It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
LONDON (Reuters) - Financial traders have a new toy: Bitcoin, a digital currency variously dismissed as a Ponzi scheme or lauded as the greatest invention since the Internet.
Unlike conventional fiat money and other digital currencies, Bitcoin runs through a peer-to-peer network, independent of central control. Bitcoins are currently worth $4.88 each on online currency exchanges, where they can be bought and sold for about 15 world currencies.
Users - an odd assortment of uber-geeks, anarchists, libertarians, scammers and forex traders - sent about $4.3 million worth to each other in the last 24 hours.
Banking and payment expert Simon Lelieveldt believes they are living on borrowed time.
"There is always a power base underlying a currency," he said, speaking at the Digital Money Forum in London in March.
WILD WEST FINANCE
He is not alone. Workers at Morgan Stanley and Goldman Sachs in London and New York have been visiting online Bitcoin exchanges as often as 30 times a day, according to documents seen by Reuters. Neither bank wanted to comment.
Employees at almost all the major international banks and numerous trading and investment firms have shown interest.
Bitcoin has become the Wild West of finance, with a proliferation of websites offering loosely regulated replicas of the services familiar to those in the financial industry.
There is a Bitcoin stock exchange, where companies can make initial public offerings and pay dividends in Bitcoin.
One website offering Bitcoin options trading was ‘listed' this month for an implied valuation of half a million dollars.
THE ANTI-BANK SYSTEM
Its popularity with financial professionals highlights an irony at the heart of the Bitcoin usership; suspicion of the banking system is written into the program's DNA.
It was released in January 2009 by a developer using the probable pseudonym Satoshi Nakamoto. Embedded in the code of its first block of transaction history are the words ‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks'.
This was a way of time-stamping the first Bitcoin transaction, but also a clue to the developer's motivation.
WHAT IS IT FOR?
The Greek owner of an island bar and restaurant who accepts payment in Bitcoin alongside euros told Reuters he liked the currency because it was the opposite of a banking system.
"I don't put money in the banks," said Gerald, who did not give his surname. "I trust the euro as a note, but I don't trust banks. I don't want them making money out of my earnings."
Digital money consultant Jon Matonis, former head forex trader at Visa, said Bitcoin was a natural fit for societies that prefer cash payments.