Financial services company Mastercard has given fresh credibility to cryptocurrencies this week by announcing it intends to start supporting payments using them on its network this year.
Many people remain very skeptical of crypto, and who can blame them? The price of Bitcoin is far from stable, and then there’s the threat of someone stealing it. Mastercard looks to be taking a cautious approach, however, and being very selective in what it chooses to support.
“We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network. This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance,” explained Raj Dhamodharan, executive vice president of Blockchain / Digital Asset Products & Digital Partnerships at Mastercard.
The recent plunge in the stock market is a cakewalk compared to what’s going on with cryptocurrencies. Bitcoin prices are down more than 15% in just the past week and have plummeted nearly 70% so far this year.
Bitcoin hit a peak above $19,000 in December 2017. Its is now trading at around $4,600.
Shares of companies with ties to the crypto market have plunged lately too, including chipmakers Nvidia (NVDA) and AMD (AMD), which make graphics cards used by bitcoin miners. Online retailer turned blockchain investor Overstock (OSTK) and digital payments firm Square (SQ) are also sharply lower. Each stock is down between 15% and 35% in just the past month.
So it seems safe to say that the bitcoin bubble has burst. Should investors start to dip their toe back in to bitcoin and other crypyto-related assets?
How can unrelated parties negotiate securely and transparently without having to rely on expensive intermediaries? Some programmers believe that bitcoin is the answer to that question and that it will revolutionize the way we do business.
What started as a nine page proposal in the white paper “Bitcoin: A Peer-to-Peer Electronic Cash System” by Satoshi Nakamoto (whose true identity remains unknown), has now become the way that more than 200,000 transactions per day are done. The rising popularity of bitcoin has caused markets and financial institutions to invest in the development of products based on this revolutionizing technology.
To understand what the buzz over bitcoin is all about and how to make the most of it, we need to become familiar with the concepts of bitcoin and blockchain, the opportunities that they are creating, and the approach that regulators are taking.