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Bitcoin: It's Time To End Paypal Dependency!

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Bitcoin has been described as many things: a digital cryptocurrency, the money of the people, an alternative to government fiat. But none of these descriptions are particularly useful to the uninformed or to potential users. Bitcoin is a currency generated by users through a proof-of-work system whereby you prove (or rather, your computer proves) that you have solved a problem and you are entered into a lottery to win the next 'block' of 50 Bitcoins.

In total, there will only ever be 21 million Bitcoins, but they are infinitely divisible, so this should not prove a huge issue in terms of trade cap. Right now, it is common to see trades denominated in mBTC (0.001 BTC) units, as a single Bitcoin is worth around $12.

But why is this important to you? Why would anyone want to consider using Bitcoin as a trade medium over the more traditional favorite, PayPal?

The first and primary reason for furry artists would be legality. It's a known fact that PayPal does not accept the sales of adult art, and that you can easily get your account (and any funds in it) frozen if somebody types the wrong message. Bitcoin has no central authority so there's nobody to freeze your assets or reverse your transactions.

Second, PayPal chargebacks are a common problem. If somebody (whether that's a scamming buyer, or someone further down the money supply chain) issues a chargeback on his/her credit card and/or with PayPal, it's very difficult as a supplier of digital goods to prove that delivery has ever occured (and, of course, with adult art, you just can't). With Bitcoin, there is no potential for reversals whatsoever.

Third, transaction fees with PayPal can be huge, whereas with Bitcoin they rarely exceed $0.06 (0.005 BTC) no matter what size the transaction is (not 6%, but a flat fee of 0.005 BTC). Additionally, Bitcoin knows no national boundaries, so currency conversion is a non-issue, and users in any country with an unblocked Internet connection can utilize the currency, even those who cannot use PayPal.

Last, anonymity. Your identity is not tied to your transactions when using Bitcoin, so nobody will know who you are, unless you tell them. This can be important for dealing with issues like buyers who decide later to post your identity, or Paypal informing your bank of your trade volume landing you in trouble with the authorities.

The weaknesses of Bitcoin are primarily price-instability (if you wait to cash out your Bitcoins, the price can move very quickly up or down, for this reason it's best to agree on a commission price in USD and then at the time of payment calculate the Bitcoin rate) and low level of adoption (those of us who use it aren't good enough at getting the message out).

If you cash out your payments instantly into dollars (or any other currency), of course, price instability doesn't matter too much. If you, like me, prefer to hold your Bitcoins, the long term outlook is good but in the short term the price can be very volatile as the market is not yet mature enough to handle the millions of dollars that go through it daily.

So, how do you get Bitcoins? The easiest way is to use a site like quickbitcoins.net, if you're in the US, which allows you to deposit money at a 7-11 and receive Bitcoins the same day. If you're not in the US, an exchange site like btc-e, virwox or mtgox would be your safest option.

How do you cash them out? It's quite easy to get money in your bank with mtgox in the US (via Dwolla), Europe and Asia. You could look on the Bitcoin forums for a buyer if that interests you (beware of Paypal buyers unless they're reputable) or you can withdraw to Liberty Reserve via btc-e.com. It's no harder to get money in your bank from Bitcoin than from Paypal, but can be a little more expensive.

For anybody who wants to have a play around with Bitcoin, I'm offering 0.1 BTC (around $1.20) to the first 10 people who download the client from bitcoin dot org, and generate an address. Just watch me, and comment on this journal with an address, and I'll send your Bitcoins.

If you'd like more information, search for the whitepaper by Satoshi, or check weusecoins.com.

If you're an artist interested in taking Bitcoins, contact me for more information.
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Added: 9 years, 8 months ago
7 months, 1 week ago
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7 months ago
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