Monday, January 20, 2014

Despite Some Predictions, Bitcoins are Unlikely to Take over E-Commerce

Over at we read:  Recently, Patrick Byrne, the CEO of announced that Overstock would not accept bitcoins as a form of currency. Although this may appear to be a step towards mainstreaming the crypto-currency, Byrne has a reputation for being overtly libertarian. He sees bitcoins as an opportunity to get away from government one more area of government regulations.
There are other web companies accepting bitcoins, such as OKCupid, Reddit and Zynga. Once again, it could and has been argued that the increase in companies accepting bitcoins increases the legitimacy of the currency. However, each of these companies attract a common demographic; the same demographic that is attracted to the use of crypto-currency.
The primary users of bitcoins are tech-savvy, middle to upper class men aged 25 to 40. This is a very specific demographic. They have made a point to understand the ins and outs of bitcoins; how to use them and how to exchange them. The common consumer is now where near ready to trust or adopt a new form of currency.
Adding to the overall mistrust and lack of understanding, countries like China and India are cracking down on the use and exchange of bitcoins. The US government has confiscated large sums of bitcoins from illegal operations. It has been found that the anonymity surrounding bitcoin ownership has made them ideal currency for money laundering, drug trafficking and more.
Finally, financial experts like Alan Greenspan have stated that the widely fluctuating value along with other factors makes bitcoins highly unstable. He discourages their use and insists the bubble growing around this crypto-currency will burst and those who have invested in them will lose out.
This isn’t to say bitcoins will never have a significant standing within e-commerce. However, it is highly unlikely bitcoins will ever take over e-commerce or become the primary currency used.


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