Bitcoin has piqued the interest of everyone in Silicon Valley, many people on Wall Street, and now a handful of government officials who are trying to figure out ways to regulate the digital currency. At a hearing in New York City on January 28 and 29, investors and policy makers gathered to discuss the future of the virtual currency, at which investors have propounded upon Bitcoin’s legitimacy.
Reports quote the Winklevoss twins — two Silicon Valley frontrunners who invest in technology enterprises and have been headlining promotion of Bitcoin as a legitimate currency — as their enthusiastic selves with regard to Bitcoin’s place in the U.S. government:
“Bitcoin is appropriate for both federal and state regulation… We believe the current regulatory environment is sufficient and can be applied to Bitcoin,” says Cameron Winklevoss on behalf of himself and his brother Tyler.
The weakness of Bitcoin are hard to ignore: The currency just came under fire this week as the CEO of BitInstant — a start-up that provides Bitcoins in exchange for U.S. dollars — was arrested on money-laundering charges for being involved with currency transfer to people who are associated with the online black market trading site Silk Road. But Bitcoin’s existence as a legal entity is even more complicated to define because of its origins.
Since Bitcoin’s existence is rooted in computer software that was begun by a coder known by no other name than Satoshi Nakamoto, and is “regulated” only by online trade sites such at Mt.Gox and other start-ups, the parameters for regulating the currency are naturally mysterious to lawmakers. Bitcoin’s virtual nature is, in one sense, attractive for its independent and decentralized existence, but in another sense fearsome for those in regulatory organizations who seek to use the virtual currency for profit. You can buy sandwiches and beer with Bitcoin, but can you use it to trade? The answer is undetermined, although folks like the Winklevoss twins are doing their utmost to progress the evolution of Bitcoin into the mainstream.