Ossian Law P.C. IT Law Alert January 16, 2014

Should Your Business Accept Bitcoin?

Recently, a number of Metro Detroit businesses started accepting Bitcoin, a decentralized currency that is created solely through cryptography. Individuals and businesses using Bitcoin are able to engage in speedy, irreversible, global transactions without the cost of traditional credit card payment fees.

One risk of using Bitcoin is the lack of any governmental backing so that lost or stolen Bitcoin cannot be replaced. The value of Bitcoin fluctuates frequently, with one Bitcoin being valued at $829.30 U.S. at the precise moment of this writing. The fluctuating value has lead to speculation by investors, yet Bitcoin is not regulated by the Securities and Exchanges Commission or any similar agency.

Last month, China’s central bank barred financial institutions from handling Bitcoin transactions. The European Banking Authority has also issued warnings to investors. Nevertheless, Bitcoin is being accepted by more and more businesses with over $12 million Bitcoin currently in circulation. Overstock.com announced it will start accepting Bitcoin in the second half of 2014. For more about Bitcoin, go here.

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