Will bitcoin really be the great bank killer? It’s got potential, according to a new report released by The Bank of England, but as of right now that threat is more theoretical than practical, reports The Wall Street Journal.
At the end of the day, bitcoin suffers from the same scale problem that everyone trying to break into payments seems to have. Does bitcoin get a lot of attention? Absolutely. Are Brits using Bitcoin? Not so much, according to the report.
According to the report, around 20,000 people in the U.K. currently hold bitcoin. According to the U.K.’s leading authority on the subject, 1,500 Brits a year claim to have been abducted by aliens—which means one can reasonably infer that there are more people alive in the United Kingdom today who believe they have been visited by extraterrestrials than who own digital currency.
There are no statistics as to how many British bitcoin owners also believe they’ve been abducted by aliens.
There is, however, data about how enthusiastically trading in bitcoin English digital currency enthusiasts are doing. There are only 300 or so daily bitcoin transactions and only about £60 million ($97 million) in bitcoin circulating in the U.K., about 0.003 percent of British broad money balances.
Moreover, the BoE thinks that bitcoin popularity is unlike to skyrocket, as it predicts a rapidly approaching end to the era of bitcoin’s low transaction fees. Moreover, a portion of what makes it attractive—it’s inflation-proof preset currency limit—also makes it unresponsive to economic pressures in the way that fiat currency is.
Which is not to say that the BoE is willing to dismiss bitcoin as a mere novelty, the technology behind the decentralized ledger does have the potential to be massive destabilizing for traditional banking. Specifically, the report notes a potential future in which a bitcoin-type decentralized payment system could be grafted into the existing financial system infrastructure.