

Local

Mayor pledges lower greenhouse gas emissions from New…

Just hours before the start of the People’s Climate March on Sunday, and two days ahead of the United Nations Climate Summit, Mayor Bill de…

Movies

Antoine Fuqua can kill someone with just a…

It's amazing what you can get done with the right tools. In designing the climactic battle in "the Equalizer," in which Denzel Washington's retired special…

Movies

Guess Ben Kingsley's worst filmmaking experience

Here's a fun game: Sir Ben Kingsley has made a lot of films since "Gandhi" in 1982, but at least one of them was a…

Books

Does Lena Dunham have any secrets left?

Get a sneak peek at her new book to determine if it’s worth the read.

Movies

List: David Bowie — Great (cracked) actor

With the documentary "David Bowie Is" hitting theaters, we round up his work as a terrific screen actor, in films like "The Prestige" and "The Hunger."

NFL

Jay Cutler takes Marc Trestman's coaching to heart

While Jay Cutler turned to an autobiography on the man who would be his head coach, Trestman had personal experience with the player.

NFL

Jets vs. Bears: 3 things to watch

Jets fans likely chalked up Monday's matchup with the Bears as a loss when the NFL schedule came out. But given their team's play so…

NFL

Rashad Jennings carries Giants in first win this…

Rashad Jennings, who came to New York from Oakland last year, by way of Jacksonville, was highly coveted this offseason by general manager Jerry Reese.

NFL

3 things we learned as Giants pick up…

The Giants picked up their first win of the season over the Texans.

Education

Here are this year's most creative college application…

The college application essay is one of the only times during the admissions process where a student can showcase his or her personality. While many…

Education

Your older siblings probably had a big impact…

As many high school students agonize over where to go to college, it turns out they turn to a very familiar source for advice and…

Food

Now you can eat Momofuku while you work

Now you can eat Momofuku at your desk

Education

4 ways to help at-risk high school students

Each year, a reported 1.3 million high school students drop out of school, a number so high that many experts say addressing it is one…