Why Bitcoin is the Future of Micro-Transaction

While Bitcoin can be considered a child in the digital age, thousands, if not millions, of people are doubting and proclaiming the impending death of this digital currency. Experts tout that the conceptual backing of Bitcoin is a mere fad and should never have reached its current value. For those who are curious, the current value of 1 Bitcoin is, at the time of this article $7,146.50, which is at an all-time high.

It’s statistics like this that have Christine Lagarde, managing director of the International Monetary Fund, intrigued at the apparent growth of Bitcoin. The reality is, if anyone glances at the statistics or graphs referencing the growth of Bitcoin, all you will see is growth. Bitcoin is, without question, firmly planting its fit in the digital world, claiming its territory, and proclaiming itself, “the Future of Microtransactions”.

What are Microtransactions?

Microtransactions are a loaded concept that, depending on the industry, the term can mean or hold different values. For example, well-known financial institutions like PayPal or local traditional bank may view microtransactions as anything under $12 to $10 USD. However, in the Bitcoin industry, microtransactions function entirely differently. In fact, typically, a microtransaction may be anything under 5 USD cents and as to little as thousandths of a cent.

The Future of Microtransactions

Increasingly, online and world-renown businesses are becoming aware of the impending power of Bitcoin. The inclusion of the digital currency as a means for payment exchange is becoming popular as companies like Microsoft and Dell have already begun the transition. As for the digital world, Bitcoin has become a major subject of microtransactions.

Bitcoin Microtransactions

Since Bitcoin does not require any traces of sensitive financial information, many websites are utilizing Bitcoin microtransaction to help promote better behavior and activity. This has become quite a popular positive reinforcement technique for individuals in the Bitcoin industry. It is an understatement to think that companies and websites are not developing new innovative ideas to transform this method in efforts to promote better business.

In other cases, Bitcoins can be sent to family or friends to purchase smaller goods like coffee or small delicacy. Such microtransaction are extremely minimal and could become the perfect spontaneous gift, especially during the holiday seasons.

The true potential of microtransactions could be said for those in the non-profit industry. With Bitcoin, individuals from around the world could donate money to thousands of different charities or non-profit organizations. With quick-and-easy transactions, minimal fees, and private transactions, Bitcoin microtransactions is quickly becoming the next-big thing. If you did not know, even one of the largest non-profits in the world, Red Cross, accepts Bitcoin microtransactions. Who do you propose is next?

Ushering in The Future

Consider what Christine Lagarde mentioned regarding the true benefit of Bitcoin, “Citizens may one day prefer virtual currencies, since they potentially offer the same cost and convenience as cash – no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identifies.”  [1] Through understanding the functionality of Bitcoin and microtransactions can one then begin to see the greater benefit of Bitcoin for the future, as Lagarde eludes.

 

[1] https://www.imf.org/en/News/Articles/2017/09/28/sp092917-central-banking-and-fintech-a-brave-new-world

Bitcoin and the US stock market

Bitcoin recently surged to yet another record high on November 3rd, peaking at around $7,400. The cryptocurrency has seen ever-increasing popularity as investors and operators slowly begin to give it more of a place in the financial sphere.

Its price clamed steadily higher throughout the week after US exchange operator CME Group said they were going to introduce a Bitcoin futures contract. CME is going to base the future contract on their CME CF Bitcoin Reference Rate that was launched last year.

The move by CME Group is due to close competition with CBOE Holdings Inc. to be the first financial marketplace to offer Bitcoin trading.

Besides the latest announcement from CME, Bitcoin has made its impact on Wall Street in a variety of other ways. The market cap of the cryptocurrency is around US$ 98 billion, up by over 500% this year alone. This puts it well above storied Dow Jones Industrial Average components like The Travelers Companies, Caterpillar, and American Express.

AngelList co-founder Naval Ravikant pledged his support to a new passively managed index fund of top cryptocurrencies. The fund, called HOLD 10, was launched by Bitwise Asset Management in early October. They are intending to have low management fees and have the fund offered as part of some tax-advantaged accounts in order to attract investors who want to invest in virtual currency, but without a lot of the risk associated with ICOs and lesser-known coins.

Bitcoin is also represented through several ETFs, most notably the Bitcoin Investment Trust and First Bitcoin Capital Corp. The Bitcoin Investment Trust was launched by Grayscale Investments in late 2013 to serve as another private fund for accredited investors, and opened to the public in late 2014.

It now has about a billion dollar in assets, compared to just $40 million when it was opened to the public. A number of mutual funds and ETFs, like Kinetics Internet Fund and the ARK Innovation ETF made bets into the Bitcoin Investment Trust and saw their decision pay off handsomely.

Several hedge funds have also jumped on the Bitcoin bandwagon. BlockTower Capital, Cryptocurrency Fund L.P., and Protos Cryptocurrency Asset Management were all formed thanks to the cryptocurrency market.

An increasing amount of micro-cap stocks are also taking advantage of piqued interest in cryptocurrency by changing their names to attract more attention. One biotechnology company in Colorado said in early October that they planned to change their name from Bioptix to Riot Blockchain. The share price jumped up around 125% after the announcement.

As Bitcoin continues to climb in value and attract attention from world governments and even more investors, its impact on the US stock market is going to be more pronounced as it moves from the margins of the financial world right to the center.

Still, there’s a good amount of skepticism about the cryptocurrency. One of the first Wall Street strategists to embrace Bitcoin, and the only with an official price forecast, began to show signs of caution once it crossed the $7,000 mark.