Feeds

Bank of America: Bitcoin could become THE currency of e-commerce

Guestimates that $1,300 is a reasonable price per coin

Secure remote control for conventional and virtual desktops

Chinese banks may not be too keen on Bitcoin at the moment (which has done something to damp down the current price) but a new research report from Bank of America rates it as a major player in future internet transactions.

"We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers," the report states. "As a medium of exchange, Bitcoin has clear potential for growth, in our view."

Some suggest that the price of Bitcoin is going through a speculative bubble not based on reality, but the report's authors suggest that the currency may not yet have reached its true value. The Bank of America analysts think that the market value of a Bitcoin should be around $1,300, based on the assumption that around 10 per cent of e-commerce transactions will use the payment system.

Bitcoin has a number of advantages in the field, the report states. As a first-mover, or at least the first online currency to gain widespread acceptance, Bitcoin could push out any competitor currencies, and the authors note that while other virtual currencies have been tried, none have taken off.

Bitcoin's electronic nature makes it highly attractive for e-commerce, but the bank notes that the delay in transaction time may cause some vendors to steer clear of the currency. The report's authors also note that Bitcoin has a particular value as a crisis currency, and that the EU's Cyprus bailout coincided with a large increase in Bitcoin participants.

However, the report notes that the currency could suffer if governments around the world were to load it down with regulation, and its price volatility could make it unsuitable as a long-term storage medium for wealth. The security of Bitcoin could also be cracked, Bank of America suggests, rendering savings either worthless or worth a lot less.

The report notes that the public's interest in the currency, and its rapid price rise, has led to a 521 per cent growth in the number of Bitcoin miners. The amount of computational power required to mine a Bitcoin has now pushed hobbyists out of the market and specialized ASIC chips are required to perform the calculations needed to generate new currency. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.