RBC Capital Markets: Apple should enter the cryptocurrency biz : Apple World Today

As noted by Coindesk, a new report from the brokerage firm RBC Capital Markets posits that Apple might be able to easily generate more than $40 billion from the cryptocurrency business. The company’s move could also help to make the U.S. a technological leader in cryptocurrencies for the next decade or two, adds the global investment bank.

RBC analyst Mitch Steves estimates that the payments firm Square (SQ) generates about US$1.6 billion per quarter in bitcoin-related revenue on an active install base estimated at around 30 million. (Square, Inc. is an American financial services, merchant services aggregator, and mobile payment company based in San Francisco, California.)

“Apple’s install base is 1.5 billion, and even if we assume only 200 million users would transact, this is 6.66x larger than Square,” he says.  “Therefore, the potential revenue opportunity would be in excess of $40 billion a year (15% incremental top-line opportunity).”

According to the RBC report, the research and development cost involved in the effort “would be de minimis in our view as Square’s entire R&D budget is under $1 billion.”

So what is crytopcurrency? A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. 

A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation, according to Investopedia. The first blockchain-based cryptocurrency was Bitcoin, which still remains the most popular and most valuable.

The accompanying image is courtesy of Hudson River Community Credit.