Wednesday, May 22, 2013

Should your business start accepting Bitcoins?

Christopher Null @christophernull May 20, 2013 1:02 PM. Few phenomena have been so widely discussed yet remain so puzzling as the world of Bitcoins. Businesses galore are now asking themselves whether Bitcoin is something they need to take seriously, even though most have absolutely no idea what it is.

First, a primer.

Bitcoins are, in the words of the Bitcoin Project, open-source, peer-to-peer digital currency. For those accustomed to dollars and cents, almost none of that makes any sense at all. Boiling it down: Bitcoins are a synthetic currency that are kept in a "digital wallet" on your PC or mobile phone. Payments are sent from one wallet to another—similar to Paypal—and an in-depth cryptographic system verifies that transactions (such as purchases) are legitimate. These transactions are verified by other Bitcoin users (part of the P2P aspect of the currency), and as a reward, those transaction processors are eligible to receive newly minted Bitcoins. (These amount to free money, but they are exceedingly difficult to obtain. This has led to sophisticated Bitcoin mining operations sprouting up, as well as an entire industry based on supporting of those operations.)

The fever surrounding Bitcoins has created one of the most volatile investments you can find. A single Bitcoin was worth about $20 in February before climbing to a value of more than $230 by April 10. By April 17, they had dropped to $70. And as I write this on May 20, Bitcoins are trading for $122. Speculating on Bitcoins requires either incredible fortitude or a massive amount of blind faith. - Read more here:

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