If you've been poking around on the Internet of late, you've probably noticed something called Bitcoin. You can use it to pay for things online, and more and more shops, bars, and restaurants are accepting Bitcoin as what is known as a cryptocurrency - a currency that allows you to send and receive it using coded "account numbers." Like Paypal, I can send anyone in the world a Bitcoin and they can spend it from anywhere. It is also completely untraceable.
Here's what you need to know to use it and why it could be the future of money.
First things first: why should you care about Bitcoin? Well, if you run a store, someone will ask you about Bitcoin and it makes sense to have an answer. "Accepting" Bitcoin is as easy as showing your client a QR code or set of numbers they type into their account. The system sends the cash almost instantly - there's a brief transmission period and the money goes into the account of the person or business being paid.
To accept Bitcoin all you need to do is create a "wallet" on a service like CoinBase. CoinBase lets you buy and sell Bitcoin right through their system and is a secure way of holding onto your coins. You can also store them on your own computer, but that's a bit more difficult. And you can join a service like CoinFlash to sell Bitcoins for cash from your home or business. You essentially become a Bitcoin ATM.
Is Bitcoin legal? Yes. It is as legal as any other currency. It's basically a way to transfer value over the Internet. When you move money into it - just like you would move cash into a bank account - you essentially buy virtual coins. Their value can go up and down (and the currency is pretty volatile, so I'd only keep things in there on the short term) but you're basically buying a currency.
It's also a great way to send money overseas. It's quick and easy to use and especially helpful if you want to pay for something in another country and you're concerned about security or exchange rates. Bitcoin has no connection to your bank account or credit card number.
Bitcoin is weird, that's for sure. It doesn't make a lot of sense and it's a little bit dangerous if you care about economic risk, but it works in theory and in practice. People will be using it sooner than we all think and it's going to be interesting once things really get going.
My advice? Learn a little about them. Though I wouldn't recommend buying them as an investment right now, I would suggest using them if you run a business online -- or in real life.
Have you heard of Bitcoin? Think you'll use it?