For this Saturday’s Georgia Tech home football game against Duke, fans should bring their team jersey, face paint, beer-resistant poncho and smartphone, but forget the wallet. There’s a new way to pay for concessions at Georgia Tech: bitcoin, reports the Atlanta Journal-Constitution.
Bobby Dodd Stadium at Georgia Tech is only one of a growing list of places integrating the use of digital currency.
"Bitcoin is described by bitcoin.org as 'an innovative payment network and a new kind of money.' It is a peer-to-peer payment network with no middleman. Users send and receive bitcoins within the (digital) network of those honoring the system," reports a Deseret News article from April.
Companies like Dell, Dish Network, Expedia, Overstock, Amazon and, most recently, PayPal are a few big names accepting bitcoin as payment for online shopping, reports the International Business Times. PayPal-using merchants, like eBay, Uber, Airbnb and TaskRabbit, will soon also begin taking the currency.
But Bitcoin is also being used beyond cyberspace. It is entering the real world.
“Some 3,000 businesses around the world accept bitcoin for payment, according to coinmap.org,” says the Wall Street Journal.
"Brick-and-mortar stores including Home Depot, CVS, Kmart and Sears" accept bitcoin at their check-out stands, reports Forbes.
Local mom-and-pop stores and restaurants are upgrading to the digital currency, too. Right now, only a handful of retailers in each big city are taking bitcoins, but that number is growing. Coinmap provides an interactive worldwide map to click and zoom to find nearby bitcoin-accepting retailers and restaurants.
To pay at local shops, the customer must have a downloaded online wallet app, like BitPay or Coinbase. The retailer presents a QR code, which the customer scans with his or her wallet app, and the bill is paid.
Why is Bitcoin growing in popularity?
The incentive for retailers is financial. “Credit card networks charge merchants around 3 percent to process transactions. Bitpay charges 1 percent or less to accept bitcoin payments on behalf of merchants. Bitpay merchants don't have to worry about the headache of disputed payments known as ‘chargebacks,’ ” reports Timothy Lee of Vox.
The incentive for consumers is less clear, but businesses are changing that. For example, “Overstock is planning to offer a financial incentive to paying with bitcoin. Since bitcoin payments save the retailer credit-card fees, Overstock will give bitcoin customers 1 percent back on their purchases (in store credit),” stated the Wall Street Journal article.
Bitcoin has its critics. The cryptocurrency began as an anonymous way to complete shady transactions online, like buying illegal drugs and other contraband on the now-shut down online market Silk Road.
More recently, critics point to the crumbling of Mt. Gox, a Tokyo-based exchange service that was handling 70 percent of Bitcoin transactions at the time of its downfall, as reason to distrust the currency. Last year, the company lost all 740,000 bitcoins — an estimated $367 million — it was holding, leaving its clients with nothing, says Richard Grossman of Slate.
Finally, the currency is unpredictably volatile. Over the course of a year (from June 2013-July 2014), one bitcoin ranged in price from $68 to $1,151. In February, bitcoin dropped 20 percent in 24 hours before rebounding the next day, reported Fortune.
However, Lee remains optimistic, especially about Bitcoin’s future in the international market.
“The currency keeps getting more valuable: the 'market capitalization' of bitcoins is now around $5 billion, almost 100 times what it was two years ago," he said. "Bitcoin's detractors are making the same mistake as many bitcoin fans: thinking about bitcoin as a new kind of currency. That obscures what makes Bitcoin potentially revolutionary: It's the world's first completely open financial network.”
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