I-Team: Las Vegas Embraces Bitcoin Transactions - 8 News NOW

I-Team: Las Vegas Embraces Bitcoin Transactions

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LAS VEGAS -- A digital currency known as Bitcoin is on a roller-coaster ride. Central banks in both China and Russia have recently announced that they won't accept Bitcoin transactions, and in the U.S., federal lawmen recently busted a Bitcoin millionaire and charged him with money laundering.

Despite the issues, proponents say there is no stopping this new form of money and they think Las Vegas is a perfect fit.

You can't hold it in your hand, like gold. You can't fold it in your wallet, like cash. You can't trade it in at the casino cage for chips or slot tokens, but Bitcoin is making inroads in Las Vegas, and every day more businesses are giving it a try.

Las Vegans have long been known for how closely they guard their bankrolls. Tip earners don't like to broadcast what they make. Bettors don't like to brag about their winnings. Bitcoins play into that by giving a measure of financial privacy. Bitcoins will buy you a plane ticket to Las Vegas, a taxi ride to your hotel, pay for your room at the D and then a meal at the Golden Gate.

Soon, thanks to a pair of Las Vegas guys, there will be ATM type machines to convert bitcoins to dollars and back. While you're in town, you can buy a mansion with bitcoins, get your nails done, send out for a pizza, and order up a personalized stripper.

In many places, Bitcoin is as good as gold and as anonymous as cash, which makes it a perfect fit for Las Vegas, even though few people know about it.

"You try to ask the average person on the street or try to tell them how it works, and it takes a long time for them to grasp the concept," said Julian Tosh, owner of bitcoininvegas.com.

Tosh is one of the driving forces behind Bitcoin's emergence in Las Vegas. He's been front and center at major Bitcoin conferences where huge crowds of investors and merchants have come to learn, network, and strategize about the future of the digital currency.

In another era, the Bitcoin folks might have been labeled as radical hippies, and while some are radical, most are dedicated capitalists, but with a twist. It is a currency that exists only in digital form, not backed by gold or a government. Contrary to assertions, it is not totally anonymous because anything online can be traced eventually, but it affords a degree of privacy and independence.

"Why can't I be my own bank? That is the opportunity that Bitcoin affords me is to say I am going to be my own bank," said David Perry, a blogger.

His Bitcoin blog, Coding in my Sleep, gets 250,000 readers each month. He thinks Bitcoin is poised on the edge of a mainstream explosion.

"I think everybody at this table is in it for the long haul. It's the philoosophy of Bitcoin, the freedom of Bitcoin," Tosh said.

At Crepes Restaurant in Las Vegas, you can use bitcoins to order an excellent meal, catch up on reading Bitcoin magazine and join the conversation.

So why would a Las Vegas business owner go to the trouble?

"It's so easy to use. I think a lot of businesses have fear that it's hard, but really it's easy. It just a concept that feels new," said Agnes Alexander, the owner of Crepe Restaurant.

Bitcoin transactions are free of some of the risks and extra charges of a credit card.

"I think it's the most important invention since the Internet," said Zlatko Bijelic who works for an online electronics company. "We have done over a million dollars in transactions with no fraudulent charges. There can't be any sort of charge backs, any of that stuff, so a clean million dollars in charges, three percent of that would have gone to credit cards and another five percent would have been charged back."

Because it is new, and outside the control of any government or big bank, Bitcoin is still viewed with suspicion.

It would take changes to Nevada gaming regulations before it could be used by casino gamblers. And congressional hearings raised the specter of criminals or terrorists using bitcoins to avoid scrutiny or launder money.

"You could apply the same argument to cash. The current most popular way of people to get non-taxed income is under the table, cash. The most popular way to buy drugs is cash. The most popular way to fund terrorism is cash, so they already have the same problem with the system they themselves created," Perry said.

Bitcoins have been used for illicit purchases online, and no doubt have facilities money laundering for drug dealers, but proponents say its a bit audacious for big banks to complain about that in light of the billions in drug money they've laundered for decades.

How Does Bitcoin Work?

While there isn't time in this story for a Bitcoin tutorial, here is something to ponder. The value, which started out at about $25 per bitcoin, is extremely volatile. It's gone as high as $1,300 and although it has seen declines here and there, the trend over four years is steadily up.

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