Photo via Twitter/@ClubAlpaca
Here are some things you can now do with bitcoin that you couldn't a few weeks ago: Put yourself through college; buy a $5 foot-long (or I should say 0.04 BTC foot-long) sub; help elect a congressman; get your teeth cleaned; do your holiday shopping; lift your breasts; go to space. Etc, etc.
It would seem businesses aren't wasting any time embracing bitcoinmania—and why would they? The novelty factor makes for great publicity, it's a good opportunity to tap a potentially new customer base, and really can there ever be too many ways to accept other people's money?
Following a promising senate hearing on the virtual currency and subsequent price leap to $900, a deluge of retailers and services are declaring they now accept the new form of payment—including some notably more mainstream than the selection of webby merchants that embraced the young currency before it cozied up to the establishment.
Via Coinmap
This is good news for bitcoin advocates and cryptoanarchist types who believe a peer-to-peer, decentralized monetary system can help restore freedom and democracy to the world, the same way the internet promised to. But before we all whip out the Guy Fawkes masks, there's a nagging question around all the cyber-commerce hype: Does it actually mean anything?
Let's really think about it. Are the enviable folks who invested in bitcoin back when it was an algorithmic digital hack, not yet poised to take over the world, going to turn around and spend it now? Probably not. Probably they're either going to hoard the coins—kick back and watch them accumulate value at a rapid clip—or sell them now and count it as a win before the bubble has a chance to burst.
At this early point in the game, the virtual currency reads more like a savvy investment—like flipping a house during the real estate boom—than an economic infrastructure. People are buying up bitcoins because other people are buying them up, or because of some vague sense of The Future. Which is pretty silly if you think about it, because bitcoin is a currency; if no one is using it to buy, sell, and trade stuff, it has no purpose. Where's the value in that? And in that vein, where's the value for businesses opting to accept the digital currency?
Marketing, for one. It's a good story, and even more so if the product being offered in exchange for the digital coins is a bit of a novelty in itself—like the company that just announced flat-chested women world round can now enhance their breasts via bitcoin. Or, if the company is the first of its kind to dive into the digital future and can thus declare itself the First-Ever Bitcoin University or World's First Bitcoin Beer.
Want to spend your #bitcoins? How about a ticket to space! Will discuss today live on @SquawkCNBC @virgingalactic
— Richard Branson (@richardbranson) November 22, 2013
Embracing the futurist currency can make a firm look cool, cutting-edge, and innovative. You know, like super-hipster Virgin CEO Richard Branson, who made headlines last week for announcing the space tourism program Virgin Galactic will now accept bitcoin for its sub-orbital flights. Branson told press the kind of folks interested in going to space are the same kind who hopped the bitcoin train early on: “Virgin Galactic is a bold entrepreneurial technology—it’s driving a revolution—and Bitcoin has been just the same.”
That's a good way to shore up your target audience. For other companies, exploring bitcoin is an opportunity to expand the customer base. Early-adopter businesses like a couple of Subway stores have the benefit of being one of the only places bitcoin-holders can buy a sandwich with their virtual coins, if they're so compelled. That’s the pitch events like Bitcoin Black Friday are making to merchants, in hope of getting more people to adopt the currency, which despite government grandstanding and hype in the press is still tricky to actually use.
Screenshot via BitcoinShop
That will probably change soon, not least because there's room for entrepreneurs to come in and make the process more user-friendly. Merchant directories are springing up to help connect customers and retailers. And this week we saw the launch of an online exchange marketplace, BitcoinShop—an Amazon for crypto-currency—where shoppers can buy anything from jewelry to refrigerators. The website makes a point to clarify "we don't sell drugs, alcohol, tobacco products, firearms, or pornographic materials or sexual toys." And true enough, above-bar transactions recorded in the blockchain public ledger increased enough this year they likely eventually surpassed the number of coins being swapped around on underground markets like the Silk Road. When there’s money to be spent—even when it’s volatile, unregulated, Wild Westy money—everyone’s going to try for a piece of the pie.