Today most large cities have a network of shops, restaurants, and bars that are accepting Bitcoin. They attract a dedicated group of fans and do very well by the cryptocurrency. They are the early adopters and it is paying off.
Why doesn’t everyone accept it? Well, eventually they will. Bitcoin has every advantage. The fees are tiny as compared with credit cards. The transactions are safe, fast, and secure. There are no lost cards. There are no charge backs. The money you make is yours.
It is just going to take some time to get from here to there. Markets are fast but the mainstream of market activity lags behind what the dreamers and idealists are doing.
You know what this reminds me of? The gradual way in which wifi came to be installed in coffee shops, restaurants, and airports.
It was the spring of 2004 — if I recall correctly — and my favorite coffee shop had no wifi. Starbucks had it but only for users of some particular cell service. It wasn’t common at all.
It suddenly occurred to me that this made no sense. I can get service in my home. Why can’t a coffee shop have wifi for its customers?
I had a talk with the manager. I explained to him that many people are becoming rather addicted to their online lives. If he made wifi available, I would do my best to get the word out. He would have a competitive advantage over others. People would come to be there just for that, and spend money on his coffee.
I know all of this seems rather obvious at this point in history, but ten years ago, it wasn’t so obvious. Merchants were just figuring this out. There were early adopters who won.
There were many questions about wifi in those days. Would people just languish and take up space, not spending money but hanging out forever? What if they use the network to download illegally? What kind of patrons are the type who can never stay away from the Internet?
This particular merchant decided to try it out. He got wifi. Over the next week, his place became so crowded and so sought after that he decided to stay open 24 hours. After that, he thanked me every time I came in the door.
Today of course every fast food restaurant has wifi. In fact, every casual space with places to sit is at a disadvantage if it doesn’t have wifi. It took about ten years to make this a reliable feature of the world.
I seriously doubt that it will take that long for Bitcoin acceptance to be common.
How important is it for the future of Bitcoin? In one sense, it doesn’t matter at all. The currency is invented for the Internet. Its primary feature is that it is the first technology that allows for the exchange of value, person to person, involving no third party trust relationships, in a manner that completely disregards geographic contiguity.
Even if no local shop that relies on foot traffic ever accepted Bitcoin, Bitcoin could still become the global currency for online commerce.
At the same time, there is a marketing appeal to being able to spend your Bitcoin in your own community. How many times have you heard someone say: “I will take Bitcoin seriously when I can buy a sandwich downtown with it”?
It really does matter.
And the beauty is that the Bitcoin network is so advanced that devotees of the currency love to turn up and spend as a way of rewarding early adopters. They will start holding meetups in your place and do promotion for you. You can’t pay for this type of advertising.
How long does it take for a merchant to get set up with Bitcoin? It can be done in one day. There are many services out there but the most successful so far is with Bitpay. You need an account, some iPads or other tablets around, the menu needs to be imported, and you are ready to go.
This presumes the merchant desires to convert Bitcoin into dollars upon receipt. Most do, of course. The really significant stage of adoption comes when merchant prefer to accept and keep Bitcoin. This will happen when enough of their own supplies are accepting as well.
That will require the phase of adoption in which Bitcoin is actually used for accounting. That is to say, Bitcoin will become the unit of account. Some people believe that it can be considered money only when this stage does arrive.
It all depends on how you want to define money, but I do think F.A. Hayek is right here: moneyness exists on a continuum. Only in the final stage does it become a widespread unit of account. And to be sure: even now, there are many people who live entirely in the bitcoin ecosphere and care nothing for its dollar exchange rate.
All of us can play a role here in pushing history forward. Help out a local merchant and suggest that he or she accept Bitcoin. It’s a small way to make a big difference in the world.