You may have heard a lot about the Bitcoin currency without really understanding it. Part of the complexity with Bitcoin is that it really isn’t like any other currency that we are currently dealing with – it is almost like a virtual or digital currency.
How do you get Bitcoins?
Unlike most other currencies that we use in our day-to-day lives, there is no central bank, printing Bitcoin notes or producing Bitcoin coins. Bitcoins are created through payment processing work – as a reward for users who have offered their computing power to verify and record payments in the public ledger. It is generally called Bitcoin mining, but effectively you are receiving a fee for services rendered – instead of being paid in Pounds Sterling or US Dollars, you are being paid in Bitcoins.
The other way that you can obtain Bitcoins is that you can accept Bitcoins as payment for goods or services that you are providing. The reason that you might choose to accept Bitcoins over other forms of currency payment is that the fees are generally lower for Bitcoin transactions, so your returns will be higher. Unlike credit cards, the transaction fees are paid by the purchaser and not the vendor.
As a digital currency, you can send an receive Bitcoins using online services – storing your Bitcoins in a digital wallet until you want to spend them or move them.
What can you buy with Bitcons?
With the growing acceptance of the Bitcoin currency, you can now use Bitcoin to buy services online as well as purchasing physical goods also. Generally the payment for either online services or physical goods will be made via an online payment but increasing businesses are exploring accepting payments on the spot via a digital wallet on a mobile device.
There are a range of directories that list companies that accept Bitcoins, but often these are quite obscure and don’t offer anything that you’re interested in purchasing.
Overstock is a good option as it is more like an online department store and offers a huge range of products – and its payment options include Bitcoins.
TigerDirect is an online computer and electronics retailer that now accepts Bitcons.
UK Theatre Tickets Direct is now accepting Bitcoin if you fancy catching a show while you’re in London.
Another option is to buy a Gift Card – a number of gift card suppliers accept Bitcoin so that you can turn your virtual currency into an actual currency Gift Card that can then be used at a huge range of high street stores.
What are the risks in using Bitcoins?
As a relatively new currency, there is still quite a lot of confusion and uncertainty as to the value of Bitcoins and how you use them for day-to-day transactions. Many of the normal consumer protections do not yet apply to transactions that have been made with Bitcoins. Bitcoins can be stolen and (unlike credit card or bank fraud) it is not possible to correct fraudulent transactions. The value of Bitcoins continues to be relatively volatile – this is primarily because commercial use of the Bitcoin currency is relatively small so there is not the volume of transactions required to establish a stable market. There is also some evidence that Bitcoins are being used for illegal activities as the virtual nature of the currency makes it easier to avoid regulation or detection by law enforcement authorities.
If you’ve got some Bitcoins burning a hole in your digital wallet and you’re ready to spend the, the options on what you can purchase continue to grow.