As online and mobile payments systems gain traction, will Bitcoin prove to be a threat to Alibaba and Apple? Bidness Etc finds out
The attraction of the traders at the Coin Mining Direct website is high. You need to look for the best website to have safe and secure payment experience. The dealing in the bitcoin is easy and simple for the people at the online reputed site. Understanding the system is important for the traders.
By: Troy Kuhn
Bitcoin (CURRENCY:BTC) has been around for some time now. Bearing a value of nearly 5 cents in July 2010, it rose all the way to its maximum of $1,127 less than a year ago. Now, it seems the bubble surrounding the cryptocurrency has burst; from an exchange rate of over $800 at the beginning of the year, it is only worth $425 currently.
Views about the potentially revolutionary currency are still mixed as the debate about its future continues. Proponents talk about the digital currency’s payment flexibility, low fees, and security, while opponents deem it no more than a Ponzi scheme.
Bitcoins allow the exchange or transfer of money without any intermediary, and in today’s digital world “bitcoin is pretty much like cash for the internet.” Recently, bitcoin ATMs have even emerged, which facilitate the exchange of cash with the decentralized cryptocurrency, and vice versa.
However, there still isn’t a great degree of acceptance for bitcoin. Even though many businesses have started to accept the currency, many more are still unaware. Bitcoin’s volatility and a lack of infrastructure or regulation have been two major hindrances to the currency’s success.
Despite the ongoing debate about bitcoin’s efficacy, there has been a lot of investment in bitcoin startups in Silicon Valley. Since 2012, $317 million have been invested in various upstarts that promise to contribute toward the expanding bitcoin ecosystem. This year alone, $224 million have been invested. The money goes into a wide array of initiatives ranging from the creation of bitcoin wallets – which make it easier to hold the currency – to introducing the currency in Africa.
According to Jeremy Allaire, founder of a startup called Circle, bitcoin is “the Internet before Netscape.” Circle has created a system whereby users can pay each other in bitcoins via their cellular devices.
As John Authers of the Financial Times puts it: “A currency protocol exists, but nobody has yet worked out how to make it easily usable. Therefore venture capital is flowing towards companies that make it easier to use bitcoin, in the hope that they are modern day versions of Netscape.”
Even though banking giants like JPMorgan Chase & Co. (JPM), Bank of America Corp (BAC), and Citigroup Inc. (C) have their own online and mobile banking platforms, they are no comparison for the hassle-free services bitcoin offers. According to Mr. Authers: “As the payments system remains expensive and clumsy, there is a good chance that bitcoin technologycould help.”
But the question remains, will people prefer a digital currency if they are satisfied with the payment methods they currently use? Well, this depends largely on the development of the bitcoin ecosystem. The cryptocurrency is still a relatively new concept, but if it saves money and offers users what current payment systems cannot, then success cannot be far.
That being said, bitcoin already has a lot to offer to the poor. The currency can be used to bring banking to the unbanked. Another aspect where bitcoin offers what banks cannot is its low fees for foreign exchange.
Bitcoin now has the option to benefit from enthusiasm generated by Apple Inc.’s (NASDAQ:AAPL) and Alibaba Group Holding Ltd’s (NYSE:BABA) mobile payments systems. Apple introduced Apple Pay in October, and with its strong brand image will bring a wave of individuals into the mobile payments system fold. Alibaba already processes more than three quarters of transactions made on its platforms through Alipay, and is planning to take its financial arm public soon.