Three Things Weve Learnt About Bitcoin This Week
The world of Bitcoin is a fascinating one – fast-moving and constantly evolving. In this article we take a look at some of the industry developments that have caught our eye in recent times.
BitPay is scaling back
Media reports indicate that Bitcoin payment processing company BitPay (based in Atlanta) is scaling back its operations through casinofair.com. BitPay enables businesses to accept Bitcoin as payment – it has been operating for just over four years and is one of the highest-profile Bitcoin payment processors in the United States. Clients have included Microsoft, PayPal, and Virgin Galactic. One of BitPay’s selling points was its “free and unlimited” bitcoin processing offer for new merchants, but they’ve announced that this offer is no longer available and at the same time announced that they have reduced their workforce by 20 positions.
BitPay’s CEO Stephen Pair has been quoted as saying that the decision to reduce staffing levels was necessary to reduce the cost base of the business and to “better align with the pace of growth in the industry” (which could be interpreted to mean that Bitcoin payment processor is proving to be less profitable than expected).
One of the challenges that businesses such as BitPay face is that there hasn’t been the hoped for growth in volume of Bitcoin transactions. Without the demand, there is little incentive for merchants to invest in the processing capability required to accept Bitcoin as payment for goods and services.
TeraExchange is in trouble
TeraExchange is a Bitcoin trading platform, but its in trouble with US regulators who have concluded that TeraExchange has failed to prevent prohibited transactions.
The move against TeraExchange is a further indication that US authorities are determined to crackdown on the unlawful trading that has long been associated with virtual, digital, crypto-currencies such as Bitcoin – other recent regulatory interventions have included Sand Hill Exchange, and CoinFlip. Sanctions generally take the form of significant fines.
One of the strengths such as virtual currencies such as Bitcoin has been that they operate outside of central bank and government regulation, however the Commodity Futures Trading Commission (CFTC) in the US has rules that Bitcoin and other virtual currencies are a commodity and are therefore subject to the US rules set out in the Commodity Exchange Act.
BitFury is investing
According to media reports, BitFury are investing USD$100 to build a 100MW bitcoin mining data centre in Georgia (the Eurasian country, not the US state).
To be built in the capital city of Tbilsi, the new bitcoin data mining centre will be BitFury’s second data centre in the country.
The development is being supported by the Georgian Co-Investment Fund which aims to attract international technology firms to the region.
The future of Bitcoin?
It seems that the jury is still out on whether Bitcoin is a crypto-currency that is here for the long-term. However what seems clear is that a digital, virtual currency of some kind has a place in the new world order of today’s economy, and the processing technology that has been created by the block chain clearly has applications in all sorts of contexts. Bitcoin remains an interesting space to keep a close eye on.
A digital currency’s worth can change constantly. A venture that might be worth great many U.S. dollars today may be worth just hundreds tomorrow. On the off chance that the worth goes down, there’s no assurance that it will go up again. As with any venture, before you put resources into cryptographic money, realize the dangers and how to detect a trick