Privacy and fraud dominate discussion at LA bitcoin event

Last week, the Los Angeles area bitcoin Meetup group held an event called "Bitcoin meets Silicon Beach". The meeting, sponsored by BitPay, featured a panel discussion and Q&A session, all focusing on the topic of payment privacy – given the current legal and regulatory environment of bitcoin.

Held at the coworking space Coloft in Santa Monica, this event offered both new and experienced bitcoiners an opportunity to learn and network with fellow enthusiasts. Organizers estimated an attendance of around 100 people, which filled Coloft’s main space almost to capacity.

Fraud: a major payment issue

Tony Gallippi, CEO of BitPay, started the session talking about the antiquity of mainstream digital payment methods. Over 12 million people per year are victims of identity theft, he told the audience. Payment fraud is a problem that has been calculated to cost merchants and payment processors more than $100bn per year.

It is with those statistics that Gallippi spoke of the virtues of BitPay. And that makes sense from a business standpoint, as his company has merchants using its services to allow people to pay for things via BTC in over 164 countries.

BitPay has a goal to sign up more 100,000 merchants by 2014 to accept payment via bitcoin, which can only be beneficial for the ecosystem overall. This is because as more payments in bitcoin are made, the stronger the network will ultimately become.

Bitcoin and gift cards

The gift card industry is ripe for fraud. Think about the fact that identity thieves thrive on the purchase of these cards in order to move money from stolen credit cards and use them in a less detectable way.

That’s one of the reasons that Vinny Lingham, CEO of gift card company Gyft flew to this event to evangelize the benefits of digital currencies like bitcoin.

Lingham indicated that Gyft sometimes sees 10% of its daily volume in credit card transactions end up being fraudulent. Yet with bitcoin, the company sees “zero fraud”.

There are additional privacy issues with credit cards. Lingham says that most credit card companies require customers to opt-in to the collection of purchasing information for marketing purposes. This is clearly a privacy-related issue not seen with decentralized digital currencies such as bitcoin.

An exchange for a basket of digital currencies

With the problems of Mt. Gox and exchange companies such as Tradehill suspending operations because of possible regulatory roadblocks, there is an opening for motivated startups to build alternative exchanges. That was the main impetus for Travis Skweres of CoinMKT to be a part of the Bitcoin Meets Silicon Beach event.

Coin MKT is unique in the respect that it allows users to trade in seven different cryptocurrencies.

Skweres told the audience that although CoinMKT launched over a month ago, the exchange is already seeing “lots of volume”. Traders that are looking to move in and out of bitcoin, litecoin and namecoin, among others, are likely seeing the value of this exchange.

Wrapping it all up

The Bitcoin Meets Silicon Beach Q&A session wasn't long enough for the panel members to answer all the questions the attendees had to ask. Some of the Q&A involved pondering the future of bitcoin without Silk Road and how merchants will be able to track user preferences with the decentralized nature.

All in all, the event signified the fact that bitcoin is growing and that LA area technology enthusiasts are ready to do business with BTC.

Check out the Los Angeles Bitcoin Meetup page if you’re in the area to look out for additional upcoming events.

Featured image: Los Angeles Bitcoin Meetup