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Debate over Bitcoin’s viability as an alternative currency is ongoing, but it’s become increasingly difficult to deny that the currency has potential to spread.
While some have become inclined to classify Bitcoin as a commodity—a prominent U.S. regulator officially classified it as such—there are more practical uses for cryptocurrency with each passing year. We may not be on a path that ends in Bitcoin replacing official currencies, but we’re certainly seeing more businesses and consumers accepting it as an alternative.
And that begs the question: where might Bitcoin still spread? Which industries, or even nations, could still make meaningful moves to embrace the spread of cryptocurrency? To some extent it’s impossible to answer these questions in advance, but given the current climate we can make some assumptions.
Major Online Retailers
Bitcoin and other cryptocurrency payments are easier to facilitate online than in person. As a result, we’ve seen several major online retailers among the first big names to accept such payments. Names like PayPal, OKCupid, and Overstock.com are frequently mentioned among the heavy hitters that got involved fairly early on. That may seem like a pretty bold move for so many large companies to make, but there’s one important thing to understand. According to an analysis of companies accepting Bitcoin, most of them aren’t actually doing so directly. Rather, they’re partnering with cryptocurrency conversion services that accept customer Bitcoin and convert it into cash before the company ever takes hold of it.
This is actually good news for Bitcoin advocates, because it makes it easier for companies to accept such payments, and still drives up the incentive for consumers to use digital currency. In a way, it’s a win-win. And because it’s relatively easy for companies to adapt by using this method, it stands to reason we’ll continue to see cryptocurrency spreading to more major online retailers.
If Bitcoin is going to become the practical, everyday alternative currency that many envision it to be, in-person merchants and local shops will need to get on board as well. This is a slow, steady process that’s difficult to measure, as it’s often up to individual business owners, rather than people in control of broader companies. In other words, there’s no way to predict if a local bakery owner in New York City will suddenly start accepting Bitcoin payments before the end of the year.
With that said, this overview of Bitcoin usage points to how European nations are making progress in the area of Bitcoin-friendly merchants (though not quite at the level of those in the U.S.). The process essentially started a little later in Europe, but because it’s now underway it’s a safe bet that we’ll be seeing an increasing percentage of European merchants accepting cryptocurrency.
The idea of Bitcoins as safe havens for citizens living in countries with struggling economies became a mainstream talking point with relation to the Greek financial crisis. That crisis has been ongoing for several years, but it’s been so bad at times that limits have been imposed on ATM withdrawals. For that reason, some in Greece have turned to Bitcoin for its accessibility and ability to operate independent of government regulations. There have even been reports of a rollout of 1,000 Bitcoin ATMs in Greece.
However, this situation is not isolated in Greece alone. When talk briefly surfaced of Greece even considering Bitcoin as an official currency should they leave the European Union, there were whispers of other European nations following suit. Argentina, meanwhile, has become a hot spot for potential Bitcoin development due to similar concerns to those in Greece. This has become a repeating cycle of sorts, with the result that nations with struggling economies are now great places to look for Bitcoin expansion.
Countries With Restrictions
There are several countries that have banned Bitcoin, either entirely or via restrictions that make the spread of the cryptocurrency particularly difficult. These include the likes of China, Russia, and Sweden among others, and while these nations aren’t currently doing Bitcoin any favors, they stand as major places of potential for cryptocurrency in the near future. Simply put, the more influence Bitcoin gains in the rest of the world, the more pressure there will be on these nations to allow it within their borders. Timing is difficult to predict, but ironically these countries could account for some nice, sudden increases in Bitcoin usage if and when they ease restrictions.
Cryptocurrency has had a strange and unpredictable journey into mainstream financial culture thus far. And for that reason, projections on its future are extremely varied. But should Bitcoin and other cryptocurrencies continue to grow, it will likely be through these channels.