Key trends in virtual currency from 2015
Last year was a wild ride for virtual currency enthusiasts, with big price fluctuations to big bank experiments on the blockchain. There has also been a plethora of new regulations from the New York BitLicense to Taiwan ordering banks not to utilize bitcoin. Here are some of the top trends from 2015:
According to this chart by bitcoincharts.com, bitcoin’s value has swung rapidly over the year, beginning at more than $300 in January 2015 and ending just shy of $450 on Dec. 22, 2015. There are multiple factors that influence bitcoin swings in price. For example, bitcoin’s recent upswing might have been influenced by the Bitcoin Investment Trust. In addition, the sudden 26 percent drop in bitcoin’s value in January of this year may have been influenced by the hacking of bitcoin exchange Bitstamp. According to a report by biznews, 19,000 bitcoins were stolen during that operation.
In June, 2015, New York finally launched its regulatory framework, the BitLicense. Reactions to this framework were mixed to say the least. One bitcoin startup, ShapeShift.io, pulled out of New York entirely since the company argued the regulation would require companies to reveal too much private consumer information. In addition, its requirement that each new product needs to be approved was heavily criticized by bitcoin companies. However, many companies have received a BitLicense, such as the Winklevoss twins’ startup, Gemini.
In other countries, we have seen both threats of banning and regulatory frameworks. Japan, for example has proposed new regulations that require virtual currency companies to register and confirm the identities of customers. Russia, on the other hand, has threated to ban bitcoin and give four years of hard labor to bitcoin users.
The debate continues to rage between the bitcoin community on whether to increase the size of blocks or to keep the current system in place. Advocates of the change have argued it will enable faster transactions on the blockchain. Detractors claim it will lead to increased centralization and spam.
However, while this debate goes on, sleeping financial giants have begun to wake up and realize the hidden power within the blockchain. Virtual Currency Today has reported on a number of huge financial institutions such as Wells Fargo, IBM and others that are working on developing their own versions of the blockchain. One of the biggest contributors is R3CEVA, a group of 42 banks that is working on the blockchain. Even stock exchanges such as Nasdaq and the New York Stock Exchange have begun to experinment with the bitcoin for trading. As a response to this, Overstock CEO Patrick Byrne is working on a service that would sell stocks over the blockchain.
Bryne is concerned that banks might use their new blockchain to destroy competition and innovation. “What’s happening is Wall Street is trying to slow us down while they come up with their own version, and that’s, I think, R3,” Bryne said in a report on BizJournals. “Wall Street comes up with their own version, and then they’re going to outlaw [the competition]. So really be alert for R3.”
We are entering a new year where bitcoin’s value is way up, and interest in the blockchain is at an all-time high. However, we are also entering a year where a war is raging for the future of bitcoin and the blockchain. If 2015 is any indication, we are in for another wild ride in 2016.