On
December 11th 2014, Microsoft made history, again thanks to the
think-different attitude of Microsoft CEO Satya Nadella.
They
became one of the largest companies to start accepting Bitcoins, a form of cryptocurrency that's
slowly gaining traction as a secure alternative
for cash online as stated in the article “Microsoft
Begins Accepting Bitcoin For Windows, Windows Phone And Xbox Purchases”,
published December 10, 2014 by Jon Russell, TechCrunch
and “Tech
giant Microsoft accepts Bitcoin payments”, published 11 Dec 2014 9:29AM GMT
By Matthew Sparkes, The UK Telegraph.
The
announcement can be read on Microsoft's blog in their post “Now
you can exchange Bitcoins to buy apps, games and more for Windows, Windows
Phone and Xbox” .
Microsoft
change to Bitcoins, first noticed by
Coindesk on Thursday December 11th 2014 as per their article “Microsoft
Adds Bitcoin Payments for Xbox Games and Mobile Content”, Published on
December 11, 2014 at 04:51 GMT by Stan Higgins, Coindesk, allows the use of Bitcoins for the following purchases :
1. Video
Games and downloadable or streaming content on Xbox game consoles
2. Windows
Phone Apps and services
3. Purchase
Microsoft software
Currently
only available to Americans, it can only be use in small fixed amounts. Also purchases
made via Bitcoin cannot be refunded. In a way, this is similar to Apple
accepting Paypal as a payment alternative for the UK and US purchases on their
Apple Online Store as reported in my blog article
entitled “Apple
supports PayPal for US and UK Item Purchases - How Jamaicans can purchase Apple
iPhones online as Fappening haunting Apple”.
Microsoft,
in making this decision, is not only being very forward thinking, but is
joining several other companies already accepting Bitcoins as a form of payment as noted in
the article “Microsoft to
accept payments made in Bitcoins”, published 11 December 2014 Last updated
at 12:31 GMT, BBC News:
1.
Paypal
2.
Dell
3.
Expedia
4.
Newegg
Some
may be wondering what exactly is a Bitcoin? Is it like Mobile money? And how it
is more secure than normal money? Also, will this trend continue in 2015? It’s
that an more and in fact, it’s slowly making its way to Jamaica!
What are Bitcoins -
Napster meets Bittorrent and gave birth to Bitcoins
That
short list is quite an impressive one. But first, a video explaining what Bitcoins are exactly. This should be
relatively pain-free.
Bitcoins are really a form of decentralized
P2P (peer-to-peer) communication standard for digital currency, much in the
same way POP3 or SMPT (Simple Mail Transfer Protocol) defines email and IRC
(Internet Relay Chat) defines IM (Instant Messaging).
Bitcoins are obtained by the some 100,000 Bitcoins miners using powerful computers mining
some 21 million Bitcoins from various
mines scattered across various Servers
in a process called hashing. Hashing is used to extract Bitcoins from Bitcoins mines online, often extracting some
25 Bitcoins per block.
The
process is very lucrative and due to the fixed supply of Bitcoins, the currency is unaffected by
inflation, albeit it can gain and lose value based on trading on currency
exchanges due to currency speculators.
As
Bitcoins are Open Source and decentralized,
it can be used for direct payment for goods and services between buyer and
seller with NO banks or middleman to charge burdensome transfer fees. With each
transaction costing mere cents as opposed to thousands of dollars for
traditional Wire transfer or Remittance services.
Something
Banks may not like if they read my article.
Bitcoins transactions are untraceable unless
you decided to place your name on your Bitcoin wallet. Bitcoins cannot be shut down by any Government
due to their P2P, decentralized nature.
They
can be converted to regular cash via Bitcoin Exchanges such as Coinbase or
BitPay, with the Dollars sent to your Paypal account. This is how these
companies actually accept Bitcoin payments as noted in the article “No, Big
Companies Aren’t Really Accepting Bitcoin”, published Jan. 9, 2015 Jacob
Davidson, Time.
So
albeit they are using Bitcoins, it really
just to show that they are progressive, as the volatility of Bitcoins traded on the Bitcoin exchanges make them
too risky to represent real money.
Microsoft and Bitcoin –
Timeline of Bitcoin and Crypto-Currency Transactions explained
Within
that significant shortlist, the acceptance of Bitcoins
actually began with Travel and booking agency Expedia who began accepting them
for Hotel Bookings on Thursday June 12th 2014 as noted in the
article “Expedia to
accept Bitcoin payments for hotel bookings”, published 12 June 2014 Last
updated at 10:40 GMT, BBC News and “Expedia
Now Accepts Bitcoin For Your Crypto-Vacations”, published Jun 11, 2014, Techcrunch.
Newegg,
that uber-popular online retailer of computer parts, began supporting Bitcoins purchases for Computer parts and
accessories on Thursday July 3rd 2014 as stated in the article “Newegg Now Accepting
Bitcoin”, published JULY 3, 2014 11:22AM EST BY DAVID MURPHY, PC World and “Bitcoin
gets buy-in from Newegg, the tech-focused retailer”, published July 1, 2014
5:00 AM PDT by Stephen Shankland, CNET News.
Really
ironic that one; your computer, which can be used in the mining of Bitcoins as noted in the CNN Money
Infographic as well as the article “What
Are Bitcoins? Virtual Currency Explained (Like You're an Idiot)”, published
Nov. 18, 2013 By RUSSELL GOLDMAN, ABC News
can purchase its own parts.
Computer
Circle of Life?
NewEgg
must have made quite an impression on Dell, as by Thursday July 18th
2014, Dell CEO Michael Dell decided to accept Bitcoins
as a payment option for computers as well as reported in the article “Dell
to Adopt Bitcoins to ‘Buy Digital With Digital’”, published Jul 18, 2014
12:35 PM ET By Olga Kharif, Bloomberg
and “Dell
Begins Accepting Bitcoin on Its Website”, published Jul 18, 2014 1:22 pm ET
by PAUL VIGNA, The Wall Street Journal.
But
it was the acceptance of Bitcoin by Paypal's Ebay subsidiary Braintree
announced on Tuesday September 9th 2014 that got my attention as
noted in the article “Paypal unit to 'embrace' Bitcoin
crypto-currency”, published 9 September 2014 Last updated at 11:10 GMT, BBC News and “PayPal’s Braintree
Embraces Bitcoin, One-Touch Payments”, published September 8, 2014 by
Kim-Mai Cutler, Techcrunch.
By
Wednesday September 24th 2014, Paypal themselves actually began
accepting Bitcoins , a report which caught
my attention as reported in the article “New Paypal partnership
enables limited Bitcoin payments”, published 24 September 2014 Last updated
at 12:02 GMT, BBC News.
So
now, Computer Retailers, a Travel Agency and now an online Payment Processor
are now using Bitcoins.
Apple soon to accept Bitcoins
- Paypal as an alternative payment option is Bitcoins by Proxy
So
where is Apple as it relates to the Bitcoin
wagon that slowly and steadily picking up steam, you ask? Technically speaking,
they’ve already accepted Bitcoins,
indirectly.
They've
recanted on a decision relating to the hosting of Bitcoins wallets applications
on Apple's iTunes Store back in June 2014, effectively a stamp of approval for
the fledgling cryptocurrency as echoed in the article “Apple
'stamp of approval' for Bitcoin points away from Apple currency”, published
June 16, 2014 8:00 AM PDT by Rich Trenholm, CNET
News.
Apple
began accepting Paypal as a payment alternative for the UK and US purchases on
their Apple Online Store as reported in my blog article
entitled “Apple
supports PayPal for US and UK Item Purchases - How Jamaicans can purchase Apple
iPhones online as Fappening haunting Apple”, effectively making them also technically
accept Bitcoin payments by proxy.
Within
the same month, on Saturday June 29th 2014, California Gov. Jerry
Brown signed the AB 129 bill, effectively legalizing the use of alternative
currencies such as points, food stamps and cryptocurrencies such as Bitcoins within California as noted in the
article “California
governor signs bill legalizing Bitcoin, other digital currencies”,
published June 29, 2014 12:57 PM PDT by Steven Musil, CNET News.
So
Bitcoins are slowly making a comeback
from the problems of 2014.
Bitcoins Exchange
Withdrawal Receipt Hacking – More Secure Bitcoin Exchanges Needed
Problems?
The
most prominent was the hacking of Mt. Gox, a Bitcoins
exchange in Japan, evidence of a bad Bitcoins Exchange but not a reflection of
the security of Bitcoins as noted from
the article “Collapse
Of Exchange Spells Trouble For Bitcoin” Published Friday February 28, 2014,
The Jamaica Gleaner.
With
this one bad actor out of the picture due to their lax security in checking the
validity of withdrawals, Bitcoins believers were upbeat by February 2014 as
stated in the article “Bitcoin
Entrepreneurs Bullish Despite Tech Trouble”, Published Thursday February
13, 2014, The Jamaica Gleaner .
CES
(Computer Electronics Show) 2015 showing of Bitcoins startups as well as the
acceptance of Bitcoins as a legitimate currency by the companies mentioned above
and now the state of California basically marks a comeback for Bitcoins as
stated in the article “Why Bitcoin is
poised for big momentum in 2015”, published JANUARY 9, 2015, 4:18 PM EST by
Daniel Roberts, Fortune.
This
despite yet another high profile hacking using the withdrawal validation
vulnerability to steal some US$5 million worth of Bitcoins from Slovenia-based Bitstamp as
reported in the article “Hackers
steal $5 million from major Bitcoin exchange”, published JANUARY 5, 2015,
9:25 PM EST by Robert Hackett, Fortune.
Both
these incidents are merely bank robberies, not hacking or printing of more Bitcoins. Bitcoins
are secure; the Bitcoins Exchanges, effectively the Banks in the Bitcoins System, need to be more secure.
Clearly, Bitcoins investors and Venture Capitalists still see Cryptocurrencies as the
future of e-commerce that will revolutionize the internet in much the same way Napster’s
centralized P2P music paved the way for decentralized Bittorrent downloading as
noted in the article “Even
after a $5 million theft, Bitcoin still has true believers at CES”,
published January 9, 2015 03:29 pm By Nitasha Tiku, The Verge.
This
is a reflection of the growing trend of using alternative currencies, despite
the security problems associated with Bitcoins Exchanges and the fluctuating
value. Here in Jamaica, one medical company, Kingston Open MR, has begun
accepting Bitcoins since December 2013 as
stated in the article “Local
medical company now takes Bitcoins as payment”, published Wednesday,
January 15, 2014 by BY SHAMILLE
SCOTT Business reporter, The
Jamaica Observer.
With
Mobile Money now beginning to pick up steam in Jamaica now that JCCUL (Jamaica
Cooperative Credit Union League) JCUES (Jamaica Credit Union e-Payment
Services) has rebranded as Connec Mobile Money and Bill Payment Processor
Paymaster is acting as the Retail Payment Service Providers as reported in my blog article
entitled “JCUES
now Connec Mobile Money - Why Connec Mobile Money still inconvenient despite
Paymaster and Remittances in the JCCUL-Mozido Jamaica mix”, Bitcoins coming to Jamaica is inevitable!
It's
only a matter of time before we start hearing other Jamaican companies
accepting Bitcoin payments for online and even face-to-face transactions
in Jamaica. I'll be doing further investigations on this coming trend in
Jamaica.
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