And finally… business forced to ditch cryptocurrency payments as value plummets
Waste management firm, BusinessWaste.co.uk, which hailed the advent of of the cryptocurrency age when it announced that is was to being accepting it as a payment for services has now reported that it is no longer accepting blockchain currencies – such as Bitcoin – because it is too volatile to be reliable.
The company originally announced it had become the first refuse and recycling business to accept these virtual currencies as payment in 2017 in order to give flexibility to their customers in an increasingly digital age.
However, the firm says that despite its efforts, the uncertainties of the market are making digital currencies an unreliable source of payment.
The decision comes in a week when it was reported that
Bitcoin’s descent below $3,400 yesterday has confirmed that it is no longer profitable to mine the cryptocurrency.
The bitcoin price has been falling steadily since it hit an all-time high of almost $20,000 in December 2017, the year BusinessWaste began accepting it. It has since dropped by some 80 per cent over the last 13 months and dragging the wider market down with it.
Mark Hall, communications director of BusinessWaste.co.uk, said of the figures: “Cryptocurrencies have become much more mainstream in recent years – which is why we were happy to move with the times and accept these digital forms of money as payment. As a business we are dedicated to being thought leaders and innovating to provide the best service to our clients, and accepting internationally-recognised digital currencies was one way we could do that – but, as with many emerging technologies, there are still wrinkles to be ironed out within the cryptocurrency market.”
These forms of currency – which include the most well-known, Bitcoin, as well as other forms such as Ethereum and Litecoin – are not tied to a particular country’s economy as with standard, or fiat, currency. This means it has a tendency to be much more volatile than fiat currency; for example, in 2010, when the currency made its first real-world transaction, 1 Bitcoin (BTC) was worth less than £0.01. In December 2017, 1 BTC was worth over £15,000 – a fluctuation many times higher than a fiat currency would experience over a 7-year period.
This volatility has come to be considered an intrinsic hazard of a currency whose value works much like traditional stocks and shares – where market rumour’s and movement have potentially massive knock-on effects on its value. This could have potentially serious ramifications for businesses who accept crypto payments and then find themselves with a payment which has dropped significantly in value within a short period – such as in December 2017, when 1 BTC fell in value from £15,000 to £2,500 today in response a crackdown on improper practices in the market.
However, the popularity of cryptocurrencies has also led to unscrupulous users attempting to use ‘scam’ or fake coins to pay for goods and services. Cryptocurrencies rely on key information to verify that they are legitimate, such as the ‘white paper’ which details the origins of a coin, who made it, and how it works. However, these papers can be forged and simply just made up – which can cause businesses who end up with scam coins to be out of pocket.
Mr Hall aaded: “We’re reluctant to pull the plug on cryptocurrencies for now – but we have to think about the implications for the business.
“Market fluctuations and scams surrounding cryptocurrencies are, unfortunately, part of the current environment surrounding these digital forms of payment, and until this is no longer the case we will stick to fiat currency.”