Digital currency continues to spread (and divide)
Two casinos in Las Vegas are the first to accept transactions in bitcoin, the digital currency created in 2009, based on an open-source platform for direct transactions between users.
The owner company announced that the D Las Vegas and Golden Gate hotels and casinos will now accept bitcoins. A spokesperson said the decision was made as more and more customers asked about the possibility of using the digital currency.
The Golden Gate, built in 1906, is the oldest casino in Las Vegas and was once a pioneer in the adoption of new technologies. It is noteworthy that it was the first to be connected to the telephone network in 1907.
The cashiers of the two casino-hotels were equipped with iPads and transactions will be carried out through the BitPay application. Bitcoins are credited to the user's digital wallet, being manageable also via mobile devices. To make a payment, the user sends an encrypted message to the network of creation and management of bitcoins.
One of the key features of bitcoin – and the reason it has come under the microscope of law enforcement agencies such as the FBI – is its substantial anonymity among transactors. The production (or mining) of new bitcoins continues uninterrupted, through a process related to the execution and encrypted completion of all transactions. It is estimated that 25 new bitcoins are created every ten minutes.
Computers that contribute their processing power to the Bitcoin network create the digital currencies and as a reward, their operators receive some new bitcoins. All transactions are recorded in a digital ledger that is visible to all participants.
Bitcoin is quite popular in China, where the largest online exchange (BTC China) operates with real money, based on transaction value. Its exchange rate fluctuations are often dizzying and create so-called “bubbles”. In 2011, the value of a bitcoin jumped from 0.30 cents to 32 dollars, only to plummet later that year to two dollars. Increased media attention since mid-2012, as well as events in the Cypriot economy, are believed to have been among the reasons that caused bitcoin to take off again in April 2013, when it reached $266, falling back to $50 shortly after. On November 19, the bitcoin exchange rate on the Japanese exchange Mt.Gox shot up to $900, following a hearing in a US Senate committee, where it was argued that virtual currencies can be considered a legitimate financial service. On the same day, one bitcoin was trading at $1,100 in China. With more than 12 million bitcoins already in circulation online, by the end of November the total valuation is estimated to have exceeded $10 billion for the first time.
To avoid the phenomenon of "mining" inflationary money, based on the complex protocols for creating bitcoin, its creators have stipulated that the number of available bitcoins will not exceed 21 million in the future, as their production through increasing transactions becomes increasingly time-consuming, requiring more computing power.
In early December, the People's Bank of China announced that it was banning the use of bitcoins by Chinese financial institutions, a development that has pressured its parity with the dollar. In recent days, bitcoin has been trading at $825 on the London-based European exchange (bitstamp).
Bitcoin has divided economists. Some describe it as a functional solution to the inevitable creation of a digital currency, while others – such as Paul Krugman, known for his interventions on the eurozone crisis – see it as an unreliable value mechanism. However, it seems to have attracted the interest of some Wall Street investment groups, who are said to have made investments of several million dollars. Already, in several countries, including Germany, it has become clear that bitcoin falls under income provisions – although it is not referred to as a currency but as a unit of account – and in others, such as Norway, the taxation of transactions is underway.
However, there are well-founded allegations that bitcoin is very often used in online arms and drug smuggling or for illegal betting.
It is estimated that bitcoin is currently accepted at more than 35,000 online stores and service providers around the world, while as in the case of casinos in Vegas, the number of physical businesses accepting transactions in the digital currency is rapidly increasing – especially in the US. Another recent example is the Sacramento basketball team, which at the beginning of the year became the first to accept payments in bitcoins.
In the Greek market, there are a few dozen businesses that accept payments in bitcoins, as the first restaurants are listed in the bitcoinx.gr directory, among others.
Source: protothema.gr
