By Jillian Godsil
Is Bitcoin going mainstream, or is it becoming ‘gentrified’
Yesterday the rumor drums went a little crazy in advance of the Amazon 3rd Quarter Financial Results and analyst call. The rumor – again -was that the retail giant was finally going to make the jump and start accepting Bitcoin. This time the rumor had a good source as the German newspaper Die Welt published this claim as a main news story. When contacted by other news outlets last night, it modified its claim to ‘if not October, then soon’ but as of today we learn that ‘soon’ is a more accurate account with no announcement happening, as yet.
This rumor had gained ground this year as Bitcoin surges to new levels, pushing past the $6,000 mark. It even spawned an online petition for Amazon to accept Litecoin payments that didn’t come to anything, but it seems it is just a matter of time.
Dr Paul Ennis, leading cryptocurrency expert and lecturer in University College Dublin, admits it might be possible but he is largely skeptical at this point. ‘It will come in time, but I don’t think 2017 is the year it will happen.’
Dr Ennis points out that the Bitcoin is still very much hoarded rather than traded. ‘We know a large amount of Bitcoin is hoarded by speculators and enthusiasts, that it is used in the dark net and that to a lesser degree it is used by companies with Bitcoin to pay employees or advisors. Right now, with Bitcoin’s inherent volatility I do not see people actually using it to purchase books.
‘Recently, we have witnessed steady growth,’ he added. ‘And as such anyone who would like to casually buy a book today for one price might then discover that the book has doubled in cost the following week via a price surge for Bitcoin. That would be a bit galling. I’m bullish on Bitcoin but volatility remains a concern for now when it comes to ecommerce.’
A lot of retailers do currently accept Bitcoin with examples such as the Chicago Sun Times and the Honest Brew, the former the first U.S. newspaper to accept Bitcoin and the latter a Brewery that sells both its own beer and others in Bitcoin. Expedia, the travel chain also accepts it and so does OKCupid (actually they have accepted Bitcoin since 2013 and were way ahead of the posse.)
The fact that Bitcoin has come to the attention of mainstream players is partly to blame for these rumours. Peter Theil, billionaire founder of Paypal, speaking yesterday at the Future Investment Initiative in Riyadh, Saudi Arabia, said we should not underestimate Bitcoin which he likened to gold, an analogy he further strengthened by referencing the mining required to gain both. ‘Bitcoin,’ according to Theil, ‘is like a reserve form of money, it’s like gold and it’s just a store of value. You don’t need it to make payments.’
Straddling the gap between actually spending Bitcoin and local fiat currency are the increasingly popular pre- paid credit cards such as Cryptopay. It is not a true Bitcoin payment as the local retailer gets paid in their local fiat currency, but the holder can top up the card using a variety of currencies including Dollar, Euro, Sterling and Bitcoin.
Irish miner and anarchist Shaun McCarthy operates thehashranch and has been mining and trading Bitcoin for the past seven years. He agrees with Dr Ennis’s belief that Amazon will move soon but he also believes in spending his Bitcoin now. He actively lives a life that contradicts Theil’s theory of stored value only as he uses Bitcoin in his everyday life.
‘Today I bought lunch it,’ says McCarthy. ‘Albeit using my pre-paid card, but I would typically buy something once a week using Bitcoin as the foundation currency.’
He acknowledges that the community does not know as yet if Bitcoin, or any cryptocurrency for that matter, reflects a stored value or is an everyday usable currency.
‘People get confused when they liken cryptocurrency to the early internet – when what they really mean is that cryptocurrency is like Facebook or MySpace. The underlying concept of digital currency, like the internet, is going nowhere and the only question is what atl coin or coins will stay the pace.
‘It is only a matter of time – tonight, next month, soon – before Bitcoin reaches its fair value,’ says McCarthy. For him this point is anywhere between $25,000 and $100,000. ‘Then it will settle and people will spend rather than speculate,’ he says.
Which just means those who sold at $200 last year might consider getting back in before the currency jumps again – with or without Amazon’s endorsement so far.
By Jillian Godsil – Crypto-advocate, Crypto-curious, Crypto-journalist – it all comes back to Crypto. And sex. She once fought the banks and they won. She once fought the government and she won. Now she wants to go back and take on the banks again in a rematch.