Poor Bitcoin. It’s like Rodney Dangerfield: it can’t get any respect. Not from the people who could take it to the next level anyway. And the very reason some touted it as the best way to move currency around online may be the exact reason it will never achieve mainstream acceptance. At least, according to nTrust founder and CEO Robert MacGregor, who is also a technology and alternative payments lawyer. The online vault systems founder (nTrust is not available in the U.S.) has some strong opinions on Bitcoins and why they remain lukewarm in reception overall to the Internet monetary exchange universe.
Still Struggling for Mainstream Acceptance
MacGregor recently coined an op-ed piece on Bitcoins, and shared his thoughts on why they will probably never be accepted by the mainstream banking worldwide entities as a real currency. MacGregor says the issue isn’t whether Bitcoins have enjoyed some acceptance, but whether they will ever receive enough acceptance to matter, and his answer is: not so much. And he’s not the only one who thinks so, either.
The nTrust CEO ascertains that, by the definition of money as something that can be used to purchase things, Bitcoins have failed miserably. And to measure that, MacGregor says, all you have to do is look at the relatively tiny number of merchants who accept Bitcoin, and, more importantly, the virtually nonexistent number of major merchants -such as Amazon et al – who allow it at all.
MacGregor continues by saying that, although many have said Bitcoins simply need time to be more generally embraced by the Internet commerce public, he simply doesn’t see it ever happening. And there are a number of reasons for that, the first being the merchant barriers towards using Bitcoins as a monetary exchange option.
MacGregor uses Amazon – certainly generally recognized as one of the world’s leading online merchants – as an example of why Bitcoins haven’t taken off. For example, Amazon pays hundreds of millions in credit card transaction fees and reimbursing credit card fraud, as well as to the employees and management systems required to make it all work. With typical processing costs averaging out to about 2-3 percent for such a massive Internet merchant, you’d think a no-fee payment option like Bitcoins would be attractive to Amazon, but it’s not.
Barriers to Adoption
A combination of uncertain liquidity (the ability to convert Bitcoins into a more usable form of money that could be deposited in a bank, for example) and the unrealistic (and already proven fallible) assertion that Bitcoins will always remain outside the long arm of the law, are the main obstacles to mainstream acceptance. A recent Department of Justice Grand Jury investigation in Maryland into Mt. Gox, the world’s largest Bitcoin exchange, has already busted that myth into smithereens.
And with the DoJ cracking down hard on anything that can and has been used for money laundering, terrorist and/or criminal acquisitions – things that Bitcoin, with its somewhat cloaked layer of anonymity, has inherent in its distribution structure – a company like Amazon would never expose itself to the scrutiny, or the risk, of a full-blown investigation.