Here’s what bitcoin companies are doing to woo Greeks

June 30, 2015, 7:18 PM UTC
A bitcoin ATM is pictured in a commercial area of Barcelona on February 26, 2014. Japanese authorities were today probing the troubled MtGox bitcoin exchange after claims of a multi-million dollar theft from its digital vaults, as US prosecutors reportedly served a subpoena on the company. Bitcoin is a virtual currency that is created from computer code. Unlike a real-world currency like the US dollar or the euro, it has no central bank and is not backed by any government. AFP PHOTO/ JOSEP LAGO (Photo credit should read JOSEP LAGO/AFP/Getty Images)
Photograph by Josep Lago — AFP/Getty Images

As their country’s financial system collapses, Greek citizens are desperate to access their money. And vocal businesspeople elsewhere in the world are eager to inform them that they have another option: bitcoin.

Coinbase, a bitcoin exchange, wallet, and arguably the hottest company in the space, announced on Monday that it will waive transaction fees (normally 1%) for all purchases in euros through July 5. Separately, Erik Voorhees, founder of the bitcoin company ShapeShift, has urged the bitcoin community to tweet at Greek citizens and send them $5 in bitcoins using the payment platform ChangeTip.

But leading Greeks to the digital currency isn’t so simple.

Right now, in fact, there are very few ways for anyone in Greece to even obtain bitcoins. Their banks are closed for a week; their ATMs are limiting them to withdrawing 60 euros per day; and as of Tuesday, they cannot use Greek credit or debit cards for online transactions. That means they can’t even take Coinbase up on its offer.

That’s okay, says Fred Ehrsam, cofounder and president of Coinbase, because the company’s motive is to appeal to Europeans who are not in Greece. “If you’re sitting in Europe, you’re seeing a timeline now—you saw Cyprus in 2013, now Greece in 2015—and you’re like, ‘Hmm, my economy isn’t performing particularly well either, and all my assets could be frozen or devalued, that’s scary,'” Ehrsam tells Fortune. “There’s little that [bitcoin companies] can do for people on the ground in Greece. The bigger deal here is if you’re sitting in Italy, Spain, or Portugal, and you’re getting a little nervous, maybe it makes some sense to put value into bitcoin where you’re less susceptible to these things. The doomsday way of saying it would be, ‘Do it before it’s too late.'”

To that end, European activity on Coinbase is up 300% in the last 48 hours, compared to an average week from the past couple months. (There was also a 35% jump in activity from Greece last week, but Ehrsam says that’s coming off of a very low baseline number.)

Bitcoin’s appeal for Greeks, or for anyone whose national banking system is faltering, is that it is decentralized, securely tracked on bitcoin’s blockchain (a public ledger that records all transactions), and can be sent around with little or no fees and little or no transfer delays. And the price of bitcoin is up: it’s risen nearly 4% in the last day, 6% in the last week, and nearly 10% in the last month.

There has been some debate, over the past two weeks, around whether the price bump is coming from Greece. News outlets have run with hyperbolic (and factually suspect) headlines such as “Greeks rush to bitcoin” (CNNMoney) and “Greek citizens eye bitcoin” (Fox News). In reality, most Greeks can’t get bitcoin right now, “eye” it though they might. There are only two ways a person in Greece could get some: from a bitcoin ATM (the country has just one, in Athens) or from meeting up with someone for a face-to-face trade (cash for bitcoins) using the web site LocalBitcoins, a Craigslist-like forum for hand-to-hand bitcoin exchanges.

David Irvine, who works for digital security company Maidsafe, tweeted that bitcoin “wont help [Greeks] at the moment… Hands on spendable cash is issue, need to buy food etc.” Indeed, says Ehrsam, “Any rise in price is not due to Greeks buying bitcoin. First of all, there aren’t that many people in Greece. But more practically speaking, Greece is not particularly forward or technologically savvy. It more goes to periphery countries in Europe. I think people are waking up a little bit.”

Ryan Selkis, director of investments for the Digital Currency Group, agrees. “Greeks aren’t buying, but I’m sure there is some moderate amount of buyers who are speculating that this turns into the next Cyprus. Capital controls and bank closures in general more or less prove the point that states are irresponsible,” he tells Fortune. “The time for Greeks to have put small amounts of savings into bitcoin—call it a 2% rainy week fund—was last week.”

The price rise is not coming from Greece, though it may be partially tied to what is happening in Greece. And, depending on how the Greek crisis plays out, bitcoin believers still see big value in educating Greeks about bitcoin. But not everyone is a fan of the effort to use this crisis as an opportunity. Some critics tweeted to Voorhees that his ChangeTip campaign looks unsavory, and doesn’t help people anyway.

For Voorhees, Ehrsam, Coinbase, and other bitcoin devotees turning Greek’s fiasco into a bitcoin marketing opportunity, the reward is worth the criticism. And Ehrsam bets that it will have an impact.

“When it’s all said and done,” he says, “I do think it’s probable that awareness of bitcoin will go up in Greece as a result of all this.”



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