I’ve read the occasional article but, a few weeks ago, a friend told me they had invested in Bitcoin and had made £25,000 in just three months. Once the green-eyed monster had disappeared and I had finished dreaming of all the designer shoes I could have bought, I decided to look again at what it was all about.
Bitcoin is a type of unregulated digital currency that was introduced in 2008.
It was launched with the aim of bypassing government currency controls and simplifying online transactions by removing third-party payment processing intermediaries.
Bitcoins can be sent from anywhere in the world to anywhere else. The cryptocurrency is open to everyone and is said to provide an opportunity to delve into an entirely new asset class. The most common use of cryptocurrency is buying and selling goods and services online, with Bitcoin transacted over an open, public, anonymous blockchain network.
That was another word I had to research, but I now know blockchain is the underpinning technology that maintains the bitcoin transaction ledger. According to Don and Alex Tapscott, authors of Blockchain Revolution: “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Still confused? Yes, me too. It’s reported that big brands like Expedia started accepting bitcoin as currency several years ago, as well as a few other travel companies, including CheapAir and Webjet (an Australian OTA). I wonder if others are considering this across the travel industry?
But before you invest, it seems for now that the bottom may have fallen out of trading. In the past few weeks, analysts have said bitcoin’s 40% collapse over the past month has raised questions over its future and that of other virtual currencies. That, combined with the volatility of any investment so reliant on the changing marketplace, makes me wonder whether the industry should really be jumping on it right now. With rumours of its drain on energy, could it be this isn’t a sustainable platform?
On the other hand, with credit card fees and transaction fees hot topics at Advantage, it raises the question of whether we should be rethinking the transactional process. Bitcoin may not be the most stable solution for our business model, but I suspect we shouldn’t be ignoring it. I for one will be watching closely.
Clearly, making any investment is not to be taken lightly and if you are considering it, make sure you understand what you’re getting into.
I’m yet to be convinced. What about you?
Paula Lacey is group commercial director of Advantage Travel Partnership
