The talk about Bitcoin seems never ending, and it looks like it’s a topic that’s not going away any time soon. But what is Bitcoin and how can it benefit your business if at all?
What are Bitcoins?
Bitcoin is a crypto-currency which essentially means it’s a virtual currency. It does not exist in any physical format and its created by a computer algorithm which assigns each Bitcoin with a unique ID which is then used to track every purchase made using the currency.
Instead of having to go through a middleman or a bank, each transaction happens person to person too, giving a better sense of security to exchanging money. It gained popularity in 2009 after the crash in Cyprus and people were looking for a safer way to store their money.
A single Bitcoin is currently worth around £350 (21st Feb 2014) but the value fluctuates frequently just like any other currency. Small parts of a Bitcoin are called satoshis which divides the coin by 8 decimals, meaning you can easily pay for small items with parts of a Bitcoin.
What’s the benefits?
Only 21 million Bitcoins will ever be released, meaning that it has a low inflation risk, plus as a virtual currency it’s not regulated by any government, meaning that the risk of the currency collapsing is low too. Some customers may also appreciate being offered an alternative form of currency.
At the moment the fluctuating price of Bitcoins is the biggest downer, meaning it’s not very convenient if you’re running a business. As it’s a new currency, not many people are using it and even less are using it offline. While some mainstream merchandisers are accepting it as a form of currency, it’s still not mainstream.
How does it affect pop ups and retail stores?
There’s lots of pop up shops that are using Bitcoins as an alternative form of currency, and what better way to test the water than with a temporary shop? A pub in London has recently offered Bitcoin as a form of payment as well as Paypal, letting customers who use this method to have a discount on their purchases.
A pop up shop in London has also recently opened which sells Bitcoins, the first of its kind in Europe. Azteco speeds up the wait time for Bitcoins by letting you purchase them over the counter, providing you with an instant code which you can then transfer into your virtual wallet. This kind of pop up store may be the solution to a lack of accessibility or knowledge about the crypto currency.
It’s an interesting alternative that could easily work, but four years on as the currency enters the popular sphere, only time will tell if we’ll be buying all our pints in the pub with virtual currency.