Bitcoin, an up-and-coming form of online currency that falls outside of government and bank regulations, is becoming popular with the fairly libertarian New Hampshire population.

DOVER — New Hampshire residents love their freedom. It's right on their license plate: “Live Free or Die.”



Now bitcoin, an up-and-coming electronic currency, is giving people around the globe the chance to choose money that falls outside the government and bank regulations and New Hampshire residents are quickly picking up the new option.



“New Hampshire is fairly libertarian and also a very cosmopolitan state. A lot of tech companies are moving up here,” said Michael Finger, the owner of Centinel Consulting, a marketing and economic consulting firm in Portsmouth. “In a way, New Hampshire is a perfect area for bitcoin.”



For people who aren't part of the bitcoin movement, it can be hard to grasp initially. Bitcoin is an electronic, decentralized currency that was created in 2009 by an unknown developer. It allows patrons around the world to conduct financial transactions with no middleman, which keeps fees low, making it appealing to business owners. Users exchange bitcoins using apps on their phones or computers, and the money can be bought in online exchanges. Exchanges are tallied in a public register, but bitcoin can be used anonymously, which has given the currency a reputation for being used for nefarious purposes.

Governments are wary of bitcoin because of lack of control over the currency — there is no way to track bitcoin transactions to an individual or to regulate the currency. However, freedom from regulation is exactly what many bitcoin users find appealing.



“It allows people to be the master of their own fate, and to determine macroeconomic issues in a way that a centrally-control currency does not,” said Darren Tapp, from Chichester. Tapp has used bitcoin to buy everything from concert tickets to candy.



Matthew Carano is the owner of The P�o Cafe in Newmarket, which was the first restaurant in New Hampshire to begin accepting bitcoin payments in the fall of 2012. He had heard of the currency a few years before, but didn't fully understand it until a friend explained the ins and outs.



“It can be a little bit daunting the first time you hear about it,” Carano said. “At first I got it, that it's a decentralized currency. Then I realized that it is also a fantastic payment processing system. From a business standpoint, it makes a lot of sense. ”

Whereas traditional credit card transactions charge a fee of 3 to 4 percent and take a few days to complete, bitcoin transactions are virtually free and instantaneous. Carano was sold.



“It just shows that our banking system is not efficient any more for the needs of global commerce,” he said. The P�o Caf� now hosts monthly bitcoin meet-ups, which draw a handful of new and experienced users to discuss everything from cyber security to new ways to use the currency. It is also a sponsor of The Bitcoin Symposium, taking place in Portsmouth on March 20. Carano said that at first he could go months without processing a bitcoin transaction, but now he sees them weekly.



“In general the technology is absolutely revolutionary,” he said. “I have a strong appreciation for bitcoin.”



Such a strong appreciation, in fact, that in addition to running the cafe, Carano also works for Lamassu, a Manchester-based company that has developed the first bitcoin ATMs. The machines, which are now being sold around the world, can accept traditional currency from over 200 countries and credit it to a user's electronic bitcoin wallet.

While bitcoin is by no means mainstream, it is garnering particularly strong interest in New Hampshire. When online retailer Overstock.com began accepting bitcoin payments in January of this year, New Hampshire had more bitcoin payments per resident than any other state. The currency is even appearing on the local political scene. In 2012, State Representative Mark Warden received bitcoin donations from about 20 supporters. He was the only candidate accepting the currency at the time, but said that he expects to see more candidates accepting bitcoin donations in this years' election cycle.



“A lot of young people are very tech savvy and libertarian minded, and they like the idea,” he said. “New Hampshire has a tradition of people who believe in the 'live free or die' spirit, and in competition and open markets in all things.”



About half of Warden's donations came from bitcoin users outside of New Hampshire who were happy to see the currency being used in a political campaign.



“They liked the mainstream credibility that comes with having a candidate accept the currency,” he said.

Many people who use bitcoin in New Hampshire are part of the Free State Project, a libertarian movement encouraging people from across the country to move to New Hampshire.



Amanda Billyrock, a blogger, moved to Manchester from Utah recently. She had heard of bitcoin before her move, but when she got to New Hampshire she said that she was delighted to see people using bitcoin for everyday expenses.



“Now I pay more bills in bitcoin than with federal reserve money,” she said.



Billyrock finds it reassuring that bitcoins are created at a set, steady rate. Eventually, there will be no new bitcoins created, so the currency will have no inflation, she said. On the other hand, the dollar's value fluctuates widely.



“The dollar and so many things that go along with it are really against what a lot of us in New Hampshire stand for — first and foremost, sound money,” she said.



Billyrock also values the security that she believes bitcoin provides.



“There is no such thing as fraud with bitcoin,” she said. “The only way someone can take your bitcoins is if they know your password, and there are a lot of resources within the crypto community for creating a really strong password.”

However, bitcoin's security has come under question recently as two major bitcoin institutions have reported theft. In late February, Mt. Gox, a Tokyo-based bitcoin exchange, reported a theft of 750,000 bitcoins, worth about $446 million. This week, Canadian bank Flexcoin reported a $600,000 heist.



Despite the news, local bitcoin enthusiasts remain committed to the currency.



“Mt. Gox was a terrible bank,” said Carano. “Most people in the community knew they were a terrible bank for a long time. It's important to know that this is an issue with a bad company, not with the bitcoin network. It's a good thing that it came out.”



Carano said that by storing bitcoin safely in a private wallet online, the currency is perfectly safe to use.



Although Billyrock does half of her spending with bitcoin, she has never used an exchange. She noted, like Carano, that the recent problems have to do with exchanges themselves, not with bitcoin technology.



“We would see banks that hold the US dollar fail left and right, but they always get bailed out,” she said. “Businesses come and go in the market. It's natural and healthy.”

A key difference is that dollar deposits are protected by the FDIC. Because bitcoin is not regulated by governments, there are no legal protections for bitcoin users.



Japan may be one of the first countries to change that. The nation is considering adopting guidelines around bitcoin, in wake of the failure of Mt. Gox. The proposed legislation would set up protocols for taxing bitcoin transactions, and would ban banks and security firms from handling the coins — treating bitcoin like a commodity rather than a currency.



Despite the risks, local bitcoin users said they would not like to see bitcoin regulated in the United States.



“It would be unfortunate if government feels the need to clamp down or restrict this,” said Representative Warren. “Bitcoin is cutting edge technology and is way more advanced than most legislators can understand. They will just mess it up.”