After spending the last legislative session pushing medical marijuana and a cell phone tracking bill, Sen. Brandon Petersen (R-Andover) is now looking toward a totally different cause: Bitcoin, the semi-controversial digital currency.
This week, Petersen announced that he's founding a new nonprofit, yesbitcoin, with a mission to communicate to people and organizations how Bitcoin works and the ideas and infrastructure behind it. Petersen will serve as the executive director of the organization, but his role as senator will stay separate.
How Bitcoin works is a bit complicated. The currency was developed in the late 2000s by a still-unknown creator, but the currency has only recently become popular. Bitcoins are something like a digital precious metal, and in order to "mine" them, you have to solve extremely difficult math problems from a certain program downloaded to your computer. However, most people get Bitcoins through exchanges, where you can buy and sell the currency, oftentimes for hundreds (or sometimes thousands) of dollars apiece.
The one big advantage of the currency is that it's a "peer-to-peer" system, meaning users can trade Bitcoins seamlessly, without the need for banks or other systems to get in the way.
"I really think Bitcoin has the potential to change the world," Petersen said. "And it has already, really. From security to saving merchants money on financial services to the speed of transactions in general, Bitcoin is good for merchants and consumers."
But the currency certainly isn't perfect. Bitcoin has already had its share of security problems, most notably with Mt. Gox, a Bitcoin exchange that was at one point the largest in the world. In an embarrassing public incident last year, the exchange lost more than 850,000 Bitcoins, worth more than $450 million at the time, believed to be due to hackers.
In addition, because Bitcoin is still relatively young, its price tends to fluctuate constantly, making it tough to nail down its exact value.
"Right now, it just seems like people buying in to sell it to someone else who wants it so they make a profit, and that can only go on for so long," said University of Minnesota law professor Richard Painter, in a recent interview with the Minnesota Daily.
Despite those flaws, some Minnesota businesses, like the Movement Minneapolis training studio in Uptown and the DalekoArts theatre in New Prague, are already using Bitcoin, as TechdotMN reported in December.