In the end, it did not cost him millions to buy him a picture of a blue cartoon cat. But it was much more expensive than I expected. Why? Fees. Fees to buy the cryptocurrency eater, transfer it to my crypto wallet and make a purchase, which included a noticeable mining charge due to network congestion.
For the sake of my dad, I will stay mom about how much I ended up spending. I would say since the fees cost more than the NFT itself, it was more than I would normally recommend to laugh fast.
Because I spend most of my time on finance, the episode also made me wonder: do cryptocurrencies really have a future as a widespread way to spend between volatility and high transaction costs?
But even after the extra costs have been addressed, the huge rise in the prices of popular cryptocurrencies like bitcoin and ether can make people hesitate to part with them.
“I do not think people look at it from a spending perspective. People still consider it an investment,” Eleesa Dadiani, an art dealer and crypto broker in London, told me.
“Why would you want to spend an appreciative asset on a write-off product? It makes no sense,” she said.
Bill Zielke, the chief marketing officer of BitPay, which executes crypto transactions between businesses and consumers, agrees that fees still remain a barrier. But there is a lot of innovation going on that could solve such problems, he said.
“I think the industry is very aware that fees are something that needs to be addressed to keep growing,” Zielke told me.
Regarding volatility, Zielke notes that clients can hedge their bets by owning multiple cryptocurrencies, or by liquidating part of their portfolio at an appropriate time.
He acknowledged that there are still many people in the crypto community who want to keep their coins – or HODL – in the industry while increasing in value.
But as bitcoin, ether and even dogecoin get steam, Zielke said there is growing interest in converting profits into luxury purchases, from boats and watches to homes and planes. This makes him optimistic about the future.
“While consumers continue to HODL, and the balance continues to grow, at some point they will … utilize and spend it,” he said. “And we want to be there.”
Conflicts over human rights complicate matters in China
Tensions over Xinjiang – where US, EU and British authorities have accused the Chinese government of oppressing Uighurs and other minority groups through forced labor, mass detention and sterilization – have intensified a growing number of businesses and trade relations in recent months, my CNN Business colleagues Jill Disis and Selina Wang report.
Beijing has vehemently denied all allegations, saying the camps in the region are ‘vocational training centers’ designed to combat terrorism and religious extremism.
But late last month, a major investment deal between the European Union and China was called into question after officials traded sanctions on Xinjiang.
“We are working with our colleagues in China to do everything in our power to meet the current challenges and find a way forward,” H&M said in a statement on Wednesday.
Beijing has made it clear that multinational companies must follow its rules if they want to work in the country, and to win favor can require anything from complying with restrictive regulations to a few good words about China. Many companies have traditionally been willing to play along, as the giant economy is enticing as a market for everything from cars and clothing to movies and luxury goods.
But the growing political setback could make some of these relationships unsustainable, especially as lawmakers and investors increase pressure on Western companies to scrutinize their supply chains for evidence of human rights violations.
“These companies are just being pushed into the middle and there is no great answer,” said James McGregor, chairman of the larger China division of APCO Worldwide. Read the full story here.
Following
Monday: ISM Non-Manufacturing Index
Tuesday: Reserve Bank of Australia policy decision; International Monetary Fund’s economic prospects
Friday: data for inflation in China; US Producer Price Index