Once people acquire bitcoins, which are a purely digital currency, they can be kept in a digital wallet with smartphone apps and online accounts allowing people to transfer their bitcoins to others in payment of goods and services.
The owner of The Sly Fox cafe in O’Connor Pat Dillon, whose outdoor business was one of the first to embrace bitcoins in Canberra, said a small but reliable number of customers used bitcoins to purchase coffee.
“There are at least 15 people who’ve come through here and used it – mostly IT type people who are familiar with bitcoin,” he said.
“I’d say we average at least 2 bitcoin sales a week at the absolute minimum.”
The relatively slow adoption of bitcoins in the ACT may not be helped by the Australian Tax Office’s August ruling that bitcoins are considered property or assets rather than a digital currency.
“The ATO’s view is that bitcoin is neither money nor a foreign currency and the supply of bitcoin is not a financial supply for goods and services tax purposes,” read the ruling.
“Bitcoin is, however, an asset for capital gains tax purposes.”
Canberra software developer Zakaria Boughuettaya, who designed the MyBus 2.0 mobile application for ACTION Buses with his business partner Andrew Clapham, said only 20 bitcoin transactions had been registered since the launch of the application some five months ago.
“To be honest we installed the bitcoin facility as a bit of a marketing tool and weren’t sure how many people would make use of it,” he said.
But Mr Boughuettaya said he was surprised at the number of emails he received when the software developers temporarily removed the bitcoin option to install updates.
“We received about 30 emails from people asking for it to be reinstalled which is odd because that’s more people than have actually used the feature,” he said.
Mr Boughuettaya said the strong response was indicative of the bitcoin’s high profile and the many people who support it but had not used it beyond occasional experimentation.
In mid-July, Australia’s third bitcoin ATM was installed on the second floor of the Canberra Centre and allowed a new user to create an account within three to six minutes, instead of waiting weeks for verification using a computer.
But ABA Technology director Robert Masters, whose company installed the machine, did not specify how many transactions had been completed but insisted that “business was booming”.
Mr Masters said the company had plans to install other bitcoin ATMS in Brisbane, Adelaide, and Perth.
But V Spot Café owner Chrissie Wittich, who installed bitcoin capabilities because she appreciated its “novelty aspect”, said they had recorded 22 bitcoin transactions totaling $296 in their Civic store since the beginning of the year.
Ms Wittich said she was surprised that many transactions had made and thought the ATO’s August ruling on bitcoin would have little impact on trade.
“I don’t expect it would have too big an influence on people using bitcoin just to buy a cup of coffee or a toasted sandwich,” she said.
President of the Bitcoin Association of Australia Jason Williams said in August the ATO’s ruling was disappointing and could lead to a decline of the currency in Australia.
“Applying double GST to some bitcoin transactions will adversely affect investment in the bitcoin economy and may push bitcoin businesses to relocate to other, more favourable jurisdictions,” he said.
One bitcoin was valued at less than $50 early last year, rose to above $1200 by December and is now priced at about $516.