Winner and loosers in the rise of Bitcoin

[BTCIndia]

POTENTIAL WINNERS

Overstock

The online retailer recently announced it would start accepting Bitcoin sometime this summer. Like most retailers who accept Bitcoin, it will immediately swap the currency for dollars to avoid price volatility. “We believe OSTK will benefit from lower transaction charges as it starts accepting Bitcoin in 2014 (as well as related publicity push within the bitcoin community),” Luria writes.

ebay

Luria thinks its inevitable PayPal, which is owned by the, online merchant giant will start taking Bitcoin. “We see EBAY’s PayPal benefiting from lower funding costs when it allows Bitcoin in its digital wallet,” he writes.

IBM

IBM quietly released a video in November in which its executive architect for banking and finance said cryptocurrencies like Bitcoin “would change the world.” “We believe IBM has become an early adopter of bitcoin technology (link), but other technology companies may benefit from the buildup of the crypto currency network almost unwittingly,” Luria writes.

Taiwan Semiconductor and Advanced Micro Devices (AMD)  

Only a small handful of chipmakers have the ability to manufacture the advanced processors needed to mine Bitcoin. TSM and AMD are the two largest. “We estimate >$200 million has already been spent on Bitcoin network (mining) equipment this year, most meaningfully on chip fabricators TSM and AMD,” Luria says.

POTENTIAL LOSERS

Western Union and MoneyGram

Bitcoin’s value as a medium for transferring funds is the thing most often cited to justify its valuation. We’ve written about this previously here and here among other places. “We see some risk to money transfer companies such as WU and MGI as bitcoin technology makes it possible to perform remittance at a radically lower price,” Luria writes.

Visa and MasterCard

Another source of value for Bitcoin is the much lower fees needed to process payments, compared with those charged by the mega card companies. “We also see some longer-term threat to V and MA, especially in cross border and micro payments,” Luria writes.

CME, NASDAQ, NYMEX

There’ve yet to be any major breakdowns on this subject, and Luria doesn’t provide much insight, though it seems possible Bitcoin trading could siphon away flows from precious metals. “Although this may be even further out, we see a potential for the technology to encroach on exchange companies such as CME, NYX, NDAQ,” he writes

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[Bitcoinpro]

Financial Industry

[Elwar]

I used to work for IBM. They do not do much development anymore, they are now a "services company". This means that they would be able to help businesses to create innovation with Bitcoin but they will not be leading the effort.

[skaffen]

You seem to be missing a link to the original article.  http://www.businessinsider.com.au/winners-and-losers-in-bitcoin-2014-1

[wholmes]

Luria is actually pretty negative on Bitcoin itself. But he is impressed by the technology underlying it, and cryptocurrencies in general.

“We continue to believe there is a meaningful probability Bitcoin (the specific currency/conduit) may not succeed, but this will most likely be a result of the emergence of a better crypto currency,” he wrote. “We believe alternative currencies will continue to emerge, though none of the current batch appears to be superior enough to overcome the substantial head start for Bitcoin.

“As with any new disruptive technology, we would expect the new powerful technology to continue to be utilized for nefarious purposes. We also believe that given the early stages of development and revolutionary technology, weaknesses will continue to be identified and at times exploited.”

[zagerfish]

wouldn't the use of bitcoin have a negative effective on the value of fiat currencies?

[cdog]

Any business that has low margins will benefit hugely, as credit card fraud/chargebacks are very detrimental to them, as well as the high fees charged by credit card companies.

Great companies like www.overstock.com will be big winners and indeed, credit card companies big losers as their "business" slowly evaporates.

[addictivegaming]

wouldn't the use of bitcoin have a negative effective on the value of fiat currencies?

It depends on how well-adopted bitcoin is. It's unlikely for bitcoin to cause a decrease in value in the near future, but if bitcoin gets really, really big it could happen.

The thing is though, the US government will never let bitcoin get to a point where it's possible it could decrease the value of the dollar, so even if bitcoin gets to that point it will likely be stopped by regulations.

[BitCoinDream]

POTENTIAL WINNERS

Overstock

The online retailer recently announced it would start accepting Bitcoin sometime this summer. Like most retailers who accept Bitcoin, it will immediately swap the currency for dollars to avoid price volatility. “We believe OSTK will benefit from lower transaction charges as it starts accepting Bitcoin in 2014 (as well as related publicity push within the bitcoin community),” Luria writes.

ebay

Luria thinks its inevitable PayPal, which is owned by the, online merchant giant will start taking Bitcoin. “We see EBAY’s PayPal benefiting from lower funding costs when it allows Bitcoin in its digital wallet,” he writes.

IBM

IBM quietly released a video in November in which its executive architect for banking and finance said cryptocurrencies like Bitcoin “would change the world.” “We believe IBM has become an early adopter of bitcoin technology (link), but other technology companies may benefit from the buildup of the crypto currency network almost unwittingly,” Luria writes.

Taiwan Semiconductor and Advanced Micro Devices (AMD)  

Only a small handful of chipmakers have the ability to manufacture the advanced processors needed to mine Bitcoin. TSM and AMD are the two largest. “We estimate >$200 million has already been spent on Bitcoin network (mining) equipment this year, most meaningfully on chip fabricators TSM and AMD,” Luria says.

POTENTIAL LOSERS

Western Union and MoneyGram

Bitcoin’s value as a medium for transferring funds is the thing most often cited to justify its valuation. We’ve written about this previously here and here among other places. “We see some risk to money transfer companies such as WU and MGI as bitcoin technology makes it possible to perform remittance at a radically lower price,” Luria writes.

Visa and MasterCard

Another source of value for Bitcoin is the much lower fees needed to process payments, compared with those charged by the mega card companies. “We also see some longer-term threat to V and MA, especially in cross border and micro payments,” Luria writes.

CME, NASDAQ, NYMEX

There’ve yet to be any major breakdowns on this subject, and Luria doesn’t provide much insight, though it seems possible Bitcoin trading could siphon away flows from precious metals. “Although this may be even further out, we see a potential for the technology to encroach on exchange companies such as CME, NYX, NDAQ,” he writes

Potential Winner: Worldwide online betting and gambling industry.

Potential Loser: Worldwide remittance industry.

[tclo]

Paypal is not going to start taking bitcoin anytime soon.   They aren't going to help BTC get more widespread acceptance when it could kill their golden goose..just not going to happen.

If anything they are probably lobbying behind the scenes to get BTC made illegal or at least more restrictions and regulations put on and around it.

[toomsie]

The only big losers are those who have a stake in the losing companies but are unwilling or unable to hedge against bitcoin by buying bitcoins.

[Serge]

Paypal is not going to start taking bitcoin anytime soon.   They aren't going to help BTC get more widespread acceptance when it could kill their golden goose..just not going to happen.

If anything they are probably lobbying behind the scenes to get BTC made illegal or at least more restrictions and regulations put on and around it.

Paypal invested back in 2013 around $2 million into Bitpay through their Founders venture fund. read that somewhere in news during november congressional hearing on digital currencies.