Starting Thursday, Bitcoin owners can exchange the virtual currency to buy digital content from Microsoft for Windows, Windows Phone and the Xbox.
Many retailers have begun supporting Bitcoin this year, including, , and . But with its announcement, Microsoft becomes the first technology player of significant stature to embrace the currency, a move that furthers Bitcoin's status as a form of payment that's here to stay.
Using payment processor BitPay, Microsoft enables you to trade in bitcoins to add money to your Microsoft account. Once the money is there, you can then pay for apps, games and other content from the Windows, Windows Phone, Xbox Games, Xbox Music and Xbox Video stores.
On one of its help pages, Microsoft explained exactly how people could use bitcoins with a Microsoft account:
- Sign in to Microsoft account - Billing with your Microsoft account
- Select Payment options > Microsoft account > redeem Bitcoin
- Select the amount you want to add, then click Next
- Review the amount of Bitcoin needed and use your digital wallet to complete the transaction within 15 minutes:
- On your computer - select Pay with Bitcoin and then pay from your Bitcoin wallet on the same device.
- On your smartphone - scan the QR code displayed on the page to pay from your mobile wallet app.
There are a few caveats, though, according to Microsoft.
Any money you add to your Microsoft account via bitcoin can't be refunded. Bitcoins can only be used to add money to your Microsoft account and buy content on the Windows and Xbox platforms. You can't use it to buy Microsoft products or services directly, at least not at this time. And Microsoft's support of Bitcoin is currently available only in the US.
Just why has Microsoft started to support Bitcoin? The support is part of the company's ongoing effort to offer flexible types of payments, according to the following statement from a spokesperson:
Microsoft is dedicated to providing customers with personalized, integrated and frictionless buying experiences, and Bitcoin represents the company's continued investment in offering flexible payment options (including PayPal, AliPay and MO).
Bitcoin has become popular because people can use it to buy items anonymously without having to deal with banks that may charge transaction fees. Buying items internationally via bitcoins is also easy because the currency isn't tied to any single country or economy. But Bitcoin has gone through its ups and downs in establishing itself as a valid form of payment.
Earlier this year, Bitcoin exchangein Japan in the wake of a security bug that led to the alleged theft of almost 750,000 customer bitcoins, as well as 100,000 of the exchange's own bitcoins. In February, Joe Manchin, a Democratic senator representing West Virginia, , saying that it is "highly unstable and disruptive to our economy."
But over time, Bitcoin has gained greater credibility as it's been accepted by more retailers and by certain financial officials. In October, former US Securities and Exchange Commission Chairman Arthur Levittbut said he believes regulation will be necessary to give it more legitimacy.
"The founders of these [Bitcoin] companies tend to be entrepreneurial, irreverent and probably feel that regulation should be avoided at all costs," he said in an interview. "I understand where they're coming from but I also believe that regulations really will do more to establish their credibility as an alternative. It's got to be sensible, balanced regulation and it can't be regulation that chokes them."
(Via The Verge)