Bitcoin is gaining increased institutional recognition, while blockchain technology is being adopted in innovative ways. Here’s how those trends are shaping 2015.
This is an updated version of an article first published on July 6, 2015 on Bitcoin Investing News.
2015 is shaping up to be an interesting year for bitcoin stock.
In particular, bitcoin stock is gaining increased institutional recognition, while the blockchain technology that bitcoin is based on is being applied to other transaction mediums. Here’s a brief overview of those key trends in bitcoin stock and why they bode well for the future of bitcoin.
Bitcoin stock trend: Institutional recognition
Bitcoin is perhaps best known for being the preferred currency of drug dealers and other criminals, but this year there’s been a clear impetus to improve its reputation.
It’s not hard to see why. A recent Goldman Sachs (NYSE:GS) survey of 752 millenials shows that more than 50 percent had no interest in using bitcoin; however, none of those millenials had ever tried using the currency. That result suggests that concerns about bitcoin have more to do with its reputation than with how it operates.
Greater institutional recognition may help address this obstacle faced by bitcoin stock, and luckily such recognition is beginning to appear. For instance, Barclays (LSE:BARC) recently signed a deal with Safello, a Swedish company looking to apply the blockchain to traditional finance. Safello CEO and Co-founder Frank Schuil has explained, “Safello and Barclays will be working together on creating a new payment platform that will support bitcoins.”
Bitcoin stock gained further institutional recognition when NASDAQ OMX Group named blockchain infrastructure provider Chain a partner in its pilot to test bitcoin technology as a means of trading shares of private companies on the NASDAQ Private Market. CEO Bob Greifeld explained at the time, “we are excited about the potential impact of this new endeavor with Chain on the transactional process.”
Bitcoin stock trend: Alternative blockchain uses
The bitcoin network functions on blockchain technology, or a shared public ledger of all bitcoin transactions. This decentralized, chronological, cryptographically sealed ledger is operated out of servers throughout the world, and ensures the security of the network.
The latest trend in bitcoin stock is the adoption of blockchain technology for alternative ends. Essentially, while the blockhain is helpful for ensuring the integrity of the bitcoin network, it also provides a cheap, secure alternative to other transaction methods.
For example, Gyft, an online platform for buying, sending and redeeming gift cards, is taking advantage of this technology to provide accessible gift card programs to small businesses. In June, the private company partnered with Chain to provide a platform called Gyft Block for small companies with point-of-sale systems.
Gyft CEO Vinny Lingham believes that using blockchain technology will provide a “very cheap, very secure, very fast” response to small businesses’ gift card needs. Other certainly seem to agree, especially where security is concerned — according to Forbes, 78 percent of retailers have experienced credit card fraud due to the inherently insecure nature of plastic gift cards.
This system not only saves money by reducing fraud, but also reduces costs for customers. While the cost to issue, transfer and settle a plastic gift card falls at about $1.50, a blockchain-based virtual gift card costs only about a cent at current bitcoin prices. This move towards applying blockchain technology to the gift card industry speaks to the versatility that bitcoin-related technologies provide, and points to possible future applications.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.