While many still see Bitcoin as an unrealistic payment method, venture capitalists say there are clear use cases for the decentralized cryptocurrency in micropayments, international remittance and charity.

"It's not hard to find a use case," said Tihan Seale, an entrepreneurial investor. Seale and other investors spoke during a panel discussion at Bitcoin Conference 2013 last weekend.

The challenge is execution, Seale said.

Bitcoin is an online substitute for cash, allowing for fast and cheap transfers of funds without charge-backs. But after the Financial Crimes and Enforcement Network issued guidance for the virtual currency in March, some worry that upcoming regulation will impair these features.

"I'm bearish on consumer applications of Bitcoin at least in the first world for the short term," said Joel Yarmon of Draper Associates. The U.S. has well-functioning payments systems, but in the third world electronic payments are unrefined, he adds.

While Western Union and other international remittance companies have provided more opportunity over the past several years, these services still leave opportunities for new entrants.

"There's been dozens of attempts to lower the cost of Visa and MasterCard over the years" which have been highly unsuccessful, said Gus Fuldner at Benchmark Capital. Bitcoin might need to start in international markets because "cost alone is not enough," he said.

Bitcoin could follow the path taken by the digital voice-calling company Skype, said Alex Ferrera of Bessemer Venture Partners. Calling within the U.S. was largely an unbroken system when Skype came to market, but by targeting international calling, an expensive friction point for consumers, Skype found its way into the mainstream.

Bitcoin could also be used for micropayments, especially to provide a cost-effective way for media to charge per article instead of offering full subscriptions.

"It's impractical to charge a penny … to view articles," said Jeremy Liew, managing director at Lightspeed Venture Partners.

To pay online, consumers today primarily use credit cards, which require the merchant to pay a fee for each transaction. Though systems such as Apple Inc.'s iTunes reduce their card fees by aggregating several small-dollar payments into a single transaction, micropayments are still a pain point.

If Bitcoin could facilitate micropayments of this nature the digital currency could go mainstream, says Liew.

Charitable giving was another area many of the panelists mentioned as a market Bitcoin could reform. Because of the pseudo-anonymity, users donating to controversial projects wouldn't have to worry about the political ramifications. Many charities have started accepting Bitcoin, including Free State Project in New Hampshire and Bitcoin 100, which takes in bitcoins to transfer to other non-profits.

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