Microsoft added bitcoin as an online payment option in Xbox and Windows stores. US customers can now purchase games, apps and other goodies, with digital currency added to their personal Microsoft accounts.
Without making a formal announcement, Microsoft added detailed instructions on its customer support webpage about how to use the digital currency.
However, the virtual cash cannot be accepted as a direct payment method.
“You can only use bitcoin to add money to your Microsoft account and then purchase digital goods at select Microsoft online stores. You can’t use bitcoin to purchase Microsoft products and services directly at this time,” says the corporation’s webpage, warning that transactions are irreversible.
The maximum daily top up of a personal account is limited to $1,000, with a $5,000 maximum limit for an account registered by an individual.
The decision to accept cryptocurrency is a result of partnership between the world’s leading computing corporation and Georgia-based bitcoin processor BitPay.
The fact that a company with a market capitalization of $380 billion has taken to accepting bitcoin means a lot for the digital currency.
With Dell and Newegg taking a lead earlier this year, Microsoft has now become the largest tech company to embrace bitcoin.
“The use of digital currencies such as bitcoin, while not yet mainstream, is growing. We expect this growth to continue and allowing people to use bitcoin to purchase our products and services now allows us to be at the front edge of that trend,” said Eric Lockard, corporate vice president of the Universal Store at Microsoft, as quoted by CoinDesk.
In 2014, Microsoft expects its annual revenue to exceed $86.8 billion.
Speaking to TechRadar, Oxford economic sociologist Dr Vili Lehdonvirta warned not to overestimate the influence of Microsoft’s affair with bitcoin, because most likely the corporation is not receiving bitcoins itself.
“This means that Microsoft itself will not be accumulating and thus spending bitcoins, which somewhat limits the significance of this announcement. Microsoft is not entering the bitcoin economy as such,”Lehdonvirta explained.
Microsoft’s involvement with bitcoin began in February 2014, when the company’s Bing search engine was modified to allow users to generate bitcoin price conversions. Microsoft co-founder, and current technology adviser, Bill Gates’ interest in digital payments technology directly influenced this.
In October, Gates spoke in favor of digital currencies during an appearance on Bloomberg’s “Street Smart.”
With all its problems, bitcoin is an “exciting” financial solution, Gates said.
Bitcoin virtual cash is based on a complicated math and cryptography system issuing unique ‘virtual coins’.
The ‘mining’ process for the global bitcoin community generates codes for new bitcoins, which are limited to a finite quantity.
At the peak of its value in December 2013, one bitcoin was worth more than $1,100, making the bitcoins in existence at present worth well over $1 billion.
The ‘exchange rate’ has dropped dramatically since then, currently making $346, according to CoinDesk.