The odds are the virtual currency Bitcoin will be accepted by a business near you, wherever you are in the world, very soon.
Despite worries over online security, Bitcoin apps and web sites are proliferating on the internet and a Bitcoin point-of-sale payment app and cash machines are rumoured to be in development.
Already, traders and organisations as diverse as a British university, pubs and more than 400 restaurants across 28 states in the USA accept payment in Bitcoin. Food giant Burger King also takes Bitcoin in the USA.
American online retailers welcome payment in Bitcoin for gift vouchers for exchange against goods, including Amazon, lingerie designer Victoria’s Secret and clothing retailer GAP. eBay is also said to be setting up a Bitcoin payment system.
As the interest and infrastruture around this digital currency grows, it seems that investors should not write off Bitcoin as potential high return safe investment. The number of outlets taking the currency is increasing across the world, especially in Europe, where Bitcoin has taken hold as seemingly more than a geeky fad.
Who takes Bitcoin payments?
Now, Bitcoin exchanges reckon more than 7,500 pubs and eateries in Britain will take the currency.
One of the main attractions for Bitcoin spenders is the virtual currency has no ties to central banks or commodities, so although the value fluctuates according to market demand, outside factors have no influence.
This means a Bitcoin is worth that day’s Bitcoin exchange value regardless of if the owner crosses into another currency zone, unlike other currencies.
For instance, a traveller flying from London to New York will see their money rise or fall in value according to the US dollar/GB Pound rate, but a Bitcoin value remains the same against both currencies.
Currently a single Bitcoin is worth around £350 – although the high has hit £650 and the low £12.
Rates are set daily by specialist exchanges.
Getting hold of Bitcoin
Bitcoins can be obtained in two ways – buying from an exchange or by solving complicated mathematical problems online.
Free open-source software for generating Bitcoin is available from the currency’s web site. The software sets the problems and links into the Bitcoin generation system.
Bitcoin suggests new miners should join small groups of like-minded individuals to protect the security of the currency and their own computer systems.
Software dictates 50 new Bitcoin are minted every 10 seconds, but over time, the minting rate slows.
More than 4 billion Bitcoin are in circulation, but the computer systems generating the currency are set to limit stocks to 21 billion Bitcoin.
Hello, as a Bitcoin user, I need to offer some corrections to your article.
The proper term is mining, not minting. A Bitcoin miner helps solve the mathematical problems that validate each Bitcoin transaction; if the problem is solved, the miner receives a “reward”: all or part of a newly created block of Bitcoins.
That reward was originally 50 BTC, but has dropped to 25 BTC. The reward is halved after a certain number of transactions, by design. You should also double-check the time period of 10 seconds you cited.
The link you provide to Bitcoin Core is for a Bitcoin wallet, in which you store your Bitcoin. It is not mining software. To mine Bitcoin now requires fairly expensive, specialized computer hardware, and a different program. Using one’s PC to mine Bitcoin is a losing proposition, because the mathematical problems require more computing power than the typical home or office PC has.
Finally, as a financial matter, Bitcoin exchange rates differ slightly among the various exchanges. There is as yet no single global Bitcoin exchange rate. Also, the exchange rates are more volatile than for fiat currencies, so it’s possible your Bitcoin will lose value on a short trip abroad. I mention these facts to caution newcomers who may want to use Bitcoin during international travel.