Conversations about Bitcoin eventually funnel down into one exasperated question: "But where can I use them if I have them?!" It's a good question. And the most honest answer is, you can buy drugs. Sure you can buy a lot of other things if you look for them, but this is the product that's moving and with Silk Road, it's the most developed market that Bitcoin has right now.
Everyone who wants to see Bitcoin grow into a mainstream currency agrees that legitimate vendors need to jump in. Then, some day, drugs will just be one of Bitcoin's dirty little side shows. You know, like they are for every other currency.
Last week, a couple of legitimate vendors jumped in. Reddit, a news recommending site, and Megaupload founder Kim Dotcom announced that they will begin accepting payment in Bitcoin, resulting in an impressive expansion of Bitcoin's merchant base and the desirability of the currency.
Reddit is the bigger catch in this haul and the biggest gain for Bitcoin since WordPress started dealing in the currency last fall. The user-generated news aggregator and self-proclaimed "front page of the Internet" consistently ranks in the top 150 most trafficked websites worldwide. In the U.S. and Canada, it's even more popular.
On Valentine's Day it announced that it would begin accepting Bitcoin payments for its Gold membership, a feature that enables users to browse without viewing advertising and gives them access to some storage for archiving. Evidently, Reddit was responding to direct requests from its users who were annoyed that their only payment options were Google Checkout and PayPal. The Bitcoin transactions will be facilitated by a relatively new intermediary called Coinbase.
This one is a very clear win for Bitcoin.
And then there's Kim Dotcom, who ran afoul of the U.S. Department of Justice last year and is now making a rockstar comeback. He has replaced his file-sharing sites from the Megaupload empire (which were forcibly taken down after claims of copyright infringement) with a new website called Mega. And although his services went offline for a whole year, he doesn't seem to have lost many customers. A day after Mega started up in January, it already had one million users and it now has over 3 million, according to Emil Protalinski at The Next Web.
Dotcom announced on Twitter last Saturday that customers can now use Bitcoins to buy monthly access to cloud storage (above the 50 gigabytes that comes with a free membership). And here I would just ask—Kim, what took you so long? You consider privacy to be a right. You seem to favor challenging the law more with technology than with discourse. Bitcoin was made for you.
His story will certainly add more controversy than glimmer to Bitcoin's reputation. But it will also bring trade, something the community greatly needs.
It remains to be seen how these new players will change the market price of Bitcoin. February has been an extraordinarily bubbly month. The cryptocurrency weighed in Thursday morning at US $29 per Bitcoin, following a month-long upward flight. If it continues, the sprint could carry Bitcoin past its record price of $32 by the end of February.