Last week Microsoft announced that it is now accepting bitcoin for app purchases on Windows phones and Xbox. Many bitcoin enthusiasts were hopeful that this would positively affect the price of bitcoin and also facilitate the wider usage of bitcoin among gamers and general public at large. However, the news of Microsoft accepting Bitcoin went unaffected just like the previous news of Dell accepting bitcoin or DISH accepting bitcoin or Expedia accepting bitcoins for booking hotels and etc etc In fact, the price of bitcoin is hovering at $330-$350 which is one of the lowest in 2014.
What affects the price of Bitcoin?
What is mentioned above are some of the good examples of what does not affect the price of Bitcoin. That means, retailers simply accepting bitcoin alongside cash and credit card payments do not make people suddenly want to use bitcoin in their daily lives. Things that would make people want to use Bitcoin would be, for example:
- Cheaper and more convenient international remittance services (..than Western Union or traditional Bank Wire Transfers) – e.g; Imagine construction workers in Dubai sending money back to India without even visiting a bank branch and at a fraction of a cost.
- Making it easier for freelancers to get paid, particularly from people or companies who reside in different countries
- Making mobile banking and micro-payments available to feature phone users via the traditional SMS technology (61% of world’s population is still not connected to internet). Telcos could play a big role in this area.
- Being able to auto-reload your smart cards when the credit on it approaches certain minimum threshold (this could easily be done by smart contracts on blockchain)
- Decentralization of platforms via blockchain technology;
- decentralized cloud storage services – this would mean emergence of truly cloud services that would make “100% uptime” a possibility
- decentralized publishing services – this would mean certain countries not being able to ban as easily as they ban Twitter at the moment
- decentralized finance and banking services – this would mean possibility of banking systems working 24/7, instead of 9-to-5, thus improving efficiency
- decentralized voting services – making elections transparent and every single vote accountable and traceable (without disclosing the personal details of the voters of course)
- etc etc
As you can see from the examples listed above, there is a stark difference between the news that we have been hearing for the past 12 months. So far, what we have been seeing in the news is that retailers are accepting Bitcoins. They are treating Bitcoin purely as an additional payment option to Credit Cards. For the average Joe, this doesn’t give any compelling reason for him to start paying with Bitcoin instead of his Credit Card. Continue reading