Magento North East: Introduction to BitCoin

Introduction to BitcoinMagento North EastSeptember 2016

@RichardCarter

What is Bitcoin?

1. A crypto-currencyRather than “real” money, it’s “virtual” money you store digitally

US Treasury calls Bitcoin

Decentralised virtual currency

2. Distributed currencyTransactions are between users: no central intermediary

3. Peer to peer currencyPublic record: a distributed ledger called the blockchain is used to record transactions

4. Secured by “miners”Transactions pass through “miners” who validate transaction

Paid in newly “minted” Bitcoins

Image: bitcoin.org

Image: weusecoin.com

Similar payment systems

Plenty of alternativesDogeCoin, Ripple, Litecoin, Mastercoin…

…but Bitcoin is probably best known and most popular

Who uses Bitcoin?

Over 100,000 merchants in Feb 2015 (and this has grown)

http://www.ibtimes.co.uk/bitcoin-now-accepted-by-100000-merchants-worldwide-1486613

Some really big companies!

MediaWikiGreenpeaceMicrosoftPayPalExpedia

Advantages of Bitcoin

Fast transactionsNo wait for your provider*

*But there are some issues these days: https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7

Free transactions

Very low feesTo convert to “flat” currency such as GBP, USD, EUR

Image: weusecoins.com

Convenient for customers

Reach a wider marketBitcoin is a truly global currency

No chargebacksTransactions are not reversible (!)*

Or are they? See https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7

Disadvantages of Bitcoin

Exchange rateFluctuates a bit…

..although so does GBP ;)

Image: xe.com

RefundsA bit trickier to do in Bitcoin.

Most merchants refund in store credit

Stolen currency?Transactions are irreversible

…basically: store a safe, offline copy of your wallet

How to steal a Bitcoin*

*but, don’t

1. Copy user’s private keysThis effectively gives you the money

…but that is traceable in Bitcoin’s blockchain (the public ledger of transactions)

2. Launder your moneyUsing “mixers”/“tumblers” –transfer it to other accounts in varying amounts to cover your tracks

…these move the money to a “clean” address in the blockchain.

3. Convert it to flat currency…is where it gets trickier, as large withdrawals to flat currency could identify you

…especially with large amounts. Best to trickle the stolen Bitcoin out slowly

Bitcoin for Magento merchants

1. Bitcoin payment providerAs a merchant, you’ll need a Bitcoin payment provider such as BitPay or Coinbase

Providers should remove some of the headaches for you!

Ask your payment provider

1. Can I get a unique Bitcoin address for each transaction?2. How is the exchange rate calculated?3. How fast are payments approved?4. What is my exchange rate risk?5. How do I receive the funds?6. Are there any fees involved?7. How can I see a listing of my sales?

Source: weusecoins.com

2. Magento Plugins!

Small selection depending on your provider

Small selection depending on your provider

github.com/coinbase/coinbase-magento

bitpay.com/bitcoin-for-ecommerce

3. Profit!

Further reading on Bitcoin bitcoin.orgweusecoins.com (merchants)

Questions?

@PeacockCarterhello@peacockcarter.com