One look at BitCoin’s website, and it’s easy to see that BitCoin’s developers have one thing in mind: taking down PayPal. BitCoin bills itself as a peer-to-peer trading service (of sorts). The idea behind BitCoin is simple enough: accept virtual coins, gather coins in your wallet, trade these coins with other BitCoin users for products and services.
BitCoin promises less fees than other money transferring systems (PayPal), and doesn’t include any kind of middleman (your money doesn’t have to go through a bank or other institution). In short, it’s a peer-to-peer money trading system that subsists thanks to virtual coins. All in all, BitCoin sounds like a promising service, yet it has a number of troublesome kinks.
Trading Your Coins
Once you have gathered a number of BitCoins, you can trade these coins for certain items. In order to purchase items with BitCoins, you have to find a service provider or merchant who is willing to accept these coins as a form of payment. This is where the first problem arises.
The list of merchants and service providers currently accepting BitCoins is limited. Of course, the idea is to become part of the BitCoin community, and, as such, help to build this community. After a number of people have opted to use BitCoin, these coins will be accepted by a growing number of merchants and service providers. At the time of this writing, the list of places where BitCoins are taken is rather slim.
From the start BitCoin will give you five coins. After that point, you can begin generating BitCoins on your own. It is possible to gain up to 500 coins per day, but this could take some time. You can sell your products or services for coins, and you can ask people to send you coins. BitCoin claims that this service is ideal for contractors, but it’s unclear how a contractor can make a lot of money by trading BitCoins.
It also takes some time for your coins to “mature.” Until coins mature, you are not permitted to spend them. Most coins will mature after one day, but this isn’t fast enough if you want to buy something last minute or bid on an item. Then again, most sites that offer last minute bidding don’t take BitCoins.
Why Use BitCoin?
Unlike the sites that it’s trying to destroy, BitCoin doesn’t charge large fees per every transaction. This is the number one reason why some people have started using BitCoin. However, the drawbacks of this service may greatly outweigh the benefits. Will BitCoin work for you? Maybe.
But this “maybe” is largely dependent on the number of people who sign up for BitCoin. Then again, if nobody decides that this service is worth the effort or time, BitCoin simply won’t work. Is BitCoin better than services such as PayPal? If you count the fees that PayPal includes per transaction, BitCoin wins hands down. Still, it’s recommended that you take the time to review BitCoin’s website before you sign up for this service.