To prepare for a bitcoin meetup in Sydney, Jason Williams has been scrounging to find a bar that will accept the cryptocurrency. No such luck, though. Nonetheless, he’s looking forward to connecting face to face with his fellow Aussie Bitcoin enthusiasts over beers on June 19. Ahead of the event, the gathering has even caught the eyes of investors who are keen on funding the next big Bitcoin startup.
China has been stealing the limelight on the international Bitcoin scene for its recent spike in downloads of the original Satoshi client. However, Bitcoin has had a small but consistent stronghold in Australia for a few years now. The Land Down Under ranked number eight globally in downloads in May, the same rank as last year at that time.
As an early adopter, Max Kaye had viewed Bitcoin as an “unstoppable technology” akin to BitTorrent and Tor. The Sydney resident first transacted in bitcoins in December 2010, convinced of the cryptocurrency’s security after reading about it in Slashdot.
“Immediately it occurred to me that it was something to get involved with and learn about, because if it took off it would be so very significant,” he said. And take off it did. Since Kaye first discovered Bitcoin, the currency’s value had grown by leaps and bounds, ballooning from 21 cents (US) to more than $100 today.
Williams jumped aboard the Bitcoin train this year, after reading about Silk Road and doing more research.
“It was amazing to me that such a marketplace could thrive dealing with illicit goods,” said Williams, who managed the anti-money laundering systems as a developer for The Westpac Group, Australia’s first bank. “Bitcoin was a risk … People took those risks, and a marketplace flourished. After reading the press, seeing a thriving marketplace and understanding the technology, it was the tipping point for me.”
While the Australian Bitcoin community is best described as emerging, people like Kaye and Williams have been turning to reddit to organize.
“There are lots of passionate people here, but we seem to lack the je ne sais quoi that you find in the valley,” Williams said, referring to Silicon Valley. “It’s exciting times to be at the front of something that will change the world. I want the community to get organized and be at the forefront of development and adoption.”
After attending the Bitcoin2013 conference in San Jose last month, Kaye began thinking about starting an Australian chapter of the Bitcoin Foundation … “which would really help to provide the foundations, no pun intended, for a strong Aussie bitcoin community.”
Slowly but surely, retailers in Australia are also getting on board. Digideals, Australia’s first e-commerce site to accept the virtual currency, conveyed its confidence by calling bitcoin “the currency of the future.”
CuffLinked, a Melbourne company that makes cufflinks, began accepting bitcoins in May.
“We’re fascinated by bitcoins, and at the same time opening us up to a new market we wouldn’t have otherwise had seemed like a no-brainer,” said owner Niki Glavich.
“I think when it comes to buying and selling bitcoins, Australia is a little behind the curve,” Glavich added, attributing this to the steep fees charged for buying and selling bitcoins in the country.
Though the community is developing, there is a bit of gray area surrounding bitcoin in accordance with the country’s Anti-Money Laundering and Counter-Terrorism Financing Act. Passed in 2006, the act defines e-currency as an internet-based, electronic means of exchange that is backed either directly or indirectly by precious metal, bullion or “a thing of a kind prescribed by the AML/CTF Rules.”
According to that, bitcoin, which isn’t backed by anything, isn’t classified as an e-currency.
Mat Holroyd, founder of BitPiggy, an Australian bitcoin exchange registered in Hong Kong, doesn’t see this as a major issue. He writes in his personal blog, “The irony is this property of bitcoin means it is not classed as an e-currency by Australian law, and thus this argued weakness of bitcoin leads to bitcoin not being burdened by AML/CTF reporting requirements — which is great for the Australian bitcoin community.”
Kaye, likewise, doesn’t think the law will have an impact on bitcoin’s growth in the region. “Most Bitcoiners don’t really care for modern monetary policy,” he said. However, it does have him thinking about developing a cryptocoin pegged to the Australian dollar.
“It’s curious that bitcoin is not counted as e-currency, yet by changing some variables and setting up a legal institution, the same product (the blockchain) now facilitates transactions of money,” Kaye said. “I think this really shows how backwards monetary policy is.”