Is this the future for holidays? Expedia now accepts Bitcoin for hotel bookings
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The digital revolution is coming... to a hotel near you. Well in the States anyway, where virtual currency Bitcoin is now being accepted as a form of payment for hotel bookings through travel website Expedia.
For Expedia customers in the US making a hotel booking, bitcoins are now offered as a payment method alongside Visa, MasterCard, American Express and Paypal.
Expedia's global vice-president, Michael Gulmann, said the company was in a good position 'to solve travel planning and booking for our customers and partners alike by adopting the latest payment technologies.'
Travellers making hotel bookings through Expedia in the US will now be able to use digital currency bitcoin alongside the usual payment methods
The company is only accepting the currency for hotel bookings to begin with, and is currently restricting the trial to its US site.
But travel experts predict the company will expand the payment option for other services depending on the success with hotels.
While Expedia is one of many to begin accepting the crypto-currency, it is the largest travel company to accept it so far.
Other lodging companies that accept Bitcoin include MGM Resorts International and HomeAway, a vacation rental booking site. by No major airline carriers have approved the currency for payments.
But banks across the world have raised concerns about the virtual currency over recent months, and it has been plagued by technological problems and security issues.
It has also been the subject of much controversy since its launch, with fears that it can be manipulated by money launderers and black marketeers, and used to 'hide' wealth.
Bitcoin: Coming to a hotel near you?
Expedia will use Bitcoin exchange Coinbase for processing transactions, but Gulmann says the company will not store the currency, but convert Bitcoin deposits back into US dollars every 24 hours.
Expedia is the first company in the travel sector to embrace the virtual currency, although an increasing number of companies are beginning to adopt Bitcoin: Google's Android platform already accepts the digital money, and Apple is looking into using it for downloads or in-app purchases from the Apple App Store.
Virtual currencies are built around shared software, with users carrying out transactions directly, without having to go through a bank or other company.
Coins are transferred directly from person to person and are kept in a digital wallet that can be accessed on a computer or mobile device.
Creating new coins is done through a process called 'mining' where users are rewarded with new coins by taking part in mathematical operations within the system using cryptography. As a result, Bitcoin is more accurately known as a cryptocurrency.
To receive a bitcoin a user must have a Bitcoin address - a string of 27-34 letters and numbers - which acts as a kind of virtual post-box to and from which the bitcoins are sent.
Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction.
A LOOK AT THE DIGITAL CURRENCY
What is a bitcoin?
Bitcoins are just lines of computer code that are digitally signed each time they travel from one owner to the next.
They are the basic unit of a new online economy which runs independently of any company, bank, or government. Because Bitcoins allow people to trade money without a third party getting involved, they have become popular with libertarians as well as technophiles, speculators and criminals.
Who's behind the currency?
It's a mystery. Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto and then adopted by a small clutch of enthusiasts.
Nakamoto dropped off the map as Bitcoin began to attract widespread attention, but proponents say that doesn't matter; the currency obeys its own, internal logic.
What's a bitcoin worth?
Like any other currency, Bitcoins are only worth as much as you and your counterpart want them to be. In its early days, boosters swapped Bitcoins back and forth for minor favors or just as a game. One website even gave them away for free. As the market matured, the value of each Bitcoin grew. At its height three months ago, a single Bitcoin was valued at $1,200. On Tuesday, it was around $500.
Is the currency widely used?
There are currently around 11 million bitcoins in existence.
Businesses ranging from blogging platform Wordpress to retailer Overstock have jumped on the Bitcoin bandwagon amid a flurry of media coverage, but it's not clear whether the currency has really taken off.
On the one hand, leading Bitcoin payment processor BitPay works with more than 20,000 businesses - roughly five times more than it did last year. On the other, the total number of Bitcoin transactions has stayed roughly constant at between 60,000 and 70,000 per day over the same period, according to Bitcoin wallet site blockchain.info.
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