Microsoft accepts Bitcoins for Purchases - Napster of Cryptocurrency set to explode in Jamaica in 2015 Year of the Sheep

On December 11^th 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 11^th 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).

Due to their heavy encryption, they are often referred to as Cryptocurrency as explained 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. As of Sunday January 11^th 2015, the value of a single Bitcoin in Jamaica dollars is JA$31,782.34 as shown below.

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.

Strangely, despite my searching, I haven't been able to determine who invented Bitcoins though he or she must have been a member of the Open Source community. Somewhat like Operating System Linux inventor Linus Torvald due to the fact that Bitcoins are Open Source.

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 12^th 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 3^rd 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 18^th 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 9^th 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 24^th 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 29^th 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.

Bitcoins