Online Currency is not something new, but it has been getting more popular. With online banking, PayPal, and other online payment systems it’s not too far fetched to create a fully online currency… or is it? BitCoin is a currency that works online and is online only. There are no governments controlling it, and no regulations as of yet. But when it gets more popular I bet laws will be created to prevent illegal activities such as gambling.
So what is BitCoin? BitCoin is a digital currency that you can send to people using their “BitCoin Address”. It is an alpha-numeric case-sensitive string that is around 34 characters long. Each user can have multiple unique addresses so they can manage where payments are coming from. So for instance I could have one for personal use, and then one for Business A, Business B and Business C to keep all the payments separate and easy to manage. If you alter your views to consider BitCoins as money it is much easier to understand. You can send and receive BitCoins, and can receive goods and services for the BitCoins you spend. For instance some large companies such as Name Cheap accept BitCoins for the products and services they sell.
Getting started with BitCoins is really easy. All you have to do is install their software. I personally downloaded the ZIP version for Windows so I wouldn’t have to install any software to my computer. After you are all synced with their servers (takes a while) you are ready to start receiving BitCoins. You are assigned a single address right away that you can have people send BitCoins to. To get your first BitCoins if you do not have anything to sell or anyone to give you any, you can buy them. At the time of posting this, 1 BTC (BitCoin) is worth $40.00 USD. Most BitCoin transactions are in the decimal places. BitCoins are divisible to 8 decimal places (0.00000000). Since BitCoins are not accepted everywhere or monitored by the government investing a lot in them can be risky. They could just get taken away and there is hardly anything you can do about it. But with that said BitCoins just a year ago were at a rate around $17.00 USD for 1 BTC, and now are around $40.00 USD, that is a huge increase.
BitCoins are assigned to your computer. If you reformat your computer, delete the software, or buy a new computer you need to make sure you have all your addresses, keys and transactions backed up. These pieces of information can be referred to as “Your Wallet”. If anyone steals your wallet, just like in real life, they have all your money. But in the BitCoin case you most likely will lose everything very quickly since they can just transfer it all away and you are not protected against theft. In real currency the Federal Government protects your money.
So are BitCoins a good choice to use and accept payments from? Well, this completely decides what your business is and who your audience is. I personally do not like BitCoins since it isn’t universal enough. Currency was created to have a universal method to pay and get paid with that all business will accept. BitCoin isn’t like this, only a small fraction of places accept it. Some creative people created BitCoin Casinos and Gambling websites since it is in a grey area of the law. For now it is mostly “legal” and you can make money by using those sites, or lose all your money. In this case using BitCoin is a decent idea if you want to risk your money and possibly breaking the law.