Bitcoin fervour cools in Singapore
Publication Date : 03-02-2015
The bitcoin appears to have lost some of its lustre here since the first two ATMs for the virtual currency were set up last year.
As many as 10 machines sprang up on the local scene after that, but a Straits Times check last week found that at least five are no longer operating.
Another four of them have been converted to payment kiosks that currently do not involve the use of bitcoins.
Local start-up Tembusu Systems, then called Tembusu Terminals, recalled its four ATMs in October last year.
Another firm, Coin Republic, said its machine had been relocated to Europe in November.
Bitcoins, as well as some other types of cryptocurrency, are used to purchase digital or physical goods and services.
Bitcoin advocates believe that its potential lies in the lack of central authority, which "democratises" money and gives the user complete control over the transactions he or she makes.
But businesses that accept bitcoins "don't see as much traffic as they used to", noted Steve Beauregard, founder and chief executive of GoCoin, in an interview with The Straits Times on Wednesday.
GoCoin is a global payment processing service provider for digital currencies, including bitcoins.
"There is definitely a direct correlation between the price of bitcoin and the enthusiasm (in the market) at any one time," he said, pointing to the value of the digital currency, which plunged more than 56 per cent last year.
A bitcoin is currently worth about US$225 - a far cry from its peak at US$1,130 in 2013.
It did not help either that the development of bitcoins globally had been plagued by hack attacks and scandal, including one relating to black-market website Silk Road, which distributed narcotics, hacking services and forged documents to more than 100,000 people worldwide.
The collapse of Mt Gox last February, which had been among the largest bitcoin exchanges in the world, also "hurt credibility in the short run", said Tomas Forgac, founder of bitcoin payment system Coin of Sale.
"But it certainly helped strengthen the ecosystem in the long run," he added.
"Unhampered free markets (including that of bitcoins) are anti- fragile, and they react to a failure by identifying its cause and taking precautions. As a result, all current major exchanges are much stronger and transparent."
In the same vein, Zennon Kapron, managing director of financial services consulting firm Kapronasia, believes that bitcoins are going through "teething pains" as a new financial instrument.
Still, much more remains to be done for the masses to adopt the use of bitcoins, said Beauregard, who was the keynote speaker for the inaugural Inside Bitcoins Conference and Expo in Singapore.
The two-day event at Suntec Singapore Convention and Exhibition Centre, which concluded last Friday, drew about 450 attendees.
"Right now, merchants mostly put up bitcoin as a payment option, launch it as an experiment, and then forget about it," he noted. "The best way to drive adoption is to improve the checkout process by giving consumers incentives - make it so they can save money by using a less expensive payment method.
"There must be some benefit for the consumer to use bitcoin in his or her transaction today."
Merchants are likely to incur less in additional charges when payments are made in bitcoins, compared with credit cards, added Beauregard.
"They should be able to pass the savings on to the consumers and encourage them to use the lower-cost payment type."
He also cited other markets with potential for bitcoins to be used widely, such as online gaming or regulated gambling sites.
As many as 10 machines sprang up on the local scene after that, but a Straits Times check last week found that at least five are no longer operating.
Another four of them have been converted to payment kiosks that currently do not involve the use of bitcoins.
Local start-up Tembusu Systems, then called Tembusu Terminals, recalled its four ATMs in October last year.
Another firm, Coin Republic, said its machine had been relocated to Europe in November.
Bitcoins, as well as some other types of cryptocurrency, are used to purchase digital or physical goods and services.
Bitcoin advocates believe that its potential lies in the lack of central authority, which "democratises" money and gives the user complete control over the transactions he or she makes.
But businesses that accept bitcoins "don't see as much traffic as they used to", noted Steve Beauregard, founder and chief executive of GoCoin, in an interview with The Straits Times on Wednesday.
GoCoin is a global payment processing service provider for digital currencies, including bitcoins.
"There is definitely a direct correlation between the price of bitcoin and the enthusiasm (in the market) at any one time," he said, pointing to the value of the digital currency, which plunged more than 56 per cent last year.
A bitcoin is currently worth about US$225 - a far cry from its peak at US$1,130 in 2013.
It did not help either that the development of bitcoins globally had been plagued by hack attacks and scandal, including one relating to black-market website Silk Road, which distributed narcotics, hacking services and forged documents to more than 100,000 people worldwide.
The collapse of Mt Gox last February, which had been among the largest bitcoin exchanges in the world, also "hurt credibility in the short run", said Tomas Forgac, founder of bitcoin payment system Coin of Sale.
"But it certainly helped strengthen the ecosystem in the long run," he added.
"Unhampered free markets (including that of bitcoins) are anti- fragile, and they react to a failure by identifying its cause and taking precautions. As a result, all current major exchanges are much stronger and transparent."
In the same vein, Zennon Kapron, managing director of financial services consulting firm Kapronasia, believes that bitcoins are going through "teething pains" as a new financial instrument.
Still, much more remains to be done for the masses to adopt the use of bitcoins, said Beauregard, who was the keynote speaker for the inaugural Inside Bitcoins Conference and Expo in Singapore.
The two-day event at Suntec Singapore Convention and Exhibition Centre, which concluded last Friday, drew about 450 attendees.
"Right now, merchants mostly put up bitcoin as a payment option, launch it as an experiment, and then forget about it," he noted. "The best way to drive adoption is to improve the checkout process by giving consumers incentives - make it so they can save money by using a less expensive payment method.
"There must be some benefit for the consumer to use bitcoin in his or her transaction today."
Merchants are likely to incur less in additional charges when payments are made in bitcoins, compared with credit cards, added Beauregard.
"They should be able to pass the savings on to the consumers and encourage them to use the lower-cost payment type."
He also cited other markets with potential for bitcoins to be used widely, such as online gaming or regulated gambling sites.
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