Bitcoin is going mainstream.Although there was no official announcement by the tech giant, Microsoft Corporation (NASDAQ:MSFT) has now joined the growing list of companies that accept payments in bitcoin. Earlier this week, Microsoft added a new page to its customer support site with details on how the virtual cash could be used to deposit into a Microsoft account.
This means bitcoin can now be used to buy content including games and videos on Xbox game consoles, to purchase apps and services for Windows phones or to buy Microsoft software. Only U.S.-based customers can make bitcoin payments, and bitcoin must be used in fixed amounts (ie, no change given).
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The virtual currency bitcoin is created by “mining” for new bitcoins which miners earn by solving complex mathematical algorithms (with the aid of powerful computers). The system is designed so that only a limited number of bitcoins can be discovered, meaning the value of a bitcoin cannot be deflated by government policy like a traditional currency. Bitcoins are also anonymous and completely transparent, as all transactions are recorded in a publicly-accessible general ledger.
Microsoft acceptance a sign that bitcoin is becoming mainstream
Bitcoins are making their way into mainstream business, and Microsoft Corporation (NASDAQ:MSFT) is joining the growing bandwagon of major companies accepting bitcoin. As of December 1st, 2014, Paypal, Dell, Expedia, Newegg, Amazon.com, Inc. (NASDAQ:AMZN), Target Corporation (NYSE:TGT), Zappos, Whole Foods Market, Inc. (NASDAQ:WFM), Zynga Inc (NASDAQ:ZNGA), Bloomberg and many other well-known firms accept payments made with bitcoin
Bitcoin prices volatile
Of note, bitcoin prices are highly volatile, and many “bitcoin millionaires” have been minted and busted by the price swings in the virtual currency. Bitcoin reached its all-time high in December of 2013, when each one was worth more than $1,100. Since then the value has dropped steadily, and each one is worth close to $357 as of December 10th.