Online currency Bitcoin comes to Hornchurch
PUBLISHED: 16:33 10 February 2014 | UPDATED: 16:09 11 February 2014
Some say it's the latest fad, others say it's the future. Online currency bitcoin is causing a stir in the financial world, with one "coin" value currently at about £550. Now, a Hornchurch business has decided to start accepting it as payment. Sam Gelder takes a closer look at the phenomenon.
It may sounds like something out of a sci-fi movie, but online currency Bitcoin is now being used to buy everything from takeaways to Lamborghini’s.
As its use in the virtual community has grown and its value skyrocketed over the last 6 months, more and more businesses are starting to accept the form of payment in the real world.
Now, a Romford business is surfing the crest of the web-based wave.
Yvette Pearson and her partner David Horne, of Hornchurch, have a distributing business for American company Forever Living – selling natural, organic products.
David, who has a keen interest in technology, suggested that they start accepting payment via Bitcoin.
“It’s a unique selling point (USP) for the business,” he said,
“I think we’re the first in the area to use it. We set the business up three or four months ago and started accepting Bitcoin about six weeks ago.”
But it was not an impulsive decision.
“We’ve been looking at using it for a while,” said Yvette.
So what are the benefits?
“I think the main idea is that it is a currency set up by the people, for the people,” explained David.
“There are no fees or charges. I could exchange with someone in China and it won’t cost me a penny - whereas banks and Paypal charge.
“Some people don’t like the idea of the government controlling their money any more. So they see it as a way to stick it to the man.”
A major criticism of Bitcoin is that there are not many ways to spend them - but the number of websites and shops where you can is growing.
High-end companies have started using the currency too, including a Mclaren and Lamborghini dealership in California. And, closer to home, you can get yourself a takeaway (takeaway.com) and a pint in Hackney pub, The Pembury Tavern.
“It’s gained serious traction in the last 12 months,” said David,
“Big banks are starting to take notice, and eBay has set up an exchange – that opens on February 10.”
You might be wondering how you pay for a pint with invisible currency. A mobile ‘wallet’ is easily downloaded onto a smartphone and allows you to pay by scanning a QR code (similar to a barcode) or near field communication (NFC) “tap to pay” technology.
Bitcoin was introduced in January 2009, though the creator remains anonymous to this day - operating under the pseudonym Satoshi Nakamoto.
Currency is generated through a complicated process called mining, in which miners are rewarded for solving complex computer-based equations that require a lot of processing power.
They can be bought through exchanges - the value of one Bitcoin last week, according to major exchange service Mt.Gox, was £572.54.
It has also been dubbed the online gold, as it is an alternative to fiat money and therefore immune from manipulation and government interference, at least at the moment. The People’s Bank of China sent a memo out in early December warning financial institutions against accepting it – causing value to plummet. This decision was reversed last week.
The supply is also limited to 21 million, of which about half have been created, and is predicted to have maxed out by 2140.
It hasn’t been a meteoric rise for the new currency though - its value has been known to fluctuate massively.
An article in Forbes magazine in December referred to it as “a small and volatile market” where “practically anything can happen” - though others suggest it will stablise as more people use it.
There was also huge negative press when the FBI shut down online black market Silk Road, seizing 144,000 bitcoins in the process.
But despite some possible negative connotations, David and Yvette remain convinced it is a worthwhile venture.
“We have been gauging opinions. Obviously some people have never heard of it,” said Yvette.
“Some say it’s the next big thing, others think it’s a bit ‘techy’ and a young persons thing. But these young people are going to get older.”
Visit foreverlivingukproducts.com to find out more on what, and how, you can buy using Bitcoin.