First Brick-and-Mortar Bitcoin Center Opens Down the Block from the NYSE

Think bitcoins are a passing fad? The guys behind the Bitcoin Center NYC sure don’t.

On New Years Eve they threw a party to officially open their vast storefront office, located down the block from the New York Stock Exchange. And they’re planning on staying awhile.

“We signed a 10-year lease,” Austin Alexander, the center’s deputy director, told Bank Innovation.

One of the center’s founders, entrepreneur Nick Spanos, has a background in real estate, so he may have secured a good deal for the fledgling institution.

The office is not much to look at now — a huge empty space that serves as a classroom for bitcoin newbies and gurus to meet up and talk virtual currency. An elevated space in back of the room will host bitcoin mining machines, and the center will also operate as a currency exchange specializing in, of course, bitcoins. The center will also offer consulting services, as well.

The move is well-timed. Interest in bitcoins has never been greater. At the Consumer Electronics Show in Las Vegas this week, for example, there was a “Bitcoin Pavilion” hosting several bitcoin startups.

The past several months have sent the decentralized digital currency’s value rocketing up and crashing down without warning, unnerving some but intriguing others. The price at press time was approximately $820 for 1 bitcoin. This volatility makes using bitcoins as a currency only for the strong of stomach, but the currency’s true value may ultimately lie not in the coins themselves, but in the platform that hosts them, where funds can be quickly exchanged at costs far below those of wire transfers between banks. For now, the currency is still highly susceptible to the influence of speculators, and the center’s location so close to the NYSE reinforces the idea of bitcoins as the latest, sexiest way to make a fast buck.

It can be hard to get the mind around a bitcoin: what is it, actually? Where does the value lie, if not with a central bank? Witness the many articles about bitcoins illustrated with gold coins bearing the bitcoin symbol. No such coins exist, except perhaps as novelty items. Is the Bitcoin Center another symptom of the need to make bitcoins “real,” a branch for bitcoins? Alexander said that the center has an educational mission to teach people what bitcoins are and how coins can be obtained, stored safely, and spent. The center has already hosted a seminar that brought in around 150 people. It is ultimately hoped the center will serve the needs of the city’s bitcoin community, with meetups for bitcoin startups and where those needing help with the currency can find it.

The day Bank Innovation visited the center it was just 9 degrees Fahrenheit outside with howling winds on Broad Street (our offices are down the street). The intrepid virtual currency enthusiasts in the entrance to the center wore winter coats as they pecked away at laptops.

“It’s a little cold in here today,” Alexander said, “but wait until we get started mining coins.”

Bitcoin mining computers give off a great deal of heat and gobble up a lot of electricity. Alexander looked around the cavernous space again and said, “It’s true. That’s how we’re going to heat the place.”