Digital currencies such as bitcoin are becoming more and more popular these days. Bitcoin is a decentralized virtual currency which got invented by a person/group named Satoshi Nakamoto in 2008. Satoshi Nakamoto as an identity is still a mystery. Unlike the traditional transactions, by using this system users can send or receive money without an intermediary.
Bitcoin uses a distributed database called a “blockchain” to record the transactions and to inform everyone in this chain that a specific amount has been transferred from person A to person B. Bitcoin is a decentralized cryptocurrency which means individuals can’t get limited for using this system.
American Retail stores such as Target and Sears, restaurants like Subway and many websites such as Amazon, Microsoft and Expedia are accepting bitcoin as a valid payment method. Statistics from 2014 show that there are 1.3 million Bitcoin users around the world and it’s expected to reach to 4.7 million by 2019.
In March 2013 bitcoin’s value was set at $47, the same year it reached to $1,145. This has led many to presume that bitcoin’s situation is like the dot-com bubble that happened in the 90s.
What Are Bitcoin’s Pros?
- It facilitates international trade
- The transaction is done without an intermediary
- It’s a way to avoid imposed banking restrictions
- Keeps users’ information anonymous
- The network is getting stronger day by day
Are There Any Cons?
Of course! Just like any other new technology bitcoin has its own downsides too.
- Bitcoin is high risk, it could lose its value in a long-term investment
- Bitcoins have fluctuating value
- The technology is not yet fully mature
- The system has been used for criminal activities reportedly
- It’s still not a widely used currency for online payments in most countries
Bitcoin in Iran
Bitcoin regulations are still not clear in Iran. In an interview, Saeid Mahdiyoun, Deputy of Iran’s National Center for Cyberspace Regulatory stated that there are no regulations that prohibit users from exchanging online money, nonetheless there aren’t any supporting laws.
Currently there seems to be no restrictions from either local and international law enforcers towards Iranians who use bitcoin. Bitcoin clients could be downloaded with no restrictions with an Iranian IP address. Many verified local exchange websites are also officially working inside the country.
BTXCapital is the first real-time bitcoin exchange service in Iran which lets users to buy, sell and deposit their bitcoins. The website uses an exchange platform from Draglet, a company based in Munich, Germany.
“The market is massive. A large population with a high proportion connected to the internet means there is a lot of completely untapped market potential. Our platform makes trading really easy. All you need to do is deposit some local currency and then you can trade,” told Ganesh Jung, CEO of Draglet to IBTimes UK when addressing the Iranian market. “There were ways to buy bitcoin but the process was very difficult and the amounts it was possible to buy were small,” he added.
The system is still not that active in Iran. Aside from a couple of exchange websites, there are almost no local online markets that accept bitcoins. PersianShoes, an online leather shoe marketplace operating from Isfahan is an exception. The business targets international customers, but since transferring money to Iran is a big hassle they only accept bitcoins.
“Before launching this website, our international sale had been limited to a few dedicated customers who knew about the quality of our products and were prepared to go through a lot of trouble to pay us! This of course, may sound incomprehensible for people who have all sorts of electronic payments at their disposal. However, before finding out about Bitcoin, receiving our money was the number one obstacle in expanding our business,” says on the about page of PersianShoes website.
Until the sanctions get fully lifted and Iranians get a chance to connect to international payment systems, using bitcoin seems to be a good solution. Local startups revolving around innovative businesses could take a good use of this system. Developers inside the country could also integrate bitcoin with their app/online services to target the international market.
Bitcoin still has a long road to travel to become a globally accepted standard payment method, but it seems that if this system attracts more trust, its opportunities could become more predominant than its threats to various economies.