Bitcoin is a nascent digital currency that people both love and fear. It can be easily transferred around the world but subverts established banks and monetary institutions. (We explained it here recently.)
Proponents say Bitcoin can empower poor people in developing countries who don't have access to banks and capital. Detractors say it makes drug deals and money laundering easier because no government can control it. Recently, the currency had been gaining steam as retailers -- including Overstock.com -- began to accept it in lieu of U.S. dollars.
Yesterday, however, the currency suffered a big blow because Mt. Gox, one of the major exchanges on which it was traded, was reportedly hacked, lost 744,408 of its users' bitcoins (worth nearly $367 million), and folded. Mt. Gox bought and sold bitcoin and held it for people in their accounts, or "digital wallets."
The event showed that bitcoin wealth can evaporate in an instant. Speculation grew that potential bitcoin users would be scared away. Some said the currency was doomed.
At one point, Bitcoins were selling for over $1,000 apiece; yesterday that figure had dropped to around $500.
But leaders of other remaining bitcoin exchanges quickly banded together and issued a statement insisting that all their their businesses were safe, and that bitcoin could still be an amazing currency system.
In Florida, some retailers say they still have faith:
The Advantaged Yacht Charters and Sales in Miami Beach, which recently did some deals in bitcoin, says it will still accept the currency.
"We are as of right now," said representative Kristie Coates. "It's definitely going to fluctuate, like any currency. It'll come back around."
John Varvarigos, owner of Wellington Florist, says he is "moderately techy" and bought a single bitcoin for $111 around August. He sold it for $700 -- a tidy profit -- around Christmastime.
"I've only done one or two transactions" for flowers in bitcoin, he says. But he will continue to accept it as payment. "It goes up, and it goes down. Mt. Gox was like the big original bank, and they went defunct. They went out kind of like Bear Stearns did and took everyone's money."
But he still believes in it. "The community of people who are into it is really cool."
And anybody wanting to go to medical marijuana school can still pay tuition in bitcoin.
Says Jeremy Bufford, founder of Medical Marijuana Tampa, "I absolutely still have 100 percent faith in bitcoin and the blockchain protocol. The announcement out of Mt. Gox today in no fashion changed my opinion about the efficacy and the underlying principles. We're going to continue to embrace digital cryptocurrency. You have to expect these kinds of developments. We are in a developing environment with digital currency as well as medical marijuana, so perhaps I'm well-suited for that kind of volatility. But we'll continue to accept it and continue to advocate for its broader use."
Send story tips to Deirdra.Funcheon@BrowardPalmBeach.com
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