Game developer, Zynga is testing bitcoin, a currency designed four years ago by pseudonymous computer programmer, for in-application purchases of virtual goods, becoming one of a growing number of online businesses accepting the virtual currency.
Bitcoin’s debut was the first time in internet history that users could buy and sell something completely anonymously and with almost any other internet user in the world.
BTC, as the units of currency are called, work much like conventional cash: they are exchangeable with other currencies including the Euro, US dollar, and British pound, and can be spent without leaving a recognisable “paper trail.”
Meanwhile, on Zynga, the bitcoin option is open to those playing seven games through the company’s main portal, Zynga.com, which include FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows and CityVille, according to a company post on Reddit.
PcWorld reported that that as a purely digital currency, a bitcoin is essentially a secret number that is transferred from one party to another on a peer-to-peer software network using public key cryptography.
“Regulators around the world are mulling how bitcoin fits into existing financial regulations. None have banned it, although some countries, such as China, have made it more difficult to move funds into exchanges that sell bitcoins. Traditional banks have so far steered clear of it.
“Bitcoin poses competition to online payment services such as PayPal, which collects fees from vendors selling goods. Bitcoin has much lower transfer fees, although businesses usually want to quickly exchange their bitcoins for government-issued money because of its volatile exchange rate. That exchange does incur a fee, but bitcoin payment processors aim to undercut PayPal,” the portal reported.
The price of a bitcoin ticked up over US$1,000 on Monday on Mt. Gox, a Japan-based bitcoin exchange.
Zynga is using BitPay, an Atlanta-based company, as its payment processor. BitPay offers a guaranteed exchange rate and regular direct deposits to merchants in 33 countries.
Online sites such as Reddit and WordPress accept bitcoins, but online giants Amazon.com and eBay—which owns PayPal—do not yet.