Betting that Bitcoin will take off

22 Dec 2013 / ABQ Journal – At Vetco, customers can’t pay with a personal check, but they can pay with virtual currency.

The Albuquerque veterinary-services clinic this month began accepting Bitcoin alongside more traditional options like cash, debit cards and credit cards.

Within hours of announcing the new policy, Vetco staff say they fielded a phone call from an excited potential customer.

Vetco processed just one Bitcoin transaction in the first two weeks, but the locally owned clinic hopes the move will ultimately attract new customers and ensure the business is prepared if – or when – the Bitcoin movement takes off in Albuquerque.

“We figure Bitcoiners have pets, too,” said Lauren MacEwen, Vetco’s marketing director.

Bitcoin – a fledgling currency described at bitcoin.org as “the first decentralized peer-to-peer payment network” – isn’t commonplace in Albuquerque yet. The volatile currency allows users to exchange funds without the involvement of a bank.

But even though many people are still unfamiliar with Bitcoin, a handful of local businesses are ready to accept it.

A Bitcoin transaction at Vetco is a swift and simple process involving a customer’s smartphone, or other Internet-connected device, and Vetco’s iPad.

It’s also cost-effective, MacEwen said. Bitcoin pays a third-party payment processor to handle the transaction for a fee of about 1 percent, less than a typical credit card.

MacEwen sees a lot of upside, including the chance to woo new customers.

“We have a lot of techies, and we have a lot of progressive people here, so I think there’s going to be a pretty good-sized Bitcoin community,” she said.

Local interest

Jacob Hall said he sees growing interest around Albuquerque in Bitcoin. The 27-year-old University of New Mexico graduate student started his own money services business (abqbitcoins.com) earlier this year to buy and sell Bitcoins in New Mexico. He said he has sold about 125 Bitcoins for $40,000 since August.

The Albuquerque Bitcoin community is “bigger than I thought it was going into this,” said Hall, noting that his customer base defies characterization.

“I’ve met anywhere from kids straight out of high school to 65-70 (year-old) retired Navy veterans and all types of people in between. There’s really not one type of person that I can say is buying Bitcoins. People within the computer and IT community, they get it more. It’s easier to them, but I couldn’t put a type of person that buys Bitcoins,” Hall said.

“I’ve literally met almost every type of person underneath the sun: hippies, teenagers, college students, moms, dads, grandpas.”

Hall – who conducts business face-to-face, usually at either Frontier or Satellite Coffee – said he doesn’t make a habit of asking what his customers plan to do with their Bitcoin.

Bitcoin – likened to cash for the Internet – has made headlines for its use in drug dealing and other criminal enterprise, but Hall said customers who do make small talk with him often say they’re buying into Bitcoin for investment purposes.

Early advocate

The chance to make money with Bitcoin is one reason New Mexico Tea Co. owner David Edwards allows customers to pay with it.

His company accepted Bitcoin as far back as early 2011. Edwards has equipped his store near Old Town to accept the digital money, but he said most of those transactions happen online.

He currently averages about 10 Bitcoin orders per month, he said, and Bitcoin has allowed him to sell easily to customers as far away as Ukraine and New Zealand.

Edwards, who also uses a third-party processor, can convert those payments into U.S. dollars or keep them in Bitcoin. He opts to keep them in Bitcoin. He once sold off a chunk of Bitcoin for profit and hopes to one day do that again.

But it’s that investment-minded approach that also limits the amount of Bitcoin activity his business sees.

“The people who are buying Bitcoins right now or earning them aren’t really interested in spending them so much because the chance to double your money exists,” Edwards said.

Accepting – and holding onto – Bitcoin creates some accounting challenges, but Edwards said taking digital currency is worth it because of another benefit: marketing.

Edwards and other local business owners say they take Bitcoin in part because being early adopters gives them a certain cachet.

MacEwen said Vetco was recently tapped by a few national pet magazines to blog about its Bitcoin experience. The clinic has also received publicity as far away as Europe.

‘A tinkering hobby’

Sunlight Homes owner Evan Davis said the exposure that comes with being at the forefront of the Bitcoin movement is probably the only advantage of accepting it – at least right now.

Davis, in fact, has yet to accept a customer payment in Bitcoin, though he and his tech-minded friends have used the currency to buy and sell items among themselves.

“It’s very much kind of a tinkering hobby at this point, not a major part of my life,” he said. “I’m hoping it does catch on and does become a larger force, but that might be a while.”

While Edwards appreciates that Bitcoin simplifies e-commerce, he remains skeptical that it will become part of the average consumer’s day-to-day life since credit cards are just as simple to use when, say, buying lunch.

“I don’t see (how Bitcoin usage) would get them anything that paying with a credit card wouldn’t get them, unless they had a lot of Bitcoins and they wanted to be outside of the (organized) financial system,” he said.

“But I don’t think anyone is there, because the ecosystem as a whole doesn’t have enough depth that you could live your life just with Bitcoin.”

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