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[Photo: Reinhard Hunger for Fast Company]

CoinSummit San Francisco, Day 2

CoinSummit is hosting a Bitcoin conference. Fast Company's Alice Truong will report live from the second day of the conference on Wednesday, March 26th.

Virtual currency Bitcoin has seen its share of ups and downs. After soaring past $1,000 a Bitcoin in the fall, the digital currency has dropped in value to less than $600--and its price keeps fluctuating.

Part of the reason for this fluctuation is that hackers are targeting Bitcoin exchanges, and their attacks have rattled consumer confidence. Japan-based Mt. Gox, which was the largest exchange until it declared bankruptcy in February, was brought to its knees after a heist involving 750,000 Bitcoins went unnoticed for years. 

All the while, a number of businesses have come to embrace the virtual currency, one of the most visible being, which recently saw $126,000 in Bitcoin sales in one day.

To help people better understand the virtual currency landscape, CoinSummit is hosting a Bitcoin conference at the Yerba Buena Center for the Arts in San Francisco, from which Fast Company's Alice Truong will post updates on Wednesday, March 26th. Stay tuned!

  • Day 2 of the CoinSummit kicks off with the panel Is Bitcoin a flash in the pan?
    From left: Andreas Antonopoulos, chief security officer of BlockchainJonathan Levin of Coinometrics; Susan Athey, a professor at Stanford; and moderator Nathaniel Popper from The New York Times

  • Panel 2: Bitcoin exchanges post Mt Gox-a new era
    From left: Jesse Powell, Payward founder and CEO; Bobby Lee, CEO of BTC China; moderator Steven Waterhouse of Pantera Capital Management

  • For a fireside chat moderated by Bloomberg's Brad Stone, right, Chamath Palihapitiya of the Social+Capital Partnership says he believes everyone should hold at least 1% of their assets in Bitcoin for investment purposes.

  • Remember when Warren Buffett told CNBC viewers to stay away from Bitcoin because the virtual currency lacks intrinsic value? Well, Blockchain's chief security officer Andreas Antonopoulos has this to say:

    "Dollars aren't backed by anything, and they don't have intrinsic value," Antonopoulos said from the second day of the CoinSummit conference in San Francisco. Instead, he said he considered the U.S. dollar a "Ponzi scheme fueled by the Fed--that's really risky. I'd rather put my money in Bitcoin instead."

    A crowd favorite at the virtual currency conference, Antonopoulos can at times come off as poetic when discussing Bitcoin. "Currency at its most basic level is a language that is used to communicate transfer of value," he says. "User adoption is what gives a currency value."

    Though regulation of the digital currency has been a popular topic among conference goers, he hasn't been shy about his views. 

    "We don't know what regulators will be asking for, but I know my answer: no."
  • Bobby Lee, CEO of the Bitcoin exchange BTC China, wants to clear up the confusion: "For those of you who think Bitcoin is illegal in China, you've got it totally wrong. Blame the media."

    Thus far, he says the country has classified Bitcoin as a virtual commodity, not as a currency. That means residents can buy and trade the digital currency, but don't expect any Bitcoin loans, insurance, or other types of financial products anytime soon.

    Lee says Bitcoin regulation isn't on the list of priorities for China this year, and that the country is "mentally deferring to the United States," looking to it for guidance as it determines how to broach this new form of currency.

    "Once the U.S. actually goes through with the process of stating how Bitcoin will be regulated in more clear terms, that's when many countries will follow," he says.
  • Some retailers have reported seeing spikes in sales once they began accepting Bitcoin, but according to some exchanges, it appears most people are treating the virtual currency as an investment vehicle.

    For the digital currency exchange Krakentrading volume indicates more people are investing--rather than spending--their Bitcoins, says Jesse Powell, CEO and founder of Payward. The company announced Tuesday it has raised $5 million in a series A round for Kraken, which in addition to Bitcoin also trades alternative currencies Ripple, Litecoin, Namecoin, Dogecoin, and Ven.

    In China, it's a similar story. "Bitcoin as a payment mechanism has not taken off yet, so all the trading volume of Bitcoin--the vast majority is in investment and speculation," says Bobby Lee, CEO of the Bitcoin exchange BTC China.

    Creator of alternative currency Dogecoin, Jackson Palmer believes the success of virtual currencies is based on its use. "It's all about active use," he says. "The digital currency that's going to win is the one that's going to be used."

    Though China classifies Bitcoin as a virtual commodity and not as a currency, Lee says he sees a future where exchanges or third parties will offer margins trading, leverage trading, credit lines, options, futures, and other financial products built on Bitcoin. 

    Steven Waterhouse of Pantera Capital Management said the virtual currency will enter the financial mainstream once Bloomberg terminals begin integrating Bitcoin charts and data. "Once Bloomberg publishes prices on Bitcoin and other digital currencies, that will enable a whole new class of users to get involved," he said, urging conference goers to lobby their Bloomberg sales representatives. "They're very driven by their clients' demands."
  • Image via Know Your Meme
    Bitcoin has earned a reputation as the currency of choice for drug dealers, money launderers, and anarchists. But that's not the case across the board for all virtual currencies. Just look at Dogecoin. 

    Built atop the Doge meme, an expressive Shiba Inu with entertaining monologues, Dogecoin is a friendlier, fuzzier digital currency that women and millennials have come to embrace. 

    "We have a lot more women in Dogecoin" compared with Bitcoin's core demographic of men, Dogecoin's creator Jackson Palmer said at the CoinSummit conference. "We also have a younger and more social media-aware demographic as well."

    Palmer, who works full time as a marketer at Adobe, said the currency is attracting a different subset because of Dogecoin's adorable mascot. "50% or more [of Dogecoin users] have had no prior experience with cryptocurrency," he say, adding Dogecoin "is more approachable" because people recognize the meme from their Facebook and Twitter feeds.

  • Next panel: Bitcoin for the masses - how to get Bitcoin in the hands of millions of people

    From left: Brock Pierce of Clearstone Venture Partners, Zach Harvey of Lamassu, Alan Safahi of ZipZap, and moderator David Lee of SV Angel
  • Did anyone at #coinsummit make it rain yet ?

  • Last panel of the conference: What are the barriers for merchant and consumer adoption of Bitcoin? From left: Tom Longson of Gogocoin, Vinny Lingham of Gyft, and moderator Luke Sully of PricewaterhouseCoopers 

    Overstock is the exception.
    Most merchants are still wary of accepting Bitcoin.

    "Most retailers don't care," said Vinny Lingham, CEO and founder of Gyft, an online gift card service. "The volume is just not big enough."

    This statement echoes earlier sentiments made by the leaders of virtual currency exchanges Kraken and BTC China about how Bitcoin is primarily bought and sold for investment and speculative purposes--not for everyday transactions.

    Linghan said media reports fheighten fears of the currency's fluctuations. For "people trying to use Bitcoin in their daily transactions--if they can get their hands on it--the volatility is a problem."

    However, he isn't in a rush to push Bitcoin to the mainstream. Instead, he hopes more investors hold onto Bitcoins long term to stabilize its price.
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