Have you heard about Bitcoins or cryptocurrencies? They are the hot, new investment trending in the news today. Bitcoins are being called “the currency of the Internet.” If you have a website that sells goods or services, then it is probably a good idea to start accepting Bitcoins, and possibly some of the other altcoins out there. What are cryptocurrencies and how do you start accepting them on your site? Well, it is incredibly easy to set it up.
Bitcoins(BTC) are a digital currency which was created in the year 2001 by Satoshi Nakamoto, which is most likely a pseudonym. No one knows who actually created Bitcoins. Bitcoins are based on open source software, which means it is open to be used by everyone and there is no central party that has control over it, including any Government entity. It is a digital currency, sometimes referred to as a cryptocurrency, which is owned by no one and uses peer to peer networking and cryptographic proofs. Any Bitcoins that you own can be saved in a digital wallet, which is hosted on your computer or to third party website like Blockchain. Anyone who has a Bitcoin address can exchange or trade the coins with you. Bitcoin can be used as virtual money which you can accept on your website the same way you would accept a credit card. The benefit is that there is no processing fee. The Bitcoins are transferred from one wallet to another seamlessly. This has led to many merchants, including big names like Subway and Overstock.com!
Litecoin(LTC) is the second-largest cryptocurrency behind Bitcoin and was created in an attempt to improve upon Bitcoin. Litecoin uses scrypt in its proof-of-work algorithm: a sequential memory-hard function. Unlike Bitcoin, Litecoins are designed to be mined using the CPU instead of the GPU or an ASIC miner, however, there are new ASIC miners coming out that will have the ability to mine Litecoins. Litecoins are kept in wallets and traded similarly to Bitcoins.
Namecoin(NMC) is an open source transfer system based on the Bitcoin technology. Namecoin allows you to securely transfer arbitrary names, attach data to the names and you can also use Namecoins in trade and the transactions. Even though Namecoins are meant to be used as a decentralized DNS, they can also be traded as currency. They allow domain names to remain uncensored by creating a new top level domain outside of ICANN control. This help to prevent internet censorship, as well as reduce outages.
More and more businesses have started accepting Bitcoins for the goods and services they deal in because the traditional payment methods have high transaction fees and is easier to accept on a website than credit cards. Bitcoin also allows for anonymous transactions. Bitcoin is like peer to peer virtual cash which can easily be transferred as payments over the internet. You can accept Bitcoin just as any other legal currency, like paying in dollars, yen or euros.
You can easily start accepting Bitcoins for your business by starting with a sign on your door or image on your website. You can let your customers know that you have started accepting Bitcoins with an image on your website saying ‘We Accept Bitcoin’. The advantage of this sign is that even if there are hardly any people using Bitcoin, you will create awareness and also influence your customers to trade in Bitcoins for future transactions. It is a conversation starter with your clients and customers. They will be aware of the fact that there is somewhere where they can spend their Bitcoins and may come to you over a competitor who does not accept cryptocurrencies.
Bitcoins, Namecoins and Litecoins achieve value from trading and use, just like the stock market and normal currencies. Bitcoins are “mined” by people with both home rigs and businesses with massive ASIC miner setups. Mining and trading in Bitcoin is on the rise the globe thanks to the increase in ASIC mining chips and devices.
Bitcoins need to be stored in an online wallet via a computer program or a third-party website. You can participate in the Bitcoin network as soon as you have created your virtual wallet. You would need a person’s identification number to send, receive or transfer Bitcoins online. The complete processing would take anything from a few minutes to an hour after your transaction has been thoroughly identified. Most transacations are verified once very quickly, in roughly the same amount of time it takes to verify a credit card transaction. The money is then transferred to your wallet once the transaction is completely processed.
The value of Bitcoin is very highly unstable and uncertain due to a lack of government interference over the transactions and traders who manipulate the price using computer algorithms and automatic computer trading. This is not dissimmilar from stock market trading and the stock traders who participate in high frequency trading. People prefer transacting in Bitcoins, Litecoins and Namecoins since these transactions are just like cash and doesn’t leave a trail like checks or credit cards. The taxpaying system has not been defined yet for these transactions.
At Design Web, we proudly accept Bitcoins, Litecoins and Namecoins as transaction fees. We can help you to set up your web site to accept these cryptocurrencies, as well as credit cards, Dwolla, Paypal, or traditional cash and check payments. Contact us if you are in need of web design or web development and we can help for just a Bitcoin or two!