BALTIMORE - Baltimore Bitcoin boosters are split on what the collapse of one of the first and largest digital exchanges for the anonymous cyber-currency means for Charm City.
But for John Reusing, owner of Bad Decisions bar in Baltimore, it simply means “the price of whiskey is going up.”
Bad Decision was one of the first businesses in Maryland to accept the digital currency as payment. There are seven businesses throughout the state that will trade goods and services for the unregulated Bitcoin.
A month ago, the cost of a beer and a basket of bacon at Bad Decisions cost .0165 Bitcoins.
This week however the collapse of Mt. Gox —one of the first online trading of Bitcoins—means the price of bacon is going up or at least the value of the same basket of bacon is going down.
Some have called the collapse the end of the e-money experiment, or an end to Bitcoin trading, but not Baltimore resident John Devors who is the lead organizer of a Bitcoin meet-up group.
“Mt. Gox is not Bitcoin. And Bitcoin is not Mt. Gox,” Devors said.
He criticized Mt. Gox for not being able to keep up with complicated technology in a rapidly changing world.
“But that’s the downside of being the first mover in 2010. … Bitcoin was just a baby,” Devors said. “The millions of transactions that were going through the system weren’t secure.”
The Wall Street Journal reported that Bitcoin lost roughly 750,000 of its customers Bitcoins, or the value of $473 million, before filing for bankruptcy protection. CNN Money reported Monday that Mt.Gox shut down its trading floor and deleted all of its tweets after CEO Mark Karpeles resigned Sunday.
Devors said he believes the imperfect system will be less volatile over time if more experienced, educated and financial backed individuals take the risk.
“I was going to put my money with the guys with PhDs and the guys who have been doing securities for years,” Devors said. “Put the big boys with the big money.”
Devors pulled his money from Mt. Gox early on, realizing it was not the “monolith” people believed it was.
“There were better options out there,” he said.
He even joked that Mt. Gox, which literally stands for Magic The Gathering Online Exchange, stumbled onto Bitcoins.
“They clearly had no idea how to run a Bitcoin exchange,” he said.
Part of what Devors tries to do with the Bitcoin meet-up group is discuss strategies to entice more vendors to sign on with the virtual currency with other like-minded individuals like Dimitry Murashchik.
Murashchik is the director of Bitcoin100.org, a Bitcoin-funded charity. He also converted his entire lifesavings to Bitoins. He has a Master’s in finance and economics and has worked for big banks but now he spends part of his days consulting and investing in Bitcoin.
“I’m pretty much involved in everything,” he said and has been since May 2011.
It was an unconfirmed report that leaked online Monday that indicated Bitcoin had lost millions. The report called it a theft, The New York Times reported.
“If the claim is actually true that they had that much money stolen it would be a blow to the community,” Murashchik
He explained that the biggest blow Mt. Gox’s collapse would have on Baltimore’s future dealings Bitcoins would be its publicity.
“My guess is this will probably blow over in a month or two,” he said. “The sad part is that we have a whole lot of good news coming in.”
Right now he said there is a “dark cloud hanging over” prospect of Bitcoin integration.
Bitcoins were trading at $490 the lowest the price had dropped since November.
“Almost no volatility for two months before this happened,” Murashchik said. “If it wasn’t for Mt. Gox the price would probably would probably be surpassing or approaching $1,000.”
Murashchik described Bitcoin like, “living in a really fancy palace but it’s still under construction.”
Bitcoin investors see a lot of benefit to unregulated currency. Chief among the benefits would be personal financial privacy from all governments. It’s also available to anyone in the world and it eliminates credit cards, which some—ironically—believe is more secure.
For now, Devors said he would be planning more outreach to spread the word of Bitcoin around Baltimore.