It’s not yet the holidays, but it’s almost Diwali, the Hindu festival of lights, a fitting theme for today’s bitcoin news. Diwali lasts for five days beginning Oct. 20, and bright lights, colorful decorations and fireworks mark the occasion. The Indian people celebrate by lighting diyas and candles around the home, seeking divine blessings from the goddess of wealth and exchanging gifts, such as gold coins.
But on a more commercial note, Indians are expected to spend as much as $1.7 billion online during the run-up to Diwali, according to RedSeer Consulting. And bitcoin purveyors and exchangers are eyeing an emerging eCommerce market in India that might offer the right components for traction.
No surprise then that, after Walmart disclosed that it was negotiating with Flipkart Ltd., India’s eCommerce leader, Amazon, is also vying for the top spot ahead of the Diwali shopping season. Bloomberg stated that Amazon is spending $5 billion to gain dominance in Indian eCommerce.
So, what’s going on with bitcoin in light of Diwali?
Some bitcoin companies see this period as a time to push the adoption of bitcoin in a country that has a large unbanked population at 21 percent.
The merchant Zebpay is enabling some of its users to buy discount gift cards of popular U.S. sellers, such as Amazon, with bitcoin. The online marketplace that allows bitcoin use, Purse, offers Amazon discounts and has a larger inventory and cheaper prices than Amazon, eBay and Google Shopping. Purse gives bitcoin users Amazon discounts between 15 and 22 percent.
Only 4 percent of India’s 1 billion population regularly shops online, which leaves an enormous untapped market for bitcoin purveyors. Morgan Stanley predicts Indian online sales will hit $100 billion a year by 2020, up from $3 billion in 2013.
Some investors are convinced of the potential of bitcoin in India. Indian bitcoin company Unocoin has raised $1.5 million in a pre-Series A round, the largest amount raised for a digital currency company in India.
But the same old bitcoin issues persist. Bitcoin use is not regulated, despite efforts by Unocoin to initiate government movement toward a regulatory framework. Sunny Ray, president of Unocoin, said: “Over the coming years, we expect that bitcoin will be regulated similar to how it is being regulated in other countries.” But that’s not saying much because bitcoin regulation in most accommodating countries is loosey-goosey, to say the least.
Ray said: “Our aim is to work with people from academia, industry and the government of India to ensure that we continue delivering on the promises of bitcoin, while systematically protecting against the downside risks. When it comes time to implement a regulatory framework … we expect to help shape the future of this industry.”
India is the world’s largest remittance market, $69 billion, according to the World Bank. It has a huge gold market and the fastest rate of adoption in mobile/internet use, all of which attract bitcoin stakeholders.
Ray stated that bitcoin is a better payment method than credit or debit cards in India because many merchants do not accept them at POS, according to Livemint.
Piyush Singh, managing director of the Financial Services Group at Accenture India, said: “There is a lack of penetration of POS machines. And even if there are machines installed, low-value transactions are discouraged by the merchants themselves. Then, there are connectivity issues, which discourages consumers from using POS terminals to make payments.”
The argument seems solid. Let’s see how that regulatory framework shapes up.
Could Africa Be The Next For Fireworks?
So, if bitcoin is poised for growth in India — note the “if” — what about Africa? According to CoinTelegraph: “It is just a matter of time for the bubble to burst in India and a little sooner for the multiplier effect of the burst to spill over to Africa. After India, Africa will take it up starting with South Africa and the continent’s former largest economy, Nigeria.”
According to CoinTelegraph, there is a cultural connection between Indians and South Africans based on the ANC’s struggle against apartheid. There is also bilateral trade to the tune of $12 billion that will grow bitcoin use between India and the whole African continent, and South African exchanges, Bitx and ICE3x, are connected to Asian countries, such as Malaysia, Indonesia and Singapore.
Aside from South Africa, Christopher Bates, head of Bitland Group, commented on Mauritius to CoinTelegraph, saying: “India is still negotiating with Mauritius, but they will likely have a result that is conducive to more business with India. As well, Bank of China just signed deal with Mauritius and opened a new headquarters.”
Earlier, Bates had stated that Mauritius could become “Blockchain Valley” because the country has the largest bank in Africa. According to Bates, Mauritius could establish an offshore data warehouse that stores government-level blockchain for countries that don’t have their own blockchain warehouse capacity.
On Nigeria, Dilip Ratha, head of the World Bank’s migration project called the Knowledge Partnership on Migration and Development, is of the opinion that Nigerians need bitcoin because exchange rates to global currencies have soared by almost 40 percent, while the banks, using certified money transfer agencies, apply foreign exchange rates that are incomparable to those on the black market.
From Lights To Lightning
And bitcoin energy is manifesting in the form of lightning transaction speed closer to home where the Lightning Network, a bitcoin network top layer that is expected to boost transaction capacity, is performing well in trials.
Montreal-based Blockstream sent the first end-to-end transaction over the Lightning Network, and the developers coined it (pun intended) “Lightning’s first strike.” The transaction was sent across a test network, the bitcoin testnet and included a 0.01 test BTC sale of a picture of two cats sitting in front of a sunset composed of ASCII characters, an invoice for bitcoin and payment routing through multiple nodes.
Blockstream’s announcement is considered a step closer to implementation of Lightning. So far, tests have explored routing rather than demonstrating how Lightning could scale bitcoin transactions.
The transaction speed was a few tenths of a millisecond, compared to transactions on the bitcoin blockchain, which often take 10 minutes for confirmation. The results, according to the engineers, show the contribution of Lightning to the network at scale. Christian Decker, Blockstream core tech engineer, said: “It took me longer to go back to the webpage and click on a link to get my cat than the actual transfer.”
Decker plans to “set up a small ecosystem” on the bitcoin testnet for micropayment channels. Blockstream will release its work so that anyone can test the technology or so that “you can buy your own cat on testnet.” A demonstration is available here, but you don’t have to be a cryptofanatic. The felines are worth a look, too.
Lights And Red Bull For Nighttime Bitcoin Hackers
Moving from one nocturnal species to another, hackers at Paralelní Polis were in need of stimulants to keep them awake all day at a conference and at night to perpetuate their trade.
So, savvy marketers strategically placed Red Bull bitcoin-only accepting vending machines to meet attendee demand. The three-day hacking congress sponsored by the Institute of Cryptoanarchy was held in Holešovice, near Prague in the Czech Republic, a country better known for its Pilsner than its caffeine-loaded drinks, but you take what you can at these events.
This was the third year of the Czech hackers’ congress, where hundreds of technology enthusiasts, cryptoanarchists and activists network.
For the bitcoin strapped, or those who were unable to hack into the nearest cryptoexchange (more Red Bull, perhaps?), congress participants could pay with a credit card or PayPal, but with a 5 percent transaction fee. Presenters, and there were almost 60 of them, included Felix Weis, world bitcoin traveler, and Andreas Antonopoulos, author of “Mastering Bitcoin and the Internet of Money.” Themes for the conference included freedom and “cryptoanarchy;” decentralized economy and cryptocurrency; political art and hacking; and science and technology. There was also a 3D-printed fashion show by FashionSTL, a hacker talent competition by Ultrahack, several drone shows and movie screenings.
Red Bull was the firm that created and distributed Felix Baumgartner’s record-breaking leap from outer space to Earth, which drew 9 million views on YouTube, according to Werner Brell, managing director of Red Bull Media House.
According to CryptoCoinsNews: “It makes sense that a company looking to be on the cutting edge of technology and social change would find its way to a hackers’ conference with a vending machine that accepts bitcoin.” Or, it could be that bitcoin as a viable currency, like Baumgartner’s stunt, is a giant leap for mankind.
Wallets And Winklevosses
And for the bitcoin trader who wants convenience and anonymity, the Exodus wallet now has built-in ShapeShift trading. Users can trade blockchain assets without exiting the wallet app.
ShapeShift.io has been working with Exodus since late 2015 to integrate its API, and the app will maintain balances in bitcoin, Ether, Litecoin, Dash and Dogecoin. According to ShapeShift, the app can trade between 38 cryptotokens, and users do not need an account or registration.
The founders of Exodus, Daniel Castagnoli and J.P. Richardson began developing Exodus in 2015. The cryptocorporates claim to hold over 90 percent of their personal wealth in digital assets and to use crypto currencies to pay contractors.
ShapeShift launched in 2013 with Erik Voorhees as its owner in early 2015. In April 2016, a $230,000 inside-job theft, according to Voorhees, left the company bruised but not bereft, and no customers lost funds.
The price of bitcoin is hovering around $611, with pundits predicting a continuation of the upward trend. Bitcoinist suggests the steady price could reflect the banking crisis in Germany and the Winklevoss twins’ Gemini exchange.
And for those who want an update on the Winklevoss’ long-awaited ETF, there isn’t one. Suffice it to say, it’s more likely the holidays may come sooner, and Diwali certainly will.