Have you heard of a bitcoin? If you haven’t, brace yourself. It’s the way customers will buy goods and services in the not too distant future. The bitcoin is quickly proving to be a real alternative to traditional methods of payment.
The bitcoin started in 2008 as a way to exchange currency on the Internet across all countries with no centralized authority. This peer-to-peer digital currency initially took off among select groups, namely the gaming industry. Bitcoins can be exchanged for real goods, services or cash. One bitcoin today is the equivalent of about $70.
Bitcoins have gained popularity and made international news a couple weeks ago when a Norwegian man cashed in the bitcoins he bought in 2009 to buy a home. He had bought 5,000 bitcoins for $24 while researching his thesis and forgot about them until they gained some momentum earlier this year. He checked his virtual wallet and discovered they were valued at more than $866,000.
Naturally, it’s driving interest in bitcoins. Further driving the value of the currency is that only 21 million bitcoins will ever be available. No more can be created, under this system.
How to Get It
Anyone can load and create an encrypted wallet for bitcoins. Apps are available for mobile devices, laptops and other hardware.
Then, the mining begins.
Within the Worldwide Web right now, people are searching for these encrypted bitcoins. Programmers have developed software to help decipher the code to uncover an unassigned bitcoin. The process can take months. Once individuals obtain a bitcoin, they receive a bitcoin address.
Bitcoin wallets now are available through apps for mobile devices and computers, hardware devices and even paper tokens. If you type “bitcoin” in the search bar, you’ll find places that already accept bitcoins as currency.
Value Soars
The value of bitcoins is soaring as more people learn about the new currency and media attention continues. One bitcoin was worth about $13 earlier this year and about $70 a week ago. On Wednesday, the bitcoin reached a new record when it traded for $425 on the Toyko-based Mt. Gox exchange.
The bitcoin may have started as a programmer’s game or even a way to more easily exchange money online. But it’s proving itself as a viable – and even preferred – payment method. While it may begin on the Internet with businesses that focus on selling goods and services online, the bitcoin is likely to translate to offline soon. Yes it won’t be long before we’re asking, “Will you be paying by check, credit, or bitcoin today?”
