Is Bitcoin Right for Your Business
Should you be accepting payment of Bitcoin for your goods or services? Ed Gebert thinks so, and is the first accounting firm in Australia to accept payment of Bitcoin for his services.
What Is Bitcoin?
Bitcoin is the world’s very first crypto or virtual currency and was created in 2009 by Mr Satoshi Nakamotor. Bitcoins do not exist in the physical world and only exist on your computer and the internet so this means you cannot touch, see, or feel them.
How Does Bitcoin Work?
The system allows users to transact directly without needing an intermediary.
Transactions are verified by a network of approximately 10,000 “nodes” around the world and all recorded transactions are recorded in a public distributed ledger called a “block chain”. Bitcoins can be obtained in exchange for different currencies, products, and services. The unit of account of the bitcoin system is bitcoin.
Ownership of bitcoins implies that a user can spend bitcoins associated with a specific address. To do so, a payer must digitally sign the transaction using the corresponding private key. The network verifies the signature using the “public key”. If the private key is lost the “bitcoin network” will not recognize any other evidence of ownership so the coins are then unusable and effectively lost.
There are 2 main web-sites where you can store your wallet of Bitcoins – COIN BASE and BLOCK CHAIN. A “wallet” stores the information necessary to transact bitcoins. A wallet stores the digital credentials for your bitcoin holdings and allows you to access and spend them.
“Mining” is a record-keeping service. There are approximately 100,000 Miners around the world and their job is to keep the block chain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a “block”. New Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger.