Compliance key to bank adoption of Bitcoin
Simon Dixon (see video below), CEO & Co-Founder of BnkToTheFuture.com, says the inventions behind bitcoin are significant. The first is a system whereby all financial transactions are reported into a transparent ledger. This is in contrast to a bank that maintains a private ledger. Bitcoin is also the largest computer network in the world and is powered by hundreds of thousands of computers around the world creating the largest super computer in the world. Finally, bitcoin created a system in how money is created in a transparent way where you would know the monetary policy and the money (fiat currency) supply at any moment in time. In contrast, traditional Central Banks adjust their policies of how money is created over time.
Hurdles to adoption
Early in 2015, Kapronasia predicted that Bitcoin will not see mass adoption in 2015 despite being the most recognized of the digital currencies. It has yet to pass the ‘mother test’: where anyone’s mother would put aside her credit card and use Bitcoin instead. Be that as it may Kapronasia also said that other altcoins, Litecoin and Peercoin for example, will not fade away anytime soon. That said, the analyst also concede that for all its technology and innovation, success for crypto currencies remain elusive – success, in this case, equals adoption and there is little in turns of bitcoin adoption for it be considered a success.
Kapronasia also theorizes that “even if Bitcoin does go ‘mainstream’, the demand or market size for multiple decentralized virtual currencies is slim, so it is very unlikely that any other digital currency would survive.”
Recent developments including Ripple and Stellar have not resulted in any meaningful adoptions of crypto technologies. Perhaps just slightly ahead of its time, Ripple is a consensus based system that focuses on solving payments as opposed to being a store of value. Although Ripple’s growth is far faster than bitcoin, we are still yet to see commercial implements of the technology in the payments market – arguably the most hotly contested space in the financial services sector.
Charlie Woolnough, co-founder of CoinCorner – a consumer-focused bitcoin services business, may have a more pragmatic view of the timeline for bitcoin’s adoption in the market. In a bylined artile titled “What 2016 Holds for Bitcoin Businesses” published on CoinDesk, he wrote that the bitcoin industry is still years away from maturity. “Unfortunately, many businesses were launched on the back of overly optimistic industry growth projections. The hard reality is, there just isn’t currently enough volume to support all the exchanges, payment gateways and wallet providers that have sprung up, let alone the number of secondary service providers, such as bitcoin compliance solutions, that have been created to support the first wave of service providers,” he explained.