03 Dec 2013 / Barron’s – Among other facets, we believe Bitcoin and its associated technology represent a potentially game-changing disruption to our covered payments companies.
We see the intrinsic value of Bitcoin as the conduit in a new global crowd-funded open-source payment network.
We observe three key sources of demand for Bitcoin as a disruptive payment network technology, an alternative uncorrelated-asset class, and a safe-haven currency, but believe the payment network capabilities are the key to the sustainability of crypto currency, with Bitcoin the early leader.
We believe that by decentralizing processing, allowing for market-based fees and adding new functionality, crypto-currency technology provides a powerful alternative to branded networks. Initial benefits for crypto-currency technology may be in processing micro transactions and cross-border payments, but the potential for innovation is significant. With a flexible fee structure and competitive price/lag dynamics, we believe Bitcoin is better suited to replace high-cost branded network micro-payments charges. We believe cross border transactions would benefit from the ability to avoid currency translation or conducting the foreign exchange outside the payment network. We further believe crypto-currency technology will develop new advantages over existing payment networks such as transaction-linked code, differential settlement fees/timeline and currency flow analysis…… Read more
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