This week, we distill insights around Bitcoin - a digital crypto-currency that enables people to make near-instant peer-to-peer transactions and purchases via the web and mobile. 100+ thinkers and planners within MSLGROUP share and discuss inspiring projects on social data, crowdsourcing, storytelling and citizenship on the MSLGROUP Insights Network. Every week, we pick up one project and do a deep dive into conversations around it -- on the MSLGROUP Insights Network itself but also on the broader social web -- to distill insights and foresights. We share these insights with you on our People’s Insights blog and compile the best insights from the network and the blog in the People’s Insights Quarterly Magazine, as a showcase of our capabilities. We have further synthesized the insights to provide foresights for business leaders and changemakers — in the ten-part People’s Insights annual report titled Now & Next: Ten Frontiers for the Future of Engagement, now available as a Kindle eBook. For more, see: http://peopleslab.mslgroup.com/future-of-engagement

1. crowdsourcing | storytelling | citizenship | social data
Bitcoin
People’s Insights Volume 2, Issue 23

2. Volume 2, Issue 23,
April - June, 2013
Future of
Money
Bitcoin
100+ thinkers and planners within
MSLGROUP share and discuss inspiring
projects on social data, crowdsourcing,
storytelling and citizenship on the
MSLGROUP Insights Network. Every
week, we pick up one project and curate
the conversations around it — on the
MSLGROUP Insights Network itself but
also on the broader social web — into
a weekly insights report. Every quarter,
we compile these insights, along with
original research and insights from the
MSLGROUP global network, into the
People’s Insights Quarterly Magazine.
We have synthesized the insights from
our year-long endeavor throughout 2012
to provide foresights for business leaders
and changemakers — in the ten-part
People’s Insights Annual Report titled
Now & Next: Ten Frontiers for the Future
of Engagement.
People’s Insights
In 2013, we continue to track inspiring
projects at the intersection of social
data, crowdsourcing, storytelling and
citizenship.
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3. 3
What is Bitcoin?
Bitcoin is a digital crypto-currency that
enables people to make near-instant peer-
to-peer transactions and purchases via the
web and mobile. Bitcoin is maintained and
regulated by a global network of enthusiasts
and is being used by people, businesses and
even investors.
DKSDan commented on the appeal of the
new currency:
“Bitcoin is not only a unit of account, it is an
entire exchange protocol designed to allow the
secure, simple, inexpensive, and irreversible
transfer of value between potentially
anonymous parties without the restriction of
borders, interference from governments, or
exposure to counter party risk. This is where
Bitcoin’s intrinsic value lies.”
Source: bitcoin.org
Source: mtgox.com
Source: bitcoin.meetup.com
This map of Bitcoin Meetup Groups provides
a glimpse at the global nature of the network:
Introduced four years ago, Bitcoin now sees $45
million of activity per day. There are currently
11 million Bitcoins in circulation, i.e., $1 billion
worth of Bitcoin. At time of writing, one Bitcoin
is currently worth an average of $96.
How do people use Bitcoin?
People purchase Bitcoins using their local
currency at exchanges like Mt. Gox. In
essence, each Bitcoin is made of a string of
codes. With each transaction, a new code is
attached. This makes it possible to trace all
the exchanges of each Bitcoin in circulation
and prevents the same Bitcoin from double-
use.
People store their Bitcoins in wallets on their
computer or mobile or on the web. Or, they
store their private key on paper. People make
payments by entering the peer or vendors’
public key, similar to how we send emails by
entering an email address.
Blogger Ashutosh wrote:
“Bitcoins are kept in a digital wallet which you
can keep in your computer, or on a website
online,which will manage and secure your
wallet for you. You can have as many wallets
and bitcoin addresses (where you receive
money from others) as you like.”

4. Volume 2, Issue 23,
April - June, 2013
Future of
Money
Bitcoin
Source: play.google.com
Since data about every Bitcoin transaction is freely available online, experts encourage people
to create and use new Bitcoin addresses for each transaction. This also prevents hackers from
seeing how many Bitcoins are stored in each wallet.
This infographic explains how people buy, store and spend Bitcoins.
View the full infographic at: visual.ly
Below is a screenshot of what someone’s mobile wallet could look like.

5. 5
Source: itworld.com
Source: money.cnn.com
Where do Bitcoins come from?
There are currently 11 million Bitcoins in
circulations, and more Bitcoins are “mined”
every 10 minutes to ensure a steady stream
of fresh circulation.
TechHive’s Leah Yamshon explains:
“In order to buy, trade, or use Bitcoins, the
units of currency have to first be introduced to
the market... Bitcoin mining software runs the
Nakamoto algorithm, searching for a specific
chain of code. When that code is found, a block
of Bitcoins is rewarded to whoever found it.
Current blocks contain 25 Bitcoins, but the
block size goes down by half every four years,
making mining harder and less profitable as
time goes on.”
“Currently, there are roughly 11.4 million
Bitcoins in circulation--that number will
cap at 21 million in 2140, according to the
algorithm’s limitations.”
Because of the rewards involved - 25 Bitcoins
equals $2,400 - there is an active community
of programmers who work part-time and
full-time to mine new Bitcoins. There is also
a universe of vendors that caters to these
programmers with more efficient computer
hardware.
Maintaining and regulating
Bitcoins
The process of mining new Bitcoins is
actually what keeps the network running. In
the hunt for rewards, miners compute all the
Bitcoin transactions and create up-to-date
logs that trace each Bitcoin’s activity.
The Economist explains:
“The entire network is used to monitor and
verify both the creation of new Bitcoins through
mining, and the transfer of Bitcoins between
users. A log is collectively maintained of all
transactions, with every new transaction
broadcast across the Bitcoin network.
Participating machines communicate to create
and agree on updates to the official log.”
“This process, which is computationally
intensive, is in fact the process used to mine
Bitcoins: roughly every 10 minutes, a user
whose updates to the log have been approved
by the network is awarded a fixed number
(currently 25) of new Bitcoins”
CNN’s Stacy Cowley draws an interesting
comparison to highlight the current scale of
the Bitcoin mining network:
“The power of all the computers networked
together to maintain the digital currency’s
system far exceeds the combined processing
strength of the top 500 most powerful
supercomputers.”
The Verge’s Adrianne Jeffries explains the
crux of this open source P2P network and
how they regulate the currency:
“The fundamentals were strong: transparency
created trust; a network of users substituted
for a central authority; and built-in deflation
canceled out any circumstantial inflation
that might devalue the currency. Whenever a
problem arose, members of the community
worked together to fix it.”

6. Volume 2, Issue 23,
April - June, 2013
Future of
Money
Bitcoin
Source: motherboard.vice.com
Source: networkworld.com
For instance, there was a recent fork in the
system and two different logs were created
which allowed for double spends. The
network immediately spotted the bug and
within a few hours agreed on a solution and
resumed operations.
Why do people use Bitcoin?
Some people are excited about Bitcoin
because it is a decentralized currency that
cannot be affected by any one government’s
actions. Some use it because it is a more
effective form of exchange in a global and
digital era.
The Economist pointed out one of the top
reasons:
“Bitcoins (or fractions of Bitcoins known as
satoshis) can be bought and sold in return
for traditional currency on several exchanges,
and can also be directly transferred across
the internet from one user to another using
appropriate software. This makes Bitcoin a
potentially attractive currency in which to settle
international transactions, without messing
around with bank charges or exchange rates.”
Writer and Bitcoin enthusiast Kashmir
Hill listed four reasons why people and
merchants would opt to use Bitcoin
“(1) It lets you make digital purchases in stores
without revealing your identity (by using a
credit card with your name and number on it).
It would let you do the same thing online.”
“(2 )Merchants can avoid paying high
transaction fees and don’t have to worry about
fraudulent purchases that result in charge-
backs. “When a transaction is done, it’s done.”
If merchants were to offer discounts to Bitcoin
shoppers, that would make the currency more
appealing.”
“(3) For spending internationally or while
abroad, you don’t have to worry about
converting your money to the local currency,
and the conversion fees that go along with that.”
“(4) It allows people to make purchases when
they are banned by other traditional payment
providers.”
Several people are also showing interest in
investing in Bitcoin, much like they would
in say, gold. This interest is part responsible
for the fluctuations of Bitcoin, which at its
highest traded at $230 per Bitcoin.
Many people believe that Bitcoin allows
‘anonymous’ transactions, but this isn’t
necessarily true. Blogger Colin Neagle
pointed out:
“Some simple research on Bitcoin shows
that although transactions are conducted
anonymously, they can be traced. The
Block Chain logs and displays all Bitcoin
transactions. Starting there, anyone interested
enough to see where the Bitcoins used to make
one transaction could follow its trajectory from
its origins.”
Many people also believe that Bitcoin allows
people to engage in criminal activities like
purchase of illegal items (e.g. drugs) or tax
evasion. Governments are now beginning to
introduce legislature that applies to Bitcoin
exchanges and vendors that use Bitcoin. The
U.S. government has also used Bitcoin to
trace illegal activity and conduct a raid on the
online drug haven Silk Route.

7. 7
Source: motherjones.com
Source: ricochet.com
Source: The Pros & Cons of Bitcoin - LeWeb London 2013
Why do businesses use Bitcoin?
Thousands of merchants, including OkCupid,
Foodler and even Wikileaks, now accept
Bitcoin. Bitcoin business solutions provider
BitPay itself reports a clientele of 7,500
merchants.
Merchants are accepting Bitcoin for a first
mover advantage, to cater to tech savvy
people or to capitalize on the opportunity to
create new services. Several entrepreneurs
have created services that enable Bitcoin
enthusiasts to spend their Bitcoins to buy
things like Zara clothing.
Source: http://www.psfk.com/2013/06/bitcoin-fashion-online-store.html
Here are some reasons why merchants
should accept Bitcoin, according to Bitcoin.
org:
“Bitcoin is an emerging market of new
customers who are searching for ways to spend
their coins. Accepting them is a good way to
get new customers and give your business
some new visibility. Accepting a new payment
method has always shown to be a clever
practice for online businesses.”
What people are saying about
Bitcoin
Thinkers, bloggers, the media and Bitcoin
enthusiasts all have a point of view on the
new currency, which range from the extreme
‘Bitcoin is a scam’ to ‘Bitcoin is the future of
money.’ Several of these points of view are
discussed in this LeWeb panel of Bitcoin.
Some thinkers question the ‘true value’ of
Bitcoin and speculate that it may be the next
Ponzi Scheme, or the newest bubble.
Vanity Fair’s Kurt Eichenwald wrote:
“In essence, the market is a fantasy. Once the
hoarders stop buying, what buyers will step
up to the plate to take their place? My bet? No
one. There will be, at some point, a time when
some hoarder decides to unload. Prices will
drop. Other hoarders will get scared and start
to sell. Prices will drop further. Before long,
there will be a mass rush to the exits. And at
that point, the illiquidity of the Bitcoin market
will be apparent.”
Several thinkers believe that Bitcoin is a
natural evolution of money, in keeping with
the digital and global world of today.
Salon’s Kyle Chayka pointed out the need for
this evolution:
“Cold, hard cash has inherent inefficiencies. It’s
bulky and difficult to transfer between owners
(wheelbarrows notwithstanding). These days,
money is barely even paper bills—it’s just a
number stored on a computer signifying credit
or debit. Digital currencies take that idea one
step further, creating self-regulating mediums
of exchange through peer-to-peer networks.”

8. Volume 2, Issue 23,
April - June, 2013
Future of
Money
Bitcoin
Tom Simonite, IT editor of MIT Technology
Review, speculated:
“Bitcoin could hit the big time as less an
idealistic reinvention of currency and more a
technology to move payments more efficiently
than today’s systems.”
Source: radar.oreilly.com
Source: bbc.co.uk
Meanwhile, Gavin Andresen, a lead developer
on the Bitcoin project, cautions:
“Bitcoin is an experiment. Treat it like you
would a promising Internet start up company:
Maybe it will change the world, but recognize
that investing your money or time in new ideas
is always risky.”
Impact on brands and
organizations?
It’s still too early to speculate on how Bitcoin
could impact brands and organizations. The
currency may have more of an impact on
financial institutions as early adopters use
Bitcoin as a way to avoid transaction fees, to
make quicker international payments to cut
costs associated with currency exchange.
Financial institutions should also note
investor interest in the currency – especially
as entrepreneurs propose the creation of a
Bitcoin fund.

9. People’s Lab is MSLGROUP’s proprietary
crowdsourcing platform and approach that
helps organizations tap into people’s insights for
innovation, storytelling and change.
The People’s Lab crowdsourcing platform
helps organizations build and nurture public
or private, web or mobile, hosted or white
label communities around four pre-configured
application areas: Expertise Request Network,
Innovation Challenge Network, Research &
Insights Network and Contest & Activation
Network. Our community and gaming features
encourage people to share rich content, vote/
comment on other people’s content and
collaborate to find innovative solutions.
The People’s Lab crowdsourcing platform
and approach forms the core of our distinctive
insights and foresight approach, which consists
of four elements: organic conversation analysis,
MSLGROUP’s own insight communities, client-
specific insights communities, and ethnographic
deep dives into these communities. The People’s
Insights Quarterly Magazines showcase our
capability in crowdsourcing and analyzing
insights from conversations and communities.
People’s Lab:
Crowdsourcing Innovation & Insights
Learn more about us at:
peopleslab.mslgroup.com | twitter.com/peopleslab

10. For People’s Lab solutions, contact
pascal.beucler@mslgroup.com