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24 Aug, 2013 16:58

Growing Bitcoin buzz: In-person Bitcoin exchanges make a splash in Berlin

Supporters of Bitcoin spent Saturday engaging in personal exchanges in Berlin, taking place in a mobile art space which supports the cryptocurrency. Its official recognition by the German state earlier this month is only aiding its expansion.

Bitcoin first burst onto the global scene in 2008 and has since been gaining rapid momentum. Germany is fast becoming a hotbed of exchanges, with August 16 marking its official recognition by the country under the term “Rechnungseinheiten,” which roughly translates to “units of account.”

“It’s a real step towards it becoming a universally, accepted, legitimate other option to state-issued currencies,”
said RT’s Peter Oliver in Berlin. In some places in the German capital, people even use the parallel currency to pay for simple commodities such as food and drink. Numerous small online merchants also accept it.

Bitcoin Exchange Berlin hosted their third meeting on Saturday at the city’s Platoon Kunsthalle (Platoon Art Hall) to launch a European hub where people can both buy and sell a selection of products using Bitcoin and buy and sell the currency itself in a stock-exchange type climate.

“We’ve got many innovative people here from all over the world, coming together," Aaron Koenig, founder of Bitcoin Exchange Berlin, told RT. "Berlin has always been a place to try out new things. Did you know that the computer was invented in Berlin? So I think that it’s just natural that Bitcoin is very strong here.”

Buyers attend with notebooks or electronic devices in order to create an account with the currency and buy it. People attending the gatherings are actively encouraged to set up a ‘wallet’ through which transactions can take place.

Germany’s “BXB” (Bitcoin Exchange Berlin) site lists as its intention the provision of the opportunity for members of the Bitcoin community “to meet and collaborate on ideas” in the hope of broadening the community itself and bringing the currency to higher prominence within “Berlin, Germany, Europe and around the world.”

The official recognition of the currency means that profits reaped from its sales should be officially taxed as income. However, the sales tax would only be applicable to commercial, rather than private transactions, and while recognized, it is not yet categorized as an official currency.

“It [taxation] may well be a lot harder than that sounds. Because of the actual nature of Bitcoin – it is a peer-to-peer online currency – it’s essentially anonymous by the entire nature of it – it would be very hard to track down just who was selling to whom for tax purposes, so it may not work out how the state fancies it,”
said Oliver.

Koenig believes that the impact of the ruling on Bitcoin's future remains to be seen.“It [the decision] brings clarity," he said. "It’s clear that it will never be illegal and hopefully they’re setting a standard. I don’t think we should have too many rules but should rather see how it develops.”

This is not the first time that an official stance has been taken on Bitcoin: At the beginning of August, a US federal judge in Texas ruled that Bitcoin is a legitimate currency. Both decisions opened up the possibility for the virtual money to be regulated by governments, which oppose the original concept of Bitcoin – a peer-to-peer, relatively anonymous payment.

However, within the last two weeks, a New York regulator announced an investigation into virtual currencies such as Bitcoin, claiming that they could be abused by gun runners and drug traffickers and could pose a threat to US national security. Other countries have taken a much harsher line: Thailand has banned it.