The cryptocurrency bitcoin and others like it may seem to operate in the shadows, but anyone seriously following the payment industry must keep an eye on bitcoin, the way some people now prefer to transfer money.
When bitcoin first came online in January 2009, few people outside a very small circle noticed it. It isn’t even clear who created this method of payment. The bitcoin currency is the most prominent in a class of cryptocurrencies that uses encryption algorithms to secure the currency’s transactions. When a payment is made with bitcoin coin, user identities aren’t revealed; only a pseudonym is provided. Records are kept, but not in a central location. And the payment method has no one in charge of it, not even its creators.
Still, bitcoin has caught on as a digital currency. It’s estimated that there are nearly 15 million bitcoin units in circulation today with a total value of between $3 billion and $4 billion. As many as 100,000 merchants of one kind or another accept bitcoin, including PayPal and Microsoft.
There are concerns with this payment method. Most obvious is how its anonymity can lead to use by criminals, including drug traffickers. But traditional financial institutions like JP Morgan Chase and others are considering whether the bitcoin currency could streamline processing and reduce the costs associated with international transactions.
Additionally, since the bitcoin price fluctuates, it can be unnecessarily volatile for some transactions. A single bitcoin has varied in price from US $0.30 to more than US $1400. In fall 2016, the bitcoin price was around $600 and showed signs of stabilizing.
There are as many as 700 other cryptocurrencies similar to bitcoin that want to get in on the game too. An academic journal called Ledger is now available to help you stay informed about the bitcoin currency and related cryptocurrencies.
At United Thinkers, we’re more than just the creators of the UniPay gateway. We’re experts who are deeply entrenched in the payment industry, following its trends and staying ahead of the curve in meeting the needs of our clients. While the UniPay gateway doesn’t support bitcoin or related cryptocurrencies yet, we’re here to support your payment processing needs. Can we help you understand today’s payment industry and the challenges of the future?