As an avid online marketer, affiliate, and SEO nut I obviously love all aspects of technology. I especially love seeing the “hidden power” of the Internet become unlocked and unleashed for the masses to enjoy.
One of the most exciting online developments of the past few years is cryptocurrency. You’ve probably heard of Bitcoin, and might have even seen it’s meteoric rise from under a dollar per unit to over $1000 in less than 2 years. You might still be confused about the fact that Bitcoins (and other cryptocurrencies) are “mined” on computer equipment, and that there are strict limits to the number of coins in existence. If you haven’t got a clue about Bitcoin, then take a look at this video to get yourself up to speed.
From the outset I want to make it clear to anybody reading this blog post that I don’t agree with the use of ANY cryptocurrency for nefarious, illegal, or unethical purposes. Before trying any form of cryptocurrency yourself, ensure that you are aware of the risks – namely that your money might just disappear overnight due to volatile prices – and also check that your local domicile does not have any rules or regulations against cryptocurrencies. I really do mean this; I’m fully conversant (not from first-hand experience, of course) with many of the “wrong” things people do with cryptocurrencies, and I vehemently oppose any such behavior. I’ve also seen people lose large sums of money on cryptocurrencies, so don’t invest anything more than you can afford to lose!
Now let’s get back down to business and examine my first foray into cryptocurrency, when I purchased Infinitecoin.
For the longest time there were really only two cryptocurrencies of note – Bitcoin, and Litecoin. In a sense the difference between the two is kind of like gold and silver; Bitcoin and gold are both rare (if you don’t understand how a digital currency can be rare, read this) and essentially a deflationary store of value. Litecoin, with its higher supply and other advantages, is more like silver insomuch that it has a more “realistic” value for use as a medium of exchange. There were other cryptocurrencies, but they weren’t anywhere near as notable.
However, as the price of Bitcoin surged in the second half of 2013, Litecoin was dragged upwards as well. This sparked interest among the cryptocurrency community for even more alternative currencies, and so a massive number were born. Some cryptocurrencies have grown to become well-established in the community, such as Namecoin. Others have fallen by the wayside for various reasons (you can see a full list of different cryptocurrencies and whether they are popular/accepted, up-and-coming, or failing here).
During a routine browse on eBay I stumbled across an offer for a relatively new currency called Infinitecoin. First up I purchased 3 million of them (along with my dad) for about $15 … but as luck would have it we got a dud seller who took the money and never delivered. He had great feedback at the time, but now his profile is packed full of angry feedback by people who fell victim to the same little con. Personally, I believe this guy pulled a fast one on everyone who purchased Infinitecoin as he saw the price rise more than 100% in about a 48 hour period. I bet he thought that even if his many millions of Infinitecoins hit just one cent each, they would be worth more than what he would have earned from fulfilling his eBay sales.
Now as a rule you shouldn’t purchase cryptocurrencies using Paypal, or from eBay. This is because you will ALWAYS pay a massive premium for your coins. For example, I paid several times the value of my Infinitecoins, but did it more for a test than for any other purpose.
Anyway, I persevered and in the end wound up purchasing around 1.3 million Infinitecoins from a few different sellers. Once again I paid over the odds (using Paypal/eBay) but was willing to do this in the name of experimenting. Furthermore, the absolute hardest part of cryptocurrency, in my opinion, is purchasing through a proper exchange using bank transfers. It seemed like a very convoluted process to purchase Bitcoin when I first looked into it, and because Infinitecoins aren’t as widely accepted they were even trickier to buy. Because of this I was happy to pay a premium for convenience.
The Role of Cryptocurrency for Internet Marketers
Despite overly-simplistic media portrayals, there is more to cryptocurrency than shady dealings, volatile prices, and the anonymous acquisition of illegal goods. In fact, as cryptocurrencies become increasingly proliferate in the mainstream you are likely to see a growing number of websites and eCommerce retailers accepting payment in Bitcoin, Litecoin, and so on.
I don’t think cryptocurrencies will really catch on for both eCommerce and bricks and mortar purchases until the following conditions are met:
1) It becomes easier to purchase your chosen currency. These days I can walk up to any Travelex and convert my NZ dollars to dozens of other currencies with ease (and a small fee). The whole process takes very little time and is as easy as possible. Until this is a going concern with cryptocurrency, I fear many will be put off using them.
2) Digital wallets become easier to use. It doesn’t take my skill or patience to bust out some crisp notes from your physical wallet. Even using a credit card is elementary. However, in their current state I simply cannot countenance the mainstream use of digital wallets. The Infinitecoin wallet is particularly frustrating, as it seems to have constant trouble ‘syncing’ with the Infinitecoin network (and fixing this requires doing some reasonably technical workarounds that also risk you deleting your entire store of currency!). My belief is that until digital wallets are so simple (and safe) that my grandma could use one, cryptocurrencies will remain on the fringes.
3) The legal status of cryptocurrencies is codified. At the moment there appears to be a distinct ideological divide in the cryptocurrency realm. On one hand you have those who fear, misunderstand, or deliberately misinterpret cryptocurrencies as being only for illegal purposes. Conversely, there are those “champions” of digital money who believe that it should not be subject to any form of
Eventually I think digital/cryptocurrencies will become the norm. Once upon a time if you had asked the average person in the street whether bank cards would replace cash, they would have ridiculed you. History never repeats eh…