Bitcoin and the death of trust
BitPay is a payment service provider PSP specializing in e-commerce, B2B and enterprise solutions for virtual currencies. The company has also gradually moved away from its original business model of providing software that allows businesses to accept bitcoin payments. Furthermore, it is falling back on the blockchain technology with the aim of finding another way to make it work. The company has come up with a set of products for payroll, settlement and intercompany transfer.
In September , in a major setback to the bitcoin commodity, banks in Australia started closing accounts of bitcoin companies. The decision made by major Australian Banks had forcefully put 13 bitcoin companies out of business. Popular banks such as Westpac Banking Corporation and Commonwealth Bank of Australia have already sent letters to at least 17 bitcoin companies, and approximately 13 companies have already closed their accounts. Surprisingly, no explanations were given for this sudden decision.
Just what policies or risks these are have not been specified. According to the Global Drug Survey, which polled , people, a growing number of internet users are buying illegal drugs online through clandestine marketplaces that trade in bitcoins.
Of those polled, 23 percent said they bought drugs online for the first time in , a proportion up from 13 percent in This increase in malpractice transpired despite the October shutdown of the Silk Road drug marketplace. In addition, Reuters reported that some of the men arrested are traders, while others are "Bitcoin cashers" or traders of Bitcoin who cash these funds after which they withdraw the money from ATMs. As bitcoin is not a regulated cryptocurrency, the government in different countries may soon interfere and restrict its usage if the misuse in the black market continues.
Chinese Bitcoin miners control more than 50 percent of bitcoin mining capacity, and they are connected to the rest of the Bitcoin ecosystem through the Great Firewall of China, which slows down the bitcoin transactions to 3 payments per second, as Mike Hearn pointed out in his recent blog. However, the bitcoin fees have become unreasonably high, sometimes exceeding more than charges of a credit card. It would be interesting to see how the digital currency performs in the next few years; of course, its fate depends on its acceptance.
As analysts at LTP, we are not biased towards any company or towards any concept. Investing or not investing in bitcoin cannot be defined as good or bad investments. The decision rests on you whether you want to invest in it or not.
Thank you for continuing to trust us with everything FinTech! Bitcoin is a virtual monetary system, a peer-to-peer currency with no central bank.
It is based on digital tokens with no intrinsic value. An outstanding innovation in the 21st century payment system, bitcoin gained popularity in its initial phase in the FinTech industry, but gradually the virtual currency is losing its charm.
Seeing the fluctuations and multiple security issues faced by bitcoin, users do not have much confidence in bitcoin. A couple of months ago, we listed some positive and negative quotes from some renowned personalities in the FinTech industry. As the fourth quarter of came closer, we observed more problems with bitcoin as did the FinTech industry.
Some of the big problems associated with bitcoin include its wild volatility, security issues, unknown flaws, and both technical and governing issues. To keep an eye on bitcoin, we had to take a closer look at what is happening to bitcoin in , and it looks like the future of bitcoin is very bleak. These are our reasons:. Very recently, one of the longstanding bitcoin core developers Mike Hearn expressed in his recent blog article that bitcoin has failed as an experiment and that he sold all his bitcoins in December FinTech startups such as Circle, BitPay and Bitreserve have all moved away from bitcoin in the last few months.
This is because contrary to the opinions of entrepreneurs and VC firms, many people did not buy into the idea of bitcoin as a medium of exchange.
The company has recently introduced new US dollar features that enable anyone now in the United States to send, receive and hold US dollars as well as using bitcoin for payments within the Circle app. Users can enjoy the benefits of bitcoin without ever holding or buying bitcoin themselves, and without being exposed to the price volatility of bitcoin.
The consumers, businesses and charities can now fund their Uphold accounts via bank transfer, or by linking a credit card or debit card as well as bitcoin. Uphold allows any users regardless of their location to move, convert, hold and transact any form of money or commodity instantly, securely and for free. BitPay is a payment service provider PSP specializing in e-commerce, B2B and enterprise solutions for virtual currencies. The company has also gradually moved away from its original business model of providing software that allows businesses to accept bitcoin payments.
Furthermore, it is falling back on the blockchain technology with the aim of finding another way to make it work.