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Archive for the ‘Finance’ Category

Rise and Fall of Bitcoins

In spite of being declared as the worst investment of the year 2014, bitcoin has not lost its momentum as technology and movement. It has attracted large amounts of venture capital and bitcoin related start ups have boomed. A number of reputed organizations and institutes accept payments in bitcoins. It is likely that bitcoins will convert more skeptics in the years to come.

There are some serious security issues associated with the digital currency bitcoin. Incidents such as 2011 collapse of the Mt Gox bitcoin exchange based in Japan and recent security breach of the Bitstamp exchange based in Slovenia have created turmoil in the bitcoin market. However, the underlying concept and technology behind bitcoins attract not only miners and developers, but also big time entrepreneurs like Marc Andreessen. Bitcoin’s block chain, which allows peer to peer secure exchange of the digital currency, is the foundational backbone of the digital currency. Potential applications of bitcoins as a mode of payment excite today’s startups and entrepreneurs.

According to Ryan Selkis, director of investments at the Digital Currency Group, the bitcoin’s block chain can decentralize some essential services such as Uber, Facebook, Dropbox and such. The block chain can be utilized for title transfers, smart contracts, share issuance and storage of secure documents. Based on the block chain, a number of innovative applications of the bitcoins can be conceived and implemented. Bitcoins as a digital currency can reshape and reinvent the internet.

At present, bitcoin is treated as a speculative asset and is traded on bitcoin exchanges. As a result, it is highly volatile. The value of one bitcoin has gone through major ups and downs. Looking at the bitcoin market price chart, we can observe that the value of one bitcoin has fallen as much as 67% in past one year. However, over the past two years, the value of one bitcoin is up 1879%. This indicates the volatility involved in trading bitcoins. The good news is, in the year 2014, the number of bitcoin related startups has gone up. Bitcoins are accepted as a mode of payment to buy goods and service and daily bitcoin transactions are all time high.

A number of mainstream businesses such as Microsoft, Dell, Dish Network and Paypal accept bitcoins. Online retailers such as Overstock and Target accept bitcoins as a mode of payment on its website. This year Overstock has announced that its employees can opt to receive payments in bitcoins. Some reputed publishers such as Time and Fortune accept crypto currency bitcoin as subscriptions. Google Finance and Yahoo Finance have added bitcoin to their tracking sites. In spite of its volatility, the year 2014 has witnessed the growth and applications of bitcoins in various fields ranging from academia to entrepreneurship. Occasional hacks and vulnerability issues are being addressed by the huge community of the people. Developer activities are also all time high.

According to bitcoin developers and investors, bitcoin ecosystem is going through a major transition. It is likely that, in coming five years, consumers will understand and adapt to the digital currencies. It is also possible that main stream banking system will accept bitcoins.

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Ecommerce Developments in India

Indian ecommerce is picking up slowly and steadily. According to McKinsey and company, yearly online sales are expected to reach$2 billion by the year 2015.

According to Forrester, the Indian ecommerce market is expected to grow at a CAGR of over 57% by the year 2016. An interesting fact about online buyers in India is that rural consumers constitute a major portion of total online buyers.

Online payment methods and transaction security concerns are the main hurdles to be crossed to trigger the growth of Indian ecommerce. According to McKinsey, less than 1% of Indian population holds credit cards and around 200 million people use debit cards. In spite of it, Indian ecommerce is increased by 34% a year since the year 2005.

Most of the reputed ecommerce websites Accept Credit Card Payments. However, Indian consumers have multiple payment options while buying online. They can use credit card, debit card, net banking or cash on delivery. Just like any other emerging markets, in India also cash on delivery is a preferred mode of payment with alarmingly high return rates.

By the year 2015, Internet penetration is expected to cross the target of 350 million households. Now is the right time for Indian e-retailers to establish their online presence by setting up state-of-the-art online stores with trustworthy online payment options.

There are a number of instant merchant account providers who offer fast and secure payment options. By setting up such account, an e-retailer can offer a number of payment options to the customers. Customers can make payments using credit cards, debit cards, gift cards, Electronic Benefits Transfer etc. All the transactions are performed through the highly secure payment gateways.

However, the consumers need to be cautious of fraudulent ecommerce websites dealing with high risk businesses. Such high risk businesses are refused ecommerce licenses. They set up their high risk merchant account through offshore or international agents. Make sure that you make your online shopping through reliable and authentic e-retailers.

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