Platform Profile: Bitcoin

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

Bitcoin is a form of digital currency that allows for anonymous peer-to-peer electronic payments. The system is run by an open source encryption protocol that isn’t managed by any central authority and where the creation of new bitcoins is automated by servers. The value of Bitcoin currency is volatile and can range from to $100 to more than $250 for each bitcoin.

There is no price to use Bitcoin, per se, just as there is no price to use any form of currency. All that is needed is the software wallet needed to maintain an account once funds had been exchanged for bitcoins. However, some programs charge a fee for each transaction or for transactions over a certain amount.

Bitcoins have several advantages that other currency systems do not. Since there is no central , and multiple redundant copies of transaction databases, it would be difficult for governments to seize assets held as bitcoins or to shut down the servers. Similarly, there is no current way to tax payments made using Bitcoins. The ownership address of a Bitcoin account can only be changed by the owner, which makes it extremely difficult to steal Bitcoins. Also, transactions can’t be reversed without the consent of the new owner of the bitcoins, thus eliminating the risk of “charge-backs”.

The biggest disadvantage of using Bitcoin is the negative association many have with people who use the form of currency. Bitcoin is highly utilized by people who are trying to avoid regulatory scrutiny, such as drug dealers, tax evaders, and other sellers of illicit goods (though nothing prevents the service for being used for respectable online purchases). There also also the limitation that come from Bitcoin not being an accepted currency by any nation, this means there are no forms of deposit insurance or any safeguards against price volatility.

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