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Bitcoin Group at Ohio State aims to increase knowledge of currency

March 11, 2014

merriman.65@osu.edu
Journalists attempt to talk with Satoshi Nakamoto, who has been called the Bitcoin creator, as he walks from his home to a car March 6 in Temple City, Calif.  Credit: Courtesy of MCT

Journalists attempt to talk with Satoshi Nakamoto, who has been called the Bitcoin creator, as he walks from his home to a car March 6 in Temple City, Calif.
Credit: Courtesy of MCT

A recent controversy over the possible discovery of Bitcoin’s founder has stirred up curiosity about the currency. Meanwhile, an Ohio State group is looking to spread the word about what Bitcoin is.

Bitcoin is a crypto-currency, or digital money. Bitcoins are created by “mining,” a process which generates them through computer power.

“Newsweek” published an article Thursday that said a reporter had found Bitcoin’s creator, Satoshi Nakamoto, living in California. The next day, Nakamoto denied his involvement with the currency in an interview with The Associated Press.

“Newsweek” published a statement in response to the AP’s article Friday, saying it was standing by the accuracy of its reporting.

There are hundreds of crypto-currencies, but only Bitcoin has a tangible following at OSU: the Bitcoin Group at OSU. The group aims to “help people exchange ideas and resources more freely through the advocation of Bitcoin adoption, Bitcoin research and the development of Bitcoin technologies,” according to its website.

Jad Mubaslat, a third-year in biomedical engineering and president of the group, said Tuesday the group has seven members. They are still searching for an adviser before they can officially register as a student organization, but Mubaslat is preparing for a launch meeting March 20.

“I’ve found a lot of people who are interested in learning more (about Bitcoin),” Mubaslat said in February.

Mubaslat said he began using Bitcoin in July.

“I was trying to find a way to make a little bit more money, and I saw that the price of Bitcoin was extremely volatile,” Mubaslat said.

On July 15, Bitcoin closed at $93.78 at Bitstamp, an international Bitcoin exchange. In December, it closed at its highest price, $1,132.01. Monday, it closed at $629.39.

At a talk with Reddit co-founder Alexis Ohanian at OSU in February, Mubaslat was allowed onstage to speak about his business, BitQuick.co, a peer-to-peer Bitcoin exchange he started in August.

“What I aimed for the exchange to be is a place where people can quickly enter the market of Bitcoin, so that they don’t have to know a lot of the technical aspects,” Mubaslat said. “I also wanted it to be a safe place to trade.”

Jason Seligman, an assistant professor at the John Glenn School of Public Affairs, said he wonders how many people “actually understand the algorithm” by which the coins are generated, and how the amount of coins will affect the economy.

“And if they’re not going to, then how safe is it?” Seligman said. “Who knows how secure or insecure Bitcoin wallets are? If Target can get hit in Christmas season for how many million credit cards, why is Bitcoin so secure?”

In January, Target publicly said hackers had stolen personal information including names, phone numbers and email addresses for about 70 million customers.

Matt Martin, a second-year in computer science and engineering, said although he has $50 worth of Bitcoins, he recognizes the currency has “security flaws to work out.”

“If they get past the troubles, it will be an awesome crypto-currency,” Martin said.

Mubaslat said BitQuick requires sellers to prove that they have Bitcoins to prevent scams. BitQuick also stores security keys on an offline server which only connects to the Internet during transactions. This way, even if the website gets hacked, Mubaslat said the money cannot be accessed.

Mubaslat said one goal of the OSU Bitcoin Group is to set up Bitcoin payment for local merchants. Mubaslat helped a business in the Short North, Blade30 Barber Lounge, to begin taking Bitcoin in February.

Shawn Mensi, owner of the business, said he doesn’t know of other places in the Short North that take Bitcoin.

“Jad’s been telling me about Bitcoin for a while … and I guess it’s gaining a little bit of traction, so we’re excited to take it here,” Mensi said. “People who are familiar with Bitcoin in Columbus are going to be looking for places to spend it.”

Mubaslat declined to say how many Bitcoins he had, except that he wasn’t “a rich man.” He said he’s broken even on his July investment so far. He added he thinks Bitcoin is a safe investment, as long as people believe in the technology and culture behind it.

“It’s a bet that it will become a new paradigm,” Mubaslat said. “But it’s a lot more risky than dabbling with the stock market or the (foreign exchange) market.”

Seligman, who does not have any Bitcoins, advised against any investment in them outside of personal interest.

“If (students) want to get into computer science and think a little bit more about public finance … I think that’s an interesting space to work in,” Seligman said.

Seligman said he is against Bitcoin’s lack of hands-on oversight, as well as its capacity for harm through money laundering and facilitating illicit purchases.

“Consumer protection probably still argues against enabling these crypto-currencies,” Seligman said. “But that isn’t to say that the public doesn’t have a right to trade with things other than government presented documents.”

U.S. officials said in November the Internal Revenue Service was working on creating its own rules for Bitcoin.

Some nations have taken a stance against Bitcoins: the Chinese government ended all Bitcoin trading in the country Jan. 31, and Russia issued a statement banning Bitcoins Feb 6. Japan issued a statement Friday that Bitcoins are not considered a currency.

Still, Seligman’s ultimate view on Bitcoin was “sympathetic.”

“People just want to know that when they’re done with a transaction, they’re actually done with a transaction,” Seligman said, noting his own preference for cash.

Mubaslat, with his business expanding to global markets including India and Taiwan, said he was “extremely optimistic” about Bitcoin’s future.

“Once you use Bitcoin, and you get over the initial hurdle … there’s no reason that you will go back to your old banking system,” Mubaslat said. “I truly believe that what the Internet did for global communications, digital currency will do for global finance.”


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