Saturday, August 27, 2011

What's Coming to Bitcoin?

While I am a Bitcoin trader, I am also a Bitcoin investor, as I have both short-term and long-term positions in Bitcoin (at about a 1:3 ratio). As an investor, I enjoy reading about some of the up-and-coming projects that will help make Bitcoin more mainstream and user-friendly. Let's take a look at some of the more interesting publicly-known projects:

1) Point-of-Sale (POS) Devices

At the moment, the average, or even the technologically adept business owner, is going to have a hard time accepting Bitcoin at a brick-and-mortar business without setting up a cumbersome interface that only hardcore early-adopting Bitcoin enthusiasts would ever use. MtGox's POS device, which we can safely assume would be integrated with the exchange, will allow for easy transactions through the use of a smartphone and a system that looks familiar to anyone that has ever conducted a credit-card transaction. The business owner could then instantly sell the Bitcoins on the MtGox exchange if they so desire, thus minimizing risk.

Here is another POS device, this one is open-source and brought to you by Instawallet. Speaking of Instawallet, our next project is...

2) Green Addresses

Instawallet, while not an exchange, is introducing an approach to Bitcoin payments that will do away with the delay associated with waiting for transaction confirmations. Green Addresses are an elegant solution to a problem which still irks Bitcoin users. When making a transaction, recipients usually choose to allow for the blockchain to increase in length by a certain amount (anywhere between one and ten blocks, depending on how paranoid they are) before they can be sure that the transaction is valid, and a double-spend cannot take place. A "Green Address" is a wallet that is known and reliable. Instead of waiting for confirmations, a merchant can simply verify that the source wallet is a Green Address and accept the transaction instantly. Implementation is not completely straight-forward, but Instawallet (and probably others) is working to make it happen.

3) Bitcoin ATMs

Todd Bethell, of Irvine, California, has introducted the first Bitcoin ATM. His company plans to roll-out two hundred ATMs over the next year, at locations all over the world. The importance of this technology is that it allows for EASY cash purchases of Bitcoin. It is still quite difficult, in some countries, to purchase Bitcoins through an exchange. With the Bitcoin ATM, it has suddenly become easy for the average person to buy Bitcoins, an important step toward making Bitcoin mainstream.

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Bitcoin will really shine when the cost and effort involved in using Bitcoins becomes significantly less than when using fiat currency. The projects discussed above will go a long way toward making that a reality.

2 comments:

  1. I talked with Todd Bethell at the conference, and he said he is no longer affiliated with Play N' Trade. He is independednt. So you can scratch the 200 locations idea for now, he is looking to get a couple installed. Maybe he will reconsider and work with play n' trade again.

    Here is my latest post: http://coinie.com/?p=5

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  2. What was the arrangement with Play N' Trade? Were they the component supplier? Were they the investors?

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