January 15, 2013 – Bitcoin is a decentralised virtual currency generated through solving mathematical problems and organised by a community. It can be applied to instant internet payments like for example PayPal. Now it has received an important acknowledgment being approved as a registered payment service provider (PSP) under European Law. That means that Bitcoin has got an international bank ID and may issue credit cards or receive money transfers from other banks.
The Bitcoin project is based on an idea developed in the 1990s called ‘crypto-currency’. Instead of authorities issuing money that is backed by the intrinsic material value of a metal like gold or another resource, it propagates the implementation of cryptography to control the management of financial resources.
In order to limit the issue of Bitcoins network nodes – computers linked to the Bitcoin network – must resolve determined problems for producing new units of money. There was, hence, some controversial debate on how unproducing it is to apply computers (and the electricity they need) for solving problems whose only goal is to create virtual money. However, bitcoins are accepted by a continually growing number of e-commercial activities. It is to be expected that Bitcoin’s acceptance as PSP will enhance this project further.
If you want to learn more about Bitcoin you should visit its website …
… and particular its FAQ section.
The Guardian reported on Bitcoin’s new rank as PSP.
And you may listen to an interview of the Guardian’s Aleks Krotoski with Pierre Noizat from Bitcoin.org about the idea behind the project: you can find it here.