04-08-2013, 08:03 AM
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The People's Post
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Join Date: Dec 2008
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Posts: 63,963
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here's a good read on where venture capital sees potential btc markets
http://techcrunch.com/2013/04/05/why...about-bitcoin/
key points::::::
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I see the opportunity for Bitcoin to disrupt multi-billion-dollar markets, but in doing so also create new big markets. There are three key markets in Bitcoin:
Wallet. Holding your Bitcoins for you, serving some of the checking account functions of a bank.
Exchange. Converting from USD to Bitcoins and back.
Payments. Helping merchants accept Bitcoins for their transactions.
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HOW DO WE GET THERE?
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All of these market-sizing analyses require a 2 to 2.5 order of magnitude increase over current levels. Those same metrics have shown a 1 to 1.5x order of magnitude increase in the last year, so it doesn?t stretch the imagination to think that it might be possible.
The other way that Bitcoin may become mainstream is in countries where the currency or financial system is already more volatile than Bitcoin.
Mainstream adoption will require bright line regulatory compliance by all elements of the Bitcoin ecosystem. That is why last month?s guidance on virtual currencies from FinCEN (part of the U.S. Treasury) caused Bitcoin prices to go up. As Bitcoin gets closer to the U.S. regulatory umbrella, it moves closer to legitimacy. These rules and the ones that will follow will increase the overhead costs of all players in the space, but that is a small price to pay for legitimacy.
The risks associated with Bitcoin are worth mentioning as well. The six biggest hacking, theft and fraud incidents involving Bitcoin exchanges, wallets, or investment vehicles have resulted in a total 1.2 million Bitcoins being stolen, out of a total of 11 million Bitcoins in existence. This means that more than 10 percent of all Bitcoin has been stolen, and this does not include many smaller thefts and losses from individual wallets. Just this week, another wallet service was shut down after suffering an attack. Given this environment, Bitcoin startups cannot remain bootstrapped for long and will need to raise more substantial capital from VCs to mitigate these risks with better security and proactive regulatory functions.
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