Bitcoin believers: Why digital currency backers are keeping the faith

Bitcoin believers: Why digital currency backers are keeping the faith

On Wednesday nights, a disproportionately male, thirtysomething crowd jams into a spartan room in a small downtown Toronto building to plot the future of money.

The weekly “meet-up” is for people interested in bitcoin, the controversial Internet currency that supporters believe can displace much of the current financial system. Entrepreneurs, early adopters and the merely curious gather at Bitcoin Decentral, a Spadina Avenue building rented by Anthony Di Iorio, executive director of the Bitcoin Alliance of Canada. Similar centres have popped up in other cities in Canada and around the world.

“It’s like a cult,” consultant William Mougayar says over the din at the meet-up. “You say you are coming from this other [bitcoin centre], and they welcome you and give you a tour.”

Those who attend the meet-ups say that right now is a special moment for digital currencies – a moment akin to the early days of the personal computer or Internet, when an interesting bit of technology finally achieves the power to burst beyond a small group of enthusiasts and create new companies and new fortunes. Many of the regulars at the meeting are bitcoin evangelists, who are working flat out on new businesses, ranging from bitcoin exchanges to a new generation of digital currency technology, a kind of bitcoin 2.0.

But as bitcoin pushes for mainstream recognition, it is facing, for the first time, mainstream scrutiny – and many people don’t like what they see. The world’s largest bitcoin exchange, Mt Gox, collapsed in February after an attack by hackers, resulting in an estimated loss of about $500-million (U.S.).

Tax authorities, regulators and banks have begun to take a harder look at the digital currency, probing its potential for tax evasion and money laundering.