More famous for being a renegade alternative to a world currency, bitcoin has managed to find a more prominent role among the global elite at the World Economic Forum in Davos.
The Alpine resort plays host to a slew of policymakers, economists, and central bankers every year. Topics usually include global growth, inequality, and climate change but the nascent industry of digital currencies has managed to eke out a place on this year’s agenda.
“From bucks to bitcoins,” is the title of the seminar due at Davos on a Friday afternoon. It explores how the mainstreaming of digital finance could disrupt financial services and transform consumer behavior. This is a far cry from last year, when the most notable mention of the cryptocurrrency was when it was openly criticized by Treasury Secretary Jack Lew and JPMorgan Chairman and CEO Jamie Dimon on CNBC.
Bitcoin is a “virtual” currency that allows users to exchange online credits for goods and services. While there is no central bank that issues them, bitcoins can be created online by using a computer to complete difficult tasks, a process known as mining. The digital currency is renowned for its volatility and with its ability to keep users anonymous it has been heavily criticized for facilitating illegal activity.
The price of bitcoin has suffered recently, with a dip to $200 from $300 since the turn of the year. It was also given the rather dubious title of the “worst investment of 2014” by some news organizations with prices starting 2014 at over $800.
Wences Casares, the founder and CEO of California-based bitcoin services firm Xapo, believes that like the rise of the Internet, it was only a matter of time before the cryptocurrency got its foot in the door at Davos.
“It’s gold 2.0…it’s substantially better than gold,” He told CNBC on the outskirts of this year’s event. His company is banked in Switzerland and provides storage services for bitcoin users. It’s not the first time he’s been to the event, but the first as a representative of a bitcoin-related company.
Rather than trying to gain more investment, Casares is in Davos to spread the word of bitcoin or “evangelize,” as he put it. Casares believes that in 10 years’ time, traditional banks will look more like multi-function telecoms firms and believes that bitcoin will form part of that transformation.
If a lack of regulation and no central bank is enough to turn the stomachs of the global elite then there are alternatives at the annual economic shindig.
Ven is a digital currency that actually predates bitcoin and is backed by a weighted basket of currencies, commodities and carbon futures trading.
Stan Stalnaker is the founding director of Hub Culture, which is a social network service that operates the digital currency. He travels to various global events, setting up pavilions with the intention of showcasing Ven. After nine years at Davos, the company now has prime real estate in a small pop-up opposite the front entrance of the main conference center.
Davos attendees can use the digital currency for a range of options this year such as paying for apartments, taking a toboggan trip or even splashing out on a new Nissan.
Stalnaker told CNBC that Ven has similarities to a gold exchange-traded fund and has a group of financial gurus that oversee operations and act as a central bank. He also said that users aren’t anonymous but the stability and its environmental interests mean it has several unique selling points that bitcoin doesn’t have.
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