Bitcoins a virtual currency invented in the online world will now buy a car in Overland Park.
By RAPHAEL SATTER
The Associated Press
I think were probably the first car dealer in the United States to accept bitcoins, said Norman Vialle, president and owner of Overland Park Jeep Dodge Ram Chrysler.
The car dealer at 87th Street and Metcalf Avenue signed up earlier this month with BitPay Inc., a bitcoin version of the popular PayPal online payment service. And he said some prospective buyers have made inquiries.
Its another important step for bitcoins as they move out of the shadows of seedier transactions that skirt government oversight and sometimes the law.
When they first pinged across the Internet, bitcoins could buy almost nothing.
Now theres almost nothing the cybercurrency cant buy, from hard drugs to hard currency, songs to survival gear, cars to consumer goods. Retailers are welcoming the virtual currency, whose unofficial symbol looks like a dollar sign with B instead of an S.
Advocates describe bitcoins as the foundation stone of a Utopian economy: no borders, no change fees, no closing hours and no one to tell you what you can and cant do with your money.
At a Starbucks in Buenos Aires, Argentinean Patricio Fink recently converted $600 into bitcoins. The software developer delivered cash to a pair of Australian tourists who wanted to pick up some spending money at unofficial currency conversion rates without risking Argentinas black market exchanges.
In the safety of the coffee shop, the tourists transferred their bitcoins to Fink by using an app on their smartphone.
Its something that is new, said Fink, 24, who described the deal to The Associated Press over Skype. And its working.
Its transactions like these up to 70,000 of them each day over the past month that have propelled bitcoins from Internet oddity to the cusp of mainstream use, a remarkable breakthrough for a currency that made its online debut only four years ago.
Bitcoins value also underwent a recent propulsion when the total value of all bitcoins in circulation hit $2 billion. Its a volatile valuation.
Their value soared on a recent Tuesday only to crash the next day, shedding more than 60 percent of their value in the space of a few hours before recouping some of their losses. Critics say the roller coaster currency movements are a sign that the bitcoin is a bubble waiting to burst.
Retailers see BitPay as a buffer to bitcoins volatility.
By linking to BitPay, a merchant allows shoppers to choose the virtual currency as a form of payment when they complete their online purchases. No dollars, euros, pounds or other government-established money required.
BitPay accepts from the shopper the number of bitcoins needed to meet the merchants posted price tag in his local currency. The number of bitcoins needed depends on their going rate on online markets, and BitPay then delivers the cash to the merchant.
Atlanta-based entrepreneur Anthony Gallippi said BitPay handles transactions for about 4,500 companies, many of which are e-commerce sites. He said adoption by traditional retailers is broadening the mainstream use of the vitural currency.
The mechanics of the virtual currency were first outlined in a research paper signed Satoshi Nakamoto likely a pseudonym and the coins made their online debut in 2009.
How coins are created, how transactions are authenticated and how the whole system manages to power forward with no central bank, no financial regulator and a user base of wily hackers amounts to a mix of computing power and savoir faire.
The linchpin of the system is a network of miners high-end computer users who supply the bitcoin network with processing power needed to maintain a transparent, running tally of all transactions. The tally is one of the most important ways in which the system prevents fraud, and the miners are rewarded for supporting the system with an occasional helping of new bitcoins.
Vialle, the Overland Park car dealer, said his interest in technology led him to mine bitcoins about a year ago. Values then ranged between $10 and $15 per bitcoin, he said.
The price of a single bitcoin blasted through the $100 barrier earlier this month, according to Mt. Gox, a site where users can swap bitcoins for traditional currencies. That was before the Tuesday spike to $266 per bitcoin and crash to nearly $100 before it settled around $160 per bitcoin.
But the anything goes nature of the bitcoin has also made it attractive to denizens of the Internets dark side.
One of the most prominent destinations for bitcoins remains Silk Road, a black market website where drug dealers advertise their wares in a consumer-friendly atmosphere redolent of Amazon or eBay complete with a shopping cart icon, a five-point rating system and voluminous user reviews.
The site uses Tor, an online anonymity network, to mask the location of its servers, while bitcoin payments ensure theres no paper trail.
Late last month, the U.S. Treasurys Financial Crimes Enforcement Network, or FinCen, announced it was extending its money laundering rules to U.S. bitcoin dealers and transfer services, meaning that companies that trade in the cybercurrency would have to keep more detailed records and report high-value transactions.
Many in the bitcoin community are frustrated at the attention paid to the shadier side of the virtual economy.
Last month, BitPay said its vendors had a record $5.2 million in bitcoin sales well ahead of the $1.2 million of monthly revenue estimated to have coursed through Silk Road last year.
Gallippi said the cybercurrencys ease of access is its biggest selling point.
With bitcoins, I can access my money from any computing device at any time and do whatever the heck I want with it, he said. Once you move your money into the cloud, why would you ever go back to putting your money in the bank?
Many Wall Street veterans are skeptical and they may feel vindicated after the bitcoins latest tumble.
Trading tulips in real time is how longtime UBS stockbroker Art Cashin described the bitcoins rapid rise, comparing it to the now-unfathomable craze that saw 18th-century Dutch speculators trade spectacular sums of money for a single flower bulb.
It is rare that we get to see a bubble-like phenomenon trade tick for tick in real time, he said in a note to clients last week.
The Stars Mark Davis contributed to this report.