Ever since its inception five years ago, Bitcoin, a digital, open-source form of money, has been controversial. Take, for example, last October’s government crackdown on the Silk Road, an online black market used mostly for buying and selling drugs. Over 144,000 bitcoins, or about US$28.5 million, were confiscated as part of the operation. Or this Newsweek cover story, which claimed to out the founder of Bitcoin (and which caused quite the storm itself.)
Of course, this hasn’t stopped some from partaking in the trade. Just last week, NYU junior Jon Kirsh, the social chair of the Phi Kappa Sigma fraternity, paid his dues via Bitcoin.
Another thing about Bitcoin is how sketchy it can get — it’s a completely anonymous way of making transactions, so it’s gained a reputation for being used in a variety of criminal ways. But Kirsh quickly rejected the idea that his fraternity would be using it criminally, stating that raw cash is still the best way of making illegal transactions because it is completely untraceable.
“The currency that’s used most for cartels and for drug money and money laundering is the dollar,” he told NYU Local. “And that’s why people in Washington are starting to realize [Bitcoin] is a good alternative to the dollar because Bitcoin is digital cash, but on top of that it has a public ledger system so any transaction that is made can be seen on a public level by anyone,” he said.
In fact, Kirsh is a big advocate for Bitcoin. He became involved with the company’s first center in New York City when it opened in December, and is currently working there as a clerk helping people and businesses facilitate trades. (He’s also one of the vice directors of the first ever Bitcoin music festival.)
It was working at Bitcoin that convinced Kirsh to integrate it into his fraternity, because he thinks it holds great potential in the future. “I think my investment is going to go up and I think it’s something everyone should at least look into,” he said.
Kirsh considered his payment a sort of experiment for the future. Not only does he encourage other brothers to start using it to pay their dues, but he also wants the fraternity to start saving their Bitcoins so they can turn a profit in the future. “If I had my way we’d be keeping some of the money. We’d watch it grow and make some money, especially now that it’s really cheap,” he said.
And it sounds like the fraternity is going to heed to some of Kirsh’s advice. Though he and his brothers who also have Bitcoin accounts (though they chose not to use it to pay their dues) bought their Bitcoins with cash, some are considering trying out mining — a way of uncovering new Bitcoins by solving complex formulas online.
While cash is still likely the optimum means of making transactions, as there is no cover charge, Kirsh said Bitcoin is a close second. If you handle it yourself, there is no charge, though when you use a third party to transfer your Bitcoins to cash, there is about a 1 percent cover charge. It’s less than most credit cards and other payment systems such as PayPal, which was one of his main incentives for using it.
Though there are still many problems and unknowns when it comes to the elusive digital currency, Kirsh makes a convincing argument in that it’s an extremely advantageous system, especially if you buy in now when costs are low.
Who knows — maybe one day we’ll be paying our tuition in Bitcoin, too.