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Robert Wagner
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Professional Credentials: The reports that I write are my personal research and opinions. They are not associated with any firm or organization, and are not intended to be taken as investment recommendations or advice. They combine my passions in economics, finance, writing and education, and... More
  • Western Union Gift Card; Another Bitcoin Killer 2 comments
    Feb 9, 2014 11:07 PM | about stocks: WU

    If you think I've been rough on the Bitcoin, you should read this article titled "Why Marc Andreessen Is All Wrong About Bitcoin...
    By Alex Daley of Casey Research." His article gives the Bitcoin a beat-down that makes mine look like a amateur hour. The reason I have been focusing on the Bitcoin is because of the obvious risks that people just seem willing to overlook. People will eventually lose fortunes on the Bitcoin, and my articles are an attempt to warn people. Mr Daley seems to share my concerns.

    Why Marc Andreessen Is All Wrong About Bitcoin... And Failure to Understand That Could Cost Investors Billions

    There are however many positive aspects about a virtual currency and the Bitcoin that could help facilitate commerce. Unfortunately, the Bitcoin isn't the answer, not even close. There are however far better alternatives, and one is certain to develop. Once a better virtual currency emerges, people will dump their Bitcoins, and the game of musical chairs will end. Only problem when the music stops for the Bitcoin, those who are slow to check their accounts will lose everything. People will go to bed one day they will wake up to an account with worthless Bitcoins, just like a person with a basement full of Beenie Babies, POGS or Pet Rocks.

    Reading the "Why Marc is Wrong" article, it triggered yet another idea for a Bitcoin killer, the Western Union Pre-Paid Gift Card. Western Union (NYSE:WU) could sell a gift card and open an account for that specific gift card. The gift wouldn't be registered under a name, but rather a number like a Swiss Bank Account. If I buy a WU Gift Card with #007, WU would open an virtual "wallet" for that 007 Gift Card. It would be completely anonymous.

    If I make an online purchase, I could transfer from the 007 virtual "wallet" into another WU virtual "wallet." If I want to transfer money to my family in another country, I would just transfer money from my virtual "wallet" to theirs. The WU Gift Card would hold actual US Dollars or actual local currencies, so the WU Gift Card is 100% perfectly elastic, and will never appreciate and depreciate like the Bitcoin. The volatility of the WU Gift Card relative to the chosen currency will be zero. If you choose to fill the WU Gift Card virtual "wallet" with US Dollars, they will be filled with US Dollars and there will be no volatility.

    The big advantage of a WU Gift Card is that there are many many many WU offices to convert your virtual money into actual cold hard cash. I could transfer $10 from my 007 WU Gift Card to another WU Gift Card account owned by someone in Japan, and that person could walk into a local WU office and withdraw the money as if the WU office was an ATM. WU would of course charge a withdrawal fee, much like an ATM, but it would safe, secure and extremely convenient. I could add money to the WU Gift Card by simply handing the cash and WU Gift Card over to the WU clerk. People could transfer money between WU Gift Card virtual "wallets" free of charge, and only pay a fee when they walk into a WU and ask to withdrawal some cash. Unlike Bitcoin, WU already has the infrastructure in place worldwide to facilitate cash withdrawals.

    In conclusion, the purpose of this article is to highlight the fact that the Bitcoin is virtual currency 1.0, it is at best a beta test for an eventual successful virtual currency. The Bitcoin is not the final virtual currency, and it will not be the one that succeeds. The Bitcoin isn't even designed to be a currency, it is designed to be an inelastic virtual speculative investment. Most Bitcoins have never even been used in transactions, they are simply purchased by people expecting them to appreciate. The Bitcoin is a high stakes virtual game of musical chairs, and one day the music will stop, and those standing when the music stops won't just lose a game, they will lose their fortunes. Once the Bitcoin "fad" passes they won't be worth the price of a pair of bell bottom jeans or platform shoes. This article was to demonstrate that there are many many ways to improve upon the Bitcoin, and when one is eventually brought to market, the Bitcoin will be immediately obsolete, and there will be a rush for the exits of the Bitcoin express. The Bitcoin has already had bouts of dropping over 50% in a day, and eventually there will be a Bitcoin crash that simply just keeps on falling, never to recover.

    Disclaimer: This article is not an investment recommendation or solicitation. Any analysis presented in this article is illustrative in nature, is based on an incomplete set of information and has limitations to its accuracy, and is not meant to be relied upon for investment decisions. Please consult a qualified investment advisor. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author's best judgment as of the date of publication, and are subject to change without notice. Full Disclaimer and Disclosure Click Here.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: WU
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Comments (2)
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  • KJP712
    , contributor
    Comments (472) | Send Message
    So stay away from the Bitcoin ETF,also......
    10 Feb 2014, 01:17 AM Reply Like
  • Ben Hanson
    , contributor
    Comments (525) | Send Message
    This is what I had in mind when I was talking about giftcards in the other Bitcoin article, but I couldn't articulate exactly what I meant.
    10 Feb 2014, 01:48 AM Reply Like
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