Financial experts are keeping a close eye on the rollercoaster ride of Bitcoin. Over the past two months, the virtual currency has climbed to a record-high valuation of nearly $20,000 and dipped back to $10,000. The virtual-currency frontier has puzzled some of the most-recognized names in finance — JPMorgan Chase CEO Jamie Dimon speculated about the stupidity of those willing to invest in it — but it’s also attracted attention from some notable names in venture capital. Consumer trends tend to take a long time to cross over into the events arena, but Bitcoin has quickly entered the conversation among association leaders.
“When we talk about Bitcoin and blockchain, they are having significant impact on our members,” Abe Eshkenazi, CEO of APICS and APICS Supply Chain Council, said in an interview in the Convening Leaders 2018 MashUp Studio. “A year and a half ago, they weren’t even on our radar.”
Wait, What Is Blockchain?
Before diving into Bitcoin, it’s important to understand the technology that powers it: blockchain. Blockchain technology relies on a peer-to-peer network for processing transactions. Instead of having a big financial institution at the center of transactions, blockchain activity uses a decentralized network that distributes all the information about transactions across the entire community.
Blockchain isn’t confined to money, though. The technology can store all kinds of data, and it has the potential to impact areas beyond dollars and cents. “The technologies underneath cryptocurrency, which include blockchain and other distributed ledger networks, are here to stay,” Experient Chief Information Officer Brian Scott told PCMA in an interview. “They are going to creep into all kinds of applications.”
For example, Scott noted that some companies in the health-care industry are exploring how blockchain technology can support information exchange with increased data security. Major corporations are recognizing its promise, too. A recent study from Juniper Research indicated that nearly 60 percent of large corporations are considering, or in the process of, using blockchain technology.
Big Challenges for Blockchain-Fueled Currencies
It’s clear that blockchain has the potential to create some big behind-the-scenes changes for a range of organizations, but Scott believes that Bitcoin and other virtual currencies have a long way to go before they’re ready for the big time. “The technology has quite a bit of maturing to do,” Scott said. “Bitcoin has some significant scaling challenges in front of it. The average transaction time is approximately 78 minutes, and fees are averaging around $20. This clearly does not position it as a viable financial-transaction platform.”
Will Attendees Want to Pay with Bitcoin?
Despite long wait times and large fees, some established brands have already jumped on the bandwagon. Microsoft, Expedia, overstock.com, and a number of other traditional companies are aiming to stay one step ahead of the digital curve. If customers are already using Bitcoin to book hotel rooms (the site does not process Bitcoin payments for flights yet), won’t they expect the same experience under the “Register” tab on an annual meeting website? Perhaps, but Scott predicts that they won’t using the virtual currency for the foreseeable future.
Scott pointed out one of the biggest barriers to virtual-currency adoption in the events industry: expense reports. “Most events and trade shows are business exchanges,” Scott said. “So people are paying with corporate credit cards or business accounts. There are many other payment types that have had a huge head start on Bitcoin such as Paypal, Apple Pay, and mobile wallets, but these still aren’t traditional payment options for business expenses such as registration.”
Ironically, the challenges of processing virtual-currency payments were made crystal clear to the same community seeking to advance the cryptocurrency sector: prospective attendees at the North American Bitcoin Conference in Miami, Jan. 18–19, a part of the World Blockchain Forum. Last-minute attendees had to pay with traditional plastic credit cards. “We wish this was easier,” Moe Levin, the conference’s organizer, told bitcoin.com, “but no ticketing options exist which can handle large volumes of ticket sales, and transaction fees on the Bitcoin blockchain exceed $30 at certain times of the day.”
Will virtual currency catch on with consumers? And can it eventually spread to the B2B environment? Scott thinks that possibility shouldn’t be dismissed. “As with many trends, the events industry usually trails the consumer market by at least a year or so,” he said. “But cryptocurrency is definitely something to keep your eye on.”