Bitcoins are a virtual currency in which new coins are created by a slow, complex computer process known as “mining.” Once a person acquires a Bitcoin, he or she can trade it online to anyone who will accept it as payment for goods or services. Right now, a single Bitcoin is worth about [$130] in U.S. dollars, though that value fluctuates. There are [11.2] million Bitcoins now in existence, and once 22 million have been created, all mining will effectively cease. The currency isn’t regulated by any central bank.

But that doesn’t really tell you the benefits of bitcoin.

If we were at the local supermarket and you were going to buy a lottery ticket I could tell you that the odds are in your favour to bet using bitcoin. Bitcoin lotteries offer far higher payouts (BitMillions pays out 90% of bets placed) than state-run lotteries (the National Lottery pays out 50%).

Or maybe you are at the pharmacy section. Bitcoins allow you to spend substantially less on your medication; when the seller is based in a country where generic versions of the medicine are produced, the price is drastically cheaper. We Brits have few issues on this front, but other countries are not as fortunate in having a state health provider.

And unlike credit card transactions, where the business is charged 2-5% for processing a payment, there is no charge for bitcoin transactions, so both consumers and businesses benefit from using bitcoin.

But I digress – let us return to John.

John contacted me after investing £2,000 into the virtual currency with the bold claim that it was ‘capable of beating Apple’s market cap’. Our conversation ended with a big money shout: ‘If [the money held by US citizens in off-shore bank accounts] were held instead in bitcoin, each bitcoin would be worth $958,333 and I would be worth $100million+.’

John is not worth millions from his £2,000 investment, but he has made a cool £20,000 from it in a short 6 months. Since our conversation the price of a bitcoin has risen from around the £10 mark to a whopping £87. And that isn’t the half of it: at the beginning of April, the currency hit a peak of over £140 per bitcoin.

Looking through the lens of the Trust Barometer the growth of this currency is not surprising, quite the opposite: it is an obvious reaction. After a financial crash that saw recessions worldwide and a severe drop in global trust in the financial services and banking industries, why would the global population not seek out an alternative system to use?

Trust in bitcoins however is fundamentally misplaced. The currency’s volatility is its fallibility. It is not and cannot be what it wants to be: a trusted currency.

We should look at a ‘real world’ example.

While UK monetary policy is aimed at keeping inflation to 2% per annum, the Japanese government is desperately trying to increase inflation to that same figure. The Japanese economy has been stagnating over the last couple of decades because consumers & business have been holding back purchases as a result of negative inflation (deflation).

The same principle applies here.

I will not spend my bitcoins if I think that they will be more valuable tomorrow. Why buy a flat now if in a month my bitcoins will be worth tens of per cent more, making the cost of that flat significantly lower?

Of course if the currency were to stabilise, bitcoin investors (who make a substantial proportion of those holding bitcoins) would lose interest and precipitate a crash in value. Those using it as a currency would have little choice but to return to more predictable currencies to place their trust in.

And then we must consider government.

Bitcoins are wholly decentralised and (virtually) untraceable. If I am paid my monthly wage in an untraceable manner and am able to make all my purchases in a similar fashion, what is to stop me not paying due taxes? If bitcoins continue to grow and begin to pose a significant threat to tax revenue then we shall undoubtedly see some form of regulation, if not an outright government challenge.

This is more of a threat from the inside than the out.

Given Bitcoin’s foundations lie in libertarian principles – and its major backers, holders, sponsors and advocates are true libertarians – government regulation would likely precipitate a mass exodus of its key stakeholders. Without these figures guiding the bitcoin community, nor their investments, bitcoin would stagnate.

For all my doom and gloom over the long-term success of bitcoin, I do believe that it has the potential to make some astounding short-term profits. This alternative monetary system taps right into the heart of distrust in the financial sector and despite the hurdles involved bitcoin will surely grow for the foreseeable future.

Unlike John I am not brave enough to have a £2k punt on something as volatile as this – imagine having to explain that I lost £2,000 on an intangible gamble, I would qualify for a career change – but I have got my £300 down. And most importantly, I am up.

Writer:

Tom Hashemi, Research Executive, Edelman Tom Hashemi is a research executive on Edelman Berland’s London team.

“Trust has risen up the company agenda,” acknowledged Angela Knight, Chief Executive of industry group Energy UK, “and any company that is not putting it on the agenda is making a serious mistake.”

This is not about the feelgood factor of company bosses that want to be loved; trust is a bottom line issue, says Laurence Evans, President International of Edelman Berland. According to Edelman’s Trust Barometer survey, companies that are distrusted find themselves in a deep well, with 57% of people ready to believe negative information after hearing it just once or twice; a mere 15% will consider positive information. Contrast that with a firm that has earned the public’s trust: at most a quarter will believe negative information about this firm, while more than half will readily accept positive news.

“People will trust the energy industry only if they can trust the market again, once it’s competitive enough,” said Labour MP Caroline Flint, who speaks for the main opposition party on energy issues. The problem, though, is how to make the market competitive. One key problem was the failure of industry oversight, said Richard Hall, Head of Energy Regulation at Consumer Futures. The lack of a “credible deterrence” against poor industry practice had allowed unacceptable behaviour to “become the norm”. But what is the right kind of regulation? The current debate in the UK – where a new Energy Bill makes is way through parliament – demonstrates how tricky it is to find agreement.

If there is one lesson that could be taken away from the event organised by the Energy and Industrials Group, then it’s the fact that transparency is central to any solution.

Stephen Fitzpatrick, founder of UK energy provider Ovo, said his young company had developed a “very clever system” to win customers: “It’s called Telling the Truth”.

“Trust equals transparency plus consistency,” he argued, even if it might cause a company embarrassment. Angela Knight agreed, and suggested that the energy sector could only thrive in a world where regulation was “appropriate, relevant and properly policed.”

If the missed the event yesterday you can listen to a few soundbites via the links below:

Angela Knight: Q – What can be done from an industry perspective to regain trust both from the retail end and the energy generator end?

Caroline Flint: Q – From a regular Conservative Government point of view, what can be done to restore trust in the industry?

Stephen Fitzpatrick: Q – What has the industry got to do to restore trust?

Writer:

Dr Tim Weber, Director, Edelman Tim is a Director in the Energy and Industrials team at Edelman UK. He is a technology and content specialist and experienced media trainer. Before joining Edelman in July 2012, he was a highly experienced and widely respected business and technology journalist at BBC News, where he was the business and technology editor of the BBC’s interactive services, in charge of online sections that reach several million readers every day.

The survey showed the continued lack of trust in business leaders and the government after many high profile scandals, with only one fifth of the general public believing that business leaders and government officials will tell the truth when confronted with a difficult issue. In response, Richard Edelman calls for ‘Inclusive Management’ so that CEOs and government officials are more open about reasoning and results through more open channels of communications and bringing together a broader group of advocates such as employees and think tanks to get their view points.

When it comes to technology, 2012 was a significant year for new products and innovations as well as landmark events including the launch of Apple’s iPad Mini, Microsoft moving into hardware by manufacturing its own tablet, Windows 8 was launched , Facebook buying Instagram and  then Facebook floating on the stock exchange.

With this growing confidence in the technology sector, its global nature and perception of financial success, the Trust Barometer showed that technology is the most trusted industry (77 per cent) to do what is right for the seventh year running in both emerging and developed countries. What a job the Edelman Technology team has to do to keep this up in PR campaigns for clients! Unsurprisingly financial services was again at the bottom of the list with only 50 per cent trusting them to do what is right, however this has increased by 5 per cent from last year.

It will be interesting to see what high profile business and government crises there will be in 2013 and how much leaders have learnt from recent mistakes. Perhaps there will be a significant breach of trust from a technology company that will jeopardise the industry’s position in the Trust Barometer league table; or on the upside, greater innovations to come that will maintain confidence in the power of technology. Either way, from a PR perspective, we maintain that honesty is the best policy and that the proliferation of communications channels will mean that all businesses have plenty of choice in how they tell a good or bad story.

Writer:

Sophie Bloxam, Senior Account Manager, Edelman Sophie has been part of Edelman’s Technology team since January 2012 and has more than seven years PR experience focusing on managing global, pan-EMEA and UK enterprise technology campaigns. She specialises in managing media relations activity in the UK and coordinating activity across the PR agency network to ensure consistent messaging and content across the brand.

Highlights from the Edelman Trust Barometer 2013

We were joined by a stellar line-up of guests who discussed the challenges facing global leadership:

• Robert Shrimsley, Managing Editor, FT.com

• Professor Sarah Churchwell, Commentator and Academic

• Tim Montgomerie, Columnist, The Times and Editor, ConservativeHome

• The Rt Hon Lord Strathclyde, former Leader of the House of Lords and Chancellor of the Duchy of Lancaster

If would like more information about the Trust Barometer, please contact kayleigh.ryan@edelman.com.

Full recording of the Edelman Trust Barometer 2013

On the 4th December Edelman hosted its fifth annual Crystal Ball Breakfast. Our esteemed panel making predictions for 2013, included: John Micklethwait, editor-in-chief, The Economist, frequent broadcaster and one of the world’s foremost authorities on globalization. He was joined by Dame Liz Forgan, the first female chair of the Arts Council, former BBC broadcaster and editor of the Guardian’s women’s pages, now chair of the Scott Trust;Sir Roger Carr, president of the CBI, chairman of Centrica plc, deputy chairman and senior independent director of the Court of the Bank of England; and, Ken Livingstone, former Mayor of London.

Chaired by Edelman’s Stefan Stern, the breakfast proved to be a fascinating discussion.

To follow the Crystal Ball discussion, please follow @edelside & #edelcrystalball

The outcome of the essays suggest that trust is on the brink – indeed, it may have toppled right over the edge, and is now merely clinging on by its fingertips. (Our new data for 2013, to be published at the end of January next year, may confirm that hypothesis.) Why is the outlook for trust so bleak? Partly this reflects the difficult economy that has emerged from the wreckage of the great financial crisis. World weariness, reinforced by cynical media, has taken hold. But has trust gone for good? Or can it be regained?

If you are viewing this on an iphone or a ipad, please click here

Have a look at the Slideshare below or download the PDF and tell us what you think:

Nick appeared on Edelman Editions’ podcast recently to discuss Employee Engagement, have a listen to his insights.

Nick Howard, Director of Employee Engagement, Edelman Nick is a communications professional with over 15 years experience advising business leaders of blue chip companies across Europe, as well as in North America and UAE. Before joining Edelman he was Retail Communication Director for Lloyds Banking Group, where he led the successful communication of Europe’s biggest financial services integration – Lloyds TSB and HBOS. Nick was also responsible for communicating several other major business issues including product withdrawals, employee redundancies and the bank’s new business strategy.

This year’s survey is bigger than ever before, with 30,000 people questioned in 25 countries. The Barometer reveals the state of Trust in business and institutions.

Richard Edelman, Global President and Ed Williams, UK CEO, were joined by a stellar panel of experts who answered questions and discussed the challenges facing global leadership.

The panel included:

• Rt Hon. Tessa Jowell MP
• Camila Batmanghelidjh, Founder & Director, Kids Company
• Anne McElvoy, Public Policy Editor, The Economist
• Amanda Platell, Columnist, Daily Mail
• Caroline Daniel, Editor, FT Weekend

Listen to the podcast of the event, then watch our YouTube playlist below for interviews with the panelists and key moments from the event:

For global information, visit our Global Trust microsite, or read our Slideshare Presentation below.

To request further information about the Trust Barometer or to discuss the implications for your organisation, please contact:

This week Stephen Doherty, Director of Communications, Diageo plc, discusses Trust and its importance to Diageo and the industry.

The series also includes a video interview with Jim Godfrey, Vice President, Public Affairs EMEA, Starbucks, who discusses the importance of Trust for business.

Watch the video interviews here:

The 2012 Edelman Trust Barometer will be launched in London on 24 January. You can download a copy of the 2011 report here.

On Thursday, 1st December, Edelman hosted its third annual Crystal Ball event. 2012 promises to be eventful: a US presidential election, continuing crisis in the eurozone, anxiety over a weak economy, and the small matter of the London Olympics and Paralympics. As another year draws to a close, a panel of experts gazed into the crystal ball. Listen to the discussion by pressing the play button above.

Our expert panel included:

• Lord Norman Lamont, former Chancellor of the Exchequer
• Matthew d’Ancona, Sunday Telegraph and Evening Standard award winning political columnist
• Reverend Dr Giles Fraser, Former Canon Chancellor of St Paul’s Cathedral, Radio 4 Thought for the Day regular and Guardian columnist
• Baroness Denise Kingsmill CBE, House of Lords Economic Affairs Committee

Watch interviews with the panelists below: