Though I admit I still do not completely understand the way Bitcoin works, this guy seems to be talking out of his you know what! According to him Bitcoin will not exist in a few years.
http://www.fool.com/investing/general/2014/01/07/bitcoin-doesnt-stand-a-chance-against-this-industr.aspx#.UswfN3mj4Sg
Is Bitcoin a threat?
Digital cryptocurrencies like Bitcoin went mainstream in 2013, with the value of a single bitcoin rising from $13 to over $1,000 at its high. Much of the hoopla surrounding Bitcoin is the idea that it could be used to transfer money around the world with significantly less friction than traditional means. This would be very bad news for Western Union.
But the promise of Bitcoin is quite a bit overdone. There are currently very few businesses that accept Bitcoin as payment, meaning the digital coins would need to be converted into the local currency to be of any use at all. While the act of transferring bitcoins can't really be regulated, the act of converting into another currency can be. Last month, the cental bank of China did exactly that, banning financial institutions from handling Bitcoin transactions. Other countries, including the United States, could eventually take similar steps.
A majority of businesses would need to start accepting Bitcoin directly for the currency to have any staying power, and so far, there are very few. The most notable is Overstock.com(NASDAQ: OSTK ) , an online retailer that does about $1.2 billion in revenue each year. The decision to accept Bitcoin, which will take effect later this year, looks to be partly an attempt to get some free press coverage, and partly an attempt to give the digital currency a boost. It looks like a gimmick more than anything else, and a risky one at that, given Bitcoin's massive daily fluctuations.
While the number of bitcoins is capped, there are plenty of other digital currencies basically identical to Bitcoin from a technical standpoint. There's very little barrier to entry in creating a new digital currency, so the question arises: What makes Bitcoin so special?
This is the major reason why digital currencies may never be fully accepted. While the number of bitcoins is limited, the number of digital coins of any type is essentially unlimited, and there's no inherent reason to favor one over another, since they're all technically very similar. There's even a digital currency named after an Internet meme called Dogecoin with a market capitalization over $1 million. As the absurdity of that statement sets in, it's clear that Western Union has little to worry about on this front. |
