11 Feb 2014 / Reuters – “Welcome to the new economy,” boasts a sign at the entrance of the self-styled Bitcoin Embassy in the heart of Tel Aviv.
The sparely furnished property opened a few months ago to support a community of Bitcoin fanatics, perhaps the most active in the world, who are out to build just that – a next-generation trading system based on the digital currency.
At least two dozen startups have popped up in Israel over the past year with a view to creating tools that will allow the currency to be used in almost any kind of transaction – from buying shoes to sending remittances or issuing company stock.
Israeli companies are pioneers in hi-tech fields like cryptography, fraud prevention, and semiconductors, all of which interact with the Bitcoin universe.
That makes the country as much of a Bitcoin hotspot as Singapore or California’s Silicon Valley, says Eli Novershtern, principal of Israel’s biggest venture capital firm Pitango, which manages assets worth over $1.6 billion.
“We see a lot of activity here and are certainly looking to invest (in such firms), even significant sums if we recognize an attractive opportunity,” he said, without offering details of specific plans.
As a crypto-currency, Bitcoin is passed between two parties digitally and can be traded on exchanges for real-world currencies. Its value fluctuates according to user demand but it is not backed by any government or central bank.
New bitcoins come from a process called mining. Computer programmers around the world compete to crack an automatically generated code and the first to do so is rewarded with a small stash. This happens about every 10 minutes.
The maximum potential number of bitcoins in circulation is 21 million compared with around 12 million currently – meaning that, over time, the payoffs get smaller…. Read more
http://www.reuters.com/article/2014/02/11/us-bitcoin-israel-idUSBREA1A0R420140211
