Bitcoin Economy

Bitcoins emerged in 2008, designed by a programmer or group of programmers going under the name of Satoshi Nakamoto, whose real identity remains unknown. The currency isn’t regulated by any government or central bank. New Bitcoins can only be created by solving complex problems embedded in the currency, keeping total growth limited.

While Bitcoins could be used for nefarious purposes, they can also be a “legal means of exchange,” and policies need to be crafted to regulate their use, the U.S. Justice Department said at a U.S. Senate committee hearing last month.

The growth in mobile Bitcoin apps is also being driven by the spreading ubiquity of mobile devices. Global shipments of mobile phones and tablets will exceed personal-computer shipments this year by more than six times, according to researcher Gartner Inc.

 Bitcoin Economy 

“That’s going to be the big game, on mobile,” Nicolas Cary, CEO of mobile Bitcoin app provider Blockchain.info, said in an interview.

The market for mobile payments is projected to be $235.4 billion in total transaction value in 2013, up 44 percent from the prior year, according to Gartner. Because Bitcoins can lower or eliminate money-transfer and other banking fees, the digital currency could potentially compete with Ebay,  PayPal, Visa Inc., Google and others offering mobile payments.

Jennifer Hakes, a spokeswoman for PayPal, didn’t respond to a request for comment.
About a third of people who own Bitcoins are initiating transactions from a mobile device, according to Crone. “In three years, it could easily double,” he said.

Makers of mobile apps report rapid growth. Bitcoin Wallet, or Multibit Wallet are used to store and pay Bitcoins, is adding more than 5,000 users a day, up from about 500 at the beginning of the year, according to its developer, Andreas Schildbach.