Financial News

  • 14 May 2014, 0:44

Glasgow Store Swaps Pound For Bitcoin

A shop in Glasgow is ditching the pound in favour of digital currency bitcoin.

CeX, a high street exchange store for tech and electronics in Sauchiehall, will offer its customer payment in bitcoins, for three days each week.

David Butler, commercial director of CeX, said: "Not only does bitcoin have a number of security and access benefits, but it is also gaining popularity amongst consumers the world over."

Bitcoin was created in January 2009, and relies on a peer-to-peer network that bypasses banks.

Bitcoins can be sent directly from one person to another and the entire bitcoin network - thousands of computers - authenticates each transaction.

The complex maths required to verify the transaction also generates new bitcoins - a process known as mining.

The small trial is another step to bitcoin becoming more mainstream.

In its early days, bitcoin enjoyed a wild reputation. The currency became associated with the notorious Silk Road, an online marketplace for drugs on the dark web.

Bitcoin conferences were packed with anarchists dreaming that bitcoin could replace centrally-controlled currencies.

But recently, start-ups have been trying to clean up the currency's image.

Today, Bitpay - a payments start up working- announced a $30m investment round, from a gaggle of blue chip investors including Index Ventures.

Mainstream companies like Overstock, OKCupid and Zynga (the makers of Farmville) now accept the currency.

In December, the Bank of America published a report saying that bitcoin could become "a major means of payment for e-commerce". Various shops, restaurants, pubs and taxis now accept bitcoin.

The currency still has problems. The Japan-based Mt Gox exchange - the most popular method for exchanging bitcoins into other currencies - recently went bankrupt, losing 650,000 bitcoins (around 170m at today's price).

And the Securities and Exchange Committee in the US issued an "investor alert" about bitcoin.

The Glasgow trial is unlikely to be a deciding factor either way, and David Butler has added that dropping sterling was not a political point.

He said: "While we are temporarily dropping the pound from our Glasgow store, at a time when Scottish independence is high up on the news agenda, we are doing so to give customers a choice in how they trade with us."

The SNP has no plans to replace sterling with Bitcoin if Scotland becomes independent.

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