>> BitCoin's lost about the quarter of its value this week, scaring away hordes of investors. If you look more carefully though, since February, prices of BitCoin have actually been going more stable. My name is Tom Wilson and I'm Reuters cryptocurrency correspondent in London. And I've been looking at what these price changes mean for how BitCoin is used to buy and sell goods and services.
Through its first ten years, BitCoin has been really notorious for its volatility prices often rise and fall. Since February, though, this year, prices have gradually started falling throughout the year and for a spell last month, there were actually more stable than US stocks, where investors are quite edgy about Federal Reserve interest rate hikes.
Even though this year BitCoin has become much more stable, fewer and fewer people are using this to buy and sell goods. One of the main reasons for that is BitCoin is still very slow to process transactions, and is very expensive to process transactions. Why would you use it compared to Visa or MasterCard or even cash?
So in general, there are three real key conditions for any currency to become useful as a means of payment. One of those is stability, one of those is speed of transactions, one of those is cost of transaction. BitCoin, it might be more stable, but the block-chain technology that supports it is still very slow when it comes to processing transactions.
Compared to the likes of Visa or MasterCard, block-chain can only process a fraction of the number of transactions per second. Big banks and BitCoin evangelists usually don't agree on very much but one thing that they do agree on in this case is that block-chain, the technology that supports BitCoin needs to become faster at processing payments made using BitCoin.
One of the bright spots in the future say evangelists, there's something called the lightning network. That's a separate computes code which is used with conjunction the block-chain. And it speeds up the amounts of transactions that can be done per second by the blockchain.