Bitcoin, an online ‘cryptocurrency’ that was launched in late 2008 has recently been growing in popularity; as evidenced by Canadian mining company Alix Resources Corp. agreeing to pay contractor Ridge Resources Ltd. in Bitcoins as opposed to any other traditional currency such as the Canadian or American dollar. Alix Resources Corp.’s CEO noted that his company has been accumulating Bitcoins as the online currency has become more popular and in turn raised in value. If this first test operation goes successfully then Alix may make a permanent switch to Bitcoins as a means of payment. There has been a lot of skepticism with regards to this transaction, both on part of Alix as an accumulator of the currency and Ridge as an acceptor of the currency; many still don’t trust the stability of Bitcoins on the whole.
Despite the skepticism, there is still those who see a lot of opportunity in the online currency. Just last week a Bitcoin ATM opened up in downtown Vancouver, where one can use a debit or credit card to purchase Bitcoins for their online wallet. As well, two Toronto entrepreneurs are working to make Bitcoins available as an accepted form of currency in retail stores across North America through use of their new ‘digital wallets’ for retailers, Coinkite.
The chart below is the price of Bitcoins in Canadian Dollars over the past 6 months.
Chart Courtesy of Bitcoin Charts via Creative Commons
As the chart shows, just over the last month Bitcoins have more than doubled in value and while some who are in the know are still skeptical, others expect the online currency to continue to rise with this new rise in popularity.
The Bitcoin situation is rather unique as it’s quite a bit more open source than anything the banking world has seen in the past and therefore has substantially lower transaction costs. Though the open source-ness of the currency is also concerning to some in the mainstream. That mainstream criticism will be hard for Bitcoin to overcome, but with so many innovators backing it it’s certainly possible. It looks like it may come down to how all these new Bitcoin related products will be marketed to the general public and whether the general public will be accepting of them.
Sources:
National Post – http://business.financialpost.com/2013/11/13/canadian-miner-to-pay-contractor-in-bitcoins/
National Post – http://business.financialpost.com/2013/10/28/bitcoin-atm-canada-this-week/?__lsa=177a-cca5
Toronto Star – http://www.thestar.com/news/gta/2013/11/12/bitcoin_entrepreneurs_want_to_put_virtual_coins_in_your_wallet.html
Coinkite – https://coinkite.com