Bitcoin, the unconventional online currency, is making an attempt to go mainstream by doing what many conventional business do: sponsor a college football game.
BitPay, a bitcoin processor, will lend its support to the NCAA bowl game once known as the Beef ‘O’ Brady's Bowl. The game is now called the Bitcoin St. Petersburg Bowl, and it will be played on December 26. BitPay will sponsor the game, fittingly held in the land of no state income tax, until 2016.
"Our goal is to continue to move bitcoin into the mainstream and sponsoring the St. Petersburg Bowl offers us that opportunity," Tony Gallippi, executive chairman for BitPay, said in a press release. "College football fans and the bitcoin community represent a similar target demographic– tech-savvy men between the ages of 18 and 40."
It wasn’t reported how much, or in what currency, BitPay paid for the sponsorship. Sponsors also didn’t say whether the game would start with an explanation of bitcoin to the hordes of non “tech-savvy” football fans.
For those readers who don’t keep their eyes wide for bitcoin news, let’s look at all the controversy around the cryptocurrency in the past few months. In late February, Mt. Gox, the biggest exchange for bitcoins, filed for bankruptcy after it lost $400 million worth of customer’s bitcoins. On June 3, Erik Voorhees, who co-owned bitcoin related websites SatoshiDICE and FeedZeBirds, paid almost $51,000 to settle charges that they sold shares of the site without registering them with the Securities and Exchange Commission.
In April, the whirlwind of bad news surrounding Bitcoin caused the price to fall to $360, down from the $1,100 it was worth at peak value. But as Monitor has reported, the price has continued to climb since then. As of Wednesday morning, it was up to $600 per one bitcoin.
Though the football sponsorship is an interesting development in the coin’s growing legitimacy, it is probably too soon to ditch the dollar in favor of the online coin. There are also major problems with the cryptocurrency.
First, it isn’t regulated, and it still resides on the fringes of consumerism. The bitcoin is also a decentralized currency, based only on supply and demand. So, if people lose interest in bitcoin, the price falls. There is no way to tell what the price will be from one day to the next.
Third, it came out this week that a company, GHash, now controls almost 51 percent of the computational power used to mine bitcoin. In layman’s terms, this means that one company can virtually control who gets a bitcoin and who doesn’t.
“GHash is in a position to exercise complete control over which transactions appear on the blockchain and which miners reap mining rewards. They could keep 100 percent of the mining profits to themselves if they so chose,” wrote Ittay Eyal and Emin Gun Sirer, who work at Cornell University, wrote in an article on Hacking, Distributed. "The main pillar of the Bitcoin narrative was decentralized trust. That narrative has now collapsed."
There could be one good development from this news. Maybe the NCAA will start paying college players in bitcoins, if it ever decides to pay them at all.