Drawing a line under the previous year, the 2013, our online magazine “The CoinTelegraph” allowed itself to publish several articles, containing expert opinions and forecasts about Bitcoin and its development in 2014. The most specialists that were contacted and asked speak out in favor of the coin, some have even named the year after the cryptographic currency. In general, everything said, claims that the initial blossom of the virtual coin is going to happen and the high level of the price already seen should not be considered as a peak that will not be overcome very soon.
As Bitcoin is not only considered as a currency, but also a payment and money transfer method, it would be interesting to evaluate its chances in comparison with main players of the branch. The fund transfer business seems to be close to a monopole. The global power here is Western Union. The company has offices in almost any country of the world, its history dates back to the 19th century, when it was a monopolist in exchanging telegrams. The revenue was $5.6 billion in 2012. There is no company providing similar services that might come any close to the American giant. The industry has its own complications that are pressing on the beginners. The main aspect is the relevance and accordance to financial regulative acts of all the countries the service is going to operate in. As the policy and legislative documents differ, the routine to establish a legitimate company is available to owners of excessive funds. Western Union invests around 3,5-4,5% of the revenue for the regulatory compliance. To get an image of the sum it is worth to mention that their closest follower and competitor Xoom has revenue close to this sum of investments.
The virtual currencies are an interesting option for diversification of money transfer. There are no fees, the transactions are really fast, the network is not controlled by any authority or organization and the anonymity allows making donations and giving support. On this stage of comparison many of the users, who would like to move their sums across borders of the countries will suggest to name the alternative currencies the only appropriate choice, but there exists a hurdle created by the governments and financial institutions to minimize the spreading of the coins.
The best example to review is the action of the People’s Republic of China. In December the government of the country has issued a warning, prohibiting financial institutions, respectively banks to involve in Bitcoin operations. It means that there is no official ban laid on the cryptocurrencies, but the deposit and withdrawal of funds becomes nearly impossible. The branch has suffered a breakdown, the price of the BTC has dropped, but succeeded to recover. In case other countries will complete the same action, the virtual coin will suffer an unseen before obstruction and attack.
In terms of policy such process can be considered as support provided to a monopolist. The diversification of the money market becomes impossible. The alternative competitors are outplayed by actions they cannot influence and deeds that cannot be changed. A report on favor of the Western Union analyzing its perspectives and being harsh on the Bitcoin was issued by “The Motley Fool” on the 7th of January, but many cause-effect links presented in the article are doubtful and arguable.
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