What is Bitcoin?
Bitcoin is the new way to pay for things over the Internet. The Internet has dramatically changed a lot of industries, but so far it has had little impact on financial services. For all the growth in e-commerce, we still end up using traditional banks or credit cards to make payments. These traditional mechanisms are slow, costly, cumbersome and drag a lot of unnecessary baggage into the digital world. Bitcoin brings payments into the 21st century and provides a secure way to move money directly between any two parties over the Internet without risk of counterfeiting, double spending, etc. Bitcoin is the foundation for solving many problems associated with our financial system today, including reducing the dependency on too-big-to-fail banks, greater efficiency/lower fees, extending financial services to the unbanked, simplifying international remittances and much more.
Here are a few explanations of Bitcoin:
- Short video
- Wall Street Journal Bitcoin Primer
- SecondMarket Bitcoin Education Center
- The Economist Explains Bitcoin
Why Take Bitcoin?
In the medium term, Bitcoin will dramatically reduce transactions costs. Instead of paying several percent of every transaction to a credit card company, by default Bitcoin transactions are free. In practice, you will probably still use a payment processor when you accept Bitcoin payments because they can simplify the transaction, ensure you get paid daily in dollars, etc. But the transaction processing costs associated with are much less than regular credit cards (e.g. Bitcoin payment processor BitPay charges 0.99% for transactions).
In the short term, Bitcoin sales will be a tiny fraction of your business so the payment savings will not be material. Accepting Bitcoin might however provide some negotiating leverage next time you sign with your credit card processor. But in the near term, the big opportunity is to get significant PR exposure and attract a technically-savvy audience. Because Bitcoin is still a novel thing, retailers who start taking Bitcoin are getting global press. While the novelty of this will wear off as more and more retailers take Bitcoin, there is still a window. In Seattle in particular, there is an opportunity to be the first to take Bitcoin and reap the PR benefits. We can ensure that local press covers the news. Because it is so easy to take Bitcoin (see below), think of this as a cheap way to drive some PR and position yourself as a forward looking entity, both hip to the latest in technology but also with a twist of populism because of Bitcoin’s potential to undermine the banks’ central role in our economy.
Examples of PR
London: Pembury Tavern
- The Guardian newspaper
- Daily Mail newspaper
- Business Week magazine
- The Australian newspaper
- Yahoo News Singapore/Bloomberg
New York: EVR Bar
San Francisco: Buyer’s Best Friend
How Do I Take Bitcoin?
Accepting Bitcoin is extremely easy for any retailer using an iPad-based POS system (although they can integrate with other types of POS systems). By installing another app and signing up with BitPay, you can be accepting Bitcoin in a matter of minutes. We will help any retailer who wants to take Bitcoin get up and running.
See more in this video from Bitpay on how the POS experience works.