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December 16, 2014updated 04 Apr 2017 4:04pm

Is 2015 the year of Bitcoin?

Bitcoin has been on a rollercoaster ride in the past year or two with its widely fluctuating price subject to the whims of market speculation, government regulation and private equity and venture capital money being invested into bitcoin to launch new business models. Akif Khan asks what 2015 holds for Bitcoin?

By Verdict Staff

Bitcoin has been on a rollercoaster ride in the past year or two with its widely fluctuating price subject to the whims of market speculation, government regulation and private equity and venture capital money being invested into bitcoin to launch new business models. Akif Khan asks what 2015 holds for Bitcoin

Bitcoin is about five years old now, having been anonymously released onto an unsuspecting world back in early 2009. 2014 was a year of highs and lows for the digital currency. The price of Bitcoin (not to mention its image) took a battering after the collapse of several high profile bitcoin businesses, and its use on the so-called ‘dark web’ continued to colour many discussions on the topic.

This was counter-balanced, however, by Bitcoin edging closer to the mainstream, with global brands such Expedia and Dell starting to accept it online in addition to charities such as the RNLI, Greenpeace and Save The Children accepting donations in Bitcoin, and the price of Bitcoin becoming (relatively) stable in the latter half of the year.

So what does 2015 hold in store for the digital currency that has become one of the hottest topics in payments?

We finally see the hockey-stick in consumer adoptionNow let’s be realistic here, Bitcoin is not going to replace all credit cards and make the banking system redundant anytime soon.

owever, in 2015 expect to see a significant increase in the number of large well-known brands accepting Bitcoin online.

Why wouldn’t they? It’s often cheaper than accepting a card payment, there is no fraud risk to the retailer (a major headache of accepting cards online), it opens up their website to a global user base of consumers, and finally, it makes them look cool.

With various companies now in place to make the mechanics of accepting Bitcoin easy for retailers, expect to see the Bitcoin logo on more and more websites. The smart retailers will want to realize the cost savings and elimination of fraud risk by incentivizing consumers to pay with Bitcoin – discounts, rewards, offers – which will in turn get consumers interested. This will start a virtuous circle of adoption amongst retailers and consumers that will continue well beyond 2015.

The world’s unbanked begin to take noticeOne reason consumers in developed markets have been relatively modest in the level of interest they’ve shown in bitcoin is that the immediate need to use it has not been obvious in the absence of retailers making it worth their while. After all, the average consumer in the UK already has an average of 4.5 debit and credit cards.

Think, however, about the 2.5bn people globally who don’t have access to traditional financial services. Schemes are popping up in countries from Indonesia to Argentina that enable the unbanked populace to buy Bitcoin. All you need to use Bitcoin is an internet connection, and in the emerging markets people have leap-frogged having laptops and home broadband and jumped straight to having mobile phones. For example, the World Bank cites that in Indonesia only 20% of over 15 year olds have access to formal financial services. And yet mobile phone penetration in Indonesia is a whopping 102% (due to multiple SIM ownership). This disenfranchised segment of the global populace will be able to move money quickly and easily without having to pay the high rates charged by the likes of Western Union, they will be able to access the world of ecommerce, and also store money securely as the Bitcoin price volatility stablises.

Companies such as BitPesa are already leveraging Bitcoin to make it easy for the diaspora to remit funds back to Kenya cheaply, quickly and easily, for example. Expect to see stories in 2015 about how bitcoin is empowering people in places that we don’t often think about.

Expect to hear a lot about Bitcoin that isn’t related to money

The digital currency Bitcoin (spelt with a lower case b) is simply one application of the Bitcoin technology protocol (always upper case B for the protocol). If that’s confused you, think of email or websites as applications sitting on top of the various internet technology protocols that most people need to know nothing about.

As fascinating as the Bitcoin digital currency is, there are a lot of smart people out there who think it’s just a sideshow to the real innovation – the underlying Bitcoin protocol. It allows two parties to exchange any digital property without the need for a central authority to manage the transaction, and it’s all recorded beyond dispute in what is in effect a publically accessible ledger called the blockchain.

Services such as Proof of Existence allow you prove that you had a particular document at a specific time, opening up possibilities such determining intellectual property rights without the need for costly patents. With startups springing up rapidly, expect to hear about how the Bitcoin protocol and the blockchain have the potential to start disrupting a lot of different industries.

Akif Khan, VP Solutions Strategy, Bitnet

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