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.
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.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- NZ dollar climbs above 70 US cents on relatively upbeat kiwi fundamentals
- Three fintech start-ups pitch for funds at end of Kiwibank-sponsored accelerator
- Xero makes a special alteration to rival's billboard
- MARKET CLOSE: NZ stocks slip as Manchester concert attack drags on investor sentiment, Comvita drops
- Immigration watchdog says unemployed Kiwis failing to step up in jobs market
Most listened to
- Business leaders on Budget 2017: Failure to set up any significant public-private partnerships for infrastructure is "really disappointing," says Paul Glass
- Serko’s Darrin Grafton says the company can use its SME platform to expand globally
- Trump travels overseas selling jobs as North Korea continues to lash out, on Trump’s Beltway with Nathan Smith
- Nick Shewring says co-working attracts "awesome people doing cool things"
- NBR Radio: best of the week ended May 19, with Grant Walker