Peter Vessenes

A new foundation will seek to rally support for Bitcoin, aiming to overcome the challenges faced by the digital currency and boost its use in the long run.

Peter Vessenes, the entrepreneur behind the CoinLab incubator in Seattle, is the executive director of the newly launched Bitcoin Foundation.

“My hope is that the Bitcoin Foundation will be the organization that focuses and unlocks all of your energy and talents towards promoting Bitcoins, protecting them, and increasing their legitimacy through standardization,” writes Vessenes in an introductory letter.

The foundation’s goals for 2013 include running a Bitcoin Conference in the spring of 2013 in Silicon Valley; publishing a set of best practices for businesses using Bitcoin, and creating a certification process for Bitcoin businesses.

“As the Bitcoin economy has evolved, we have all noticed barriers to its widespread adoption—botnets that attempt to undermine the network, hackers that threaten wallets, and an undeserved reputation stirred by ignorance and inaccurate reporting,” reads the foundation’s site. “To us, it became clear that something had to be done. We see this foundation as critical for bringing legitimacy to the Bitcoin currency. Only then can we increase its adoption and positive impact on the world’s finance.”

PreviouslyTech vets explore potential of digital currency, try to avoid pitfalls

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  • Christopher Budd

    I think they’re missing a couple of somethings in their list of challenges.

    First, explaining what problem BitCoin really solves. Second, explaining how they’re a real currency and what controls and protections they have as a real currency.

    My understanding is they want this to be a true digital currency. That’s well and good but first why does the world need BitCoin in addition to Dollars, Euros and other world reserve currencies? And if it’s a real currency, what are the protections and controls in place around fraud, counterfeiting, speculative manipulation etc?

    What’s going on with the Euro right now shows that a currency is a very, very serious thing with huge ramifications and so requires a very serious foundation of trust and fiduciary responsibility and controls.

    BitCoin seems neat and all, but it seems like the Esperanto of currency. A nice idea built on great ideals but has little practical use or traction in the real world.

    • Vroo (Bruce Leban)

      Love the analogy to Esperanto! Although at least Esperanto was trying to solve a real problem.

      One of the criticisms of fiat currency is that it represents nothing of value. BitCoin represents even less value than that. The work expended in the past to generate it has no present value, and it has no intrinsic value like gold or silver does.

      • Christopher Budd

        Thanks for the kind word. That’s an interesting point about intrinsic value. It does raise another point about BitCoin and currencies in general: we’re living in a time of volatility and uncertainty around currencies around the world (will the Euro be here in 10 years? will the dollar collapse due to staggering debt? will the US return to the gold standard)?). Many of these are very unlikely, but the fact that they’re even questions right now shows how much uncertainty there is around currencies. And that, I’d argue, puts more pressure on something like BitCoin to explain its valuation, value proposition and protections (i.e. I’d love to hear more about the counterfeiting protections Peter referenced).

        And with that, I’m going to go watch To Live and Die in LA now! :)

      • Sam


        I’d argue that Bitcoin is addressing a real problem. Perhaps even two problems.

        The first problem is this: foreign currency exchanges, coupled with the banking industry, make it very inefficient to transfer money internationally.

        The hefty fees and unnecessary delays add costs rather than value for people who are trying to participate in the global economy. Bitcoin helps empower them to do so.

        With the technology available to us today, it simply should not take several days to make an international transfer.

        Think about the potential for Bitcoin to help upstart nonprofits in less developed countries. What bank would help work with them to open an account? How much of a fee will they have to sacrifice for each of their donations?

        The second problem: available currencies are necessarily linked to the government or governments that issue them.

        In light of your comment about gold, you may be more interested in this point.

        Just like gold, Bitcoin is a non-political form of money. No government controls it or can print it. It cannot be inflated at the wil of an authority.

        Also like gold, Bitcoin has a fixed supply (or will, once its “mining” period ends.)

        But unlike gold, Bitcoin is inherently easier to exchange and more readily divisible. This makes a much better medium of exchange in the era of ubiquitous computing.

        Do these points make sense?

        I’d also like to add that I am not personally invested in Bitcoin, nor have I ever been.

    • Peter Vessenes

      Christopher, I respectfully disagree with most of your closing points. Over $3mm USD a day (that sounds like over $1bn a year to me) are transfered using Bitcoins right now. Many people like it, need it, and choose to use it for their transactions.

      Bitcoins increase transparency, both in terms of balances in accounts and in terms of payment flows. And they’re easy to work with — the Foundation’s ecommerce membership setup took only a few hours to put together, counting account creation and security. Wow! Think how many person-hours of work are needed for an ‘e-commerce’ addon for a typical website.

      While I love it for its ‘nerdy’ aspects, it clearly meets an existing need. In addition, many people around the world have come to love the idea that they can pay anyone in the world as they choose. Freedom is neat.

      In some countries, Bitcoin is a currency, often a ‘local’ currency. In the US, we would just call it money, since there’s only one ‘currency’ here. Bitcoin makes anti-counterfeiting guarantees well in excess of any centrally issued paper money system in the world.

      That’s not to say there isn’t lots to do, hence the Foundation. But come on, enjoy it a little!

      • Christopher Budd

        Thanks for the reply. I understand you disagree (thank you for doing so respectfully :)). To a degree, I would argue, if you can make information about those first points better known/more widely available I think those would address my concluding comments.

        I agree that what I know of it is neat and interesting technically. But I’m looking at this more on the currency side of things. To be fair, as a regular end-user, not a currency expert or a BitCoin expert. And these are questions/thoughts I have right now. In a way, I’d argue where I am is a guidepost of areas of information needed.

        Ultimately, I gather you’re working to foster knowledge and acceptance of BitCoin, so I’m hoping my sharing my take is helpful in outlining where information is needed and would be helpful.

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