Bitcoin (BTC) has experienced an extraordinary and turbulent run in the market over the past few months. The conversion rate has at times been upwards of $1000 USD per Bitcoin. If you held one BTC for 12 months you could have made returns in excess of 50x.
Paul Osborne and Julian Faelli recently attended Paris’ LeWeb conference (http://leweb.co/) to explore this intricate currency further and shed some much needed light on the topic.
These digital currencies are a serious play now. The fact that we are talking about it seems to suggest it has some real staying power. US senate committee hearings have deemed the rise of digital currencies as legitimate. Property developers in China have started to offer their apartments for purchase with fixed BTC exchanges from a purchaser. Last month there were three independent Bitcoin events held in New York by Wells Fargo, New York State’s Superintendent of Financial Services and the New York City Economic Development Corporation (NYCEDC), an organisation set up to drive economic development, growth and jobs in New York.
Secret Agent was the first company to accept BTC payments within the Victorian market for real estate services. We are proud to welcome Cosmo McIntyre to our team, the catalyst to our start into digital currencies. Cosmo continues to help Secret Agent explore this emerging market.
There are many sceptics; Jamie Dimon CEO of JP Morgan, arguably one of the most powerful bankers in the world, has recently canned the crypto-currency; “it’s a terrible store of value”. While we still think that the risks are great, there is no doubt that Bitcoin has a future in itself or as a catalyst for paving the way for other e-currencies. It has some very interesting attributes recently highlighted by tech- entrepreneur legend Mark Andeessen who is behind such ventures as Digg, LinkedIn and Twitter.
Bitcoin can be bought, sold and transferred for free with no transaction fees, or for a very minimal amount depending on which broker you use. BTC solves the problem of trust, establishing a fool proof method of transferring money between two unrelated parties over an un-trusted network – the internet. The possibility of other digital property being transferred in this way is very real. Digital contracts, digital keys, digital signatures, and digital ownership of physical assets, could be one day safely transferred.
BTC is a very practical solution for micropayments over the internet. Traditionally merchant fees, credit card fees and exchange rates have been a prohibitive factor when wanting to pay/charge small amounts over the internet. Bitcoin’s ability to be almost infinitely divisible makes it the perfect payment solution for micro payments. Online news publications could charge a fee per article, train tickets purchased individually, and songs streamed over the net could be charged on a per listen basis. These are all very viable solutions.
It’s likely that the Bitcoin currency could fail in its quest to be the prime adopted digital currency. However in doing so it will have paved the way for another digital contender to emerge in its place. There are now over 60 virtual currencies. A home purchase taking place with a virtual currency, or even a landlord accepting rent payments are all future possibilities.