Google is exploring how to integrate Bitcoin into its products.
A marketing manager named Jarar Malik from Pakistan decided to email the CEOs of top tech companies in the U.S. to see if they would start accepting Bitcoin.
He got no response from Tim Cook, Jeff Bezos, Sergey Brin, or Larry Page. He decided to email their lieutenants.
He got a response from Vic Gundotra at Google, who runs Google+. Gundotra forwarded the email to someone in the payments group at Google.
“We are working in the payments team to figure out how to incorporate Bitcoin into our plans,” said Sridhar Ramaswamy, who is a SVP for Ads and Commerce at Google.
Malik posted the emails on Reddit, and people got excited. Another Googler reached out to Malik and asked him to host a Google survey on “What would I want Google to do with Bitcoin?”
Google’s spokespeople are downplaying any talk of Bitcoin, telling Forbes, “We have no current plans regarding Bitcoin.”
Regardless, Google is looking at Bitcoin, which makes perfect sense. Bitcoin is very popular in Silicon Valley. Influential venture capital firm Andreessen Horowitz is all about Bitcoin — founding partner Marc Andreessen just wrote a big explainer on Bitcoin and compared it to the PC and the Internet.
Google Ventures has invested in Bitcoin startup OpenCoin. Google Ventures’ Kevin Rose is an investor in at least one Bitcoin startup, too.
Google accepting Bitcoin would be a nice win for the Bitcoin community.
For Bitcoin to have a lasting impact/value, it needs companies to start using Bitcoin. There’s a lot of debate about why Bitcoin has value. If companies start using Bitcoin, then it will have value.
As our own Joe Weisenthal explained, things don’t have value until they do. Twitter for instance, is worth $US0 if no one uses it. Once people start using it at scale, it becomes a multibillion company.
At the start of the month, Jeremey Allaire, CEO of Bitcoin startup Circle, emailed us with his explanation for why Bitcoin can eventually have real value:
Because of the fixed supply, by definition the value backing Bitcoin will be the total of the savings and transactional value that happens in bitcoin. Specifically, as more and more real trade for products and services is conducted and in turn held in Bitcoin, it’s value is supported.
In short, over the long-run, the “value backing Bitcoin” will be the sum of the real macro-economic activity happening in it. Real economic market participants (consumers and businesses adopting it) will be incented to use it both for real-world savings but also to hold it as a currency that appreciates as it grows in usage. To a large degree, this mimics the infamous Metcalfe’s Law of the exponentially increasing value of networks as new nodes are added and use it, but in this case the value is tangible financial value.
As more and more real trade and savings occur in Bitcoin, it is likely that governments will participate in shaping and making the market for bitcoin as they do with existing currency markets, ensuring they fulfil their financial stability mandate.
In other words, the more Bitcoin is used, the more it has value. Google accepting Bitcoin would be a big step in making this happen.