SAN FRANCISCO – Steve Kirsch, CEO of Cointrust, said he has mademoney every year on his bitcoin investment of $1 million.

“I've wired $1 million to Slovenia. It does show up at the otherend,” said Kirsch at America's Credit Union Conference onThursday.

“You have to be willing to take a risk to get involved. Youmight find it's the best investment of all time,” he added.

According to Kirsch, only 21 million bitcoins will be produced. He said the most important aspect ofbitcoin to remember is the current value is set by supply anddemand.

“It's kind of an arbitrary number – 13 million have already beenused,” he said.

“It's not until 2025 when all bitcoins will be used. They keepslowing the rate of issuance,” he said.

Kirsch laid out a series of facts about bitcoin during his breakout session, including:

• Bitcoin is a common global currency not controlled bygovernments.
• Bitcoin with an uppercase B refers to the technology of miningand digitally signed coins while bitcoin with a lowercase b refersto the virtual currency.
• All funds are kept on computers by programmers called dataminers.
• 1 bitcoin (BTC) is currently valued at $650.
• With bitcoin, Kirsch said there are no chargebacks.
• As a virtual currency, bitcoin has faced many challenges, whichhave prevented it from moving mainstream, such as volatile pricingand trust issues.
• If you invest in bitcoin, you receive a private key.
• If the key is lost, Kirsch said you would lose your entireinvestment. “You're screwed,” he added. Kirsch said most people donot trust themselves to store the private key.
• The IRS currently treats bitcoin investments as property.
• According to Kirsch, if you bought a bitcoin for $650, sold itfor $750 but did not report it to the IRS, there is a chance theIRS might find out and you could end up in jail.

Kirsch encouraged the audience to invest $10 in bitcoin to seehow it works. Almost zero members of the audience raised their handwhen he asked if they would like to get involved.

“I expected zero hands,” Kirsch said. “That's not because it's abad thing, it's just because credit unions tend to be kind ofchicken, for good reason, right? You've got a nice business. Whyjeopardize it? Let's let other guys take the risk and if it's safe,then we'll follow them.”

However, when Kirsch explained more about his own company,conference attendees seemed a bit more interested.

“It opens up the ability for people to write electronic checksthat work really fast and are really secure,” he said. “Thistechnology allows you to move money in between accounts in a secureway.”

Kirsch also said credit unions could issue virtual currencieswithout compliance issues using his company's services.

“What would do is encapsulate the bitcoin so that it complieswith all federal and state laws regarding money because right nowwith bitcoin, you do not know who the other party is,” he said.

“We can make it so that you encapsulate bitcoin so it can't besent to another party without making sure that it applies with allthe laws and regulations,” he added.

Some audience members asked Kirsch if the federal government isgoing to crack down on bitcoin.

In response, Kirsch said regulators announced earlier this yearthat they are not going to take action against bitcoin.

“It's quite scary that it is out there and unregulated. Itcertainly is something that could be a competitor for us, but I'mnot sure if it's something we would make available to our members,”said Deb White, vice president of operations at UCU UniversityCredit Union in Orono, Maine. “From a compliance standpoint, it'svery scary.”

John Worthington, ‎executive vice president at Security ServiceFederal Credit Union in San Antonio, said there are a lot ofvariables about bitcoin that have no answers.

“I'm confused. It's a very interesting concept but it's notready for primetime,” he told CU Times.