In the end, buying him an image of a blue cartoon cat did not cost millions. But it was far more expensive than I expected. Why? Fees. Fees to buy the cryptocurrency ether, to transfer it to my crypto wallet, and to execute a purchase, which included an eye-popping mining charge due to congestion on the network.
For my father’s sake, I’ll stay mum about how much I ultimately spent. I will say, given that the fees cost more than the NFT itself, it was more than I’d typically recommend shelling out for a quick laugh.
Because I spend most of my time writing about finance, the episode also made me wonder: Between volatility and high transaction costs, do cryptocurrencies really have a future as a widespread means of spending?
But even after addressing added costs, the massive run-up in the prices of popular cryptocurrencies like bitcoin and ether may make people hesitate to part ways with them.
“I don’t think people are looking at it from a spending perspective. People are looking at it as an investment still,” Eleesa Dadiani, a London-based art dealer and crypto broker, told me.
“Why would you want to spend an appreciating asset on a depreciating product? It just makes no sense,” she said.
Bill Zielke, the chief marketing officer at BitPay, which executes crypto transactions between businesses and consumers, agrees that fees remain a barrier. But there’s lots of innovation happening that could solve such problems, he said.
“I think the industry is very aware that fees are something that has to be addressed for us to continue to see growth,” Zielke told me.
On volatility, Zielke notes that customers can hedge their bets by holding multiple cryptocurrencies, or by liquidating some of their portfolio at an opportune moment.
He acknowledged that there are still plenty of people in the crypto community who want to hold their coins — or HODL, in industry parlance — while they increase in value.
But as bitcoin, ether and even dogecoin gain steam, Zielke said there’s been growing interest in translating gains into luxury purchases, from boats and watches to homes and planes. That makes him optimistic for the future.
“As consumers continue to HODL, and that balance continues to grow, at some point they’ll … leverage it and spend,” he said. “And we want to be there.”
Clashes over human rights complicate business in China
The strains over Xinjiang — where US, EU and UK authorities have accused the Chinese government of repressing Uyghurs and other minority groups through forced labor, mass detention and sterilization — has ensnared a growing number of businesses and trade relationships in recent months, my CNN Business colleagues Jill Disis and Selina Wang report.
Beijing has vehemently denied all the allegations, and says its camps in the region are “vocational training centers” designed to combat terrorism and religious extremism.
But late last month, a landmark investment deal between the European Union and China was cast into doubt after officials traded sanctions over Xinjiang.