By Ray Dirks
With $11 billion worth of bitcoin in circulation today, the digital currency offers promise as the new global currency of the digital age. However, bitcoin faces many challenges including security, before more people start to use it. A company called SmartMetric (OTCQB:SMME) just announced it is set to launch its SmartMetric Biometric Bitcoin Card. It’s the patented nano-computing and fingerprint technology invented by SmartMetric that makes their smartcard the kind of solution that is sorely needed for bitcoin to become more widely adopted.
SmartMetric has created the smallest fingerprint reader in the world, which fits on a standard sized credit or debit card. It reads a fingerprint in less than one second and the card only works if the fingerprint matches the owner’s. Couple this with the company’s nano-sized motherboard and processors to create a tiny computer all on a card. The company describes this as a “quantum leap in card authentication in the payments industry”.
The nano-computer on the card enables storage and transfer of bitcoins. The cards are fully compatible with any ATM. You can visit the bitcoin-friendly coffee shop down the street and use your bitcoins on a card to purchase a cup of coffee. Or you can stop by the ATM and withdraw dollars at the equivalent of that day’s bitcoin-to-dollar exchange rate. This is bitcoin on a smartcard with more security than any payment card has ever offered.
Despite its cryptography, security has been a big problem for bitcoin. Bitcoins stored on online wallets have been stolen or destroyed through a number of cyber-attacks. A major impediment for broader adoption is that people are concerned bitcoins cannot be stored securely.
A very thorough and detailed list of Bitcoin heists is presented on a forum called bitcoitalk.org. Digital thieves have been quite busy. The Verge recently ran an article titled, “How to steal Bitcoin in 3 easy steps,” Basically, bicoins are just like cash. Unlike conventional money in a bank account or on a debit card, which may be insured and come with certain levels of guarantees and security from a bank, once bitcoins are stolen or lost, they are gone.
What bitcoin needs in order to become widely accepted and used as a global currency in addition to security is ease of transfer between currency holders, broader acceptance among businesses and retailers both online and more perhaps more importantly offline, and stability. The last factor, stability, will only come after we see significant advancement in the first three factors.
Fed Chairman Ben Bernanke recently took a position on bitcoin stating in a letter to the U.S. Senate noting that bitcoin may “hold long-term promise… if the innovations promote a faster, more secure and more efficient payment system.” SmartMetric’s card may be the first key innovation to really move the currency forward and outward into the mainstream.
More investors are taking a position in SmartMetric. The company announced on Friday that it plans to launch the card in the first quarter of 2014. Although a number of privately held start-ups have recently garnered attention for getting big venture capital bucks, for retail investors looking to participate in the potential upside of the bitcoin phenomenon, there seems to be a dearth of investment opportunities. SmartMetric may be the only public company going after the bitcoin opportunity.
SmartMetric’s breakthrough nano-computing and biometric security technologies, converging with the where bitcoin is in emergence, is serendipitous timing for the currency and the card provider.
A growing number of online retailers are now accepting the currency. Amazon is certainly not there yet. However, some mainstream retailers are coming on board. U.S. online retailer, Overstock.com (NASDAQ:OSTK) just announced on Thursday it will begin to accept bitcoins. Overstock reported that in its first 22 hours of accepting the digital currency, it accepted 800 orders in bitcoin, worth a total of about $126,000.
On Friday Singapore became one of the first countries to issue guidance on bitcoin taxation for businesses. A global map representing the regulatory stance of countries towards bitcoin, unsurprisingly, shows that free market economies have been permissive of the virtual currency. Fortunately these economies also happen account for most of the world’s wealth.
According to a Bloomberg poll published last month, 42% of Americans knew that bitcoin is a virtual currency. As a generous guestimate, if 1% of Americans currently have bitcoins, a 42% awareness in the general public is pretty impressive.
A recent New York Times article quoted Chris Dixon, a partner at Silicon Valley-based venture capital firm Andreessen Horowitz. Dixon said of bitcoin, “It’s one of the five best computer science ideas of the last 40 years.” Bitcoin may just be here to stay. SmartMetric may be the company with the nano-computing biometric technology that make it mainstream accessible on a payment card.
This urge people have to store incredibly sensitive data with a fingerprint acting as a pass-key is so naive. I cant think of anything less secure than a fingerprint. We don’t live in an age where fingerprints are guarded secrets. The first rule of secure passwords is to not write it down anywhere, i cant think of one object that I use that my fingerprints aren’t plastered all over it. convenient? yes, secure? hell no. I might like to use it for my username, that I could see, but a password? no way.