Update: Can St. Louis Capitalize On Bitcoin?
Last month we spoke with two St. Louis businessmen who completed a Bitcoin transaction worth $3,000; Michael Huber of Paradigm New Media and Vance Crowe of Articulate Ventures. Crowe is a proponent of the digital currency, and wants to see St. Louis emerge as a forerunner in the field.
“It’s been an exciting ride,” Crowe said. “Watching Bitcoin come into my account, and then I just held onto it for a while and watched the news. And upon the news that Overstock.com would accept Bitcoin as payment, just last night I was able to sit at my computer and use Bitcoins to purchase a dry erase board.”
Despite the ephemeral nature of a currency without physical form, Crowe is confident in its security.
“When I was buying with Bitcoin yesterday, I didn’t have to enter any credit card information. All I had to do was send Bitcoin to their public address and they are going to ship me a dry erase board to my house. There is no vulnerability in that transaction to have my data breached in the way it could with a credit card.” Crowe said.
“Part of the security aspect of this is the transaction is not reversible,” Bitcoin miner Rob Long said. “So if you buy something with a credit card, up to 90 days later you can call up the credit card company and say stop that payment...So they need to have your address, your contact number. They need a really good indication that you are who you say you are. But with Bitcoin, it’s not reversible…So you don’t need to collect all of this extraneous information.”
Long is a big data engineer at Monsanto who mines Bitcoin in his spare time. A Bitcoin miner, Long said, does mathematical computations to break up blocks of code into useable Bitcoin. In turn, he receives Bitcoin as payment.
According to Long, Bitcoin transactions can’t be diverted by cyber thieves because Bitcoin is “mathematically secure.”
“It works in the same sort of mathematical structure that public/private key cryptography is. And that’s the basis for all secure connections on the Internet. So there’s basically two halves of a key and you are the only person that controls both of them. You give your public one to everybody else, and only your private one can actually unlock it,” Long said.
The same mixture of mathematics and computer code that Long says makes it so secure, also makes Bitcoin difficult for the average consumer to understand and use. But Crowe sees that as an opportunity for St. Louis.
“If you’ll remember when the Internet was coming of age, at first it was really difficult for people to use and only computer programmers could. But it also provides opportunities for people to simplify it and make it easier for people like you and me. Then they can make money off of solving people’s problems about how do I use Bitcoin... I think St. Louis should look at this as an opportunity. There are computer programmers here that could be finding ways to make Bitcoin simpler for people like you and me,” Crowe said.