4 Major Businesses That Began To Accept Bitcoins in 2013!

A popular question that always comes up involving Bitcoin is, "Where exactly can you use it?" Fortunately for Bitcoin investors, the answer to that question continues to grow. Here are four major businesses that just began to accept bitcoins this year.

1) Baidu

Baidu, China's most popular website (frequently referred to as "China's Google"), began accepting bitcoins in October. Although, at this point Baidu is only accepting bitcoins for its security service,
this is still great news for Bitcoin investors, especially given the Chinese government's history of cracking down on virtual currencies in the past.

2) Reddit

Reddit, a social news and entertainment website where registered users submit content, began to accept bicoins in February. Bitcoins can be used to buy the premium reddit gold subscription service which adds a number of features to the Reddit interface. Reddit uses the Bitcoin payment processor Coinbase.

3) OKCupid

OkCupid, a popular free dating website, began accepting bitcoins to pay for certain features in April. OKCupid also partnered with Coinbase to handle Bitcoin transactions.

4) The Pirate Bay

The Pirate Bay (or TPB), a website that facilitates peer-to-peer file sharing using the BitTorrent protocol, started accepting bitcoins for donations in April. It also began to accept another digital currency called LiteCoin.

3 Bitcoin Companies Venture Capitalists Are Getting Excited About

For those who believe that Bitcoin is likely to be successful in the long run, it makes sense to consider investing in companies that aim to improve the Bitcoin economy. Here is some basic information about three of these companies that have been receiving a lot of attention lately.

1) Coinbase
Coinbase is an electronic wallet for Bitcoin. It is described on its website as "the simplest way to buy, use, and accept Bitcoin."  Coinbase is based in San Francisco, California and was founded in June 2012.  It has aimed to provide a service similar in experience to "Paypal" and launched its method to buy and sell bitcoins using a linked bank account in October of 2012. Coinbase investors include Start Fund, Funders Club, Greg Kidd, Garry Tan, Y Combinator, Adam Draper, and IDG Ventures.

2) Coinsetter
Coinsetter is a funded NYC-based levered forex trading platform for Bitcoin. It's goal is to enable traders to make levered trades on margin and short the Bitcoin market. It's blog promises that, "Through its focus on security, transparency and a great user experience, Coinsetter will be working to make bitcoin more accessible to both mainstream and institutional traders. In an ancillary arm, Coinsetter will also offer the first scalable solution for accredited investors and institutions to earn interest on their bitcoins." It announced in April 2013 that it had raised $500,000 in seed capital. Coinsetter investors include Tribeca Venture Partners, Barry Silbert, Jimmy Furland, Charles Songhurst, Ben Davenport, and Roger Ver.

3) BitPay
BitPay is an automated Bitcoin payment processing system that boldly quotes on the front page of its website that "“Credit Cards were never designed for the Internet!” It enables online merchants to except bitcoins as a form of payment. The service first launched in July 2011. It announced in January 2013 that it had raised $510,000 in capital. Bitpay investors include Barry Silbert, Shakil Khan, Jimmy Furland, and Roger Ver.

Interesting Things People Are Saying About Bitcoin (Part II)

Last week I posted a blog about 5 Interesting Things People Are Saying About Bitcoin. Well, as theories and speculation about Bitcoin continue to make top headlines, here are five more interesting things people are saying as well as a few of my personal opinions.

1) "Whatever It Is, It's Not Money!"
Forbes contributer Steve Forbes claims that Bitcoin is not really money because it has no fixed value, is volatile, and is not transparent. But does any currency really have a fixed value? Isn't the value always relative to what you can do with it? One cannot disagree that the price is currently very volatile, but I don't necessarily think that this makes Bitcoin completely irrelevant. As long as I can use bitcoins to buy some stuff then it certainly seems like real money to me.

2) "Even if it crashes, Bitcoin may make a dent in the financial world"
An article in The Economist compares the impact that Bitcoin may make on the financial world to the impact that Napster made on the music world. The articles states, " Napster and other file-sharing services have forced the music industry to embrace online services such as iTunes or Spotify. Bitcoin’s price may collapse; its users may suddenly switch to another currency. But the chances are that some form of digital money will make a lasting impression on the financial landscape." With potential Bitcoin alternatives out there or being developed (i.e. Ripple), it isn't unreasonable to assume that Bitcoin is just the beginning.

3) "Bitcoin Isn’t the Only Cryptocurrency in Town"
Alternatives currently on the market include litecoins and PPcoin. So why is Bitcoin getting all the attention? Well, for one the value of all the bitcoins in circulation (currently over $1 billion) is over twenty times times higher than the second largest cryptocurrency Litecoin. Still, the point is that Bitcoin does have some competition, and some of the newer currencies may have some advantages over the Bitcoin model that investors should take into consideration. The big question is, will competition help or hurt the overall digital currency market?

4) "Bitcoin Doesn't Have a Deflation Problem"
One of the main arguments against the future success of Bitcoin is that the limited supply will lead to deflation issues. The basic argument is that an expected increase in future demand will lead to an expected increase in future value which will cause people to hoard bitcoins rather than spend them causing a crash. Forbes contributer Timothy B. Lee disagrees making the argument that " if market participants become convinced that 'the price of a bitcoin is on a steady upward trajectory,' they’re not going to hoard their Bitcoins for weeks or months waiting for the price to rise. They’ll bid the price up right away. And that means there will never be a significant period of time where people generally are hoarding their Bitcoins in anticipation of future price rises. In equilibrium everyone who thinks Bitcoin is under-valued already has all the bitcoins he or she is willing to pay for."

Bitcoin 101: An Introduction To This Facsinating Digital Currency!

You may have heard about Bitcoin in the news but how much do you really know about this digital currency? Here are the basics!

What exactly is Bitcoin?
Bitcoin is an untraceable digital currency that is not controlled by any government. Bitcoins can be transferred among online users without a financial intermediary. 


How long has Bitcoin been around?
Bitcoin was launched in 2009.


Who created Bitcoin?
No one knows the founders real identity. Bitcoin was started by a developer (or group of developers?) that used the pseudonym Satoshi Nakamoto and has since disappeared. 


Where do you keep Bitcoins?
Most Bitcoin holders set up a virtual wallet through a third party website. You could also store Bitcoins on your computer. 


How do you spend Bitcoins?
If you have a virtual wallet you can send them to other virtual wallet holders as long you know their anonymous identification numbers. 


So are these virtual wallet firms basically just banks for Bitcoins?
In a sense, but most banks invest the money you deposit with them while Bitcoin wallet firms generally don't. Also, unlike most banks, Bitcoin wallets do not have the backing of federal government insurance on deposits (i.e. FDIC).

Is Bitcoin a very stable investment?
No, the price of Bitcoin is currently very volatile. That's not to say it is a bad investment in the long term. Time will tell. 


Where do new Bitcoins come from?
The creation of new Bitcoins is automated and limited (to twenty one million). As new Bitcoins are created they are obtained by a process called "mining" where computers compete to solve very complex mathematical problems the fastest. The fastest solver for each problem wins a specified amount of the new Bitcoins and then a new problem is presented.

If Bitcoins are untraceable won't they likely be used for illegal transactions like drug trading?
Yes. This is one worry many people have about Bitcoin. 


How many Bitcoins are there?
As of January 2014, approximately 12.2 million Bitcoins have been created. The total supply will be limited to 21 million.

Can a Bitcoin be divided in smaller units?
Yes. Each Bitcoin can be divided in 100,000,000 smaller units, defined by eight decimal places.

Why is Bitcoin transformative?
According to http://www.bitcointrust.co/, "The price of bitcoin has increased significantly over the past year as early adopters and notable thought leaders have recognized the potential for bitcoin to innovate and disrupt as 1) store of value; 2) global currency; and/or 3) global transaction network.

5 Interesting Things People Are Saying About Bitcoin

1. "Bitcoin Is A Disruptive Technology"
Forbes contributer Timothy B. Lee called the bitcoin a "disruptive technology," referring to a term coined in Clay Christensen’s The Innovator's Dilemma to describe something that is simpler and cheaper (although often inferior) than what is already in the market. He compares the current bitcoin economy to the PC market in the late '70s in the sense that while it may now just be something that a few nerds are playing around with, the right applications could turn it into something more. From Lee's perspective, "When people dismiss bitcoins because they can’t think of how they’d use it, they’re missing the fact that bitcoin is a platform, not a product in its own right."

2. "Chinese People Will Drive The Next Bull Market In Bitcoin"
Quartz writer Gwynn Guilford offered several reasons for why the Chinese may be likely to join the bitcoin craze. One is the potential of the bitcoin to help the Chinese people evade strict currency controls which can make it difficult for them to buy stuff online. The inability of the government to track the transactions or circulation of bitcoin may make it impossible for regulators to crack down on.

3. Bitcoin "Tells Us Something Important About The Nature Of Money"
Although he calls the bitcoin "ludicrous", Neil Irwin points out that it raises the question "What is money?" He says that we need to think of money as an idea rather than a thing and that it is just "the way we as a society record how much capacity to buy stuff each of us possess." Regardless of whether it is tied to precious medals, or central banks, or very difficult math problems, it is only as good as what you can do with it.

4. "Bitcoin's Volatility Is A Disadvantage, But Not A Fatal One"
Forbes contributer Timothy B. Lee suggests that the bitcoin is volatile because it's a "startup currency" and that its volatility will decline once people learn more about the bitcoin platform's potential. Although he admits that the bitcoin is still likely to have higher volatility than conventional currencies, this isn't as important if we stop making the mistake of thinking of the bitcoin as a replacement for conventional currencies instead of focusing on its potential to serve special niches. In other words, there are cases when the advantages of using the bitcoin may be worth the extra volatility.

5. Bitcoin "Says Something Important About The Current And Future State Of The Global Economy"
Times writer Micheal Sivy wrote that the bitcoin's recent gains are not merely a result of speculation but also reflects "anxiety about the safety of the global banking system and the stability of major international currencies." Internet currencies may offer an alternative for investors worried about government control and fiscal policies. Bitcoin may just be the beginning.