Despite the high price, Bitcoin is still a minor player in consumption



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Bitcoin and other increasingly valuable cryptocurrencies such as Ethereum have brought great rewards to investors and companies that have launched initial currency offers, selling their own digital currencies to finance a variety of new businesses and projects, often for millions of dollars . And companies in the encrypted market say that the increase in prices has attracted millions of new users: the cryptocurrency exchange of San Francisco Coinbase reports that it has more than 10 million users today, compared to 5.5 million of January.

"At a high level, I think we are seeing a mbadive increase in the number of people who are buying their first digital currency," says Dan Romero, vice president of operations at Coinbase. "We are finding a lot of new people entering the ecosystem."

But while Bitcoin was conceived by its pseudonymous creator Satoshi Nakamoto as a payment system, a kind of "electronic cash" usable without the need for third parties such as credit card-cryptocurrency companies still seem to be considered primarily as investments. For the most part, they are alternatives to investing in stocks or gold, not to paying with MasterCard or Visa.

"In a sense, it's a digital store of value: people around the world see it as a place to store some of their wealth and know that other people are going to find the valuable bitcoin," says Romero. "That in itself is a good use case."

The Luxembourgish startup Blockchain, which supplies around 18 million wallets where users store the digital currency, reports that about 65% of its users "invest in bitcoin", while only 39% use the currency for " buy goods and services. "

Part of the reason is likely that, at least for most US consumers who buy legal goods, it's simply easier to pay with an existing credit or debit card than to follow all the steps necessary to change dollars for bitcoin, Find a merchant that accepts it and discover how to transfer it to make a purchase.

"What has been holding back the adoption of the dominant cryptocurrency, basically, is how difficult it is," says Justin Tabb, founder and CEO of Substratum Network, which is developing a PayPal-style cryptocurrency payment system called CryptoPay "At least currently serves people who are at least a little knowledgeable about technology and want to make money with it."

Amélie Arras, marketing director of UK financial technology marketing firm Adastra, traveled from Toronto to Las Vegas earlier this year, spending only bitcoins during the seven-day trip. Arras was part of a "payment race" that led to the fintech conference on Monday 20/20 in the United States, competing against limited rivals for other payment methods, including gold, one-dollar bills and contactless payments. Arras won the competition, accumulated the most points, completing several challenges along the way, such as taking a selfie at the Grand Canyon and acquiring a souvenir from the Jack Nicklaus Museum in Ohio, but he found few brick and mortar stores that actually took bitcoins. Even some companies that had announced that they took the coin did not do it when it arrived, he says.

"Most of the merchants did not accept Bitcoin because they had not heard it or had not investigated it." she says.

Arras had better luck working with cryptocoins or even ordinary strangers he met during his travels, who would be willing to make a purchase on his behalf in exchange for bitcoin and, sometimes, a quick primer on the currency.

"Due to all the press that has been done about bitcoin, people are interested and want to try it," he says. "They said yes, they just helped me with bitcoin."

But for ordinary consumers, finding a friendly broker to trade with bitcoin is unlikely to be a practical way to make daily purchases in person. Online, of course, it is easier to find merchants that accept cryptocurrencies, and some stores have attracted followers of digital cash enthusiasts. Overstock.com, whose founder Patrick Byrne has long been an advocate of shared ledger technology behind cryptocurrencies, accepts multiple payment methods. According to Johnson Johnson, president of the blockchain investment division of Medici Ventures of Overstock, although it is still a small fraction of the company's total revenue, $ 424 million in the most recent, the company increased its cryptocurrency revenue by approximately $ 100,000 in November 2016 to approximately $ 400,000 in October. quarter only.

"For us, we love it, because we're in the business of making it easier for people to spend money on our site," says Johnson, who is also a member of the online retailer's board. [19659002] With cryptocurrencies, there is also less risk of fraud for the merchant, since the cryptocurrency is more like cash than credit cards and their chargebacks related to fraud. With an offer like Bitcoin, privacy-conscious customers do not have to provide as much information to Overstock as they would a credit card, says Johnson.

"There is not a billing address," he says. "There is only one shipping address."

That helps make bitcoin more attractive to pay in darker shops, where customers may be less willing to use their credit cards, says Romero de Coinbase.

But before the cryptocurrency becomes a reality, there is likely to be a need for more layers of digital plumbing and user-friendly interfaces between users and blockchains (or shared books) that record who owns what amount of each currency . Those layers could facilitate easier payments, or use features such as Ethereum's smart contracts for other purposes, says Romero.

In fact, it is possible that the first blockchain projects to see the widespread use of the consumer do not involve cryptocurrencies at all. Jerry Cuomo, IBM's vice president of blockchain technologies, said 2018 will likely be the first year that consumers will see the benefits of non-currency blockchain-based systems, although consumers probably will not work directly with digital books. . He declined to comment on cryptocurrencies.

"Blockchain is an indirect innovation," he says. "It helps companies provide better services by working more collaboratively with fewer obstacles with more confidence so they can offer better services to the consumer."

Companies can use blockchain-enhanced technology to better control their own personal information, such as using tools that could give a doctor's office limited access to medical records for a specific period of time. Or, they could benefit from companies that use technology to share data from the supply chain and improve food security.

Large banks and other financial companies are also exploring how blockchain can make their own registration and trading operations more efficient. area that Overstock.com and its subsidiary Medici are also exploring.

"We are very optimistic with the cryptocurrency, and we are more optimistic with the general blockchain technology," says Johnson.

But can consumers live solely through their crypto wallets? Not yet, despite the high price of Bitcoin.

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