Bitcoin has been about a lot of things: bubbles, volatility, China, and — my personal favorite — the Winklevoss twins. But it’s been less about being an actual currency people can use to buy things.
But businesses willing to accept the cryptocurrency have been steadily popping up all over the world. What do these business owners see that has encouraged them to jump on board?
That was the question I set out to answer, and today, with the help of Bitcoin merchant pioneers across the United States, I’ll be digging into three of the most important reasons business owners have been adopting Bitcoin, and address whether this trend can continue into 2014.
According to Ashkaan Hassan of NuLegal, a “new school” legal practice in Beverly Hills, Calif., demand drives his excitement about accepting Bitcoin. “Yes, Bitcoin has been great,” he said, “We’ve been accepting Bitcoin since May of 2012, and we have seen a steady increase in its use.”
And that’s not just on the tech-savvy West Coast. Bitcoin, according to Coinmap.org, has at least one merchant in nearly every state in America — with the sole exception of South Dakota — and is picking up steam in major cities.
Demand, not volatility, will ultimately determine the future of Bitcoin. As long as there are Bitcoiners demanding to use Bitcoin — and their numbers have been growing — more and more businesses will start accepting the digital currency.
Jennifer Emerson of Cups and Cakes Bakery, in San Francisco, Calif., noted that “Cups and Cakes has been mentioned in several news outlets (WSJ, BBC, Forbes, etc.) for our Bitcoin acceptance.”
There are thousands upon thousands of bakeries across the United States, but only a select few accept digital currency, in fact, Emerson gleefully mentioned that, “even customers worldwide that happened to be visiting San Francisco decided to visit our little cupcake shop so they could use their Bitcoin in person.”
Cups and Cakes’ story is grabbing, and it unquestionably distinguishes the business from the competition. And isn’t that what every business is looking for? Bitcoin is a cost-efficient way to gain some big-time publicity, and other businesses wise up and take notice of that.
It’s easy to use
Because of things like blockchains, miners, and cryptographic puzzles, for most people, the nuts and bolts of Bitcoin’s functioning are terribly confusing. Then again, so are cell phones, and we’re using those pretty much all the time now. The fact is, it may be complex in theory, but not necessarily in function.
Steve Brown, the owner of Madison’s Grill in Portland, Ore., provides a perfect example of this. He was approached by a Bitcoin meet-up group this past August and asked to begin accepting the digital currency.
With only a vague knowledge of what Bitcoin was or how it worked, Brown managed to quickly, and fairly easily, develop a system for accepting Bitcoin. He explained it to me like this:
We have Bitcoin users capture our wallet address QR code and then transfer the appropriate amount of Bitcoin to reflect the charge on their receipt. I receive a record of all transfers on my phone and match them to the sales records of the staff.
Brown then set up a Coinbase account linked to a bank, and was able to simply and reliably exchange the Bitcoin for U.S. dollars.
The Madison’s Grill owner did, however, express one major concern — the lag in transferring Bitcoin to dollars. Brown said: “We had a big Bitcoin meeting and the burgers and beers I sold for Bitcoin became cheaper by the time I could transfer to dollars.” This is something for businesses to be aware of, as it’s one of the few, but major, drawbacks to accepting Bitcoin.
Will more businesses accept Bitcoin in 2014?
It certainly looks that way, and at this point, I think there’s little excuse not to. The willingness to accept the currency has opened up the businesses I’ve mentioned today — as well as many others — to a totally new and growing customer base. It’s a system that’s easily adaptable and has no evidence of backlash — meaning that customers who don’t use Bitcoin haven’t been offended by the increase in their payment options.
Bitcoin is a great opportunity for businesses to be forward-looking and cutting-edge without actually taking an enormous amount of financial risk. I think it’s a home run, and I applaud those businesses willing to think outside the box.
The banking world is a-changing
The traditional bricks-and-mortar bank will soon go the way of the dodo bird — into extinction, that is. This sounds crazy, but it’s true. Every single one of the nation’s biggest banks are dramatically reducing branch counts and overhauling the ones left behind. But despite these efforts, they’re still far behind a single and comparatively tiny lender that’s already leapt into the future. Since the beginning of 2012 alone, this company’s shares are already up more than 250%. And they’re bound to go higher.