Bitcoin caption. Photo courtesy: www.digitaltrends.com
‘This is the biggest idea since the Internet’: local bitcoin user says of digital currency
By Linda Hoang
Peter Dushenski has always considered himself a bit ahead of the curve.
He was an early adopter of Macs, getting into them at a time when “everybody used to make fun of Mac users.”
“Now you’d be hard-pressed to find a PC laptop on campus,” he says.
The 27-year-old technology enthusiast and entrepreneur believes a similar scenario will play out for his latest tech obsession: bitcoins.
Bitcoins are a digital currency and online payment network that is rapidly growing in popularity.
Dushenski believes bitcoins will change the world.
“I personally feel this is the biggest idea since the Internet itself,” he says.
“The Internet fundamentally changed the way we communicate with one another. It disrupted essentially every industry that it has come into contact with. Now what we’re seeing is the Internet is disrupting banking and the way we exchange value, the way we see value and the way we share value.”
Dushenski purchased his first bitcoin in April 2013.
Since then he’s launched a company called Bitconomy Ltd. that educates and helps people and businesses understand and incorporate bitcoin into their day-to-day lives and work. He’s also the founder of the Bitcoin Edmonton Meet Up (BEMU) group, a network of local bitcoin users who come together every three weeks to share ideas and raise awareness about the global online currency.
Peter Dushenski (@bitcoinpete) is an early bitcoin adopter & now educates, raises awareness & helps businesses understand and use bitcoins. Photo supplied.
The confusing currency has been making recent headlines, as more companies around the world start to accept bitcoin. The world’s first bitcoin ATM machine was recently opened in Vancouver. A University in Europe is now accepting bitcoin as tuition payment and bitcoins can also be used to pay for a space flight on Virgin Galactic.
I say bitcoin is confusing because the concept – and its implications – can’t be understood in one go.
It’s not easy but it’s not supposed to be.
“I have a good background in economics and technology and it still took me a really long time (to understand bitcoin),” Dushenski says. “That speaks to how important it is. If you could understand it, and could appreciate the implications right away, I don’t think it would be as important as it is.”
What it is and how it works
- A bitcoin (BTC) is an online currency that uses cryptography to secure transactions.
- Transactions are made across a decentralized global network of computers.
- 25 bitcoins (BTC) are created every ten minutes. There will only ever be 21 million BTC created.
- Bitcoins can be stored on hard drives, flash drives, desktops or smartphones.
- Each bitcoin has a unique address/code (cryptography).
- Bitcoin ‘wallets’ store collections of bitcoins.
- Bitcoins can be split into smaller units. A ‘satoshi’ is .00000001 bitcoin.
- Bitcoin launched in 2009.
- In late November, 1 BTC was trading for more than $1,000 CAD due to high demand and limited quantity.
- As the value of 1 BTC gets higher, more trades or purchases are being made with smaller portions of BTC.
- If you want to buy a bitcoin or a satoshi, you must either know someone who uses bitcoin and is willing to sell you one for a negotiated price, or you can trade with strangers on an online exchange.
- You can also win small amounts of bitcoins on various ‘free bitcoin’ / giveaway websites.
Click here to get the 101, 201, and 301 on what bitcoins are and how to use them.
Bitcoins are being accepted in more brick-and-mortar stores. In Edmonton there are three known companies accepting bitcoins.
Bitcoins and business
Locally, Dushenski helped set up Remedy Cafe to accept bitcoins in the summer. Remedy is believed to be the first physical store accepting bitcoin in Alberta.
Since then, an Edmonton-based camping and survival gear business has started accepting bitcoins, as well as the Somatics Institute School of Massage. There are still very few companies accepting the currency but more and more are starting to get on board. Dushenski says businesses who move towards accepting the virtual currency have a lot to gain.
“You can’t put a price on the amount of free advertising that is up for grabs if you say you’re accepting bitcoin. Just saying you accept it increases awareness and positions your company as a forward-looking business.”
There are also transaction cost benefits. Dushenski says while Visa and MasterCard charge high percentage fees for transactions, transferring bitcoins costs pennies.
“It transfers as quickly as an e-mail and for essentially no cost,” he says.
Find a list of online merchants accepting bitcoin here.
‘New asset class going viral’
There’s been a fair share of controversy surrounding bitcoin, along with a lot of scepticism.
The currency’s value is growing exponentially and that’s got a lot of eyebrows raised.
“A lot of people think this is a bubble and that it’s a very unsustainable rate of growth, when really what we’re seeing is an entirely new asset class going viral,” Dushenski says.
He compares it to a kitten video going viral. One week a video may have a handful of views, but by the next week it could have amassed more than 100,000. Does the bubble pop after the video goes viral? No.
“People will keep watching it just like people will keep using it (bitcoin) to the extent that they find value in it.”
There’s also a challenge of responsibility.
Becoming a bitcoin user means you must also act as your own bank, and be secure with how you store your bitcoin.
“I don’t think a lot of people are yet ready for that responsibility,” Dushenski says.
“If you forget your password, your money is gone. If you lose your flash drive or hard drive, and you don’t have it backed up elsewhere, tough luck. Bitcoin demands we are a responsible adult.”
You can expect to hear more stories of bitcoin users’ money being hacked, lost, stolen or forgotten, but don’t expect its popularity to slow down or the ‘bubble’ to pop any time soon.
The currency is becoming more widely accepted and for as long as there are users who believe bitcoin is valuable, and will buy and sell using the currency, then it will remain valuable and continue to grow.
Dushenski is at the forefront of bitcoin’s growth here in Edmonton.
He’s passionate and has made it his mission to raise awareness about the benefits of bitcoin.
“I believe this is an idea worth sharing,” Dushenski says. “I see huge value in this.”
Eventually everyone will be using bitcoin – similar to your Mac and PC story from earlier? I say.
“I can totally see that kind of thing happening,” he says.
Follow Dushenski on Twitter @bitcoinpete, learn more about bitcoin at his website bitconomy.ca, and attend the next Bitcoin Edmonton Meet Up.