Bitcoin's promise: a financial revolution the web's been waiting for

Thu Mar 20, 2014 5:06pm EDT
 
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By Jeremy Wagstaff

(Reuters) - Bitcoin may not be the messiah of a new currency its hardcore fans yearn for, but it may herald the deeper financial revolution the internet has been waiting for.

While computers and smartphones have brought the web to more than a third of the world's population, online commerce still largely depends on a banking system that has changed little over recent decades, some of it relying on computer code written before the web was born.

The growing interest in bitcoin, a digital currency that requires no centralized body to handle transactions, is beginning to change all that.

"The rise of bitcoin has changed everyone's idea of what a good payment system should be," says Manu Sporny, CEO of web payments company Digital Bazaar, who is spearheading an effort to get the industry together to agree on standards for handling online transactions. "Bitcoin raised the bar, so everyone's got to come in and match that in some way."

A key moment, Sporny and others say, will be a meeting in Paris next week hosted by the World Wide Web Consortium, or W3C, one of the key bodies for setting internet standards.

Gathering for the first time to discuss web payment standards will be telecom operators such as Deutsche Telekom, Telefonica and AT&T, payment companies including SWIFT, PayPal and Gemalto, as well as the U.S. Federal Reserve.

Bitcoin can claim some credit for this buzz of activity.

Much of the focus on bitcoin has been on its meteoric rise in value - soaring from $30 a year ago to above $1,000 late in the year - which has been only slightly dented by the collapse last month of Mt. Gox, a leading bitcoin exchange, with half a billion dollars' worth of bitcoins missing.   Continued...

 
One of Bitcoin enthusiast Mike Caldwell's coins in this photo illustration at his office in Sandy, Utah, September 17, 2013. REUTERS/Jim Urquhart