The worldwide community website Reddit.com, which focuses on news sharing, recently followed in the footsteps of WordPress.com in accepting Bitcoins as a formal currency. In fact, Reddit is claiming that the virtual tender is “as good as gold” by enabling Bitcoin transactions for all payments.
If you haven’t heard of the Bitcoin concept before, it is a peer-to-peer digital currency that knows no global bounds; mainly because it is not formally regulated by any government entity.
Bitcoin For WordPress.com Customers
WordPress.com announced late last year that it would begin accepting Bitcoin for service payments in an effort to ease restrictions and facilitate access to the WP platform in areas that are currently blocked by PayPal.
In a November 15th blog entry, Andy Skelton stated that “PayPal alone blocks access from over 60 countries, and many credit card companies have similar restrictions. Some are blocked for political reasons, some because of higher fraud rates, and some for other financial reasons. Whatever the reason, we don’t think an individual blogger from Haiti, Ethiopia, or Kenya should have diminished access to the blogosphere because of payment issues they can’t control. Our goal is to enable people, not block them.”
Reddit Digital Currency Integration
Reddit CEO Yishan Wong provided a statement in a comment thread on how the company will integrate digital currency into its payment process. “We use a third-party payment processor (as we and pretty much everyone else) do for all our payments. For Bitcoin, it’s Coinbase, and the bitcoins are converted directly to USD, mostly because (1) we do our accounting in USD and (2) the value of BTC fluctates considerably and we don’t have any goods or services that we as a company purchase using BTC,” Wong said.
Could Bitcoin Compete With PayPal For Theme Purchases?
The premium WordPress theme realm is dominated by PayPal in many sectors, with developers who market products on open marketplaces such as ThemeForest almost exclusively using PayPal transfers for downloadable content (DLC) transactions.
Because the BTC digial coin is accepted in parts where PayPal is banned (and also because the demand for WordPress has truly grown worldwide), future competition is feasible. However, there are still numerous obstacles standing in the way of supplanting the company that has features such as Invoice Creation and Tax Breakdowns hard-written into its software code.
For one, many firms view the virtual coin as an un-secure method of payment that is preferred by those engaging in criminal activity. Companies already on board with tax code adherence are quickly moving to ensure invoices and payments are tracked and deliverable to the corresponding government authorities; representing another hiccup for Bitcoin – which currently allows users to operate anonymously.
Bitcoin’s de-centralized status allows the peer-to-peer transactions to take place without going through a bank or clearing house, which vastly decreases the fees normally associated with transfers. Code verification can be evaluated independently due to the platform’s open source status, and the mining process places a limit on digital fiat generation.
There are already a large amount of plugins for WordPress websites that enable Bitcoin transfers that can be purchased (or obtained for free) over the Internet.
Online Retail Potential
Perhaps the most promising segment of WordPress sites that would thrive under a Bitcoin surge falls under the category of e-Commerce. Online points of sale worldwide that offer goods ranging from clothing to video games stand to gain from an increase in consumer purchasing power that directly correlates to lower transaction/payment processor fees.
Whether we’ll eventually see Bitcoin alongside Google Wallet, MasterCard, PayPal and Visa in the near future remains to be seen, but with a monthly equivalent of $1 million USD in Bitcoins changing hands as you read this article, the possibility certainly exists.