*Where they are busy amassing political capital from the tech start-up scene before the feds can annihilate the gray-market pioneers...
*A great example of the "is this disruption legal?" "Not yet!" dynamic at work.
(...)
"More significantly, the conference also showed that Bitcoin has begun to attract the backing of conventional technology industry investors, who have sunk millions of dollars into a handful of Bitcoin startups. “What’s going on right now is a transformation from stage one, supported by the purists that are devoted to the idea, to a period where we are asking ‘What does this do for global commerce?’ ” Chris Larsen, CEO of OpenCoin, told me at his company’s booth, one of about 20 in the conference’s exhibition space.
"Larsen previously founded two conventional finance companies, E-Loan and Prosper; his new company runs a service called Ripple that offers easy transactions between conventional currencies, bitcoins, and a math-backed currency of the company’s own design. OpenCoin is backed by Silicon Valley venture funds Lightspeed Venture Partners, Andreessen Horowitz, and Google Ventures (see “Big-Name Investors Back Effort to Build a Better Bitcoin”). Bitcoin businesses have been started before, but OpenCoin and a few others now have access to funds, expertise, and contacts that allow a more significant, lasting assault on the status quo. The U.S. Treasury helped strengthen investor interest in March, when it clarified which financial crime regulations apply to virtual currencies.
"CoinBase, the media sponsor of the San Jose event, received the largest venture investment in a Bitcoin business to date earlier this month. The company, which originated in the incubator Y Combinator and helps individuals and businesses use bitcoins, received $5 million from Union Square Ventures, a fund better known for backing Tumblr and Zynga. In San Jose, I also met the founders of BitPay, which enables online stores—including those hosted by Amazon—to take Bitcoin payment. Bitpay recently received $3 million from Founders Fund, led by Facebook’s first major investor, Peter Thiel.
"BitPay CEO Tony Gallippi told me that Thiel invested because he saw how the company could help ease online commerce across borders; the company already handles $5 million in transactions each month and says the figure is growing. “Traditional payments such as credit cards don’t even work in half the world, so companies just choose to not service international customers,” Gallippi said. “That leaves a big opportunity.” He plans to take further investment later this year but told me it will be more for reasons of making strategic contacts than a need for cash, since he and his cofounders have significant Bitcoin holdings.
"One reason Bitcoin is interesting, says Jeremy Liew, a partner with Lightspeed Venture Partners, is that it could displace the practice of wiring money across borders, which underpins much international trade today and can be onerous...." ((("Boy, life sure is convenient now that the onerous obstacles of nation-states and the middle class have been removed from the wealth-flow.")))
