The story of the German Finance Ministry stating essentially Bitcoin is “legal tender” has been making the rounds all over the virtual currency and technology world. The German government recognizes the digital currency as a “unit of account” that can be used in Germany. This makes them a kind of “private money”, which can be used in multilateral clearing circles.The German Ministry of Finance has issued an official statement recognizing Bitcoin as “Rechnungseinheiten,” a legal designation that translates to “units of account”. This type of money is also referred to as “artificial currency” or “side payments.”“We should have competition in the production of money. I have long been a proponent of Friedrich August von Hayek scheme to denationalize money. Bitcoins are a first step in this direction,” said Frank Schaeffler, a member of the German parliament’s Finance Committee, who has pushed for legal classification of bitcoins.This is a very, very big deal. Not just because some bureaucrat seemingly “legitimizes” the crypto-currency, it is also the first commonsense approach from a major economy to-date. While the U.S. government specifically the New York Department Of Financial Services and the US Senate are putting in place appropriate regulatory safeguards for virtual currencies, Germany is merely accepting the obvious.The USA is not the only country to scrutinize Bitcoin operation; Thailand has also decided that Bitcoin is not a type of currency. Senior members of the Foreign Exchange Administration and Policy Department of Thailand advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets, Thai officials believe that Bitcoin transactions must therefore be illegal in Thailand.A positive step?Germany has gone ahead and given legal status to the Bitcoin, as it could become an alternative to the euro if the single currency ever ceased to exist. Schaeffler said “If the euro does go belly up the German authorities could potentially still collect tax if everyone started using the bitcoin” – that’s a good example of German forward-thinking!
Archive for the ‘Future of Money’ Category
The Federal Governments Reaction To Bitcoin Is An Acknowledgement Of The Dollars Vulnerability – Forbes
The term “fiat currencies” is strange and mostly not understood in this modern “progressive” era, where everything is transformed by political “Progressives” into fiat rather than natural forms, which continue to exist as long as so-called “Progressives” have the power to impose them. So instead of Natural Law, we have fiat law, which is whatever those who currently have the political power say it is. And instead of Natural Rights, the world today mostly recognizes only fiat rights, which are only the rights those in power say we have. America was rooted in Natural Rights and Natural Law, which so-called Progressives have been rebelling against for more than 100 years, certain they had better ideas more suited to the modern world.And so today we have fiat money instead of natural money. Fiat money is money with a government declared value, rather than a natural, inherent value. That is how the government takes some paper, slaps some ink on it, and supposedly it has the value the government and the ink says it has. Bitcoins Are Digital Collectibles, Not Real MoneyLouis WoodhillContributorIts Not That Bitcoin Can Be Regulated As Money: Its That Now Bitcoin Will Be Regulated As MoneyTim WorstallContributor Dont Be Silly, The Entitlement State Wont Allow BitcoinHarry BinswangerContributor Bitcoin Is a Junk Currency, But It Lays the Foundation For Better MoneyNathan LewisContributorBut that fiat money also lasts only as long as the ruling class has the power to impose it on us. That means the political power and the market power to do that. At some point, the market power, which is more real and natural, can overcome the political power. And that is the point we are reaching, when the innovation becomes more real and natural.
“So, is Bitcoin actually money?”It’s a fair question and, with the intense scrutiny directed at the “crypto-currency” of late, an increasingly common one. But the real question is not whether Bitcoin functions as money today, nor whether Bitcoins themselves are a good speculative investment. The real question – and the only important question when considering whether Bitcoin could be a viable alternative currency – is, “can Bitcoin ever function well enough as money to matter?”And that answer, I fear, is no.Whether something is “money” has nothing to do with the source of production, whether it’s issued by a government or a private company or spontaneously generated by a community, whether it’s minted or mined or printed or issued electronically.Money is … well, money … to the degree to which it enables transactions, to the degree that you can use it to purchase things. No matter how efficient or liquid a market is, unless it can be used to purchase things, it’s not money; it’s a commodity.By that measure, Bitcoin is unquestionably money.It just happens to be terrible at it.Wheres the marketplace?Even the most vocal supporter of the system acknowledges that the number of merchants accepting Bitcoins is miniscule and the number of large merchants embracing it is almost nil.But is that unfair, or at least premature?Perhaps it’s just a question of time, business development, marketing … of scale. One hears the term “critical mass” a great deal when this question is posed, the implication being that the ecosystem just needs enough merchants to buy in for Bitcoin to become useful as money and to become self-sustaining.But it is not quite so simple.
Mobile Payment At U.S. Starbucks Locations Crosses 10% As More Stores Get Wireless Charging | TechCrunch
Starbucks is seeing impressive adoption of mobile payments in its U.S.-based store locations, the company revealed during its quarterly earnings conference call last night (via WSJ). Mobile payments crossed the 10 percent mark in the U.S. as a percentage of in-store purchases, indicating efforts like the Starbucks mobile app, Apple’s Passbook and Square Wallet are popular among users.
The coffee franchise is pushing forward with more mobile-focused initiatives, including the installation of wireless charging mats in select locations. The Powermat-supplied wireless charging initiative follows a trial of 17 locations in Boston, and will roll-out in Silicon Valley throughout August. The standard it uses is the Power Matters Alliance variety, which unfortunately doesn’t work with phones that use the Qi standard like the Google Nexus 4. Still, a growing number of companies are joining up with PMA’s standard, and Starbucks’s continued support should help it appear in more devices.
The lesson here is that Starbucks is putting a lot of weight behind its mobile digital initiatives, and those efforts are bearing fruit. Starbucks Chief Digital Officer Adam Brotman said on the call that its “various digital initiatives have added demonstrable impact to our U.S. business in the third quarter” and promises to do even more for the company with continued investment.
Is Bitcoin Crashing As Of Early July 2013?
The answer is definitely, maybe, kind of!
Your chart shows just over two months … they look rough!
But, in fact they happen to be among the calmer months in bitcoin’s life history.
How about this chart:
While consumers may be happy enough with their payment options, they certainly aren’t 100% happy with the shopping experience as a whole. And mobile payments done right could transform that experience dramatically for the better.
So what exactly about the modern shopping experience needs improvement?
Fixing Coupons and Loyalty Programs: One problem with the current shopping experience is that, while merchants are generally eager to offer customers incentives in the form of loyalty programs, discounts and rewards, many of these offers are handed over at the wrong time: at the register. Instead, these benefits should be communicated early and often, with a personal touch. A good time to inform customers of a deal being offered on, say, a pint of ice cream, would be right when they walk into the grocery store on a hot July afternoon. Even better if the coupon could pop up as they stand in front of the freezer case making a decision. Location-based services embedded in mobile payment apps could put the offers that consumers actually want in their hands at just the right time.
Loyalty and rewards programs also tend to be very generic and rarely provide coupons and deals for the things that customers are actually interested in. For every CVS coupon I get for something that I actually need, I get a yard of paper coupons for things I have no interest in. Mobile payments apps with effective data collection and high-tech targeting capabilities could eliminate this problem (and as a side bonus do away with the paper trail altogether!)
Merging the Online and Offline Worlds
There is no seamless way to move from online browsing to offline shopping, even though many of us do this regularly. Barcode scanners and the like make it fairly simple to showroom items we’re interested from inside a store. And there are a few apps out there (Nordstrom’s comes to mind) that allow customers to quickly select an item for local in-store pickup. But for the most part, once you find an item that you want online, the only way to be sure that a store will carry it is to call around. That’s, frankly, a huge pain. It isn’t even close to the seamless shopping experience that most of us want.
But let’s say you want to locate and buy a particular pair of Ray-Ban sunglasses – pronto. In a perfect world, you’d be able to search a map on your phone and pins would pop up to indicate local stores where you can visit, try them on and buy them right away. Mobile payments apps, designed to connect customers with products, could do exactly this.
Shopping has become very impersonal. Few people have a relationship with a salesperson who knows their style and preferences and can direct them to the right items at the right prices as soon as they walk in the door. But wouldn’t that be nice? Preferable, certainly, to wandering cavernous stores, fending off pushy salespeople who don’t even bother to learn our names, much less our favorite colors and fabrics.
Online, personalization mainly takes the form of heavy-handed algorithms that are ineffectual if not downright intrusive. Even the internet’s famously creepy retargeting ads, which follow you from site to site flashing the same three pairs of shoes you just looked at on Zappos, don’t really offer anything personal. They’re just showing you what you’ve already seen in the hopes that repetition will sway you to purchase. Sure, retargeting might work now and again, but it definitely doesn’t add up to a better consumer shopping experience.
Mobile could offer a powerful solution to this problem. Imagine if, when you browsed for items on your phone, it suggested similar items and indicated which stores near you carry them. Using sophisticated big data algorithms, smart shopping apps could learn everything from your favorite color to your exact measurements (bypassing the annoying problem of vanity sizing) and even capture your style and preferences with enough accuracy to actively suggest new pieces to add to your wardrobe at the beginning of the shopping season. These are just a few (clothes-focused) examples of how mobile tech could make our shopping experiences significantly more convenient — and fun.
Businesses Want the Same Things as Consumers
The strange thing is that merchants want all three of the things mentioned above — a more effective loyalty program, a successfully merged online/offline experience, and a personalized shopping experience. They know that all of these things will bring them new customers and keep existing ones coming back.
Bitcoin backers have big dreams—dreams of reinventing the financial system based around a currency not issued by governments and not subject to the whims of central banks. But the cryptocurrency’s volatility over the last few months has raised questions about whether most people would want to depend upon it to pay for goods and services.
Despite the wealth of bitcoin-related startups entering the market, even bitcoin’s most avid supporters admit that its volatility might not subside anytime soon. But that might not matter. After all, bitcoin isn’t really a tool for normal consumers; while it may be used by companies to exchange money and avoid transaction costs, there’s little reason for small-time consumers ever to use bitcoins directly.
Everybody needs to calm down about BitCoin. There has been an explosion in the virtual currency’s price in the last few months. Below is the 6 Month price graph as of the USD :: BTC conversion rate. Not featured on this chart are the years 2009 through 2011, on which you would see two more orders of magnitude growth at the very least. Phenomena like this don’t come along that often; charts like these forge millionaires and financial legends. As appealing as the fantasy is, we have not yet seen how this particular instance of virtual currency will pan out. Which is why everybody needs to calm themselves. Virtual currencies (vTC) are not a new thing; far from it. There are quite a lot of them out there, just as there have been many incarnations of the mobile phone, the social networking site, the blogging platform, and almost any other technological advancement that has ever happened.
Online shopping may be where the attention is focused, but the brick-and-mortar retail store is still where 93 percent of total U.S. retail dollar volume goes. This, according to a new study from researchers at Javelin Strategy and Research.The new study also said that mobile payments will soon begin affecting the point-of-sale retail market in profound ways.”The retail POS market is evolving at a remarkable rate with the increased popularity of the e-commerce and mobile payments markets,” said Aleia Van Dyke, industry analyst at Javelin Strategy and Research. “Today’s consumers are demanding more digitized payment options to enhance their in-store shopping experience. The advanced features of non-traditional payment options like mobile and prepaid cards have encouraged adoption with today’s tech-savvy shoppers.”According to the new Javelin study, mobile payments will reach $5.4 billion by 2018. Admittedly, thats a tiny portion of retail POS purchases, which Javelin estimates will reach $4.2 trillion in 2018.
Mobile payments will become mainstream in next four years – AIB Merchant Services – Digital Life – Digital Life | siliconrepublic.com – Ireland’s Technology News Service
“Consumers, retailers and technology developers will see mobile payments becoming mainstream within the next four years,” said AIBMS general manager Nigel Motyer, opening the event, which was attended by 150 people, including merchants. “Consumers will insist on mobile loyalty rewards and coupons, making their mobile shopping decisions based on this.”
Jon Rutter, director of product management for mobile solutions at US payment processing company First Data Corporation, advised merchants not to be complacent when it comes to adopting new technology. “Consumers have an increasing amount of power and will take business elsewhere if dissatisfied,” he warned.
“You have to get ahead of that curve, get in touch with your consumer base. Over 80pc of the world population have a mobile device. One-third of all Facebook usage and one-half of all Twitter use is mobile,” he added, explaining that consumers want a seamless experience. With First Data being an AIBMS partner, Rutter unsurprisingly recommended that merchants develop partnerships to leverage others’ expertise in m-commerce in order to keep up with consumer demands.