Is Bitcoin A “Fad”?
“Bitcoin is the fad currency du jour,” says Grant Arnott Director of e-tailing site Click Frenzy told CN.
“It is gaining some traction as a legitimate form of currency, and we have seen some early adoption in Australian retail, though mostly on the fringes.“
Aussie owned companies Annex Products and Millenniuem Electronics currently accepting Bitcoins, as does at least one Sydney pub. There are also vast security risks associated with bitcoin as well as fluctuations in value and mass users are still thin on the ground.
“With such small penetration as a currency, there’s little urgency for retailers to jump onto the Bitcoin trend just yet.”
Dell yesterday announced it would be accepting bitcoin on Dell.com consumer site in the US as part of a pilot project, is the largest global organisation to make the move to the digital currency.
Global sites Expedia and Overstock also accept the currency which first emerged in 2008.
However, accepting bitcoin certainly isn’t the be all and end all, says Arnott.
“It’s not likely Bitcoin owners have no other payment options, or will snub retailers not accepting their currency. As Dell has shown, it’s a nice way to generate some PR, but I doubt it’s a substantial boost for the bottom line, if at all.”
Bitcoin backer and Union Square Ventures founder Fred Wilson pointed out the currency’s major flaw at a talk last week:
“One of the real issues with Bitcoin right now is that it’s not that secure, and the reason it’s not that secure is, it’s easy to hack into people’s computers, if they have a wallet on their own computer, it’s easy to get in there and steal the Bitcoin.”
The “first big commercial opportunity in Bitcoin, is to create secure systems. Because without that, I don’t think we’ll ever get enough confidence and trust in the system for people to really start using it.”
Scott Browning, Director of JB Hi-Fi also believes bitcoin has a “long way to go.”
“My understanding is that it still has a long way to go before it could be recognized as a low risk transactional currency, given all the existing robust merchant platforms and corporate treasury management issues.”