Bitcoin investors enthusiastic; the public, well, not so much

By

Published:

 

SAN FRANCISCO — While hundreds of investors and entrepreneurs assembled here to talk about ushering bitcoin into the mainstream, a poll released this week said most Americans remain distrustful of the digital currency that is not controlled by any government or bank.

According to a survey by market research firm Harris Interactive, just more than one-tenth of adults in the U.S. who know about bitcoin say they would invest in it. The more people know about bitcoin, the less they trust it, according to the December survey of 2,000 adults. People in the Western U.S. knew the most, yet were more wary of bitcoin than any other region — just 7 percent would invest in it over gold, compared to 13 percent across all respondents.

But at CoinSummit, a two-day conference to discuss bitcoin and its future, enthusiasm for the digital currency was everywhere.

"It's as bulletproof as anything I have ever seen," said Marc Andreessen, founder of venture capital firm Andreessen Horowitz.

The firm has invested about $50 million into bitcoin-related projects, and is eager to invest millions more to build a robust bitcoin portfolio, Andreessen said Tuesday. The firm was a lead investor into San Francisco's Coinbase, a digital wallet to store bitcoins in the cloud.

Bitcoin is a virtual currency and payments network that was created in 2009 by a mathematical formula. The total amount of bitcoins that can be created is capped at 21 million, and bitcoin can be bought on global Internet exchanges.

No company, government or organization controls the currency, and no traditional banks are involved in any transactions. On Tuesday, the Internal Revenue Service announced it would tax bitcoin as property and not recognize it as legal currency.

Last month, the world's largest bitcoin exchange, Japan-based Mt. Gox, filed for bankruptcy after saying it had lost more than 750,000 bitcoins — and then found 200,000 of them in a forgotten wallet.

And Vircurex, an exchange and trading platform, announced Monday it would halt operations after hacking incidents last year depleted users' accounts, and Vircurex was left to cover the loses.Supporters are pushing for more ecommerce companies and retailers to accept bitcoin as payments.