Bitcoin Buys Burgers to Beer as Shoppers Go VirtualNatasha Doff
What do a street-van burger, a wedding bouquet and a Beatles album have in common? They’re all on a growing list of products shoppers can buy over the counter using the virtual currency Bitcoin.
From Berlin record store Long Player to the Flower Lab, a florist in Santa Monica, California, more retailers are accepting Bitcoin as consumers increasingly buy into the money, pushing up its value. In the past month, the number of businesses on CoinMap, a website showing physical companies and vendors accepting Bitcoin, has tripled to more than 2,100.
“People come to us from all over the world because we accept Bitcoin,” Vesna Sic, co-owner of the Lekkerurlaub guest house in Berlin, said by phone. “We had one man from Texas who has nowhere at home where he can spend his Bitcoins, so he came to Berlin for a week to spend them.”
There are about 12.2 million Bitcoins in circulation, according to Bitcoincharts. While online payments for everything from university tuition fees to gummi bears aren’t unusual, over-the-counter transactions are just beginning to become popular. Now the virtual currency can buy olive oil in Spain or vodka shots in Moscow as consumers seek ways to spend the digital money.
“Our news inbox has gone crazy over the last couple of months with more and more vendors saying they are accepting Bitcoins,” said Jeremy Bonney, a project manager at CoinDesk, a website that tracks the progress of the virtual currency.
Bitcoin exists as software and isn’t controlled by any government or central bank. The cryptocurrency emerged in 2008, proposed by a programmer or group whose identity is unknown. While a handful of companies have minted physical Bitcoins with a code that can be scanned to link them to the digital version, they’re rarely used for everyday purchases since they’re worth hundreds of dollars apiece. Today, a Bitcoin fetched $757, according to the CoinDesk Bitcoin price index.
There are 26 physical retailers in London that accept Bitcoin and about 160 in Britain, according to CoinMap. Government and banking restrictions prevent U.K. retailers from adopting Bitcoins on a larger scale, said Chris Skinner, director of the Financial Services Club and head of Balatro Ltd., a research firm in London. While there are few limitations on individuals buying and selling, lenders may close the accounts of businesses conducting many transfers with the electronic currency.
“Banks are running scared of money-laundering regulations and Bitcoin is primarily associated in the government’s mind with avoidance of tax and potentially fueling and funding terrorism and drug running,” Skinner said.
The European Banking Authority is weighing whether to regulate virtual currencies, a decision that could make or break wider-scale use by retailers. The banking regulator warned Dec. 13 that users risk theft and lack protection from losses if their virtual exchange collapses.
Bitcoin’s value has been known to lose or gain more than a quarter of its value in a single day. A decision by China’s central bank to bar financial institutions from handling transactions of the currency earlier this month sent the value tumbling.
“Today the exchange rate is a third of what it was last week,” London street vendor Tom Reaney said on Dec. 11. “It’s a constant gamble unless you cash them in at the right time, but then where’s the fun in cashing them in because then you don’t have any coins?”
Late last month, Reaney’s Burger Bear became London’s first street food vendor to accept Bitcoin. Within three weeks about 50 customers had used the currency, paying him by making a transfer with their smartphones.
“I wasn’t expecting all the fuss when I said I would accept Bitcoin, but a lot of people have jumped on it,” Reaney said. “People are desperate to spend their coins on something rather than just online transactions.”
Reaney often parks his van near the so-called Silicon Roundabout, an area of East London with many tech startups. He decided to start accepting Bitcoin after noticing that customers were users.
One of his first virtual-currency clients, Web developer Ryan Holder, said he bought his first Bitcoins in April and has since seen them more than quadruple in value.
“I wanted to start moving a larger and larger proportion of my free cash every month into Bitcoin,” Holder said. “That was what inspired me to search for some food that I could buy because it’s all well and good having currency, but if you can’t eat with the currency then you’re in trouble really, aren’t you?”
Holder bought many Christmas presents at online Bitcoin stores this year, including a remote-controlled quadcopter for his son.
Stephen Early, the owner of the Pembury Tavern, the first London pub to accept Bitcoin for beer, says it’s an attractive form of payment for small retailers because, unlike credit cards, it has no transaction fees and payments can be processed in less than a minute.
“I was fed up with the credit card process so it’s been nice to use Bitcoin,” Early said. “But I’m not yet confident enough to put all my savings into it, even though if I had done so earlier this year, I would now be very rich.”