The Need for Localised Exchanges
Mt. Gox was on its last legs for some time. The difficulty withdrawing funds from Mt. Gox made them a risky counter-party.
The market factored that into a large US dollar premium at any given time, over 2013.
The NY times notes a statement by Sarah Meiklejohn, a graduate student who studies virtual currencies, confirming “what everyone in the Bitcoin community has known for a while: Don’t use Mt. Gox,”
Mt. Gox spent 2013 loosing it’s commanding 80% market share to other international exchange players.
Their most recent troubles come amongst a spate of other negative news in the press, all at once: Russia ‘banning’ Bitcoin, Charlie Shrem’s arrest and Apple’s banning of the Blockchain wallet from its store. Of course, Mt. Gox troubles and its seemingly imminent demise are news at which Bitcoin advocates and enthusiasts should rejoice. It is an inevitable part of the maturing landscape.
As Mike Wheatley notes, this only “confirms how strong Bitcoin is right now.” Mt. Gox is no longer the only player in town.
In a space that continues to evolve at a break-neck pace they are already dinosaurs. There now exist “dozens of more reliable and better organized pretenders.” Bitcoin will directly benefit from the purging of this agent from the ecosystem.
This is in a similar way to the direct benefited from losing the Silk Road. At first there will be decline. But as the market learns how inconsequential Mt. Gox really was, these losses will be short lived.
Mt. Gox is a collapsing star. However, it will not suck Bitcoin into the black, void hole it is about to create. Despite the uncertainty about the integrity of Bitcoin itself it has intentionally or unintentionally created.
Quite simply Bitcoin outgrew Mt. Gox some time ago. Bitcoin is a new game, necessitating new exchange players.
As John Matonis of the Bitcoin Foundation notes, Localised, ubiquitous exchange options are what is needed. It is localized exchanges that will form an integral part in the evolution of the Bitcoin ecosystem and landscape.
Such exchanges will facilitate trade based on the needs of local customers. This is what is necessary to create a “truly global network”.
As the Bitcoin space continues to mature we can expect more corporate casualties. Bitcoin is a pure market environment.
Entrepreneurs compete to create value and competition is fierce. In such a dynamic space those who can not adapt and contribute necessarily disappear.
But Bitcoin is greater than the sum of all these businesses. Such a dynamic space is indicative of an underlying strength in Bitcoin’s development.
For South Africa’s local Bitcoin exchange service, click here.
(This is not to be taken as investment advice, make sure you seek professional advice when considering financial investments).