Bitcoin has an image problem! A problem of its own making and it’s a bad image, one that, to some extent, it deserves. The cryptocurrency Bitcoin has gone from a value of cents to being worth over $1,000, and in less than five years. It has now dropped back to less than $500 and, here is the thing, it’s not the first time the currency has done this. In 2011, Bitcoin went from 30 cents to $32 before slipping back to $2. People remember the drop because bad news sells papers and a drop of $30 or almost 94% is a great headline, frightening, isn’t it. If the currency had gone, slowly and steadily from 30 cents to $2 it would be the best investment ever, with a return of 567% over the year. People see the return and want to come on board, but, and this is the problem. They don’t want the volatility, they want to insure Bitcoin.
[dropcap size=small]B[/dropcap]rett Strapper, the CEO of Falcon Global Capital says:
Most investors saw the charts rising and that got them interested.
He went on to say:
“But if you’re seeking something that gives you a 5,000 per cent return in a single year, you have to accept it comes with some pretty high risks. You can’t compare it to a normal investment. We don’t even know some of the risks yet, because the technology is still evolving.”
There are three areas of risk that concern most potential Bitcoin investors, and by investors I mean users as well: (1) Theft, (2) Regulation and (3) Technological failure. People are simply terrified by the prospect of their bitcoins disappearing into another Mt gox.
Strapper has a solution! He believes strongly in the British Company, Elliptic Vault. This company claims to offer, nothing less than, the World’s premier cold storage service. Tom Robinson, who co-founded Elliptic, states that customer’s bitcoins will be stored on a ‘cold’ computer (Not connected to the internet), held within a bank vault. Mr. Robinson claims that he has 250 investors already signed up and hopes to have bitcoins, with a fiat value of $100 Million, on deposit by the end of the summer. Bitcoin advocates are positive that, as more consumers come on board and become advocates, values will rise. Elliptic guarantees the bitcoins lodged by ensuring their Fiat value. The level of insurance chosen is a matter of personal choice but the level of exposure to risk may well prove to be very low.
“We are big believers in Bitcoin and other digital currencies, and expect them to fundamentally change the way the world thinks about and uses money. From lower-cost international remittances and merchant payments to smart contracts and property, we are only just beginning to scratch the surface of what is possible. Digital currencies have huge potential to transform the way commerce works. Elliptic is proud to be at the forefront of the digital currency revolution. We are building a suite of services that will make it easier and more secure to acquire, use and store digital currencies. Our first product is Elliptic Vault, with further services to be launched over the coming months.”
I believe that an insured, cold storage facility, contained in a secure vault is an excellent development in the development and stabilisation of Bitcoin, I believe that Bitcoiners want insurance too, but I must ask the obvious question… How do we ensure the safety of the bitcoins when moving them between secure facilities? Further, is regulation, in light of developments in China, not a significantly greater threat to our bitcoins than hackers? As CCN’s Editor Caleb Chen has asked: What true Bitcoiner would want this service for a fee? The beauty of Bitcoin is that any individual can guarantee and ensure Bitcoin cold storage themselves.
Last modified (UTC): April 29, 2014 00:55