Bit coins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. This activity is called mining and miners are rewarded with transaction fees and newly created bit coins.[19] Besides being obtained by mining, bit coins can be exchanged for other currencies, products, and services.[29] Users can send and receive bit coins for an optional transaction fee.
Bit coin as a form of payment for products and services has grown, and merchants have an incentive to accept it because fees are lower than the 2–3% typically imposed by credit card processors.[31] Unlike credit cards, any fees are paid by the purchaser, not the vendor. The European Banking Authority[ and other sources have warned that bit coin users are not protected by refund rights or chargeback’s. Despite a large increase in the number of merchants accepting bit coin, the crypto currency does not have much momentum in retail transactions.
