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Why the porn industry is embracing Bitcoin

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As you might expect, a conference for the adult film business is a lot more laid back than your typical industry trade gathering.

At the Xbiz Summit, currently taking place in Miami, Fla., members of the porn industry are enjoying their fair share of relaxation. There's a casino night happy hour, nine total hours of "poolside networking," and a two hour block of time planned for Friday night simply called "Havana Nights."

But like any other trade show, there is actual business to be taken care of during the day. And today, in between the "Gay Biz" panel and an afternoon pizza party, porn stars, producers and distributors will discuss one of the biggest changes to potentially hit the adult film business since the Internet: Bitcoin.

"Things have changed," said Avi Bitton, chief technology officer for Wicked Pictures, who will be on the Bitcoin panel at the Xbiz Summit. "Everyone has to continue to evolve and work harder to make sales. Bitcoin is a new market and its properties make it an ideal payment system for adult consumers."

Its most important property is anonymity, Bitton told The Daily Dot. Bitcoin, which was created four years ago as the world's first digital currency, is designed to be spent like cash online. Bitcoins aren't regulated by any government and, although they’re stored on hard drives in digital wallets, are not connected to a user's bank account or identity. So in that way, Bitcoin is ideal for those who don't want their "adult purchases" tracked online.

This is no surprise to Bitcoin supporters. Though Bitcoin has gained more legitimacy in recent months, with sites like Wordpress and Reddit giving it their endorsement, much of the currency's early success was founded in the internet's grey- and black-markets. So Bitton and others say it's only natural that the currency would begin to spill over into mainstream porn and find new support there.

"Generally speaking, porn is an early adopter of anything related to new technology," Coinbase Founder Fred Ehrsam told The Huffington Post recently. "If you look back, they were the first to adopt many of the new video formats."

It's not just Bitcoin that would reap a benefit from an expanded relationship with mainstream porn. Bitton projects that the currency's anonymity will encourage at least a certain segment of the porn consuming public to actually pay for pornography rather than go to free aggregator sites.

"Free has always existed," he said. "(But) there has been a lot of consolidation over the past five years."

Just how much this will increase porn industry revenues is unknown. Quantifying the consumption of porn online has been notoriously difficult. Forbes Magazine estimated in 2010 that 4 percent of the world's million most popular sites were for pornography and that about 13 percent of all web searches were for erotic content. It's hard to tell, though, just how much revenue would be generated by an industry-wide adoption of Bitcoin.

Bitton said a number of sites have already found success with Bitcoin, but that the industry remains largely aloof to the growing phenomenon.

"It's still got a geek factor," he said. "I believe more will adopt quickly as people become more familiar with what it is."

Illustration by Jason Reed