Bitcoins are units of digital currency that can be transferred over the Internet. They get sent to a bitcoin address and stored in a digital wallet that you can access with a password. Creating a wallet is free and easy. Try it here at our favourite e-Wallet provider.
New addresses start with a zero balance. Transactions between addresses are recorded in a public file and published on the Internet. Copies of the file are distributed over the bitcoin network which keeps track of the balance at every address.
Roughly 150 new bitcoins are generated every hour and distributed proportionally to the addresses of people that contribute computing power to the network. The software to participate is free and open source so anyone can run it on their computer to earn bitcoins.
Over time, fewer and fewer bitcoins will be created until there are a total of 21 million of them in circulation by the year 2040. Each bitcoin is divisible up to 8 decimal places, making it possible to transact very small portions of them.
They're free, fast, secure, and global. Merchants don't get charged for accepting them and you don't get charged for transferring them, even internationally. There are no fees, prerequisites, or limits. You can register addresses anonymously and create as many accounts as you like. They can never be frozen because no central authority controls them. Whether you're sending a fraction of a cent or a million dollars, the network doesn't discriminate.
You can use bitcoins to send free, immediate payments to your friends and family from your phone or laptop so you can pay a co-worker back for coffee, transfer wages to family overseas, or donate to organizations like WikiLeaks who have been cut off by the major payment companies. Or, use them to backup your savings and gain access to them from anywhere that has Internet access. They tend to appreciate in value over time because of their limited supply so they make a good investment. Unlike dollars and other national currencies, no government or issuing authority can print more of them.
Contact one of our trusted exchangers.
There are also several bitcoin markets operating online. The largest one in Canada is cavirtex.com and is run out of Calgary. They link up buyers and sellers and facilitate trades by allowing you to deposit and withdraw Canadian dollars directly from your bank account. A list of other online exchanges and their rates can be found at bitcoincharts.com.
You can also use sites like Local Bitcoins, Bitcoinary, and Bitcoin OTC to find people to trade with over the Internet if you want to take your chances with strangers.
Most merchants accepting bitcoin will use an exchange rate from one of the online markets to determine their equivalent dollar value. The exchange rate is simply the last price that some seller was able to charge some buyer for bitcoins in the free market and is governed by supply and demand.
Bitcoins aren't backed by any underlying commodity or insured by any authority. They have value as a form of currency due to their mathematically guaranteed scarcity, security, ease of use, distributed nature, lack of fees, divisibility, and global recognition.
We peg our rates to cavirtex.com.
You can spend them locally at one of our participating merchants or check out this article for some other good suggestions. The number of companies accepting bitcoins is growing quickly and we're working to get more stores accepting them in Vancouver. We believe it'll be in their best interest to avoid the transaction fees charged by the credit card companies. Transaction fees end up getting built into the prices we pay for goods and services across the board so we're all paying for them indirectly.
Come to our monthly meetup group or contact one of us.