PayPal CFO: Bitcoin’s Success is Very Likely

Earlier this year, PayPal CEO Dan Schulman called Bitcoin “an interesting experiment” in a Facebook Live event, while also noting that “it could change the world.” At the same time, Xapo CEO Wences Casares even went so far as to predict a future in which one single Bitcoin could be worth $1 million.
· February 21, 2018 · 8:00 pm

There’s a lot of doubt surrounding Bitcoin’s potential as a viable, real-world currency – but PayPal’s chief financial officer sees only positive things in the dominant cryptocurrency’s future.


A ‘Very High Likelihood’ of Success

According to John Rainey, PayPal’s chief financial officer, Bitcoin, and other cryptocurrencies will one day become a popular method of payment – just not yet. Rainey toldThe Wall Street Journal:

Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.

Nevertheless, Rainey recognizes Bitcoin as a legitimate currency, even if it’s not quite ready for mainstream adoption yet. Says Rainey:

At some point there is very high likelihood. The technology, there is real merit to it. I do think, though, it will be years down the road before we see the kind of ubiquity and acceptance that make it a form of currency that is used every day.

PayPal and Cryptocurrency

This is not the first time PayPal has shown support for Bitcoin and cryptocurrency. PayPal was one of the first companies to accept cryptocurrency as a currency on its platform, allowing merchants the option to be paid in Bitcoin as early as 2014/2015.

Earlier this year, PayPal CEO Dan Schulman called Bitcoin “an interesting experiment” in a Facebook Live event, while also noting that “it could change the world.” At the same time, Xapo CEO Wences Casares even went so far as to predict a future in which one single Bitcoin could be worth $1 million.

Differing Opinions

Of course, not everyone agrees with Rainey’s and Schulman’s optimistic long-term assessment of Bitcoin’s future as a currency. Earlier this week, Bank of England Governor Mark Carney claimed Bitcoin has already failed on virtually every front, stating:

It has pretty much failed thus far on … the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.

Differing Opinions

Venture capitalist and Tezos investor Tim Draper, however, recently claimed Bitcoin is “the future” of currency while claiming a large portion of the world’s currency will someday be comprised of cryptocurrencies.

What do you think about Bitcoin’s potential as a mainstream currency? Do you think digital currencies are the way of the future? Let us know in the comments below!


Images courtesy of Reuters, Fortune

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The Future Of Banking: Cryptocurrency ATMs And Blockchain-Based Drones

Rachel Wolfson , Contributor I write about crypto, women in crypto and blockchain technology. Opinions expressed by Forbes Contributors are their own. A Bitcoin logo is seen on an Android device in this photo illustration on February 1, 2018. (Photo by Jaap Arriens/NurPhoto via Getty Images). A recent …

A Bitcoin logo is seen on an Android device in this photo illustration on February 1, 2018. (Photo by Jaap Arriens/NurPhoto via Getty Images)

A recent trip back to my hometown of Dallas, Texas got me thinking about the future of cryptocurrency. During my visit, I came across a physical “Bitcoin ATM” while putting gas in my car at the local Chevron Station.

I learned that this Bitcoin ATM is operated by Coinsource, one of the world’s largest Bitcoin ATM providers. With over 250 Coinsource ATMs located across the country, the company aims to leverage the tremendous growth of Bitcoin by providing an easy and secure way for people to convert Bitcoin to cash and vice versa. As Bitcoin becomes more mainstream, the Coinsource network saw the need for a “scalable identity platform” that could support this expansion.

The rise of Bitcoin ATMs clearly demonstrate the advancement of digital payments. As a result, a transition to real-world financial models is being seen as Bitcoin and other cryptocurrencies become more common.

More interestingly, however, cryptocurrency ATMs also offer an innovative solution to solve one of the world’s biggest problems – banking barriers.

Approximately 2 billion people worldwide and roughly 59% of adults in the developing world don’t have a bank account. Yet in some countries, cash transactions represent up to 95% of all transactions.

However, it’s interesting to note that a large number of these unbanked people possess a cell phone, providing them with the means to keep a digital wallet to store cryptocurrencies. Once a digital wallet is in place, blockchain transactions allow for the transfer of Bitcoin and other cryptocurrencies in a peer-to-peer fashion, without any intermediaries involved. The use of blockchain technology in the financial sector has been identified by many as a potential solution to reduce poverty by democratizing the access to the economy.

How Cryptocurrency ATMs Work

In the case of Coinsource Bitcoin ATMs, Bitcoin holders who wish to exchange their digital assets for fiat currency only require a cell phone. Users simply download the “Coinsource Bitcoin Wallet” app to send and receive Bitcoins by scanning a QR code using a cell phone’s camera.

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Bitcoin: MPs launch inquiry into digital currencies

Ms Morgan said: “People are becoming increasingly aware of cryptocurrencies such as Bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors. “The Treasury Committee will look at the potential risks that digital currencies …
Graffiti in LithuaniaImage copyrightGetty Images
Image caption Speculative investment in Bitcoin prompted graffiti in Lithuania

MPs have launched an inquiry into cryptocurrencies and the technology behind them.

The Treasury Committee said it wants to understand the risks and benefits of digital money following an explosion of interest – and investment – in them.

The MPs will cover the role of digital currencies in the UK, including the impact on consumers and businesses.

Although currencies such as Bitcoin have drawn criticism, the technology behind them has been praised.

Nicky Morgan, chair of the of the committee, said the MPs would look into how consumers and Britain’s financial infrastructure might be better protected, without stifling innovation.

Last year’s rapid rise, and subsequent fall, in the value of Bitcoin focussed attention on cryptocurrencies. They were variously dismissed as fraudulent, a “Ponzi” investment scam, and a vehicle for criminals and tax evaders.

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Media captionBitcoin explained: How do cryptocurrencies work?

Bank of England governor Mark Carney said Bitcoin had failed as a currency, but that the underlying technology which records and verifies the chain of transactions might prove useful.

Warren Buffett, the venerated investor, said the speculative cryptocurrency craze “will come to a bad end”.

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Ms Morgan said: “People are becoming increasingly aware of cryptocurrencies such as Bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors.

“The Treasury Committee will look at the potential risks that digital currencies could generate for consumers, businesses, and governments, including those relating to volatility, money laundering, and cyber-crime.

“We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment.”

But she also wants to strike a balance between protection and regulation, and not hindering the blockchain technology behind cryptocurrencies. “As part of the inquiry, we will explore how this can be achieved,” she said.

The committee, which has yet to set a date for its first evidence session, will take evidence on key questions, including:

  • Are digital currencies ultimately capable of replacing traditional means of payment?
  • To what extent could digital currencies disrupt the economy and the workings of the public sector?
  • What risks and benefits could digital currencies generate for consumers, businesses and governments?
  • Could regulation benefit digital currency start-ups by improving consumer trust?
  • How are governments and regulators in other countries approaching digital currencies and what lessons can the UK learn from overseas?

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US arrests operator of shuttered bitcoin investment platform

(Reuters) – The operator of a shuttered bitcoin-denominated exchange was arrested on Wednesday on federal charges that he lied to U.S. securities regulators to avoid taking responsibility for the theft by hackers of virtual currency now worth nearly $70 million. Federal prosecutors in Manhattan …

(Reuters) – The operator of a shuttered bitcoin-denominated exchange was arrested on Wednesday on federal charges that he lied to U.S. securities regulators to avoid taking responsibility for the theft by hackers of virtual currency now worth nearly $70 million.

Federal prosecutors in Manhattan announced the charges against BitFunder founder Jon Montroll the same day the U.S. Securities and Exchange Commission filed a lawsuit accusing him and the company of running an unregistered securities exchange that defrauded its users.

“As alleged, the defendant repeatedly lied during sworn testimony and misled SEC staff to avoid taking personal responsibility for the loss of thousands of his customers’ bitcoins,” Manhattan U.S. Attorney Geoffrey Berman said in a statement.

Montroll, a resident of Saginaw, Texas, was charged in a criminal complaint with perjury and obstruction of justice and was arrested in his home state. A lawyer for Montroll, 37, did not immediately respond to a request for comment.

Prosecutors said Montroll operated WeExchange Australia Pty Ltd, which functioned as a bitcoin depository and exchange service, and BitFunder.com, which allowed users to sell virtual shares of business entities in exchange for bitcoins.

According to a criminal complaint, hackers in 2013 exploited a weakness in BitFunder’s programming code to cause it to credit them with profits they had not actually earned, allowing them to withdraw 6,000 bitcoins from WeExchange.

Due to the hacking, BitFunder and WeExchange lacked enough bitcoins to cover what Montroll owed users, prosecutors said. Yet they said that during a subsequent SEC probe, Montroll denied that the exploit the hackers used had been successful.

Prosecutors said that he also produced to the SEC a screenshot that falsely represented how many bitcoins were available to BitFunder users as of October 2013.

Three days after the hacking, Montroll, using the alias, “Ukyo,” participated in an online chat in which he sought the help from the principal of a different bitcoin exchange to track down “Stolen bitcoins,” prosecutors said.

He later transferred some of his own bitcoins into WeExchange to conceal the losses, prosecutors said. BitFunder shut down in 2013.

At the time, the more than 6,000 bitcoins the hackers stole were worth about $775,075, the SEC said in its lawsuit. Today, those bitcoins are worth about $69.6 million, according to the criminal complaint.

The case is U.S. v. Montroll, U.S. District Court, Southern District of New York, No. 18-mj-1372.

Additonal reporting by Nikhil Subba in Bengaluru; Editing by Arun Koyyur and Phil Berlowitz

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Bitcoin Usage Falls to Its Lowest in Months

Bitinfocharts calculates a median fee of 52 cents, versus just over 1 cent for bitcoin cash. This reduction in transaction fees will not be felt by all bitcoin users however. Anyone withdrawing from an exchange will still be hit with standard fees. Binance and Kucoin, for example, set a flat rate of 0.001 BTC, …
Bitcoin Usage Falls to Its Lowest in MonthsBitcoin Usage Falls to Its Lowest in Months
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There’s never a bad time to be sending and receiving bitcoin, but right now is especially good. Fees are at the lowest in 18 months, with the average transaction value now under a dollar. This contrasts starkly with the latter quarter of last year, when rising fees peaked at $34. There’s a primary reason why fees have been dropping since then: with bitcoin too expensive to send, people simply stopped using it as currency.

Also read:How to Calculate Bitcoin Transaction Fees When You’re in a Hurry

Bitcoin Fees Take a Tumble

It’s not just the USD/BTC market that oscillates: bitcoin’s fee market follows suit. Due to various factors ranging from network usage to Segwit adoption and hashrate, fees can rise and fall significantly. Throughout 2017, that trajectory was largely an upward one, culminating, in December, with fees becoming infeasible. Transaction fees have been mercifully declining since then, hitting an 18-month low as of February 21, but given that daily transaction volume has halved in the same period, that’s not surprising. A standard six-block transaction can now be pushed through for as little as 15 cents. Bitinfocharts calculates a median fee of 52 cents, versus just over 1 cent for bitcoin cash.

This reduction in transaction fees will not be felt by all bitcoin users however. Anyone withdrawing from an exchange will still be hit with standard fees. Binance and Kucoin, for example, set a flat rate of 0.001 BTC, or around $10.60 at current prices. As Binance CEO Changpeng Zhao pointed out in a recent tweet, though, exchanges have a case for charging above the base rate for the service they’re supplying. Whether they can justify charging upwards of $10 a time is a matter for debate though.

Bitcoin Fees Fall to Their Lowest in Months

Bitcoin Fees Fall to Their Lowest in Months

Why the Low Fees?

High transaction fees arguably helped push the “store of value” meme that was popularized on r/bitcoin last year. Saddled with a cryptocurrency that was too expensive to send in small amounts, there was little choice but to hodl and wait for BTC to appreciate in value. Soaring fees were one of the triggers for a number of businesses to stop accepting bitcoin including Stripe and, ironically, the North American Bitcoin Conference. Steam also stopped accepting bitcoin in December, citing “high fees and volatility”. Frustrating as fees have been for users of the bitcoin network, some good has come of this predicament.

Bitcoin Fees Fall to Their Lowest in Months

Bitcoin Fees Fall to Their Lowest in Months

Users and exchanges have scrambled to seek out ways of making transactions more efficient, with fixes including batching transactions together and adopting Segwit. Exorbitant fees also spurred quicker trials of the Lightning Network, though its adoption is still too low to have affected current bitcoin fees. Evidence suggests that the biggest driver in fee reduction was not technical, but sociological: on December 17, almost half a million bitcoin transactions were sent. That figure now averages under 200,000 a day.

With fees now at the lowest they’ve been in 18 months, it will be interesting to see whether retailers such as Valve will resume support for cryptocurrencies or steer clear until some sort of stability can be maintained. A number of companies have previously spoken of considering alternative cryptos, with Stripe mentioning litecoin, stellar, and bitcoin cash.

Bitcoin’s real test will come when people resume using the cryptocurrency as a medium of exchange and blocks begin to fill up once more.

Do you think bitcoin fees are now at a reasonable rate, or do they need to fall further still? Let us know in the comments section below.


Images courtesy of Shutterstock, and p2sh.info.


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