3 min read

Here is how Bitcoin will fare in 2016

Mobilitybitcoin, virtual currency, digital currency, digital payment

By now you may have heard that yet another attempt at identifying Satoshi Nakamoto – the pseudonym used by the creator or creators of Bitcoin has been made.

Earlier this month, Wired named Craig Steven Wright, an entrepreneur and academic with businesses in Australia as the person behind the digital currency. His home in Sydney was subsequently raided by police, although they claim it’s over tax issues.

We spoke with Christie Christelis, president of Technology Strategies International Inc., a Canadian digital payments research firm, on this headline and others digital currencies have made in 2015, as well as the technology’s outlook in the upcoming year.

 

CDN: First of all, is there anything useful that Canadian banks or businesses can take away from the ID aside from satisfying their curiosity?

Christie Christelis: I don’t really believe so to be honest. There’s a lot of doubt about whether they found the right guy; I think it could be a hoax. I’m pretty sure that past identifications have been proven wrong.

Even the arrest doesn’t give it more legitimacy; the raid was related to tax issues. Many people have a lot of bitcoin holdings if buying and selling bit coin for quite a while. It’s only illegal if you don’t declare what you made. They think he hasn’t declared all his bitcoin holdings. It’s like celebrity issue; it doesn’t really matter. 

 

CDN: Does the arrest have any impact on the legitimacy of Bitcoin?

CC: Bitcoin is alive and well and living on the planet. From a technology point of view, knowing who the guy is that created this is not very significant. My gut feeling is that they got the wrong guy.

If I invented bitcoin I would have told everybody.  Look how brilliant I am! The reason why they probably don’t want to be known is that he or she has amassed a lot of bitcoins.

 

CDN: What was the state of legality and regulation for Bitcoin in 2015? 

CC: It varies quite a lot around the world. The Canadian approach saw senate committee hearings over the last year. The bottom line is that they recommended a hands-off approach.

The criticism there is that without specific legislation, they’re reliant on existing legislation. That legislation doesn’t take into account unique characteristics of bitcoin. On the other hand regulating bitcoin specifically by taking on all the nuances would be fairly restrictive, so you have both sides of the argument. But without specific legislation businesses don’t regulatory certainty. Practices could get wiped out in the streak of legislative pen.

Eventually Canada will regulate all virtual currencies. In the US, everyone is looking at different things. New York, for example, is geared to specific regulation. It’s hard to say what’s best. I prefer less regulation, but I understand the need for legislation for money laundering.

 

CDN: What thoughts do you have on digital currencies in the new year? 

CC: 2016 is going to see a lot of stuff happen under the hood, not much in regulation.  The market is still quite small; a lot of players are worried about speculative things.

Mobile payments have been knocking on the door for a long time and are being put into operation. That will take up much of the energy in the financial sector; banks can’t chew and walk.  

We will also see alternative uses of blockchain. More and more merchants accepting bitcoin because the way it is being done poses little risk to them. For a company like Microsoft and Amazon, the window of risk from the time that bitcoin is received to it being converting to cash is very small. They are running as an exchange.

Some merchants have some bitcoin holdings, but most are from the former economy where you are buying and selling and converting right away. Merchants want to accept all of the forms of payment that consumers want to use, makes themselves future proof, it’s just about consumer convenience. I don’t make a big song and dance about it, but I accept bitcoin.