On June 18th, MIT-Stanford Venture Lab (VLAB) hosted its monthly event on virtual currencies, titled “Virtual Currencies: Gold Rush or Fools’ Gold. The Rise of Bitcoin in a Digital Economy” at the Stanford Law School campus, Munger Conference Center of Paul Brest Hall.For social entrepreneurs, virtual currencies represent new potential for the democratization and distribution of funds to further local and international work. As startups such as Coinbase, Ripple, and dozens of others, are building payment rails & making math-based currencies more accessible and usable for a broader base of users—there is a real opportunity for social enterprise to take notice and action as early adopters. This can be through accepting funding via bitcoin or other math-based currency, transacting via virtual currency, building crowdfunding sites that allow portions of raises to be made in bitcoin, and/or at the least become knowledgable about the topic and exploring its potential.To crowd of standing room only, the panel explored the topic of virtual currencies through various vantage points, with a focus on actionable discovery for entrepreneurs, technologists, and investors. The panel, pictured below, from the left included: Chris Larsen (CEO and Co-Founder, OpenCoin, the company developing the Ripple protocol), Fred Ehrsam (Co-Founder of Coinbase, a digital Bitcoin wallet), Wendy Cheung (Director of Compliance and BSA Officer, Silicon Valley Bank), Cameron Winklevoss (Principal Investor at Winklevoss Capital) and Tyler Winklevoss (Principal Investor at Winklevoss Capital)

VLAB Virtual Currencies #VLABvcurrency

VLAB Virtual Currencies #VLABvcurrencies

 

 




Event brochure

Virtual currencies (aka math-based or digital currencies or cryptocurrencies) are emerging forms and units of digital transaction, outside the realm of government regulation (so far, anyway). They usually can be transacted with virtual anonymity, and be transacted globally fairly quickly.

VLAB Virtual Currencies #VLABvcurrency

Infographic, adapted from Visual Capitalist, on Bitcoin

Bitcoin is the first such digital currency to gain traction. Created by a developer or group of developers named Satoshi Nakamoto (pseudonym) in 2009, today there are 11M bitcoins in circulation and the current market for Bitcoin already tops $1.5B. The currency itself is quite unique. Bitcoin are created (or “mined”) by computers completing complicated algorithms. The first to solve the algorithm and achieve the closest answer effectively claims an allocation of bitcoin. This goes on until the outer limit of 21M bitcoin are mined.

VLAB Virtual Currencies #VLABvcurrencies

VLAB Executive Chair, Ron Chavez, welcomes the audience 

VLAB is a 501(c)(3) nonprofit comprised of volunteers who pitch topic ideas that span innovation and disruptive technology and work in small teams to understand the space, identify controversies, and form an engaging panel.
VLAB Virtual Currencies #VLABvcurrency

Featured speaker, economist, and Stanford Business School professor Susan Athey introduces virtual currencies as an economic concept.

Professor Athey focused on four unique uses of virtual currencies as: a way to store value (especially in light of inflationary currencies); as a ledger; as a method of making anonymous transactions, and possibly as a basis for government monetary policy.

VLAB Virtual Currencies #VLABvcurrency

Moderator & Forbes Online Sr. Editor Kashmir Hill introduces her unique experience with Bitcoin, sushi, and cupcakes

Hill, whose work has lately focused on digital privacy took on a unique challenge in early May. She lived only on bitcoin for one week. She recapped challenges such as finding retail food locations beyond Cups and Cakes Bakery and Sake Zone sushi in SF. She recalled how things got interesting when her landlord didn’t accept rent in Bitcoin, causing Hill to have to find BTC-friendly housing for a few days.

 







Founder/CEO Chris Larsen (OpenCoin, Ripple) explains  math-based currencies and their potential to disrupt payment processing, exchange, and currencies

 

VLAB Virtual Currencies #VLABvcurrency

Panel discusses various topics related to virtual currencies, with questions posed by Moderator Kashmir Hill

VC’s Tyler and Cameron Winklevoss commented on the scope they see for math-based currencies as a disruptor to industries such as remittance. They own approximately 1% of bitcoin in circulation, and most recently funded a Bitcoin startup called BitInstant.

Wendy Cheung of Silicon Valley Bank spoke about state and federal compliance concerns relevant to bitcoin and math-based currency startups. SV Bank currently works with a number of startup companies in this space.

Fred Ehrsam (second from left) touched on unique challenges as a startup in the space. He co-founded Coinbase after noting efficiencies of current systems  as a foreign exchange trader on Wall Street. Coinbase  has had to navigate through the compliance and regulatory requirements and is poised to become the leading bitcoin wallet on the market.

Audience members could text in questions that were fed to the moderator’s iPad. Kashmir selected a few to ask to the panel and noted common questions. Of these a few popular questions were—directed to the Winklevoss investors—whether their firm would ever fund a startup using Bitcoin. Other questions asked about how mining for bitcoin actually works, and yet others touched on inherent limitations of a finite curency (i.e. There will be a total of 21M bitcoin available to be mined).

VLAB Virtual Currencies #VLABvcurrencies

You can view the video of the virtual currencies event when it is posted here

Events in the past year have included: the Founders’ Series, Collaborative Consumption, The Future of Diagnostics

, Commercial Drones

, Young Entrepreneurs

, Synthetic Biology

, Grid Energy Storage

, Software-Designed Networks

, and Gamification

.

VLAB Virtual Currencies #VLABvcurrency
[photo credit J. Fuqua]
A few of VLAB event team members with moderator Kashmir Hill

It was a wonderful experience co-chairing the event team for the virtual currencies panel with Frank Martinez (far right). A huge thank you and recognition to event team members including Edward, Jerry, Richard, Jenny, Tony, Lisha, Chethana, Prashant, Geeta, Luca, Jeanne, Michelle, and marketing team Siejen, Chitrak, Tom, Jae and the broader VLAB community.

 

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