By Llew Jury
Bitcoin, the internet’s virtual currency, is becoming increasingly mainstream with ATMs, trading platforms and even Dell computers now accepting them for your new PC.
But understanding what a bitcoin actually is and the opportunity this new currency presents can get confusing.
So I decided to get to the bottom of everything bitcoins with Jeremy Glaros, the CEO of Singapore-based bitcoin trading firm Coinarch.
Glaros believes future applications for the underlying bitcoin technology are huge and we are only just getting started.
Jeremy, what are bitcoins?
The easiest way to think about bitcoins is they’re money for the internet.
You can keep bitcoins in a bitcoin wallet and use them to buy things both over the internet and in bricks and mortar shops.
The key benefit of bitcoins is that you can use them without the need for your payment to go via a bank, making things faster, cheaper and easier for both buyer and seller.
How do they work and how do you buy them?
Bitcoins can be used like any other currency.
You can buy bitcoins using your Australian dollars through bitcoin exchanges such as Coinjar and BitTrade and even through ATMs like those offered by Australian bitcoin ATMs.
Once you have bitcoins, you store them electronically in your ‘bitcoin wallet.’
It’s an app that sits on your phone or computer and keeps track of the bitcoins you hold.
Your wallet allows you to spend your bitcoins easily by either scanning QR Codes or entering the address of someone else’s bitcoin wallet.
So who started bitcoins?
The technology behind bitcoin was introduced in 2008 by someone called Satoshi Nakamoto.
Nakomoto published a paper online that laid the foundations for Bitcoin and which removed the need for an intermediary (i.e. bank) to be involved.
What’s the technology opportunity of buying and selling bitcoins?
Bitcoin technology offers opportunities in a range of fields, not just payments and payment processing.
Because of this potential, large numbers of people worldwide have been attracted to invest in bitcoins on the expectation of their price increasing over time.
For people interested in investing in this potential, there are a few key ways that you can do this: you can buy bitcoins via the exchanges (or any number of others offered around the world) and hold on to them; you can use products like those offered by Coinarch which allow you to maximise your bitcoin returns; or you can start a business that builds on the underlying bitcoin technology and become a bitcoin entrepreneur in the process.
For the people out there who believe the price of bitcoin is higher than it should be (and there are some high profile examples of this), you may also be able to make a profit from this by using our Coinarch products too.
Where can we use them in Australia?
There’s plenty of Australian locations where you can use bitcoins, both online and in the real world.
At the big end of town, computer manufacturer Dell has just started accepting bitcoins for its online products making it the largest ecommerce site to accept bitcoins, while a growing number of smaller online retailers are also now accepting bitcoins.
There are also a lot of small bricks and mortar retailers such as coffee shops, bookstores and other outlets now accepting bitcoin transactions.
In Brisbane, there’s even now a bitcoin ATM at The Roastery Café in South Brisbane too.
Tell me more about Coinarch and your technology.
We started Coinarch earlier this year to give investors interested in bitcoin new ways to maximise their bitcoin returns.
Our goal is to build the best products out there to allow investors with different views and opinions to get involved in bitcoin. We are well on the way to achieving this already.
Where do you see bitcoin in two years time?
Bitcoin has the potential to have a huge impact over the coming years.
Over the next two years, bitcoin will become more and more widely accepted by merchants and consumers the world over, greatly reducing costs for both and allowing new and exciting ideas to thrive.
It will also start to really transform the lives of people in the developing world by bringing them something that is today beyond their reach: basic banking services.
This will allow entrepreneurs from Manila to Mozambique to create and expand businesses that were previously uneconomic, creating jobs and futures for people who before would never have been given the chance.
Llew Jury is the managing director of Reload Media and LlewJury.com