What Microsoft’s adoption of Bitcoin payments means for the digital markets
The story of Bitcoin is one of ups and downs; from initial obscurity to eventual digital currency dominance, the ‘cryptocurrency’ has struggled to gain mainstream acceptance for a number of reasons, not least its lack of a physical anchor. This situation has only been compounded by the lack of stability in the value of the currency, which theoretically shouldn’t be too much of a problem given the inherent availability limits built into the currency. This has not been the case however, as the value has fluctuated wildly, with news of hacker raids among other events throwing the market into disarray.
Slowly however, as more firms buy into the idea of digital currency, and as the world continues to become more digital in its approach, the currency is gaining something approaching broad mainstream awareness, if not acceptance. Slowly it is becoming the case that Bitcoin users can purchase more of their goods and services using their currency of choice, however this is not necessarily of especial benefit in the long run.
As such, Microsoft’s newly announced acceptance of the software is not necessarily an automatic benefit to the currency. As mentioned, Bitcoin operates with the notion of a finite number of coins in existence, however this limit has not been hit yet. The news of Microsoft allowing payment for their products and services means that there will somewhat automatically be a large influx of bitcoins into the market, in turn creating a downward trend with regards to value. Their commitment to the currency isn’t complete, nor is it of particular use, rather it is something of a novelty, simply there for those who have the means or the whimsy.
For Microsoft of course, this is a positive development, as it is for its customers. Although employees won’t be receiving their wages in Bitcoins, nor will the company be speculating on the market in the long-term, it is another step on the road to mainstream acceptance, even if that road is a million miles long.
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