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A Safe Choice to Paypal? Bitcoin

When Paypal made their first entrance onto the consumer scene back in 2000, their services were relatively unique. This should come as no surprise, given that online shopping in general was a new phenomenon at that time. Powerhouses like eBay and Amazon were still in their infancy, and while many people were starting to use the internet as a shopping tool, the amount of online sales compared to today were but a fraction of the total shopping done by consumers.

This trend would not last, with more and more online retailers opening up each and every day. As such, the services Paypal offered became more and more popular, especially with smaller ventures that did not have the size or turnaround to accept credit cards directly. In fact, its offered services were so well liked and useful that internet giant eBay purchased Paypal and integrated it directly into its services.

While Paypal has been a huge boon to many of its users, both on the sending and the receiving end of funds, there are a few factors that have soured a segment of the population. Chief among these is the fact that payments made through Paypal can be reversed, potentially leaving a vendor without any compensation for the goods or services they have provided.

This has given rise to many different alternatives to Paypal, some of which have become successful with others falling by the wayside. Chief among these competitors are Amazon Payments, Google Checkout and Dwolla.

One of the characteristics that most payment processors available today have in common is that the valuation of their currency is based on real-world money. Money paid into a Paypal, or other payment processor, account has a value that remains constant, with no market fluctuation based on the value of currency.

However, there are a few payment options whose value is not determined by the currency it was purchased with. One of the first types of these processors was E-Gold, a currency created by Douglas Jackson, which was based on the value of actual gold. This was primarily due to the stability of the value of gold, with the value of purchased E-Gold rarely falling lower than what was originally paid.

However, given that the basic makeup of E-Gold was created to work outside the established government regulatory bodies, it quickly came to the attention of USA law enforcement. This led to the seizing of assets and charges filed against Douglas Jackson, ultimately culminating in its downfall.

What Is Bitcoin?

A new payment solution came to light in 2009, with the launching of Bitcoin. Bitcoin is considered a true cryptocurrency, meaning that all of its operation and value is conducted and weighed entirely through the internet, with no ties whatsoever to a real-world government or currency. It is also operated completely on a peer-to-peer basis, with no centralized location for authorities or customers to interact with.

How Can I Use Bitcoin?

While the exact details of how Bitcoin actually works are very in-depth and technical in nature, the actual use of it by an individual is incredibly easy. The first step is to download and install a Bitcoin program, called a wallet. One of the most popular and widely used is MultiBit, which can be downloaded here. Once the download has completed, simply follow the easy setup process to get it installed.

Once you have your new wallet installed, the next step is to fund the account. The choices on how to do this are wide and varied, more so than what you would normally find with an online payment processor. One website that is dedicated entirely to the buying and selling of Bitcoins is LocalBitCoins. Here you will find users from all over the world, all looking to buy and sell their Bitcoins in a safe and secure environment. Payment options on LocalBitCoins range from cash deposits at a local bank, Paypal, major credit cards and even in-person delivery.

Once you have purchased your Bitcoins and had them transferred into your LocalBitCoins account, you can then transfer them into your Multibit wallet. Multibit provides you with numerous ways to secure the Bitcoins it contains, including double authentication and encryption. As such, keeping your Bitcoins in your Multibit wallet is probably the safest bet. “

Once this is completed, simply locate the goods or services you desire, confirm that they accept Bitcoin, and make your purchase. As with other payment processors, the pricetag of the purchase is deducted automatically from your Bitcoin balance. An example of how many different retailers accept Bitcoin can be found here.

Dangers – As with many other online payment processors, the chance for fraud or theft is always present. Phishers may send out bogus emails asking for the details of your Bitcoin wallet, all disguised as a reputable institute. Hackers can get into your Bitcoin wallet if you are not careful, draining you of all of your hard-earned currency. Given that there is absolutely no way to make a reversal on a payment using Bitcoins, extra caution definitely needs to be taken.

Buying and selling online has become one of the most common and attractive ways to do business, with the potential number of customers and retailers reaching into the millions. By using a cryptocurrency, such as Bitcoin, you can easily ensure that you have as many choices in who to sell to or buy from as humanly possible.


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