Bitcoin finding its way from cyberspace to North Jersey shops
SATURDAY FEBRUARY 15, 2014, 11:56 PM
BY JOAN VERDON
STAFF WRITER
THE RECORD
A streetwear clothing store in Bergenfield will sell you a camouflage hoodie for about 0.10862 bitcoin. It’s received bitcoin for online orders, but so far no one has walked into the Jeffersons’ storefront and asked to pay with it.
At Helen’s Pizza in Jersey City, you can buy a slice for 0.00339 bitcoin by pointing your phone at a sign next to the cash register.
For 0.10560 bitcoin, at the current exchange rate, A Class Limousine will pick you up at Newark Airport and take you to New York City.
Those transactions, calculated at Friday’s exchange rate, are small change in the bitcoin universe, in which more than $60 million changed hands on an average day last week, but they are a sign that the 5-year-old virtual currency is inching its way out of cyberspace and onto the main streets of New Jersey.
Bitcoins are digital cash. The technology behind it — Bitcoin (singular with a capital B) — lets someone convert dollars into digital strings of encrypted numbers — bitcoins (small b) — that can be sent around the world as easily as email.
– See more at: https://www.northjersey.com/news/bitcoin_jersey_city_new_currency_digital.html#sthash.bWc7is3F.dpuf
What are they?
Bitcoins are created when computers solve complex mathematical problems. The problems become more difficult in order to limit total bitcoin supply. Bitcoins are blocks of data that can be transferred digitally from one owner. They exist only online.
How can I get some?
Bitcoins can be purchased for dollars, euros, yen or other national currencies on more than 40 trading exchanges. As of 5 p.m. Friday, one bitcoin was worth more than $600. That is how most people acquire them. They also can be earned in exchange for goods or services. Or you can become a bitcoin miner and be paid in bitcoin for running a program on your computer that processes bitcoin transactions.
Who invented bitcoins?
The science behind Bitcoin — with a capital B, the software protocol governing the creation of bitcoins — is credited to an anonymous programmer or group of programmers using the name Satoshi Nakamoto. He released the first bitcoins in 2009, and said he was angered by the global financial crisis and wanted to create a currency removed from manipulation by bankers and politicians. Nakamoto disappeared from online forums in 2010, and efforts by journalists to uncover his identity have been unsuccessful.
What gives them value?
The premise behind Bitcoin is that there is a fixed number of bitcoins. The total number of bitcoins is capped at 21 million. In effect, it creates a digital gold standard, just as there is a finite amount of gold on Earth.
What are the benefits of bitcoins?
For consumers, bitcoins can be exchanged like cash, with no personal information attached to it. For example, if you pay cash at a store, the merchant doesn’t need to know your name. But if you pay by credit card, your name, address and other information are attached electronically to the transaction, putting you at risk for identity theft. Bitcoins also are useful for international purchases, because they can be used around the world.
For merchants, bitcoin transactions save money because the typical processing fees are 1 percent of the purchase amount, compared with 3 percent to 4 percent for credit cards. Merchants also don’t have to worry about charge-back fees, which occur when a customer cancels a payment and the store must reimburse the credit card company.
What are the risks?
Bitcoins are highly volatile, with big swings in value. If a better form of digital currency surfaced, and demand for bitcoins plunged, the value could evaporate, because bitcoins are not backed by central banks or government reserves.
Where can I learn more?
Go to the bitcoin.org website, or watch any of the numerous “Bitcoin for Dummies” videos on YouTube.