Nocks, an exchange and payment processor working closely with Gulden, has dropped Bitcoin support, citing the cryptocurrency’s bad reputation and slow confirmation times.
According to a Medium post by Nocks, the processor and its associated cryptocurrency, no longer wish to deal with Bitcoin’s increasingly high fees and slow confirmation times. Additionally, Gulden as a whole, while maintaining a commitment to user privacy, is seeking to move away from anonymity. As such Nocks seeks to tighten security over the kinds of users that use its service through “thorough identity checks, freeze list referencing and much more to ensure a great user-base.”
Rijk Plasman, Gulden’s founder, sees the change as an opportunity for a clean slate for the digital currency’s public perception:
“We’ve been standing on our own since the start. There is no such a thing as Bitcoin popularity with the general public, it’s the opposite. Bitcoin has a very negative and hostile reputation, due to money laundering, hackers and black markets. That’s something we and our users want to stay far away from. Of course, I am not talking about Bitcoin development, I have huge respect for the people who actually build stuff and try to improve Bitcoin. But unfortunately their community and user base is holding them back. We don’t have that problem.”
Gulden is seeking to avoid being tied down to Bitcoin’s slow speeds
The integration with Bitcoin originally allowed Gulden users to seamlessly send and receive payments with users who don’t have any, eventually Bitcoin became too much of a liability. According to Roel Boer, co-founder of Nocks, this was in part because of slow confirmation times.
“About 80 to 90 percent of our Bitcoin transactions required support because the transactions took longer than an hour to either confirm or broadcast to complete a purchase,” says Boer. “So users either requested a refund or we manually processed their payment. In most cases, users pay through a third-party service which causes confirmation times up to 48 hours, something that we just can’t use in our type of business. We’re aiming for a quick settlement and direct results.”
Bitcoin’s impressive growth as the standard bearer for cryptocurrency has nonetheless been accompanied by growing pains in the form of a heavy network load and the accompanying symptoms of slower confirmation times and higher fees.
Roger Ver, a longtime advocate of increased block size scaling solutions, points out that Bitcoin’s adoption would be even greater without its currently unsolved scaling issues:
Boer points out that Bitcoin’s speed has become an issue in particular when compared with more nimble cryptocurrencies such as Gulden. “Though we’ve done Bitcoin transactions for about 16 months and looking back, it wasn’t always like this,” he explains. “At first it was acceptable because we did small transactions that worked perfectly with zero confirmations, accept on broadcast.”
“Now it’s just not feasible economically to keep using Bitcoin this way,” Boer continues. “We were focusing on Gulden anyway since we first launched, so we just decided to cut BTC from the roster. Something we wanted to do along the way anyway, but this felt like a great time to do it.”
Anonymity is still a priority for many cryptocurrency users
Virgil Vaduva, CEO of decentralized ridesharing and emergency response app Cell 411, sees anonymity as a crucial element to safeguard against potential abuse such as government overreach. “We all know that there is a world-wide effort throughout the world by the government is to minimize and eventually eliminate the use of cash and other means of anonymous payments,” he says. “We saw it in India recently and in Europe for years.”
“These efforts are ultimately aimed at tracking all individuals for tax purposes and force users to account for all their income,” Vaduva continues. “It’s in essence police-state surveillance tactics for the finance sector. Anonymity and fungibility go hand in hand, and this is why currencies like Monero are fast becoming popular because a segment of the market demands anonymity and privacy. Expecting privacy does not make one a terrorist or an unsavory user. That argument is empty of value and greatly overused. We are not buying it.”
Not every digital currency prioritizing wide adoption and ease of use for the average consumer embraces the notion that anonymity must be sacrificed. Eric Sammons, the consultant for Dash, points out several reasons why maintaining anonymity is an integral element of cryptocurrency.
“Anonymity is vital for a lot of reasons and is an essential characteristic of sound money,” Sammons explains. “A private company might not want to let the world know about a recent acquisition yet, an activist in an oppressive country might not want the authorities to know his financial activities and we all buy personal items we just don’t want to broadcast to the world.”
“But at the same time, there are legitimate reasons for some financial transactions to be tracked and monitored; for example, the purchases of a public company or a government,” he argues. “Dash is the best of both worlds, for it offers a transparent Blockchain while allowing individual users the ability to mix their coins such that one cannot trace their origin.”