Bitcoin madness at SXSW 2014

Journalist:
March 12, 2014
Bitcoin was well represented during the 2014 SXSW convention.

SXSW, also known as South by Southwest, is a yearly gathering where every ‘cool’ technology company tries to gain some mainstream media attention. One would think Bitcoin would be well represented over the past years, but the virtual currency acted merely as an underdog, until this year.

Bitcoin-crazy events

The 2014 edition seems to be a turn point for Bitcoin, as it seems harder to find a booth where the crypto isn’t being discussed at all. Aside from the official events where Bitcoin was a subject at SXSW’s largest venues, it was also the buzz at several after-parties that had all the high-profiles from the tech world in attendance.

So what does this do for Bitcoin? The prime example is last year’s informal acceptance of the currency by the Treasury Department. This happened soon after SXSW’s 2013 edition, and it helped send the value of Bitcoin on a rollercoaster ride. During SXSW, the coin was valued at about $50, where after the Treasury Department’s hearing it soared up to more than $250. Obviously, the way up was paired with some crashes as well, but at a steady value of little over $600 right now, it’s clear that Bitcoin made good use of the positive attention. Even more so when you look at the recent negative news regarding Bitcoin, it seems that people are reacting to messages of optimism. That is an important influence on Bitcoin’s long-term viability.

Dreaming big

The techies at SXSW clearly weren’t surprised by all the BTC frenzy. They’re fascinated by virtual currencies and are dreaming of a world with broad applications for it.

“Anyone who has any interest in technology has to be interested in this,” said Russell Castagnaro, who was attending his second SXSW for his job with the Hawaii Information Consortium. Castagnaro was seen at many of the Bitcoin events. He hopes that governments will begin to use the ledger that is a part of the Bitcoin system to transfer property and make payments easier.

Another interesting matchup was at an event that wasn’t even specifically about Bitcoin. A panel discussion on “The Future of Money”, hosted by Yahoo, had one panelist from PayPal and another one from BitPay. BitPay is a company that enables merchants to accept cryptocurrency payments, with some big names on its list.

Next up was rapper Nas, who is known to be a firm believer and investor in Bitcoin. He started talking about the currency during a panel discussion that featured venture capitalist Ben Horowitz. Horowitz is co-founder of Andreessen Horowitz, a firm that has invested about $50 million in Bitcoin-related start-ups. During the discussion, Horowitz called Bitcoin “the Internet of money.”  Nas and Horowitz also recently invested in Coinbase, another Bitcoin company. Coinbase founder Fred Ehrsam was also found at the gathering, stating that “once you get people talking about this, you can’t get them to talk about anything else.”

From zero to hero

Bitcoin entrepreneurs like Ehrsam and many others made a quick rise to stardom. A year ago, Coinbase was barely up and running. This year, at his first SXSW, Ehrsam was a main speaker on Monday afternoon in one of the largest venues. On top of that, he was able to gather a large crowd, showing once again how much interest there is in cryptocurrencies.

During these sessions, Ehrsam, and many others, were continuously asked to talk about the scandals that came up regarding Bitcoin, the Mt. Gox disaster being the number one question. People seem to be skeptical about Bitcoin, but curious at the same time. They believe in its strengths while not shutting their eyes for its weaknesses. “This is a healthy approach, people are willing to accept Bitcoin even after hearing some horror stories over the past weeks. I’d say this is really positive news for cryptocurrencies as a whole.”, a Los Angeles entrepreneur stated after Ehrsam’s session.

Ehrsam argued that Mt. Gox was a company that used Bitcoin, but it was not important to the underlying decentralized network that Bitcoin runs on. As a result, he said, its collapse should not threaten the basic technology that was invented in 2009 to allow digital money to be moved around the Internet. Many of the Bitcoin start-ups at the conference were pitching services that would make virtual currency accounts more secure with things like multiple-signature capabilities.

Bitcoin fans are hoping that the events at SXSW will help broaden the acceptance of virtual currencies beyond the early adopters and speculators who have driven many of the price moves until now. In this fast-changing crypto business, who knows what next year’s SXSW will mean for Bitcoin…

Christoph Marckx @cryptomaniacs

Internet addict and virtual currency aficionado living in Belgium. I work in a school, where I am responsible for every computer and the entire network that keeps our students connected to the world. I love cryptocurrencies, mostly because it gives us a chance to take back our freedom. If we do this right, there are exciting times ahead!