Bitcoin: Money of the Future, Part 1 - KYTX CBS 19 Tyler Longview News Weather Sports

Bitcoin: Money of the Future, Part 1

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TYLER (KYTX) -- Some believe we could soon live in a society with no more cash or coins. All you would need would be codes assigned to units of currency that exist completely online. And you could carry those codes around on your smart phone. Well it's real. It's called cryptocurrency and there are several varieties. But the most popular one is called Bitcoin and it's accepted right here in East Texas.

Scott Williamson owns Tyler's Brewing Supply. Last year he adapted and started this home brewing business when competition from expanded alcohol sales approved by East Texas voters forced him to close his liquor stores. And now he's adapting to the changing nature of business itself..

Williamson accepts credit cards and PayPal, but you'll find another option when you check out on his website: Bitcoin.

"I saw a need online. I had some buddies who are home brewers," he told us.

And those friends asked him to take Bitcoin. He says as a business owner the biggest advantage is he doesn't have to pay the fees charged by credit card companies. Those can be as much as 3.5 to 5 percent per transaction. If you own the software to take a Bitcoin transaction it's free to you. And it's less than one percent if you use a third party to handle it for you. Williamson uses one called Bitpay.

So what are Bitcoin's advantages for you as a consumer? Williamson says in some ways it's actually safer than cash since it's held on your phone or computer.

Williamson said, "your wallet can get stolen, your physical wallet. But unless someone knows your password they can't steal your Bitcoin."

There's also complete anonymity so if you're making a discreet purchase your privacy is protected. But that can be double-edged sword. Williamson said, "I think some people won't accept it for the simple fact they think it's all drug dealers and people who deal with cash. I don't think that's the case. There are many big retailers on line that do take it."

But some also say as more big retailers start taking Bitcoin the money they save on credit card transaction fees could be passed along to customers.

"In companies that big that's millions or billions of dollars a year. And once they do it and they can lower their prices a little bit because of that, that's going to make it more consumer friendly," said author Tom Mitsoff.

Mitsoff works with the Tyler Morning Telegraph and recently co-authored a book called Bitcoin Decoded to help people wrap their minds around this foreign concept.

"There is no cash, you can't count it out and hand it to somebody."

A Japanese software developer created the peer to peer electronic currency system in 2008. Its popularity grew around the world reaching the U.S. in 2011. Someone who uses Bitcoins stores them all in what's called a Bitcoin wallet, an electronic holding place. And in addition to entering your payment information online you can scan a QR code on your cell phone to make a purchase in a store.

So how do you get these Bitcoins? There are two ways to do it and both of those methods require a little explanation. Find out how in Bitcoin: Money of the Future Part 2 also here on cbs19.tv

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