Alternative payment methods are creeping up on us constantly and continue to challenge the scales of innovation. Bitcoin, launched in 2008 by pseudonymous developer ‘Satoshi Nakamoto’ has been one of the most interesting payment methods posed to individuals and businesses alike in recent years and its success has yet to be defined.
What is Bitcoin?
Bitcoin is three things, a digital currency, a protocol and software that enables the following; instant peer to peer transactions, worldwide payments and low or zero processing fees. Essentially, it is like digital gold. A person can get started using bitcoin by installing a virtual wallet on their phone or desktop In order to get bitcoins you can purchase them through websites such as Coinbase.com. Users can then trade their bitcoins electronically with other individuals or businesses over the internet that also use bitcoin virtual wallets. There are 2.1 quadrillion invisible units of value and no more will ever exist. Each unit is digital, so they are instantly transferable to anybody across the world. Payments are directly sent from one party to the other, without the involvement of any financial institution.
The digital currency is not managed by any financial institution or bank, Bitcoin is not managed or owned by any central authority and is essentially indestructible as long as its means of communication, the internet, still exists. Bitcoin seems to be a wider payments experiment, perhaps a novelty for users that lacks any credible usefulness or benefits. Still in its emerging stages, it is unlikely to see it growing as a steadfast or prominent currency.
Who uses Bitcoin?
Businesses that currently accept Bitcoin include online handcrafted goods trader, Etsy, OKCupid, online dating site and the latest big American business to test out the bitcoin waters are Foodler, where you can order food from over 17,000 restaurants across the United States. Paying for food online with Bitcoin, is in fact not a new concept. Pizzaforcoins, has set up a website which accepts Bitcoins in exchange for ordering a pizza from your local Domino’s.
How is Bitcoin doing as a currency?
In general Bitcoin is not a widely used currency and is subject to a lot of skepticism. The value of bitcoin since its birth has generally been considered volatile, given its fluctuating nature. Bitcoins very own website warns not to invest your entire savings in it, as the price may increase or decrease dramatically at any given time. It has proved successful with many users and businesses alike taking the bitcoin experimental payments plunge, but given its nature has had some growing pains. As an emerging payment method, it is unlikely to see bitcoin as a major competitor or threat to existing merchants.Mobile payments and Near Field Communications have already proved strong in their emerging and teething stages and instantly appear as a more secure, safe and reliable payment method for traditional consumers.
Bitcoin is more than likely to progress as a relatively powerful peoples currency. However many obstacles and a rocky road lie ahead for this payments method and its progression.
Source: http://goo.gl/03iuc
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