Bitcoin proponents have long touted the virtual online currency as the future of money. Now that’s in doubt. Mt. Gox, once the biggest bitcoin exchange, filed for bankruptcy in Tokyo Friday. As much as half a billion dollars could be gone in what the company says was a hacking attack.
But, to talk to bitcoin proponents, the fall of Mt. Gox is a good thing. Seriously. They say this is part of a natural shaking out in a new industry, clearing out bad actors so that the serious entrepreneurs can take over.
“Well, I think this is really the end to amateur hour,” says Jordan Kelley, CEO of Robocoin, which bills itself as the first bitcoin ATM.
He’s undeterred, actually glad for the bitcoin publicity this week. Businesses like his are banking on a long future for bitcoin. And, he says, despite Mt Gox, there remain good, safe places to buy bitcoins.
“You want to be buying all of your coins off trusted exchanges like Bitstamp or Vault of Satoshi,” he says.
Another believer who isn’t shaken is Nick Shalek, who say the Mt Gox collapse is diappoinging, but doesn’t change his longterm view on the value of bitcoin. Shalek is a partner at Ribbit Capital, which invests in both bitcoins and related companies. He says the next wave of entrepreneurs are far more serious about transparency and security.
“Bitcoin is another form of money, and there are many ways you could keep your cash secure,” Shalek says.
Proponents actually welcome regulation, which he thinks will give bitcoin more legitimacy and safety.
And, there are now ways to trade bitcoin derivatives, which some say could help investors hedge.
“If you think the price is going to go up, you can go long. If you think it’s going to go down, you can go short,” says George Samman, COO of BTC.SX, a bitcoin derivatives trading site.
But Samman is not taking any chances. He says when he looks at his bitcoins, he makes sure to take a photo of the computer screen with his smartphone, just in case.
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