Bitcoin OKCoin: Bitcoin promotes innovation in the field of Internet finance

Reuters recently published a blockbuster commentary entitled "Bitcoin's promise: a financial revolution the web's been waiting for". The article stated that although Bitcoin may not become a brand new currency, it is expected to promote a financial revolution.

The reason why many people pay attention to Bitcoin is mainly because they are attracted by its skyrocketing value: it has soared from US$30 a year ago to more than US$1,000 at the end of last year. The bankruptcy of Japanese Bitcoin exchange Mt.Gox last year did not bring much impact to it.

But these people may be missing the point. The digital currency is based on a set of important computer algorithms that combine distributed timestamping, public keys and proof of work systems, which is extremely important for reforming the current way of e-commerce transactions.

“All three technologies can be turned into money, but they can also do a lot of other things, such as promoting innovation in the Internet sector,” said Mingxing Xu, founder and CEO of bitcoin startup OKCoin.

In the eyes of industry insiders, the first possibility of Bitcoin promoting Internet innovation is to reduce transaction costs. PwC estimates that credit card companies charge about 3% of transactions, and PayPal charges as much as 4%. Bitcoin companies like OKCoin do not need to rely on central financial institutions, so the transaction fees are almost zero. This forces traditional companies to innovate and reduce transaction costs.

South Africa’s Standard Bank recently launched a trial to integrate bitcoin transactions into its own currency system, and there is also interest from telecom operators and postal companies looking for cheap ways to develop a currency transaction processing system.

Mobile wallets are the second financial innovation that Bitcoin may promote. Bitcoin is a natural fit for the concept of mobile wallets and is also suitable for small payments that have been difficult to popularize so far due to high costs.

For example, Dogecoin, a variant of Bitcoin, successfully raised funds for the Jamaican bobsleigh team and three Indian athletes at the Sochi Winter Olympics last month, and this week raised $30,000 for Kenya.

Another Icelander named Baldur Friggjar Óðinsson launched a cryptocurrency called Auroracoin for all Icelandic residents. He said the move was to help Icelanders use a currency that can be used to trade or buy products and services online. Since the 2008 financial crisis, Icelanders have been subject to strict currency controls, making it difficult to convert funds into foreign currencies.

"Hopefully this will spark a lasting revolution that shifts control of money from the elite to the masses," said Baldur Friggjar Óðinsson.

Xu Mingxing, founder and CEO of bitcoin startup OKCoin, said that in the field of Internet finance, there are opportunities for gold rush in the fields of wallets, payments, crowdfunding, bonds, equity, etc. Technology and innovation are the fundamental driving force for social development, and the same is true for Internet finance. Enterprises that can find innovative models will have more development opportunities in the future.