blog If you needed any further indication that we now live in the science fiction future long ago mapped out for us by visionary authors, then look no further. News arrived this week that an Australian digital currency company and Bitcoin mining concern, digitalBTC, has listed on the Australian Stock Exchange through a backdoor listing. You can find the full media release available online in PDF format, and here’s what the company’s chairman, serial entrepreneur Zhenya Tsvetnenko, had to say about the move:
“Bitcoin is a highly exciting and fast emerging currency system which I believe will dramatically change the way in which many users approach making payments or financial transfers in our new hyper-connected, globalised world where the old boundaries and intermediaries between citizens and firms in different locations become less relevant.”
As the Bitcoin system matures beyond its initial niche and begins to realise its true disruptive potential, sophisticated service firms will be increasingly required to facilitate the system. We believe that sophisticated intermediaries such as digitalBTC can derive significant profit in supporting this emerging growth phase of Bitcoin, as it takes its place as a true worldwide currency.”
According to its media release, digitalBTC has established Bitcoin mining revenues, including “strategic agreements with key Bitcoin mining partners”, an established trading desk and market bringing in revenues, is currently developing retail consumer products around Bitcoin, including digital currency mobile applications, a well-credentialed management team, and long-term growth potential. The company has raised some $9.1 million as part of its listing.
To be honest, I’m not sure what to make of this. BitCoin is only five years old, its origin is murky and there have been several very high-profile problems with major companies trading the currency, including the theft of Bitcoins worth more than US$450 million from Tokyo-based Bitcoin exchange Mt. Gox. Traditional investors are certainly leery. Warren Buffet’s thoughts on Bitcoin, as quoted by investor publication The Motley Fool this week about digitalBTC’s listing, are as follows: “It’s not a currency. I wouldn’t be surprised if it wasn’t around in the next 10-20 years. It’s being priced off the [US] dollar,” Buffett added. “It is not a durable means of exchange.”
Is this crypto-currency really stable enough to form a platform for an ASX-listed company, with all the regulatory controls that come with that? I guess we’ll find out. Either way, I think we can establish one thing through this exercise: Australian investors love the technology sector. If they’ll pump $9.1 million into a venture in a sector this unstable and risky, they’ll probably invest in anything.
Image credit: antanacoins, Creative Commons
Bernie Madoff had companies listed on the NYSE. The NYSE had controls and regulations. People invested with Madoff.
I wish them luck but geeze, I can’t imagine a more competitive environment than bitcoin mining. It’s difficult to see how anybody could make money out of it in the long term. A bitcoin exchange maybe – but it’s this company is one weed in a large paddock of them. There are people literally selling them out of there houses around Brisbane now.
And Renai, I assume from your comments you are with the traditional investors on this one. Yet you are running a technology rag. Here’s a suggestion: try accepting bitcoin for subscriptions. That should suck you in enough to investigate whether it’s real or not – so you don’t have to rely on an 83 year old man’s opinion on whether a cryptocurrency is likely to succeed. I wonder if he knows it is a cryptocurrency, and not something like Beenz.
The one thing BTC is good for is skipping banking controls and regulations when transferring internationally, as well as receiving the ‘funds’ within minutes and not days. It is also far cheaper to exchange than foreign currency with transaction fees in the tenths or even hundredths of a percent. For this reason alone, it will always be useful, and useful things endure.
Mining BTC will not endure, because like all resources, they run out, or become so expensive to mine it stops being worth it. BTC is limited by it’s own making, and the current “newly minted” block chains are fast becoming unwieldy (in size) for most computers, let alone some of our local data connections.
As for using it as an everyday currency? Well, I don’t think so. Because it erodes both banking profits and central controls, the banking lobbies in most major countries are likely to influence their respective governments to ban it, or curtail it’s use so that it cannot be legally traded for “legitimate” currency.
Just remember one thing; the only real currency is Gold (or Oil for that matter). All the rest are fiat, virtual or not. http://en.wikipedia.org/wiki/Fiat_money
Comments are closed.