One of the arguments about bitcoin, which we come across, more and more, is, “it’s all very well to invest in it, but where do I spend it? No one accepts it.”
This may well have been true, even a short time ago, but a quick search on the net reveals things are changing rapidly. This is a map of London showing bitcoin ATMs.To quote the site, “Bitcoin ATMs are arguably one of the easiest ways to buy bitcoin and more and more are appearing in cities across the UK. These machines allow you to buy bitcoins at a fair price using cash (and sometimes debit/credit cards) and receive them instantly into your wallet. Some bitcoin ATMs also let you sell bitcoin and pay out cash.”
Another site shows the locations of 1,891 Bitcoin ATMs worldwide – as well as over 40,000 other cryptocurrency services which are now available.
This would have been unthinkable just a year ago.
In the UK, even the central bank, The Bank of England, is looking seriously at bitcoin. This PDF is a summary of their current involvement in cryptocurrencies. They have been investigating the issue for at least 12 months.
In addition, it was announced this morning that Britain and the EU are joining forces to crack down on the tax implications and money-laundering aspects of cryptocurrencies.
Taken at face value, an intra-governmental initiative to prevent the widespread use of cryptos could be seen to be a bad thing for investors in Bitcoin, Ethereum, Litecoin and all the others. What this news has actually done though, is legitimise further, the use of these methods of payment. For governments to intervene, they must perceive a real threat to the status quo provided by the banks and old-guard financial institutions.
The likes of Goldman Sachs and JP Morgan have been scathing in their dismissal of cryptocurrencies as frauds recently, and regard them as a bubble, which they are assuming, will burst very soon. Obviously, governments think differently.
One of the arguments these governments are using is the alleged anonymity of users. They fail to acknowledge that the blockchain is based on complete transparency. Transactions can be followed back to their original source. In order to open an account for any e-wallet, some form of ID is invariably asked for – usually in the form of a passport or drivers license. Any form of cash, as an existing fiat currency, has the same issues.
With national debts at record levels, stagnating economies with reduced tax income being made, and a seemingly, inexhaustible need for money to sustain their administrations, governments across the world are looking for ways to increase their tax take, and cryptocurrencies are a prime target, given their growth, capabilities, and future prospects. Rather than outlaw them, and kill the project dead, they see this rise in popularity as a way of finding another stream of income.
With an ever-increasing number of people losing faith in their politicians, and the way in which those same governments are mismanaging major financial issues, like their pensions and their social security, it is little wonder the public are turning to cryptos as new methods of finance, which they perceive as a better way of looking after their interests.
Bitcoin has been the cheerleader for such cryptocurrencies. It has firmly established itself in the minds of the public (especially investors) as a serious alternative to existing paper currencies; along with their limitations of exchange rates, physical storage, the risk of theft, and other drawbacks. As more ATMs are made available, and retail outlets decide to accept cryptos as a payment method, so people will become more comfortable dealing with them, and using them.
Such cryptocurrencies are in their infancy, but they are becoming an increasingly accepted means of payment and this alone makes them worth keeping an eye on.