BitCoin has already impacted internet marketing in a significant way considering the relative infancy of the new online currency. But as is the case with the introduction of any new monetary system, there are a number of benefits and risks that should be examined prior to getting involved yourself. This is especially true considering that BitCoin currency is backed and funded by nothing more than the belief that it has value.
Of course, this is true of all types of electronic currency that people take for granted every day. For instance, that balance that you see in your checking account? It's not really there. In fact, it's not even a tangible item until you withdraw it as cash.
The same can be said for BitCoin, which operates free from any centralized bank or fund. This means that unlike nearly all other types of currency, BitCoin currency is not based on the value of stockpiles of gold and silver. Instead, its value is based on the belief in this particular system of electronic "trading
Here's how it works:
BitCoin currency is released to the public at a steady rate that will eventually cap at 21 million units, preventing the possibility of inflation. As of late April 2012, BitCoins were valued at less than $5 each, down from an all time high last summer of $33 each.
Transactions are processed via a revolutionary file sharing process whereby verifications and logging are performed automatically by computers within the BitCoin "cloud" of users. It's a complex process but one that is secure and without the need for centralization.
BitCoin users can trade the currency electronically for goods and services, and a number of businesses worldwide are now accepting BitCoins as payment – including several restaurants. In fact, financial experts have stated that the success of BitCoin is dependent on businesses accepting it as a form of payment.
So how does BitCoin affect internet marketing? Now that you have a basic understanding of how it all works, consider the following pros and cons:
Pros:
*Internet marketers can avoid dealing with companies like PayPal
*Offering an additional payment option may increase conversions
*Transactions offer complete anonymity
*Not based on gold or silver
*Not affiliated with any government
Cons:
*Potential for wild swings in value (as with any currency investment)
*Illicit use common as a result of total anonymity of transactions
*Government interference possible at some point
*Value of BitCoins tied to user belief in the system
*Transactional computation needs may one day exceed the ability of users to self-process
Overall, BitCoin will probably benefit internet marketing professionals by providing an additional form of payment, but the system is still new enough that it could fail. In the event of the collapse of BitCoin, those who would lose the most would be those holding the most BitCoins when the market dies.
It's sort of like musical chairs, with intangible yet very real "money" on the line for those caught without a seat when the music stops. But ultimately, the risks are the same for any type of currency or investment.
To find out if BitCoin currency can benefit your business, call the number at the top of your screen now for an immediate consultation.