Why you should care
Because maybe you’re fed up with Ben Franklin and George Washington.
Walk past Aleix Ripol on the streets of Barcelona and you’re probably not giving him a second look. That’s not a dig on his looks — he’s a perfectly attractive white guy in a denim shirt and Clark Kent glasses, just like a sizable segment of the tech sector. But like Clark Kent, our man Ripol, a sociologist and web page designer, leads something of a double life. His alter ego? Cryptocurrency rebel.
“There is a militant profile to many of us,” says Ripol, president of the Barcelona Bitcoin Community, an association of enthusiasts. “With the crisis, they told us banks were too big to fail, and we realized we needed an alternative.”
Thought bitcoin was dying out faster than your grandmother’s obscure Ukrainian dialect? Think again.
Over two years, bitcoin has taken a roller coaster ride, climbing briefly to nearly $1,000 a coin at the end of 2013 and then sinking all the way to $177 at the beginning of 2015, only to rise again to around $350 of late. But that hasn’t stopped a big band of Spaniards from jumping into the high-tech currency — and for reasons almost as fascinating as the way the bitcoin system works. Generally, people interested in bitcoin see a financial opportunity — if it’s cheap now, why can’t it go up, the thinking goes. Then there’s the fear factor: Some people have vivid memories of just how bad and shaky the banks were during the fiscal crisis of 2008. Bitcoins, despite their own risks, can serve as a money-in-the-mattress option.
But the motivation is a little different for this new breed of bitcoiner. Indeed, these are rebels with a cause, people who believe that buying up bitcoins instead of euros basically sticks it to the Man, in this case banks and the government. Joaquin Fenoy, founder of Barcelona-based Bitchain, will tell you that these anti-establishment folks, who are otherwise perfectly mainstream, are “an important part of users.” And if all this continues, many feel that it’s only going to help drive the growing industry of bitcoin services throughout Europe, from bitcoin-friendly cash machines to businesses that accept the digital currency.
Certainly, the very nature of bitcoin might appeal to the rebel within anyone. Even its beginnings are a mystery: It is rumored to have been founded by a highly reclusive Japanese physicist descended from samurai. Launched in 2009, it functions like a decentralized, peer-to-peer currency without a powerful guarantor, such as a country’s central bank. There is a finite number of bitcoins, which are created by so-called miners with the increasingly sophisticated know-how required to do so, and each transaction is logged in a massive ledger called a blockchain, although it is possible to hide your identity.
With low transaction fees, the tourism industry has been an early adopter of the currency, and as gadgets improve and expand, more consumers are expected to try using it. Currently, just 2 percent of merchants accept bitcoins, but according to a Goldman Sachs report, 33 percent plan to do so in the next three years. Some of that growth is already apparently under way. Even though the dollar value of bitcoins sank, Blockchain.info, which tracks bitcoin use, shows that the number of transactions and volume of bitcoins negotiated worldwide has increased consistently over the past two years. It currently averages three times more transactions and twice the volume.
Bitchain, meanwhile, started installing its tellers in March (with the ultimate near-term goal of 15), and the tellers were promptly overwhelmed. Now the company is aiming to have 20 in Spain, 10 in Greece, and another 10 split between France and Italy and says Latin America and the U.S. are next.
In some ways, bitcoin is the protest currency par excellence, a giant step up from an anarchist bumper sticker — and a whole lot riskier too. But within the context of Spain’s Great Recession, it makes a kind of sense. Since 2008, Spain has been struggling through a financial crisis precipitated by the bursting of a 50-year housing bubble and followed by the collapse of markets, disappearing credit and austerity. In 2012, the country applied for a 100 billion euro bailout package. Many Spanish bitcoiners are fueled by rage at the banks. “Part of the population, and I’m among them, realized with the bank rescues that they were scamming us,” says Ripol. But he’s not tossing Molotov cocktails; instead he’s throwing pizza parties where fellow bitcoin geeks can enjoy beer and some camaraderie.
To be sure, whatever the motives for bitcoin’s usage spikes, plenty of skeptics think bitcoin will never be more than souped-up Monopoly money. “You’re not necessarily talking about an audience that can sustain volume in the longer term,” says Windsor Holden, head of forecasting and a cryptocurrency expert at U.K.-based Juniper Research. By the end of 2014, the user base in Western Europe was 350,000 (out of a total population of roughly 190 million), Holden says, but “we are not anticipating 1 million users before 2018.”
And then there are the littler problems. During our conversation, Fenoy had an emergency: Someone confused a teller with a regular ATM and tried to jam a credit card into it.