Bitcoin seems to have left us high and dry. The virtual currency has hardly grazed the surface. If you compare transactions of Bitcoin with US corporate virtual currencies:
- Overall Bitcoin transactions in US are 12 times lesser as compared to unused gift cards
- We are not even comparing Bitcoin transactions with overall US Corporate transactions as the virtual currency has hardly scratched the surface
The following chart depicts a clearer picture:
Here are 5 different aspects to be considered:
1.) Bitcoin has received some bad press lately:
Bloomberg has handed the title of “worst performing currency” to Bitcoin. It has been all over the news that Bitcoin lost over 70% of its value in dollar terms in 2014. But some might consider the negative press on Bitcoin as a positive thing. Many supporters see the collapse of Bitcoin as a healthy thing and take it as evidence that the market is functioning as it should.
However, there is no doubt that Bitcoin has gained much recognition and acceptance in the past year. The opinions on Bitcoin in the media, whether good or bad, generate more discussions and awareness around Bitcoin. Even if in a negative way, the virtual currency is worthy of mention by Bloomberg which might not have not have done so a year ago. This shows the extent to which Bitcoin has gained public acceptance.
2.) There have also been major problems around Bitcoin:
Bitstamp has frozen accounts and transactions as it investigates a breach. Hackers have stolen more than $5 million in virtual currency from the major bitcoin exchange. Post the breach, the exchange has frozen user accounts, suspended trades and blocked deposits. Fraudsters have reportedly made off with 19,000 bitcoins.
Bitstamp keeps up to 90% of its funds on hard drives, known as “cold storage” that are off the grid and therefore harder to hack into. The attackers have seemingly targeted the remaining 10-15% of cryptocurrency that is stored on servers in a data center.
3.) There have been regulatory issues around Bitcoin as well:
The financial services and money transmitters regulator in California still hasn’t made any formal decision on the regulation of Bitcoin. The state of California has been seeking to determine whether regulating bitcoin and digital currencies is in the best interest of consumers. A final decision on the matter could be highly influential as California is reportedly home to 40% of all Bitcoin professionals as of mid-2014. Bitcoin companies like Coinbase, ChangeTip and Ripple Labs consider the state as their major base as well. A positive decision would grant Bitcoin and a host of other alternative forms of value the status of “legal money” under California law.
4.) But the industry is not giving up on Bitcoin:
BitPay, a Bitcoin payment processor, is organizing a virtual currency showcase at the Consumer Electronics Show 2015 dubbed as ‘The World of Bitcoin’. It would feature a 2000 square foot convention comprising of 10 virtual currency related companies such as BitPay, Bitman, Bitstamp, Blockchain, Circle, CoPay, Kraken, Private Internet Access, Robocoin and yBitcoin. Attendees can download bitcoin wallets, purchase bitcoins, get a demo of mining hardware, get a bitcoin exchange account, learn about online security, etc.
5.) Payments experts still see a bright future in Bitcoin:
As mentioned by Bill Ready, chief executive of Braintree, to Coindesk:
"I don't know that we wake up in two years and half the people are paying in Bitcoin. It won't be that rapid. In a few years, a significant number of merchants will accept Bitcoin, and therefore a meaningful number of consumers can pay that way. But not the majority [of consumers]. We're at the very beginning."
As reported by Coindesk, Bill Ready is convinced that Bitcoin has a future in the payments space. He is of the view that Braintree should take Bitcoin mainstream.