Thoroughbred breeding and racing is a global enterprise in which buying and selling is transacted in established and familiar currencies; dollars, Euros, yen, and pounds. Bitcoin is a fledgling cryptocurrency that could increasingly substitute for such government-backed money. The software and protocol for the bitcoin digital medium of exchange were created in 2009 by an anonymous individual or group using the pseudonym Satoshi Nakamoto.

Bitcoin enables parties to a sale to transfer virtual cash from one “digital wallet” on an online site like Coinbase to another using the Web and a computer or mobile device. Because bitcoin is not issued by a government central bank, it must be purchased with a conventional currency on private exchanges—BitPay, Mt.GOX, and others

The nascent monetary innovation has been compared to the Internet in terms of its revolutionary potential to disrupt and improve ecommerce. Dissenters disagree and see bitcoin as a flash in the pan or as a risky and unregulated modus operandi for illicit dealings. In December 2013, China’s central bank banned its use and in January 2014, federal prosecutors in the United States filed money-laundering charges against a prominent bitcoin promoter.

Despite its growing pains, bitcoin is beginning to gain traction. was the first major retailer to accept bitcoin and Google and Amazon are exploring ways to use it. Two Las Vegas casinos permit bitcoin to be rendered as payment for rooms, food, and drinks, but not for gambling. Businesses have a monetary incentive to prefer bitcoin to credit cards because its processing fees are much lower.

Companies are generally wary of bitcoin because of wide swings in its value and limited legal recourse in the event of fraud. Thus bitcoin advocates will have to overcome people’s understandable skepticism about using it, perhaps via some degree of government regulation, for the currency to become a major force in buying and selling.

Bloodstock auction companies, leading farms, and ADWs with clientele from around the world, will likely sooner or later have to decide whether they will take bitcoin in addition to government-sponsored currencies.

Copyright © 2014 Blood-Horse Publications. Used with permission.

Postscript: The view here is that bitcoin is too risky at the present time for a merchant to accept.