People Are Buying Less with BitcoinSkill Level 3, Published on: Nov 24, 2018
The use of bitcoin has decreased sharply in 2018.
Chainalysis is a company that researches bitcoin, a digital form of money that is not controlled by a state. The company said that the value of bitcoins traded by major payment processing companies has fallen by 80 percent in the first nine months of this year.
Some financial experts suspect this is because bitcoin is struggling to change from a risky asset into a widely-accepted currency.
At the same time, the exchange value of bitcoin is now becoming relatively stable – although sharp changes remain common.
This week, bitcoin’s value again dropped sharply to its lowest level this year.
But, financial experts say stability is what the currency needs to be used as money for payment.
Joni Teves is with the bank UBS in London. She noted, “There would have to be a stability requirement if it is to become another form of money.”
However, that is not the only thing that Teves is concerned about.
“One thing that would take bitcoin into the mainstream is scalability,” she told Reuters news service. She said people need to be able to process it just like they do money and in very large amounts on a large scale.
That could be a problem.
Bitcoin, and currencies like it, are based on blockchain technology. That means all activity related to bitcoin is recorded and confirmed by computer in a blockchain. Blockchain technology permits records to be checked and stored securely, but requires a lot of computing power.
The system can only process a small number of transactions compared to, for example, a major credit card company.
This suggests that the use of the currency by many people could be difficult.
Chainalysis said its research shows that in the month of December the value of payments made with Bitcoin reached $427 million. By September, however, that number had fallen to $96 million.
The company studied 17 bitcoin payment processors, including one of the biggest, BitPay. Reuters reports that most sellers which accept bitcoin use a processor like BitPay to change bitcoin into a normal currency.
Read the following vocabulary with your teacher.
digital (adj.) - using computer technology
asset (n.) - something of monetary value that is owned by a person, company, etc.
stable (adj.) not easily changed
currency (n.) - the money that a country uses and supports
scalability (n.) - the ability to easily make something larger or in much greater numbers
Answer these questions about the article.
- What is Bitcoin?
- Did its use drop in 2018?
- What is the problem with Bitcoin?
- How much the the value dropped?
Fill in the blanks
Fill in the blanks with the correct word listed below.
digital, asset, stable
- _______ cameras are the standard today.
- This platform is very _______.
- _________ photography gives you a lot of options for editing.
Have a discussion on following questions.
- Bitcoin will dissapear?
- Do you use it?
- Are you mining for Bitcoins?
- Do you like cash or credit cards more?