Dear Clients, Colleagues, and Friends,
The Jeffrey M. Verdon Law Group, LLP is pleased to announce that effective May 1, 2015, it will add Bitcoin to options of payment methods for services rendered. This effort is in response to increasing requests for payment in Bitcoin, and we see this trend increasing as more and more people desire the use of virtual currency, i.e., electronic cash.
Bitcoin is an online payment system invented by Satoshi Nakamoto, who published his invention in 2008, and released it as open-source software in 2009. The system is peer-to-peer, i.e., users can transact directly without needing an intermediary such as a bank or credit card company.
Here is how Bitcoin works:
Bitcoins are purchased from an exchange company using conventional currencies. The digital currency is stored in an owner’s e-Wallet or other such storage medium, either in the cloud or on their computer.
When the owner desires to buy goods or services using their Bitcoins, they simply select a “Pay with Bitcoin” payment option.
To purchase a bitcoin, one needs to acquire at least one bitcoin address from an online exchange. There are two addresses per transaction, one for the sender and one for the recipient. Addresses are made public through the “block-chain” which is a public registry that (1) records all bitcoin transactions and ownership interests and (2) verifies that the sender sent his public key to the recipient and certified the transaction by signing with his private key.
The e-Wallet saves the bitcoin address and private key, information needed to access and transfer a bitcoin. A bitcoin can be stored in a (1) virtual wallet on a program on a smartphone or personal computer, (2) an online wallet hosted through a third party company, (3) or a paper wallet which is a piece of paper containing a bitcoin address and private key.
Miners verify the transaction on a publicly distributed ledger called the “block-chain”. The ledger uses its own unit of account, also called the bitcoin. Such public transparency supports the integrity of the bitcoin system and provides a safety measure. Bitcoin is often called the first cryptocurrency and is more correctly described as the first decentralized digital currency. It is the largest of its kind in terms of total market value.
Bitcoin as a form of payment for products and services has grown and merchants have an incentive to accept it because fees are lower than the 2-3% typically imposed by credit card processors.
For any questions or assistance on Bitcoin transactions with our law firm, feel free to contact Michael Fink, the law firm’s accountant and finance manager, for details.