BEERS, BYTES, AND BITCOINS

BEERS, BYTES, AND BITCOINS

CHICAGO-On January 7th 2014 45 intrepid souls came in from the cryogenic freeze that was Chiberia and into the warmth of the cryptographic currency group The Chicago Bitcoin Meetup.   Currently sporting 350+ members the meet up group is organized by Joe S., a real estate investor and crypto currency “hobbyist”.   The gathering took place on the edges of the Lincoln Park and Lakeview neighborhoods at Atlas Brewing Company located at 2747 N. Lincoln Avenue.   

The evening’s festivities were organized and coordinated by Jonathan Solomon.  Jonathan, a former attorney, is the Founder/CEO of Chicago Mint.  Chicago Mint is a merchant payment company specializing in crypto-currency.   Due to time constraints,   Atlas was unable to setup the Bitcoin payment terminals for the acceptance of Bitcoin, Chicago Mint was.  As a kind of “hack” at the end of the night the evening’s participants took their bar tab receipts and presented them to Jonathan.  The participants then used their Bitcoin “wallet” application on their smart phones (wallet A) to transfer the dollar equivalent of BTC to Chicago Mint’s wallet (wallet B) using proprietary software on the iPad.   

/ht to Jonathan for taking the exchange risk, but for a guy that is “all in” on crypto currency I don’t think he minded holding onto the BTC.  I watched Jonathan process seven payments myself.  The average time for the BTC payment to go from wallet A, through the BTC system, and into wallet B was a mere five seconds. 

The meet up brought together people of all stripes, from people who were mining in the early days of Bitcoin to the curious “newbie’s”.   Many interesting folks were in attendance with some already up and running their own crypto-currency centric business’.  

One interesting fellow I met was Conrad Barski.  Conrad is, by day, a medical doctor who happens to be a software engineer; and a crypto-currency eBook seller by night.  Checking out Conrad’s site was the highlight of my night.  With his site cointagion.com a buyer can purchase a book “with your computer without touching your computer”, opening an account, or entering your email address. 

Huh?

How? 

You can find out by viewing Cointagion’s 35 second instructional video found here.   

WHAT THE DEUCE IS BITCOIN?  BITCOIN DEFINED

Bitcoin was invented as a peer-to-peer system for online payments that does not require a central authority or government. Since its inception in 2008, Bitcoin has grown into a technology, a currency, an investment vehicle, and a community of users. Right now, a single Bitcoin is worth about $800  the value fluctuates, sometimes wildly. There are 12.2 million Bitcoins now in existence.  The final number will be approximately 21 million with the last block distributed in the year 2140.  Bitcoin isn't regulated by any central bank, and is overseen and by the network of users and the Bitcoin Foundation.  For more information, Bitcoinsimplified.org is a good place to start.

Over the last three months the finance and technology news cycle has been “lit up” with news covering Bitcoin and other crypto-currencies, and the “run up” in the prices of crypto-currency assets. 

In case you missed it, the crypto-asset, Bitcoin, increased in value some 8000%.  Yes, you read that right.  If you invested $100 in Bitcoin at the beginning of 2013 at a price of $12.50 you would be left with a paltry eight grand.

THE CHICAGO GATHERING CONTINUED

This being Chicago there are many trader and ex-trader types all around the city and, sure enough, a few of us landed at the meet up (I’m a former derivatives trader).   One is my old friend and trading colleague from the CBOE, Neil Sy.  Neil graciously accepted the assignment of photographing the meet up and all photo credits for this article go to Neil.  Neil is the first professional photographer in Chicago to accept BTC.   You can view Neil’s work and portfolio here.  Another is Collin Palmer, a former colleague from the CME, who was demoing his concept for the Chicago Digital Currency Exchange.   Among these friends, I introduced myself to some new friends.  These folks shared some of their business concepts which ran the gamut from digital wallets to mining pools/guilds.    

The Chicago Bitcoin Meetup ended around half past ten with the participants packing up their wares, their smartphones, and bundling up to go back out into the sub-zero temperatures.  Their smartphone Bitcoin wallets a little lighter but all were full of good cheer from the beer, food, and lively conversation revolving around this dynamic Bitcoin invention.

What’s not so new and a story that’s as old as the hills is forgetting or misplacing your money!   Two of our fellow met up attendees left their credit cards at Atlas!  All had left but for Jonathan, his girlfriend Kate, & me.   Jonathan noted the names and emails have been sent. 

But it brings us to a point.   The credit card number is the secret that you use to spend from your account and the process of spending requires you to reveal that secret.  Something you don’t have to worry about with Bitcoin.

CHIBERIA A TRADITION UNLIKE ANY OTHER

 Chicago is the home of many financial innovations.  The formation and trading of agricultural futures starting at the Chicago Board of Trade (CBOT) in 1868.  The invention and trading of interest rate, currency, and stock index futures began in the 1970’s and early ‘80’s at the CBOT and the Chicago Mercantile Exchange (CME).   Not to forget options!  The Nobel Prize winning Black-Scholes model that unlocked a mathematical enigma relating to the valuation of option contracts was refined here at University of Chicago with listed option contracts trading at the Chicago Board Options Exchange (CBOE) starting in 1973.   

Bitcoin, in contrast, is a mere five years old this week.  Make no mistake; its impact is already deep.

With our rich history in financial invention and business development it’s surprising how far behind other cities, in relation to crypto-currencies and their adoption, we are here in the Windy City. 

Perhaps the venturing out in the sub-zero cold of a few bold Chicagoans to share their remarkable ideas around a captivating new creation can begin to change all that.

Gilbert “Gil” Valentine interest and investment in the Bitcoin network began in early 2011. 

He is a member of the founder’s team of Invincible Wallet®, a software technology company providing crypto-asset security solutions and products.   

He is also a consultant to the founders of Alpha Point LLC, a Bitcoin exchange software provider. 

Gil curates news and writes about crypto-currencies and crypto-assets at Great Lakes Chicago Bitcoin at glcbitcoin.com.