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Investors in Bitcoin Seek to Turn It Into Major Currency

By Dan Weil   |   Monday, 04 Nov 2013 08:45 AM

Various investors are working on projects they hope will turn the bitcoin, a digital currency, into a widely used transaction vehicle.

They say the currency engenders lower payment processing costs and safer transactions, The New York Times reports.

"I'm confident you will see major worldwide retailers adopting systems built on bitcoin," Jim Breyer, a partner at venture capital firm Accel Partners, told the paper.

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He and Accel have invested in Circle Internet Financial, a payment processing system for bitcoin transactions on and offline.

The bitcoin is currently accepted for payment at only a niche group of businesses. It gained notoriety for its usage on Silk Road, a major website for drugs and forged documents.

The feds shuttered Silk Road in October, and bitcoin advocates say that will help promote the currency.

"The bad guys basically lost," Fred Ehrsam, co-founder of Coinbase, a start-up that helps merchants accept bitcoin and helps consumers obtain it by exchanging traditional currencies, tells The Times. "It took the single most illegitimate player in the space and wiped them off the map."

Cheaper payment processing fees will boost the bitcoin's use too, they say. Retailers generally pay 2 to 3 percent fee on each sale they make to a customer with a credit card.

Bitcoin payment fees generally run from zero to 2 percent, because of its open-based technology system, according to The Times.

The first bitcoin Kiosk opened last week in Vancouver.

Robocoin, the Las Vegas-based company that makes the ATM-like kiosks, sees them gaining worldwide presence. "By the end 2013, we'll be all over Canada. By the end of 2014, we'll be all over the world, including the United States," CEO Jordan Kelley tells Reuters.

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