Bitcoin Bowl Points To Virtual Currency Vitality

College football game a sign of things to come? Some vendors jump in, others stay on sidelines as bitcoin usage grows.

Signs that virtual currencies could get serious traction have popped aplenty in recent months. And amid all the reports of venture capital interest and growing acceptance by merchants was this: the Bitcoin St. Petersburg Bowl.

That would be the college football game played Dec. 26 in that Florida city, one of dozens of such showdowns that end the season each year, but the only one sponsored by cryptocurrency.

For those keeping score, North Carolina State notched a 34-27 victory over the University of Central Florida. For those who watched the game (I’m a college football junkie, and am guilty of watching the whole thing), references to bitcoins were few and far between.

The real action for bitcoins took place off the field and the small screen, and that’s what’s most worthy of notice to those who work in payments and that includes every credit union in the land.

For instance, published reports say the sponsor, Atlanta-based bitcoin servicer BitPay, paid ESPN in bitcoins that the network then turned into dollars. And the 26,675(announced attendance) folks who were at the game were greeted by vendors seeking to educate football fans about bitcoins.

That included payments industry heavyweight NCR, which recently announced that it would support the virtual currency on its NCR Silver cloud-based point-of-sale system.

Working with cryptocurrency continues the evolution of a company that began by making cash registers in 1884 in Ohio. Now based in Atlanta, NCR has long been a major provider of ATMs and has more recently gotten into interactive kiosks with its purchase of uGeniusand online banking by picking up Digital Insight, both companies with deep credit union ties.

Reggie Kimble, NCR’s small business development director, says supporting bitcoins (it’s using BitPay to do that) is part of a strategy that includes mobile wallet apps and physical sales adding to the e-commerce surge that bitcoins have already seen.

He recognizes that most of the 80,000 transactions his company says are now taking place through bitcoins each day are online. However, Kimble says, NCR’s POS solution is now in about 5,000 physical locations after starting from scratch about two years ago.

NCR hasn’t traditionally played well in that space, but with some 3 million small businesses out there, it’s kind of like the Wild West, Kimble says, noting that Square also didn’t exist five or six years ago, either.

We looked at our particular product and market and found that 76% of small business owners would like to accept bitcoins in their physical stores, so it just made sense to us to offer that as an option, Kimble told

That makes sense to Trevor Murphy. He’s the CTO of bitcoin storage solution provider Bitstash and a tech startup veteran who sees plenty of potential in the virtual currency.

Venture Capitalists And Virtual Values

Along with heavyweights like NCR and Microsoft which now accepts bitcoin payments for apps and games getting involved, Murphy says venture capitalists have sunk more than $400 million in bitcoin players in the past couple years.

South Carolina-based Bitstash, in fact, got a boost from crowdfunding through Kickstarter. And bitcoin companies and possible investors have been a major presence at venues like the highly attended Money 20/20 show in Las Vegas in November.

Murphy says all that investment will drive growth among providers and interest among regulators, who together will create an infrastructure for virtual currencies. Regulations will form around its use and capital investment will create solutions around that, Murphy predicts.

Asked about how a virtual currency like bitcoin can have real value in the marketplace, Murphy replies, A check is only a piece of paper. When you understand how valued is created, you can see that currency and the transactional relationship are inseparable.

He adds that bitcoin has taken five years to get where online banking did in 20 years and says, The headlines ignore the real solutions and the tour de force that has been accomplished here.

Meanwhile, a couple key core processors say they’re examining how to deal with cryptocurrencies while they maintain a wait-and-see attitude.

Tom Berdan, vice president of product development for Toronto-based Davis + Henderson and the UltraData core platform had this to say about cryptocurrencies: We’re not getting involved in it right now. We’re watching bitcoin, but more in the payments channel. We haven’t looked at it in terms of enabling a core to handle them.

And Jack Henry & Associates President David Foss told, We don’t have a stated direction on bitcoin and the other flavors of virtual currency right now, but they’re certainly on our radar.

Foss, who oversees the Missouri-based operations that include Symitar and ProfitStars, says the jury is still out on whether his client credit unions and banks want to play in that space and adds, Bitcoin is the darling one day and the next day it’s perceived as something that’s totally unsecured.

Hackers, naturally, have greeted bitcoin with the same enthusiasm and technical chops they’ve shown in routinely looting untold millions of dollars around the world stored electronically in traditional currencies.

News of bitcoin cyberthefts now occur routinely, it seems, and they usually involve accounts being pilfered. That was the case, for instance, this week when USA Today reported that one of the world’s largest bitcoin exchanges was hit to the tune of $5.4 million worth of the currency. (At current prices. Wild swings in bitcoin values are another story.)

The New York Times this past weekend, however, reported a case with a twist. It’s about thieves overseas successfully using ransomware to extort money from the writer’s mother, ransom payable only in bitcoins and through a secluded, bitcoin-enabled ATM.

The article is titled How My Mom Got Hacked and it’s recommended reading for credit union executives watching the growth of cryptocurrencies and wondering if and they should get involved.

As for ransomware, that’s a whole other story. If you have one you’d like to share with us, please let me know at or 803-917-5918. We’ll honor all requests for anonymity.

January 8, 2015

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