The increasing popularity of the digital currency Bitcoin has been of particular interest to investors and consumers alike. With an expanding base of online users, the crypto-currency has appeared on the radars of numerous governmental agencies, with some stating flatly that the currency is not really money and/or cannot be used. But while critics may think that the expanding list of governments against Bitcoin could lead to its demise, lovers and users of the anonymous currency can add another big name to the list of companies willing to accept it as payment for goods and services.
How many carrots can you buy with one bitcoin?
Online gaming firm Zynga (NASDAQ:ZNGA) is the latest in a string of companies and institutions supporting Bitcoin. Following the news that gamers could use the online currency for Zynga's online social gaming sites, the price for a single Bitcoin passed the $1,000 mark yet again.
The currency had been experiencing a lull in its value since the middle of December, when China's largest exchange said it would no longer take orders for Bitcoin following increased pressure from governmental authorities. Since then, the currency has been working its way back toward its recent highs, with Zynga's announcement pushing it over the top.
Testing, hedging, and gifting
Zynga's plan is to test the use of Bitcoin as a payment method for players of its popular games like "FarmVille 2" and "CastleVille" through the site BitPay. Other retailers, including L Brand's (NYSE:LB) Victoria's Secret and Overstock.com (NASDAQ:OSTK), have announced they will accept Bitcoin as well. So far, customers can buy VS giftcards through the Gyft app.
It will be a little while until Overstock.com sets up its system for Bitcoin payment. When the site announced it was planning to accept Bitcoin, CEO Patrick Byrne said that it would take some time to figure out how the company would process Bitcoin transactions, as well as how to hedge its extreme price volatility -- hence the site's timeline stretching out to next summer.
A foggy future
Though there is obvious interest on behalf of online consumers, and statements from big firms like Bank of America stating that Bitcoin has a real chance at becoming a widely accepted form of payment in the future, there are still plenty of hurdles for the online currency to face.
Though global governments may have a final say in the legality of Bitcoin's use, consumers and retailers will play the ultimate roles in determining how widespread the use of an anonymous online currency will get.
Without the acceptance of Bitcoin as payment for goods and services from a large number of retailers and other companies, Bitcoin's chance of acceptance as a true currency will be slim. For now, the news from Zynga and other companies willing to take the risk on is a sure sign that Bitcoin isn't going away anytime soon.