In the end, buying him the image of a blue cartoon cat didn’t cost millions. But it was much more expensive than I expected. Because? Rates. Fees for buying the ether cryptocurrency, for transferring it to my crypto wallet and for carrying out a purchase, which included an astonishing mining fee due to network congestion.
For my father’s sake, I’ll keep silent about how much I ended up spending. I will say that, given that the fees cost more than the NFT itself, it was more than I normally recommend spending for a quick laugh.
As I spend most of my time writing about finance, the episode also got me thinking: between volatility and high transaction costs, do cryptocurrencies really have a future as a common means of spending?
But even after addressing the additional costs, the massive rise in prices of popular cryptocurrencies like bitcoin and ether can make people hesitate to part ways with them.
“I don’t think people are looking at it from a spending perspective. People are still looking at it as an investment,” Eleesa Dadiani, a London-based art dealer and crypto broker, told me.
“Why would you want to spend a revaluing asset on a depreciating product? It just doesn’t make sense, ”she said.
Bill Zielke, BitPay’s chief marketing officer, who performs cryptographic transactions between companies and consumers, agrees that fees remain a barrier. But there are many innovations going on that can solve these problems, he said.
“I think the industry is very aware that fees are something that needs to be addressed if we are to continue to see growth,” said Zielke.
Regarding volatility, Zielke notes that customers can protect their bets by holding multiple cryptocurrencies or liquidating part of their portfolio at an opportune time.
He acknowledged that there are still many people in the cryptography community who want to keep their currencies – or HODL, in industry jargon – while they increase in value.
But as bitcoin, ether and even dogecoin gain momentum, Zielke said there is a growing interest in translating earnings into luxury purchases, from boats and watches to homes and planes. This makes you optimistic for the future.
“As consumers continue to make HODL, and that balance continues to grow, at some point they will … enjoy and spend,” he said. “And we want to be there.”
Human rights conflicts complicate business in China
Tensions in Xinjiang – where US, EU and UK officials have accused the Chinese government of repressing Uighurs and other minority groups through forced labor, mass detention and sterilization – have entangled an increasing number of businesses and trade relations in recent months , my CNN Business colleagues Jill Disis and Selina Wang report.
Beijing has vehemently denied all accusations and says its camps in the region are “vocational training centers” designed to combat terrorism and religious extremism.
But at the end of last month, a historic investment agreement between the European Union and China was called into question after officials negotiated sanctions against Xinjiang.
“We are working together with our colleagues in China to do everything we can to manage today’s challenges and find a way forward,” said H&M in a statement on Wednesday.
Beijing made it clear that multinational corporations must follow their rules if they want to operate in the country, and winning favors can require anything from complying with restrictive regulations to saying a few good words about China. Many companies are traditionally willing to play together, considering how attractive the giant economy is as a market for everything from cars and clothes to movies and luxury products.
But the escalating political setback may make some of these relationships unsustainable, especially as legislators and investors increase pressure on Western companies to examine their supply chains for evidence of human rights abuses.
“These companies are just squeezed in the middle and there is no magic answer,” said James McGregor, president of the Greater China division of consulting firm APCO Worldwide. Read the full story here.
Next
Monday: ISM Non-Manufacturing Index
Tuesday: Reserve Bank of Australia policy decision; Economic perspectives of the International Monetary Fund
Friday: China’s inflation data; US producer price index