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Brooklyn Businesses: Show Me The Virtual Money

NEW YORK (CBSNewYork) -- Some Brooklyn businesses are among the few early adopters embracing a virtual currency.

As CBS 2's Tamara Leitner reported, "Bitcoin," which has been around since 2009, is growing in popularity. Anyone can buy it using real money at an online store, or an "exchange." To purchase something with Bitcoins, a shopper simply transfers the value from his or her online Bitcoin wallet to someone else's.

The five Brooklyn businesses owned by Dan Lee's family -- including the Boerum Hill restaurant Oxford Kitchen -- accept Bitcoins and even offer a 10-percent discount for those customers who use them.

"I thought it was kind of a novel idea," said Lee, the restaurant's business manager.

Only a small number of businesses accept Bitcoins, but there are also online businesses that take them.

For the first six months, not a single customer paid with Bitcoins at Oxford Kitchen, but it seems now, the concept has caught on and roughly five customers a day pay for their purchases with Bitcoins, Lee said.

"We actually get a lot more questions about Bitcoin than we do about the discount," Lee said. "So it's more of like, 'Well, what is Bitcoin?'"

Paying with Bitcoins is as quick as paying with a credit card, and it's cheaper for merchants because of the low transaction fee. Every Bitcoin purchase is transparent, meaning anyone can see what was bought or sold.

Arik Hesseldahl, a senior editor for the tech website All Things Digital, said the currency is volatile and the exchange rate changes often. Currently, one Bitcoin is valued at more than $420.

"It's still really in that experimental phase," Hesseldahl said. "Government is still struggling to figure out how to regulate this."

Meanwhile, most New Yorkers interviewed by Leitner were not aware the Bitcoins exist.

"Bit what?" Ben said. "Never heard of it."

"That's strange," said Tiara Shine. "I want to be able to touch my money."

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