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4 Jul, 2013 12:36

Americans fed up with currency manipulations, turn to Bitcoin

After almost a century of paper money manipulation by central government people turning to its virtual and free of state control alternative – Bitcoin.

Experts say people see it as a more reliable option, when the crisis is hitting traditional currencies.

“I think we’ve had one hundred years of what the US government can do when it gets to manipulate a currency and a lot of people are kind of tired of that and they want to experiment in a space where you can’t manipulate a currency; and I think that’s why a lot of people are interested in this space,” Jonathan Mohan, a founder of “Bitcoin NYC”, told RT.

The New York City EVR restaurant is the first establishment to accept the digital currency. At EVR one can find the big Apple’s expanding community of Bitcoin investors, who now choose to use Bitcoins instead of paper money or credit cards. Free from Government, bank control and credit card processing fees –these are Bitcoin key allures

When the Bitcoin network came into existence in 2009, the new 'crypto currency' faced huge criticism. The invisible money created through a set of computer manipulations, with its exchange rate being determined exclusively by the demand on transactions left most people skeptical.

“I first came into the Bitcoin space, I was the only person in New York city who even heard of Bitcoin. I was laughed out of every VC firm in the city, and now fast forward two years, there are so many start ups. there are meet ups,” said  Charlie Shrem, a co-owner at EVR & Founder, talking to RT.

Charlie Shrem hosts a weekly Bitcoin meeting in Union Square, where people can buy and sell the digital coins – a gathering that attracts hedge fund investors and high frequency traders. "We’re all friends with each other", Shrem said. Today Bitcoin has become “kinda like a culture” in New York, as Shrem classified that. A culture of young, financially savvy New Yorkers determined to build an unregulated financial system.

Most recently, the key Bitcoin initiators the Winklevoss twins filed with the US Securities and Exchange Commission (SEC) for the currency IPO. This could make Bitcoin a more accessible and popular investment – like stocks or commodities.

In New York City which is home to the global headquarters for most of the world’s largest banks, the Bitcoin economy is slowly being embraced by respectable business. Domino’s Pizza and the hotel chain, Howard Johnson's accept Bitcoin payments and a New York-based limo service just began accepting the digital coins. Fair to say that New Yorkers can eat, sleep and commute without spending a dollar.

Software engineer Mike Caldwell peels back the hologram of a new Bitcoin he minted to reveal a code in his shop on April 26, 2013 in Sandy, Utah. (George Frey/Getty Images/AFP)

In search for better confidence and security

At a time when the traditional financial system is going flop and monetary authorities across the world leave ordinary people largely disappointed, Bitcoin is becoming increasingly attractive.

“You can finally opt out of a system that you don’t agree with. Like, Bernanke can keep printing as much money as he wants, Bitcoin users aren’t effected”, Josh Rossi said. “We’re holding Bitcoins. It only makes our Bitcoins worth more dollars. It’s a natural hedge against inflation,” he added.

Online, popular sites like www.reddit and www.okcupid.com accept Bitcoin. Cars, furniture and tech gagets have been put up for sale on the trading website ‘craigs list’, with dollars or digital coins equally accepted.

The recent scandal over the leaks of personal data processed by such internet giants as Google, Facebook, Apple makes the anonymous Bitcoins shine brighter.  Bitcoin users don’t need to register anywhere.

Many economists remain skeptical of the long-term stability of a currency that lacks backing from a single government, which is not a problem for Bitcoin believers.

“If they were pleased with the monetary system, if they felt it was fair, then they wouldn’t be looking for an option like Bitcoin. So, you see already, the loss of confidence, the loss of commitment, it’s a sign of where the society is going,” Richard Wolff, economic analyst and author, told RT.

The US government, though, isn't too happy with Bitcoin's popularity. It shut down a virtual Tokyo – based Mt. Gox exchange system the currency was using, claiming it was essentially a money-laundering platform. Last Thursday the platform registered with the Treasury Department's Financial Crimes Enforcement Network (FinCEN) as a money services business (MSB), according to FinCEN's website. However, the fruit this move may bring remains vague. It may either bring the company in line with the Treasury’s rules, or open the exchange to increased regulatory attention. Before the registration, Mt. Gox stopped its US dollar withdrawals, saying it needed to introduce some system improvements amid increased demand for Bitcoin operations .