Sunday, October 05, 2014

Trying Out Cryptocurrencies

Lately, I have been dedicating a little bit of spare time towards learning about cryptocurrencies such as Bitcoin, Litecoin, Dogecoin, and others. On the surface, there isn't much difference between these newer coins and good old-fashioned Linden dollars from +Second Life. Once you read into the currencies more, however, there are some significant differences, which don't seem of much use at the moment.

I first got interested when I heard that had opened up to the public. Signing up was much easier than opening a bank account, that's for certain. Rather than dive in with guns blazing, I decided to get started with just $20. My mistake was attempting to use my debit card to deposit. My first try was flat out declined. My second attempt a few days later contemplated depositing, but ultimately rejected the deposit. On my third try, I used a bank draft instead. That seemed to work just fine.

Customer service at Circle was a little lame. They just give you generic responses, nothing specific. I think they could do better in their goal of making Bitcoin easy for the general public. I think the danger with Circle is that they may have simplified it too much. I can't find my addresses anywhere. I think, perhaps, they propose that you use a new address for every transaction.

I also got a +Coinbase account. Coinbase was straightforward in informing me that they were going to take a few days to make my money available. So, I'm waiting a few days for those coins to become available. Overall, the website seems straightforward. I like that I can find my Bitcoin addresses easily in the interface.

There is one service that I really liked, +Coinkite. What I think is really cool about Coinkite is that they also offer a processing terminal similar to credit card terminals. This machine allows you to make sales and/or operate as an exchange agent. It spits out printed Bitcoin in QR codes. I forgot to mention that Coinkite also works with Litecoin, the up and coming competitor.

Something else I really like about Coinkite is that they round out their processing terminal with a debit card. Of course, you can't use the debit card at a regular ATM. You must use it with the Coinkite terminal. However, in the greater likelihood that you will not have a terminal or computer nearby, your Bitcoin address is printed on the card in numbers and as a QR code. This makes it easier for you to process transactions on the go.

My urgency in buying Bitcoin was so that I could transfer money into my Coinkite account to order a debit card.

I have no illusions that I will be able to go anywhere and buy things with Bitcoin or Litecoin. I think it is still a bit too geeky and the price is too volatile. I think that for Bitcoin or Litecoin to become more accepted, they need the network effect in place. That is to say, you need to know that there are a reliable number of people who will pay you in cryptocurrency and whom you can pay in cryptocurrency.

I recognize that there are other features that cryptocurrency provides that make it a powerful service; but, none of the websites that I've visited thus far use those features. They mainly focus on trading. You have to be a developer geek to take advantage of those extra features, it seems.

In the meantime, I'm waiting for some of my deposits to clear and for my Coinkite debit card to arrive so that I can carry it in my wallet. In the meantime, I will be looking for places that accept Bitcoin. And I suppose I will post my Bitcoin and Litecoin addresses up on my profiles for potential payments. Maybe someday somebody will surprise me and offer to pay in Bitcoin.

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