Ten years ago, I don't know how seriously I would have taken the bitcoin phenomenon.

Today, though, I'm taking it very seriously.

#-ad_banner-#I've learned my lesson the hard way. I used to regularly miss the boat on stocks, while other early adopters got ahead of the curve.

In the mid-'90s, I paid very little attention to the developments surrounding the Internet. My parents did the same thing with personal computers in the 1970s.

So with bitcoin I've been paying attention. And what I've learned is that there is real merit to this digital currency. I'm not guaranteeing anything, but I do think bitcoin has a fighting chance.

And there's one virtually unknown company that could soar if bitcoin gains acceptance. It could even be known as the "Amazon.com of Bitcoin" in the near future.

There are some strong economic forces supporting the acceptance of bitcoin. These are the primary reasons why I predict some of the world's most successful businesses are going to be very motivated to embrace the digital currency.

The first big advantage that bitcoin provides over other electronic transactions is cost. Bitcoin transactions involve no fees.

When I first read that, I didn't think it was a big deal. Transaction fees are annoying, but they don't amount to much. But I wasn't thinking about transaction fees from the proper perspective.

You see, in the retail business, profit margins are pretty thin. Even for an online retailer, price competition keeps margins tight. In short, transaction fees do huge damage to the retailer's bottom line.

For example, a typical retailer might have a pre-tax profit margin of 5%. If a credit card company takes 2% to 3% of that in transaction fees, the retailer immediately loses half of its profits.

That's a shockingly big impact, and it's not hard to see why a merchant would be eager to adopt a system like bitcoin that eliminates transaction fees.

The second advantage involves fraud. In theory, bitcoin eliminates the possibility of fraud altogether. While I'm not entirely convinced of that (it sounds a little too much like an "unsinkable ship" claim to me), if bitcoin is able to ensure a greater level of security than traditional currencies, it could be game-changing.

Here's why...

According to a 2009 study by LexisNexis, merchants in the United States lose $190 billion a year to credit card fraud.

The perfect example of how big a problem this is was recently illustrated when Target (NYSE: TGT) had a massive data breach over the holidays. It involved credit card information being stolen and up to 15% of the cards being subjected to fraudulent activity.

Estimates are that this single incident will cost Target $1 billion.

Do you think Target might be interested in a currency system that would greatly reduce such risks?

And merchants don't just suffer from the cost of fraud itself. There is also the cost and massive headaches involved in trying to prevent fraud from happening in the first place.

For merchants, widespread acceptance of bitcoin could be a tremendous financial blessing. It could save companies hundreds of billions of dollars.

I was blown away by the magnitude of the financial benefits that bitcoin could provide to merchants. If merchants are willing to accept bitcoin, then consumers are going to be far more likely to use it as well.

And if bitcoin acceptance grows, I think over time shares of BitcoinShop Inc. (OTCQB: TUCND) could end up being a big winner. (By the way, its ticker symbol will soon change to BTCS.)

BitcoinShop already offers 100,000 different items that can be purchased using bitcoins on its website. From books to movies to toys and hardware, this site seems to have it all.
That's why I call it the "Amazon.com of Bitcoin."

BitcoinShop is a very young company. It was founded just last year by two NASA employees, and it only started publicly trading at the beginning of this month. The company has yet to file its first set of financial statements, which means this isn't a low risk investing opportunity.

That said, the company is seeing some positive early results. Because it is young and only now being discovered, it is experiencing very rapid rates of growth. Products sold have increased more than 10 times in the company's first two quarters, and the number of registered users has gone up sevenfold.

We are talking about an unproven company in an unproven industry, but this could be an opportunity to get in on the ground floor of something that has the possibility of becoming very big.

Think of this as venture capital investing. You make a small investment and realize that you are taking on a lot of risk in exchange for a chance at being part of a potentially huge winner.

Risks to Consider: I would advise investors to wait a couple of months before buying shares in this company. I believe there is some confusion in the market about the number of shares this company has outstanding. This is likely going to create some serious volatility in its stock price until the first set of quarterly financial statements are filed.

Action to Take --> Consider buying shares of BitcoinShop. If the currency takes off, this stock could be a real game-changer.

This article was originally published at InvestingAnswers.com:
Shocking Prediction: This Company Could Be The 'Amazon.com Of Bitcoin'

Related Articles
  1. Budgeting

    Plated Review, Is It Worth It?

    Take a closer look at the ready-to-cook meal service, Plated, and learn how the company can help you take the hassle out of home cooking.
  2. Investing News

    How China's Economy is Now Like America's

    China's economy could take the global economy down with it; why that might be good news in the grand scheme.
  3. Investing News

    A 2016 Outlook: What January 2009 Can Teach Us

    January 2009 and January 2016 were similar from an investment standpoint, but from a forward-looking perspective, they were very different.
  4. Fundamental Analysis

    South Korea - King of Exports

    Read about one the most important and successful exporting countries in the world, and learn more about the types of products it exports.
  5. Investing News

    Volatility Vexed? See What the Experts Are Saying

    Volatile times lead to a diversity of opinions on where the market is headed. Here are takes from five investing luminaries.
  6. Investing Basics

    The January Barometer: Is it Still Relevant?

    The January Barometer has been historically accurate. Will that be the case in 2016?
  7. Investing News

    The 8 Highest Grossing Movies of 2015

    Count down the most popular films at the American box office in 2015, and learn how much they earned in the domestic and worldwide markets.
  8. Economics

    Why the Chinese Economy Impacts the U.S. So Much

    Here's how the Chinese economy, the second-largest in the world, impacts the United States.
  9. Investing News

    Why You Should Be Buying Stocks, Not Going to Cash

    Hedge fund managers are buying up the shares of big companies. What do the managers know that we don't?
  10. Economics

    Why Commodities Aren't to Blame for Market Malaise

    Commodities are taking the brunt of the blame for poor investment performance. Are they the real villain?
RELATED FAQS
  1. What is the long-term outlook of the metals and mining sector?

    An industry agency council was established by the World Economic Forum in 2014 to serve as an advisory board on the future ... Read Full Answer >>
  2. What is the railroads sector?

    The railroads sector is comprised of publicly traded stocks for companies that operate railroad tracks and/or trains. Railroad ... Read Full Answer >>
  3. Who are Amgen Inc.'s (AMGN) main competitors?

    Biotech giant Amgen Inc (AMGN) bills itself as one of the first biotechnology firms. It was founded in 1980 and has grown ... Read Full Answer >>
  4. What's the most expensive stock of all time?

    Back in late August 2012, Apple’s (AAPL) stock price reached nearly $700 per share. The stock has since split but has yet ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center