Sounds great, right? But, it does come with downsides. Transfers aren’t processed immediately as they have to be verified by an independent programme run by other users; the lead time can be up to 3-4 hours. It is possible, however, to pay a fee in order to bump your transaction up the queue.
As a relatively new currency, its market price is unsterdandably very unstable. Valued at 5p in 2009, bitcoin peaked at the end of 2013 at £640 before staggering down to £150 today. Investors beware. There’s the infamous story of James Howells whose hard-drive contains 7,500 bitcoins (now valued at over £1m). The unfortunate part of this narrative is that his computer is somewhere in a Newport landfill after he chucked it, not realising its value.
But it may find a new lease of life as rumours have emerged this week that Barclays will begin to accept Bitcoin later in the year. Although the bank has since stated that it’s merely advising charity clients on its usage, it does demonstrate that big banks are considering the value of using bitcoin.
This is big news. While bitcoin has gained some traction online, with companies like Wordpress and OKCupid, it hasn’t broken into retail outside of burger vans in Shoreditch. Bitcoin’s lack of transfer charge does make it seem the holy grail of finance solutions but it does have its two fatal flaws.
Its first issue, the delay, can be remedied through the implementation of big bank infrastructure, which is why many are excited by Barclay’s involvement. However, before it can be accepted as a viable currency, it needs to stabilise. Until bitcoin manages to establish equilibrium it won’t be taken seriously by the highstreet. Its risk is just too great.