Talk Sugar Accepts Bitcoin

Phone sex platform site Talk Sugar now accepts — and makes payouts to SugarHosts (phone sex operators) and affiliates with — Bitcoins. I’ve no experience with Bitcoin whatsoever, but here’s what reliable sites and publications have to say.

Bitcoin (BTC) is an experimental peer-to-peer digital currency which uses public-key cryptography. Of particular concern is this simplified description:

Each time bitcoins change hands, so does a transaction history encoded in a string of characters. This “hash value” or digest can be decoded by anyone with sufficient computer power and time to devote to the effort. When bitcoins are exchanged, a digest is broadcast to the network of users, a participant does the work of decoding the transaction history, and other users quickly confirm their history is accurate. (The decoders earn a 50-bitcoin bounty for their work.) This happens about once every 10 minutes. Everyone who holds the currency agrees on who owns what, which ensures people can’t copy-and-paste their way to millions or defraud other users without the whole network agreeing that it happened.

In other words, Bitcoin isn’t just a currency, it’s a massive experiment in group trust.

If reading about public-key cryptography is confusing or frightening to you, you probably are no longer interested in trusting the digital currency as a method of payment in your business, no matter how easily is supposedly converts to a PayPal payment, direct deposit, re-loadable Visa card, or other options.

However, if you think you understand what Bitcoins are and how they work, I’d advise reading the following:

An article on Bitcoin in The Economist.

Wired magazine’s The Rise & Fall of Bitcoin.

MetaFilter‘s discussion on recent Bitcoin scams and spokesperson Bruce Wagner.

Here’s a Quora discussion on Bitcoin.

UPDATE: Talk Sugar closed in 2013; links to the site have been removed.

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