Bitcoin makes mainstream moves

The digital currency platform Bitcoin is making moves into the mainstream with some recent deals aimed at securing its legitimacy.

The most recent – and probably most significant – deal involves Bitcoin-Central, a European Bitcoin exchange, becoming a registered payment services provider (PSP) under European law.

PSP's are online payments systems such as PayPal and WebMoney, which allow people to pay for goods and services via websites.

The deal was made in France between Bitcoin-Central, investment bank Aqoba and the Credit Mutuel bank.

Bitcoin-Central now has an international bank ID number, meaning it can send and receive transfers between other banks and issue debit cards, according to The Guardian.

The deal has the potential to bring Bitcoin into the mainstream, allowing its use for a much broader range of services.

It also means users could be issued with debit cards, so Bitcoin could be used as payment in physical shops as well.

The value of a Bitcoin is currently £8.54, much lower than its peak of £18 in June 2011.

WordPress adoption

Further evidence of Bitcoin being accepted more widely is that WordPress, the popular blogging site, will now accept Bitcoin as payment for its services.

WordPress said it wanted to open itself up to Bitcoin so users from countries which do not support PayPal or credit cards can still use their service.

"We don't think an individual blogger from Haiti, Ethiopia, or Kenya should have diminshed access to the blogosphere because of payment issues they can't control," WordPress said.

WordPress is a massive service. It powers the blogging platform for the New York Times, CNN and Reuters, among many others, according to Forbes.

There are nearly 60 million WordPress sites written in 120 different languages.

One of WordPress' main arguments for supporting Bitcoin was deficiencies of the centralised bank card associations.

"Unlike credit cards and PayPal, Bitcoin has no central authority and no way to lock entire countries out of the network.

"Merchants who accept Bitcoin payments an do business with anyone," WordPress spokesman Andy Skelton says.

In Bitcoin Magazine, Vitalik Buterin points out another of Bitcoin's virtues; anonymity.

"Many bloggers that operate in restrictive regimes do so using pseudonyms for their own protection, and traditional payment methods like credit cards and PayPal are unusable for those bloggers because they expose the payer's physical identity.

"Bitcoin, on the other hand, offers its users a large degree of anonymity, giving bloggers, dissidents or simply people trying to live their lives in authoritarian regimes a much greater chance at evading persecution."

Bitcoin's underground reputation

Since Bitcoin was launched in 2009, it has become associated with sites such as the Silk Road, which enable users to buy all kinds of illegal materials anonymously.

For people buying illicit drugs, pornography or weapons, Bitcoin was an ideal payment method for avoiding detection from authorities.

Bitcoins are not physical items, existing only as computer code.

They are completely anonymous. There is no central issuer or disputes service, and once a transaction is completed it cannot be undone.

The system is run entirely by the online community.

Bitcoins are released into the system via a complicated computer process called "mining".

The process ensures the market is not flooded with Bitcoins, to prevent hyper-inflation.

But despite misgivings about their use for illegal activity, proponents will point out traditional money rarely stops people buying drugs or weapons anyway.

Whatever the advantages of the Bitcoin system, its use is increasing.

This year alone there have been some five million Bitcoin transactions, double what there were in 2011.

callison@nbr.co.nz

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13 Comments & Questions

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Thanks for the good article, Caleb. As with the beginning of the internet in the late 1990s, super new things always seem to start with the 'shadier' industries. Right now, we're seeing Bitcoin enter the mainstream and it's a trend that will continue.

Cheers,
Charles B.
Owner, http://www.RoyalBitcoin.com

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Interesting, a stateless currency.

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Bitcoin is most assuredly NOT completely anonymous although step can be taken to make it more so. Do your homework.

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Loving this concept, and hope to see it succeed. My question is, will the US government allow it? Can they do anything about it?

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There is nothing to allow/deny its already in place and being used in the US.

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It can be made anonymous, or Silk Road wouldn't have done 22 million dollars in sales this year. Some folks have said this form of currency will fail because it will only be used for money laundering. If it really was only used by criminals for laundering money, that shows me that it's working quite well. That argument also ignores the fact that government-issued "legitimate" currencies and their supporting institutions are presently doing the lion's share of the laundering.

Governments fear this currency because it is basically a digitized system of barter that keeps them out of the loop.

JohnnyX
Owner
4bitcoin.tk

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Great article Caleb!

bitcoindomainsforsale (dot) blogspot (dot) com

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This definitely makes Bitcoin more valid. Not necessary as 'currency' to hold, but clearly as 'currency' to use in money transfer.

http://www.bitcoiney.com

Its easy to see that if more companies accept Bitcoin payments in ANY form, then Bitcoin will benefit, from few reasons like increased trust and increased visibility. And that means more people will decide not only to use temporary bitcoins to pay, but later also more people will decide its safe to hold some of their wealth in bitcoin.

As a side note, what you said above is exactly same for most US companies that would accept EUR payment. They set price of their goods in US$, and allows you to pay EUR, but then in most cases convert that EUR in US$ to avoid risks of currency fluctuations.

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Good article! Bitcoin breaks ranks with all the common beliefs people have about currencies: not issued by a government, not backed by anything except itself, not centrally controlled, totally global, not subject to banking restrictions/fees. Bitcoin is today what email was in 1992. An incredibly valuable tool, but not yet widely used.

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Bitcoin's attractive features that you cite for Wordpress would be dramatically less appealing to those users if they had to go through registered, government-approved exchanges like Bitcoin-Central.

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Bitcoin's attractive features that you cite for Wordpress would be dramatically less appealing to those users if they had to go through registered, government-approved exchanges like Bitcoin-Central.

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Bitcoin is really about monetary freedom. As others have noted, it is 'stateless' and doesn't suffer from bad monetary policies or political whims.

It has the potential to do something that hasn't been possible thus far - put control of financial transactions into everyone's hands, instead of being dictated to by a banking and political monopolies.

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Mmmmmm, monetary freedom.

monetaryfreedom.org

Click on the "Resources" link ... information to help you get your head around the coming revolution.

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