They’re many in places like Africa and the Caribbean who are betting that bitcoin industries will become a source prosperity for them.
That’s indeed a possibility. However, bitcoin needs to become more widely used before that prosperity can be realised.
Bitcoin can’t become widely used if it’s not more widely available. It’s very hard to get a hold of bitcoins. The easiest method of doing so to date (the U.S. based ‘circle.com’) no longer offers users the ability to obtain bitcoins with a payment card (Visa, Mastercard, etc).
There’s some conspiracy theory around this that I won’t go into, however, suffice to say, this is a big negative for bitcoin.
What needs to happen?
In my view the free market needs to start working. There’s very little true free markets in the world today and that’s probably because there’s very few independent thinking, free enterprise oriented market participants.
The bitcoin market has a number of exchanges similar to markets for other assets, however, there’s not many dedicated bitcoin dealers like there are in other asset classes.
There are a few dealers based in the Caribbean who allow bitcoin purchasers to buy bitcoin in the same manner they would buy other types of coins (like gold/silver coins) or any other type of retail item on-line for that matter.
One simply selects the item desired (a bitcoin in this case), the quantity desired, provide a delivery (wallet) address and an email address (where a receipt/confirmation can be sent), submit payment the card details (just like on Amazon) and that’s it! No need to open any accounts with an exchange and/or supply any unnecessary documentation.
Bitcoins vs Gold/Silver Coins
For an asset that isn’t legally considered money by most jurisdictions, it’s quite surprising that it’s treated like it is.
It’s my understanding that most exchanges use the ‘account deposit’ model and thus fall into the remit some laws governing remittance services in many jurisdictions.
A bitcoin dealer, trading his(her) own inventory won’t have to deal with this. It’s therefore my opinion that what the bitcoin market needs are more bitcoin dealers, facilitating the purchase of bitcoin via a method like the one described in paragraph 8 (selling bitcoin for fiat or making purchases with bitcoin aren’t major issues currently).
Once the ‘account’ part of the process is eliminated the nature of the transaction changes substantially, and this is exactly what the market needs in my view. Bitcoin users don’t need more accounts or wallets, the majority already have a wallet (or two). They just need a hassle free way to obtain bitcoins.
What About Risk?
From the dealer’s perspective the risk of taking payments by card aren’t materialy different from the risks of taking card payments for other items retailed on-line (or off-line), so that shouldn’t be a major consideration.
So lets get more bitcoin dealers in Africa and the Caribbean retailing bitcoins via the process in paragraph 8. Perhaps some hedge funds some where might be interested (think Alpha)?
What do you think? Do you see the logic? Please share your thoughts!
Oh one more thing, why aren’t remittance services offering to remit to digital wallets like they remit to bank accounts? If they did, it would also be a major positive for bitcoin and other digital assets.
That’s my insight on it all, what do you think?
Attribution: This content was originally published on the 14h of December, 2016. https://medium.com/@mikehydes/bitcoin-needs-more-dealers-not-more-exchanges-71b4ef57e792
