KIC+ Manchester Volume 3, February 2014 | Page 9

Bitc in - the future of money?

9

By

Abdullah

Maghram

Sir Richard Branson is one the most adventures business men in the world. He likes to do the undoable, the unexpected. This is what led him to think about using the virtual currency in his Virgin empire.

An article released in the Guardian on Friday 22 November 2013, reprted that Virgin Galactic will accept payments made by Bitcoin for the space-flight that Sir Branson’s initiating.

"All of our future astronauts are pioneers in their own right, and this is one more way to be forward-thinking,” Branson said. So, this shows business – people are ready to change to virtual currency. It has become desirable for business people but, why?

Smart phones are playing an extremely important role in changing payment channels and shifting purchasers habits towards the internet. In 2012 total payments paid through smart phones reached 173 billion dollars. Moreover, monthly downloads from the two leading smart phones stores (Apple and Google) were huge. The first reached 2.5 billion and the 2nd 8.5 billion, so the next generation of the world population is ready for the shift. In fact, they are the drivers for the change to virtual currency.

The question now is what is the government's role? Do they have to be worried? If yes, about what?

There are many differences between virtual currency and the normal currency (notes and coins), first off all, it enables us to transfer money between parties anywhere in the world without the need for intermediaries like banks. Moreover, digital currency like Bitcoin is also outside the control of any central bank or government, this is what has led some countries, like China, to warn their citizens about using virtual currency.

In my opinion Governments must ensure the regulations for virtual currency are strict enough to not be an easy port for money laundering, especially as the transactions made by these currencies has reached a billion dollars. On the other hand the shifts in currency might affect the banking sector in the long run which is linked to the national economies that might cause massive damages if the Governments don't reform the banking sector as well as the education system to guide qualified citizens in the e-commerce field.

Virtual currency is a new trend which is linked to commerce thought the internet. However the e-commerce company thinks it's an important tool to maximize sales through their online stores. This is what encouraged Amazon to launch its own currency and in the future we might see e-bay and others will launch their own.