This week, the U.S. Congress is taking a hard look at Bitcoin.
Companies around the world are beginning to accept payment in this cyrptocurrency and the market is driving this currency rather than a bank of government. What is it about Bitcoin that makes it so unique? Emmanuel Abiodun of Cloudhashing.com discusses this decentralized, peer-to-peer and strictly deflationary system.
Kurt Wallace for Rare: Bitcoin shot to 900 dollars this week. Fed Chairman Ben Bernanke said it may hold long-term promise. Congress is now looking at Bitcoin. Naysayers suggest that Bitcoin doesn’t have a strong commercial market presence and that stops it from going mainstream. But what about the nature of Bitcoin? Decentralized, peer-to-peer, and it is limited to only 21 million Bitcoins that will ever exist, unlike fiat currency.
Here to discuss is Emmanuel Abiodun. He is the CEO of cloudhashing.com. And Emmanuel, it’s good to have you with us.
Emmanuel Abiodun: Hey, thanks for inviting me again.
Kurt Wallace for Rare: Bitcoin is a crypto-currency. It’s a digital currency. And people that don’t really understand Bitcoin may be in the dark and not really get what we’re talking about, here. Let’s go ahead and explain what a Bitcoin is, and how many Bitcoins are there in existence, at this point?
Emmanuel Abiodun: I think today, around about, 12 million Bitcoins in existence. Now, there are only ever going to be 21 million Bitcoins in existence ever. Now, that makes it a deflationary currency. If I go back to your question — as to what exactly is a Bitcoin?
Bitcoin is the world’s first decentralized digital currency. What does that mean? It means it’s a currency that has no central government. No central control. And nobody at any given time has sole control over its operation or its governance. So a great thing about that is Bitcoin is a real, true-market instrument whereby it’s governed by market forces so, if I’m willing to pay $10 for a Bitcoin, after a price of Bitcoin, if I’m willing to pay $100 for Bitcoin, that’s a price of Bitcoin. It’s not manipulatedby any entity. It’s based on supply and demand, which is a way it should really be for currencies. Now, Bitcoin has a massive benefit that it’s online.
So, you can send Bitcoin to anyone in the world, without the need for a bank or without showing any kind form of I.D. or having any form of affiliation with any kind of credit company that would issue you credit. Now, think about what that will do for affluent countries, what people don’t generally have credit cards and if they have Bitcoin, they can now do commerce with anyone in the world with little or no limitation whatsoever.
Now, to bring it back — to go further on to what Bitcoin truly is. Now, Bitcoin allows two people to exchange value within themselves without the intermediary of a bank. That is done cheaply and effectively and very quickly. To give you an example, we purchased hardware last week using Bitcoin. Now that transaction is going to take me less than ten minutes. The person we paid for the hardware received the funds was able to complete the UPS order and give a subtracted number very, very quickly. Was, if it we had to wire that money, you could be talking two to three days. Think about what that can do for international finance.
Now, that is what Bitcoin is. Now, the benefit again, is it’s a deflationary currency, with a U.S. dollar earning that kind of currency. The governor in any way or any kind of will can decide, okay, we want to print more money to pay the banks debts or to do whatever we feel — build roads or pay ourselves a higher salary. Bitcoin, you can’t do that. Bitcoin is, in a sense, it’s controlled. The number of Bitcoins creates in a day is actually a fixed number. It’s controlled by the network itself. So, what you actually have is the value of Bitcoin increases as more people get involved. So, it’s not printing money to decrease the value. It’s actually getting more people involved and increasing the value of Bitcoin. That’s as massive, massive benefit in terms of upside for anyone who’s willing to invest in a Bitcoin.
Kurt Wallace for Rare: The U.S. Senate, U.S. Congress, is now looking at Bitcoin as a real option of a currency in the United States. What does this say to the United States, the people and the rest of the world?
Emmanuel Abiodun: I think that if there’s anything that you can take away from that hearing is that, you know, there isn’t a certain perceived hostility towards Bitcoin as first seen by the outside world. I actually think it was a positive hearing, and I think it’s progressive, and I think it’s kind of in line with some of the things we’ve heard from Europe. For the guys in America, I think it’s good for them to have finally some form of discussion around Bitcoin. So, all the money that’s parked on the side, waiting to get in, can actually look to get involved; whereas before, without any form of guidance or any form of government stance on it, it made it very difficult for people to make a sound, investment decision. But you’re seeing that — a lot of preemptive money — going into Bitcoin and right now, I’ve actually been to a few financial institutions on Bitcoin as of recent — in New York and in other places, and there’s a massive, massive interest from alternative investment sources and even those who are heavily invested in gold and look by the way of diversification into crypto-currency as a whole.
Kurt Wallace for Rare: Well, there were naysayers that, you know, they’re suggesting that there isn’t the marketplace which actually isn’t — you have to have that — you have to have companies and retail outlets, accepting Bitcoin — in the United States, that is true. But that’s not actually the case around the rest of the world.
Emmanuel Abiodun: I think there are a lot of businesses actually taking up Bitcoin. I’ve actually had private meetings with some business owners who are talking about adopting Bitcoin and dropping sources like Western Union as a means of collecting funds from all around the world. Again, if we look at Bitcoin, it started in 2009 and went on to 2013. Some of these things do take time — you need to have adoption and adoption sometimes takes time as trust settles in. And having comments like what we’ve had recently from the Fed would only further strengthen the case of Bitcoin and generally, it’s actually going to draw attention to those who aren’t fully aware of the properties of Bitcoin.
So, I think it’s a progressive thing. And there are many businesses online today that accept Bitcoin. Now, I’ve had meetings with a few hosting companies who actually want to adopt Bitcoin as a means of billing for their customers as it kicks out the credit card companies and the chargebacks that they have to deal with. So, yeah, I do believe it’ll take time, and I do believe it’s actually progressing in the right way.
Kurt Wallace for Rare: How does a company like yours help individuals get into Bitcoin — find an entry point — into owning actual Bitcoin?
Emmanuel Abiodun: Yeah, some clow-bashing – the sole purpose of clow-bashing – is to make Bitcoin easy, making it accessible to everybody. Not just Bitcoin but also Bitcoin mining, so we’re actually a large proponent of the whole Bitcoin network. What we do is we actually process the Bitcoin transactions — so if someone’s going to make a payment between person X and person Y — we’re the person in the middle helping to verify this transaction, ensuring everything’s that safe and secure. So what we do is people generally partner with us — they buy a mining contract as we call it. That in it wasn’t a prophet from the processing of these transactions; we’ll let the big version of either but without the actual debt involved. So, we essentially today have about 2,000 to 2 and a half thousand customers who sign up with us on our earning Bitcoins on a day-to-day basis. So, rather than go to an exchange to access to buy Bitcoin, you generally would buy a contract and that would earn you Bitcoin over a period of time. With the increase in Bitcoin recently, we’ve actually had customers who bought a contract with us from September — a business contract — and actually have made a return investment within a period of a month. Now, that’s unprecedented in many industries and that’s Bitcoin as a whole. I do believe a lot of it is a share from new investments and, you know, a lot of it from China. But I do believe at the same time, it’s also a good sign of the strength behind Bitcoin from the institutional investors who aren’t seeing a lot more volume from today, especially off market deals where people are looking to buy 2 to 3 million dollar weather Bitcoins without having to go to an exchange to move the price. We facilitate those kind of transactions.
Kurt Wallace for Rare: Emmanuel Abiodun, thank you very much for being with us today on Rare.
Emmanuel Abiodun: Thanks very much.