WPCS International: A Great Play on Bitcoin?

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What is Bitcoin? Bitcoin is an Internet-wide distributed ledger. You buy into the ledger by purchasing one of a fixed number of slots, either with cash or by selling a product and service for Bitcoin. You sell out of the ledger by trading your Bitcoin to someone else who wants to buy into the ledger. Anyone in the world can buy into or sell out of the ledger any time they want with no approval needed, and with no or very low fees.

The Bitcoins themselves are simply slots in the ledger, analogous in some ways to seats on a stock exchange, except much more broadly applicable to real world transaction. Bitcoin is a new kind of payment system. Anyone in the world can pay anyone else in the world any amount of value of Bitcoin by simply transferring ownership of the corresponding slot in the ledger. In many cases, there are no fees. A company that could develop a trading platform that earns even small commissions off of Bitcoin exchanges could be a huge success. One such company is WPCS International (NASDAQ:WPCS), and I will discuss that in a bit. First, you must understand Bitcoin.

Bitcoin is the first Internet payment system where transactions either happen with no fees or very low fees (down to fractions of pennies). In lots of places, there are either no modern payment systems or the rates are significantly higher in order to use Bitcoin. How does it work? Bitcoin is a digital bearer instrument. It is a way to exchange money or assets between parties with no pre-existing trust. A string of numbers is sent over email or text message in the simplest case. If you have the money or the asset, you can pay with it; if you don’t, you can’t.

Unlike credit cards, there are no chargebacks; this is novel as such potental has never existed in digital form before. Thus, Bitcoin is a digital currency, as value is based directly on two things: use of the payment system today — volume and velocity of payments running through the ledger — and speculation on future use of the payment system. Right now, Bitcoin’s value is based more on speculation than actual payment volume. However, the speculation is setting up a high price for the currency that payments have become practically possible. The plain fact is that Bitcoin has risen in value in part because of speculation of its real life utility. Bitcoin can be used entirely as a payment system because merchants do not need to hold any Bitcoin currency or be exposed to Bitcoin volatility at any time. Any consumer or merchant can trade in and out of Bitcoin and other currencies any time they want. More and more, merchants are accepting Bitcoin.

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