Bitcoin’s comeback: should Western Union be afraid?


” Bitcoin’s value as a way to move and store wealth depends on the value of Bitcoins being relatively stable against conventional currencies. And the continued value of Bitcoins depends on people finding nonspeculative uses for it. But if the currency continues to retain its value in the coming months (a big if, admittedly) this would be a sign that the chicken-and-egg problem has been solved. And the longer Bitcoins continue to exist, the more confidence people will have in its continued existence.

Western Union moved $70 billion across borders in 2010, earning about $1 billion in profits. There’s no Bitcoin Inc. to compete directly with Western Union, but the owners of Bitcoins can be thought of as shareholders in a decentralized Western Union alternative. If the Bitcoin network captures a small fraction of Western Union’s money-transfer business, the currency’s current “market capitalization” of around $30 million could wind up looking downright puny.”

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