The growing acceptance of Bitcoin (BTC) as a permissible online virtual digital currency by corporates has been demonstrated once again by Core4Solutions, which is now among the first enterprise-level IT hardware resellers to accept BTC as a payment method.
Customers of the US-based IT hardware reseller can now go directly to the Core4Solutions’ website to find and purchase products using the Bitcoin virtual currency; the value of which has been on the rise towards the end of this year.
Introduced in 2008, Bitcoin is being used to pay for everything from gourmet coffee to smartphones on the Internet. There are almost 12 million Bitcoins in circulation, according to Bitcoincharts, a website that tracks activity across various exchanges.
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. There is no real physical bitcoin. There is a set amount of bitcoins that can be issued – 21 million units – as decreed by a software program created by a person or a group of persons who goes by the pseudonym Satoshi Nakamoto.
According to the Bitcoin website, Bitcoin is free from the highs and lows of inflation, interest rates and market fluctuations, and its value is determined by the number of bitcoins in circulation. Bitcoins are typically bought through an exchange. The process involves setting up an account, then transferring funds into the account in order to start buying bitcoins.
Today, the largest Bitcoin market in the world is China. But regulators have been quiet about their stand regarding the virtual currency. According to Kapronasia, there have been some speculation, at least in China, that the reason that regulation hasn’t happened yet is because some officials are using Bitcoin to move their wealth outside of China.
In the U.S., government agencies are actually recognizing Bitcoin’s development and legitimacy. Just recently, the U.S. Department of Justice at a U.S. Senate committee hearing announced that Bitcoin can be a “legal means of exchange.”
While many multinational corporations (MNCs) and corporate treasuries will naturally be wary of accepting an untried developing currency in this early stage of its development, especially when security and money laundering concerns proliferate, the fact is that many smaller firms such as Core4Solutions – in the technology world and elsewhere – are already accepting the virtual currency. Its current rate of progress means it may soon begin to impinge upon big business and become something that treasurers actively have to investigate.
Core 4 Solutions is a relatively small electronic e-commerce based IT hardware reseller founded in 2011, but it is typical of the sort of tech start-up firm that is adopting BTC, alongside coffee shops in Berlin and other physical offline businesses. Core4Solutions already ships to more than 80 countries worldwide, and are expecting to expand further by allowing customers to pay using Bitcoin. It holds inventory for more than 40,000 IT products in their Minnesota, US, warehouse covering HP, Dell, IBM, Cisco and Adtran IT products.
“Bitcoin will allow us to transact more seamlessly with customers both stateside in the US and overseas,” said Core4Solutions founder, Bronson Broer. “Transactions can be completed cheaper, and hopefully quicker than ever before, when compared to the old way of doing business via credit cards, bank wires and bank transfers.”
The Rise of Bitcoin
Bitcoin is currently valued at an all-time high, fuelled by a wave of new interest from China, interest from the US government authorities and continued media attention. It is much more than a replacement to fiat currency, because there are no transactional costs when using BTC. It could revolutionise the industry of merchant payment processing and international money transfers.
“We find the true value of Bitcoin to be the savings we’ll see in transaction fees, sometimes even as high as five percent,” said Broer. “By paying zero transaction fees, we plan to pass the savings on to our customers by offering discounts for customers that are purchasing with Bitcoin. We see this as a win-win.”
