Juniper Research: Use of cryptocurrencies plummeting over theft, murky deals

By Andrei Skvarsky.

Juniper Research, a UK-based communications research and consultancy company, forecasts that global cryptocurrency transactions will plummet in value this year to just over $30bn from more than $71bn in 2014.

A Juniper Research report, The Future of Cryptocurrency: Bitcoin & Altcoin Impact & Opportunities 2015-2019”, attributes the anticipated decline to the combined impact of exchange collapses, Bitcoin theft and regulatory concerns over the role of cryptocurrencies in dark web purchases.

According to the report, announced by Juniper in a press release, last year’s surge in altcoin transactions was overwhelmingly attributable to brief spikes in activity during the first quarter in Dogecoin, Litecoin and Auroracoin. However, by the end of 2014 daily dollar values of these transactions were at less than 5% of their initial levels.

The report argues that setting up licensed, regulated exchanges could serve to stabilise cryptocurrencies and lead to an increase in virtual currency transactions.

It says consumer confidence in cryptocurrencies has been eroded by the February 2014 demise of Mt. Gox, a Tokyo-based Bitcoin exchange, and the recent theft of nearly 19,000 bitcoins from hot wallets managed by UK-based Bitcoin exchange BitStamp.

Mt. Gox launched liquidation proceedings in April, announcing that bitcoins belonging to customers and worth more than $450m were missing and were likely stolen.

The report argues that Bitcoin will have a job fighting off a tech-savvy libertarian demographic, even though PayPal now allows US consumers to make purchases with it.

The report foresees a more powerful role for cryptocurrency protocols.

“It is likely that we will see the technologies behind cryptocurrency deployed in areas such as real-time transactional settlement,” the Juniper press release quoted the author of the report, Dr Windsor Holden, as saying.

“Ripple Labs [a San Fransisco-headquartered online payment protocol developer] is already focusing overwhelming on that approach and in the medium term we may see a role evolution to this end amongst other cryptocurrency players.”

Juniper Research, based in a historic building in Basingstoke, Hampshire, much of which dates back to the reign of Henry VIII, specialises in wireless communications.

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