Last week tech websites went nuts when announcing Starbucks will soon be accepting bitcoin. The notion of purchasing a Frappuccino with cryptocurrency was too seductive a headline to miss. Over the weekend, Starbucks clarified its position: no, they are not accepting bitcoin, but yes, they are working on implementing a conversion program that will exchange your crypto for cash.
Fiat currency is still winning.
But for how long? You might not yet be able to exchange crypto for caffeine, but that day is approaching. What those Friday articles revealed is telling: Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, is launching its own blockchain, Bakkt. The Fortune 500 company has already announced partnerships with Starbucks, Microsoft, and BCG. With the digital assets marketplace valued at $270 billion, it’s not surprising big players would infiltrate; one selling point for ICE is its longstanding ties to international regulatory bodies, propelling it well in front of the competition.
The move has profound implications on the future of blockchain. Marco Santori, President and Chief Legal Officer of Blockchain.com, called it the “Wall St troll of the century.” He recognizes both edges of this sword. First, such a massive financial player stepping into cryptocurrency implies “enormous validation of the crypto asset class.” Yet it could destabilize current industry players.
Stability is a key factor in utilizing cryptocurrency. Right now, value fluctuates too wildly for retail to rely on. Mining fees could exceed the price of a beverage, depending on when it is purchased. And the biggest hurdle to date: the transaction could take minutes, which is antithetical to the Starbucks (or most any retail outlet) ethos. If you think waiting behind someone writing a check at the supermarket is annoying, just wait until someone in front of you blankly stares at their digital wallet awaiting verification.
This technological hurdle will soon be solved. Blockchain offers…
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