Bitcoins are digital currency that exist on the Internet. They are not backed by government and their market value fluctuates. Bitcoin was introduced in 2009. It isn’t printed. Bitcoin is a form of money called cryptocurrency. Transactions are made by updating a log, but there’s no exchange of tokens. Buyers and sellers are identified through ID numbers. Bitcoin can be used to buy goods and services.
Bitcoin has been criticized by some economists as unsustainable. The virtual currency has been linked to a Ponzi scheme in Texas. Bitcoin has been used on online black markets to buy and sell narcotics and to launder money. It's like anonymous cash.
While bitcoin use is limited, an increasing number of merchants are accepting them as payment. Customers are seeking out business that accept bitcoin. Retailers welcome fee-free bitcoin payments because they avoid the typical 2.5% to 3.5% transaction charges for credit card transactions. Three Grand Rapids area businesses caught on to this new trend. One Stop Coney Shop, DeCommer Fine Art and Action Institute are currently accepting bitcoin.
The nonprofit Action Institute in Grand Rapids said it began accepting bitcoin because credit card transactions are hard to do in some countries. The institute believes bitcoin is shedding the stigma it gained early on as a currency for black market deals and drugs.
Many bitcoin users and businesses feel that the currency is a real innovation and that it will gain in popularity.