Bitcoin gains support of cryptography think tank
Coin Center, a newly created research and advocacy center, will focus on public policy issues faced by the virtual currency.
Bitcoin, the best known form of virtual currency, faces numerous obstacles to widespread acceptance and adoption, but a new group called Coin Center has added a voice of support.
The organization is led by Jerry Brito, a law professor and a former research fellow at George Mason's Mercatus Center. In an announcement made Thursday, Brito said Coin Center is a "new non-profit research and advocacy center focused on the public policy issues facing cryptocurrency technologies." Bitcoin was the first and still the best known virtual currency or crytocurrency, which means that cryptography is used for its transactions and its creation.
The venture is backed by a number of prominent figures, including venture capitalist Marc Andreessen. Coin Center has also been financially backed by companies and individuals including Hudson River Trading, Union Square Ventures, RRE Ventures, itBit, BitPay and Coinbase.
Coin Center will start with a budget of $1 million annually.
"Our mission is to build a better understanding of these technologies and to promote a regulatory climate that preserves maximum freedom of action for digital currency innovation," Brito said. "We will do this by producing and publishing policy research from respected academics and experts, educating policymakers and the media about block chain technology, and by engaging in advocacy for sound public policy."
Brito predicts that Bitcoin will eventually be "an important part of our economy." While policymakers are beginning to consider how to regulate digital forms of currency -- which by nature are not backed by a central bank -- there is a need for an organization which can be a trusted to act as a credible source of information about the regulatory implications of technologies surrounding cryptocurrency. Coin Center will "seek to be that trusted and credible source."
The Bitcoin industry is in a period of change with regulators mulling over potential legislation, places such as Ecuador and Bangladesh banning it entirely, and countries including China imposing restrictions on its use -- and yet, businesses and payment solutions have begun accommodating virtual currency.
In related news, a new theory has emerged concerning the falling price of Bitcoin, as noted by The Wall Street Journal. At its peak, a single Bitcoin reached a price of over $1,050, but at the time of writing, the value has dropped to $403. The original collapse in price took place after the closure of Mt. Gox, the once-dominant Bitcoin exchange. However, a number of theories have emerged in order to try and explain why the price is stagnant. Setting aside the changes listed above, a summer-long price fall appears to coincide with a rise in Bitcoin mining across China, where the general public may be using Bitcoin to circumvent the Chinese government's control of foreign purchases.