An entrepreneur has opened the first shop in Europe where Bitcoins can be bought over the counter. Normally it can take weeks to set-up an account and purchase the digital currency over the internet – but Akin Fernandez simply prints off a voucher so they buying drugs online with bitcoin be accessed immediately.
The user then enters a 16-digit code and the Bitcoins are transferred to the designated virtual wallet within 70 seconds. Mr Fernandez, 51, has opened his Azteco shop in Shoreditch, central London, and hopes to set up similar outlets around the world. The entrepreneur likened his vouchers to Pay As You Go top ups for mobile phones. He said that Bitcoins will one day enable 2. 2billion people in the developing world who do not have bank accounts to pay for goods and services over the internet for the first time.
Mr Fernandez, who is a former publisher, charges around one to two per cent commission on each transaction. However, it has since fallen to around half that amount. Bitcoins can be used to send money cheaply. Bitcoin is a distributed peer-to-peer digital currency that functions without any central authority, such as the Bank of England. The currency was invented by Satoshi Nakamoto in 2009 and is traded within a global network of computers. Bitcoins can be bought with near anonymity, which supporters say lowers fraud risk and increases privacy. But critics say that also makes Bitcoins a magnet for drug transactions, money-laundering and other illegal activities.
And it is hitting ‘real life’, with a cash machine in Vancouver, Canada, and a sushi restaurant in San Francisco dispensing and accepting the currency. It’s value is not determined by any government but instead by a peer-to-peer network of mainly anonymous users. So, like any undefinable commodity, it can plummet suddenly. 1250 to the Bitcoin last November – but is now worth around half that amount. People can create their own Bitcoins by ‘mining’ for them. The process involves using computers to solve algorithms so complex that the amount of power they take up limits how much currency can flood the market.
The trade of Bitcoins is not regulated in Britain by the Financial Services Authority – and critics have said that because of its secrecy the virtual currency can be used by criminals to purchase drugs or guns. The entrepreneur had hoped that people would be able to redeem their voucher immediately in his shop through a Bitcoin wallet app like Blockchain, City AM reported. However, the apps were recently blocked by Apple – so now people have to use their computer to access one of the e-wallets. Bitcoin is hard to understand, but it doesn’t have to be. We have boiled it down to its essence so that it is simple, easy to use and works very quickly,’ he said.
With Bitcoin, it is now possible to send a fraction of a Euro or Pound anywhere in the world instantly, to anyone directly, without a bank and with near zero fees. Of course, you are not actually sending money with Bitcoin. What you are sending is an entry on the Blockchain global ledger, that has a value because it is scarce. Its like a seat on a train. This is entirely different to actual money, even though superficially it acts like it. Bitcoin is going to change ecommerce forever.
With Bitcoin, everyone in the third world will have access to buying goods on the internet with a fraud proof method of payment. This means that every website in the world that sells goods will eventually be accessible to some of the 2. 2 billion unbanked people in the world. Making Bitcoin accessible and easy to use is key to making this transformation happen. As a result, Mr Fernandez is hoping to open Bitcoin shops in Mexico and Sierra Leone. He said he opened his first shop in London so he can gain access to the best software developers.
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