If you’ve been following recent financial technology news, you would have noticed an upsurge of activity surrounding Bitcoin. After quintupling it’s value in 6 months it’s easy to see why it’s a hot topic. But should we be emptying our bank accounts and investing everything we have into cryptocurrency?
It’s not hard to see the benefits. To an extent, we’ve been gradually moving towards a cashless society for awhile now. The UK - especially London - is already in the forefront, taking influence from India and Sweden. For instance, 1 in 6 Brits are card-only shoppers, with 30% not having taken out cash from an ATM or bank in a week.
Transforming City Travelling
In July 2014, TfL prevented London busses from taking cash. This scheme was to provide a more efficient bus service and encourage Londoners to use Oyster cards for quicker and easier travel. TfL developed this concept by introducing new busses like the Routemaster – which has more than one Oyster Tap Point.
Musicians With Micro Readers
With card payments becoming the new normal, buskers like Charlotte Campbell - a regular on London’s Southbank - have invested in contactless card readers to capture generous listeners who don’t carry cash.
“We are living in an increasingly cash free society” says Campbell in one of her regular YouTube vlogs, “and while that’s really convenient, there are professions where that is not so convenient”. Clearly card readers have helped professions like Campbell’s, that usually deal in cash, adapt to the times.
The concept that card readers can have a functionality outside of traditional retail stores is becoming increasingly popular. In fact, in Sweden – where less than 1% of the value of all payments made are with coins or notes – the Government have helped provide micro-readers to the homeless community.
But What About Bitcoin?
Just as with card readers, Bitcoin is slowly integrating itself into new and exciting ventures. For instance, you can now walk into The Old Nun’s Head near Peckham and buy a pint with Bitcoin.
However, due to the fluctuating value of cryptocurrency, companies and establishments that use Bitcoin may struggle to provide full transparency over product prices. Just think, a pint might cost you more or less depending on the day you went in.
The price surge this year alone has been phenomenal with a new peak value being reached every 2 months always following a double dip decline. The consequence of this is that retailers and vendors will arguably have to become quasi-experts on stock market.
A Simpler Process
Another pub that had been using Bitcoin until recently is the Pembury Tavern in Hackney. When asked why they stopped accepting Bitcoin, they said “the uncertainty around the future of the network from 1st August, combined with high transaction fees and slow unreliable transaction confirmations was the final straw”.
However, Founder of Individual Pubs Steve Early, still wanted a system that would easily deal with new payment methods in a simple process. Their new Bitcoin till function now produces a QR code for customers to scan with their wallet app.
When the till is being closed at the end of the day, it sends a request to the web service listing the transactions paid by Bitcoin. Early then pays the pub company the total amount in Sterling for those transactions.
JP Morgan boss Jamie Dimon, recently described Bitcoin as a “fraud” wondering why people were “stupid enough to buy it”. Warren Buffett said “you can’t value bitcoin because it’s not a value-producing asset, a real bubble in that sort of thing”.
Unless we can get rid of the uncertainty surrounding Bitcoin or create a digital currency we can trust, there will be a reluctance from people to strive to become truly cashless.