Bitcoin is a PayPal competitor - not a currency - for retailers

newegg bitcoin
Newegg is the latest business to accept bitcoins, but the company is just converting them into cash - making Bitcoin more of a PayPal rival.

Yet another big retailer has started accepting Bitcoin. This time it's online computer and software seller Newegg.

That means you can buy an Asus Transformer tablet on Tuesday for $375 -- or 0.5751 BTC. And it shows this independent digital currency thing is actually gaining steam.

In addition to buying gadgets on, you can use bitcoins to book travel with Expedia (EXPE), CheapAir and Virgin Galactic; subscribe to Dish Network (DISH) or the Chicago Sun-Times; shop on Overstock (OSTK), TigerDirect and buy tickets to the Sacramento Kings or San Jose Quakes. Or you can purchase the latest albums by metal band Mastodon and rapper 50 Cent.

But here's the caveat. These companies are immediately converting those bitcoins into cash.

Related: What is Bitcoin?

They accept Bitcoin payments, because they are cheaper to process than credit card and PayPal payments. But they are wary of hanging onto the volatile currency for too long.

The UK's first Bitcoin ATM
The UK's first Bitcoin ATM

It shows Bitcoin -- or something like it -- has a promising future as a back end payment system. But maybe not as a currency.

Related: My business accepts bitcoins

On that note, the price is way up again. A bitcoin is now trading at $655.

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