What is a bitcoin, you might ask? Wikipedia defines it as this:
- Bitcoin is a peer-to-peer payment system and digital currency
introduced as open source software in 2009 by pseudonymous developer
Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses
cryptography to control the creation and transfer of money.
The bottom line is it's money that isn't governed by anyone yet it represents real value. Bitcoins only exist online and once purchased (or mined, read the wikipedia article to see what this means) they are stored in virtual wallets. In early 2013 the value of bitcoins were around $13.00. By the middle of December they were valued at $1,200.00. In hindsight, I wish I had bought a boatload of these things when the gurus on the Emerging Technologies steering committee were discussing them.#Medium(151-250) #FutureandEmergingTechnologies #Small(under151) #Large(251-500) #VeryLarge(over500)
So what can you use bitcoins for? Why, to purchase things, of course! Bitcoins aren't restricted to online use either. At least not for the purchasing phase. I recall in the early days of reading about bitcoin that a traveler in the UK had lost his wallet. He put out the word online and found someone willing to buy bitcoins from him and pay him in cold, hard cash! The traveler did just that so that he had some walking around money until he could get his credit cards replaced.
In and around Santa Cruz, California people are welcome to pay for shuttle busses, wine tours and other services (even weddings, according to cnbc.com).
But, here's one of the major hurdles bitcoin has leaped over. On January 9th, Overstock.com began accepting bitcoins for purchases. In the first day they received over $126,000 worth of payments in this "new" currency. Not a gigantic amount based on their average sales but if the trend continues it could be around 4% of Overstock.com's daily sales. That's not a paltry amount by any means.
With bitcoin now hitting some of the mainstream online retailers its popularity continues to soar. I can see Amazon.com being the next big acceptor of bitcoin (however they have denied that they will be doing this anytime soon). Even Overstock.com's CEO expects the other retailers to follow suit.
Now don't let me make you think these mainstream businesses are at the front of the pack when it comes to accepting bitcoin... Places like SilkRoad and the Assassination Market (google them) were out there a few steps ahead and bitcoin has been used for many other shady dealings: purchasing stolen credit cards, purchasing illegal weapons and money laundering, just to name a few.
As crazy as bitcoins, and their widespread use, has become. I can't wait to see this technology take the (rest) of the world by storm.