Thanks to the Keene Sentinel’s Martha Shanahan for her feature article about local bitcoin-accepting businesses that appears on the front page of today’s Keene Sentinel, above-the-fold! She interviews the operators of Corner News, Stone Farm Bed and Breakfast, Moda Suo, and Carroll Garden Center regarding their experiences as local businesses accepting bitcoin.
Bitcoin is a decentralized currency and financial transaction network that is changing the world. One bitcoin is worth over $600 at the time of this writing. As time goes on, more merchant solutions are being released that are making accepting bitcoin at brick-and-mortar business easier and easier. These local businesses are the pioneers in this space. How exciting that bitcoin is being used in Keene!
If you’re on facebook, join up with the Keene Bitcoin Network!
Here’s the Sentinel’s story:
As Silicon Valley investors and currency speculators continue to keep their sights — and dollars — fixed on Bitcoin, a small number of Monadnock Region businesses are dipping their toes in the water to experiment with the electronic currency.
When someone comes into the Corner News in Keene interested in buying something with Bitcoin — about three or four times a week, owner Roberta Mastrogiovanni said — both parties whip out their smartphones. Using one of many available Bitcoin apps that link to their online wallets, Mastrogiovanni creates a unique code representing the transaction.
“I just open up the app,” she said, demonstrating on her iPhone.
For example, say the customer wants to spend $10.
Mastrogiovanni taps the dollar amount into her phone, and it tells her how much bitcoin she will receive. In this case, at the going rate of about $620 for one bitcoin, just under 0.02 bitcoin will be subtracted from the customer’s wallet and transferred into hers.
“It’s a cinch,” Mastrogiovanni said.
The customers get their bitcoin by buying it at an online exchange or through one of several startups that will set up in-person meetings between interested buyers and sellers.
Corner News joined the Bitcoin craze in 2011 when customers started asking for it.
“I didn’t know a lot about it, so I did some research and decided to accept it,” Mastrogiovanni said. Back then, one bitcoin was worth about $40, she said.
The currency is used like PayPal, but it isn’t regulated by any bank, and no one guarantees the transactions except the network of people operating computers all over the Internet.
The unregulated nature of Bitcoin has appealed to New Hampshire’s many libertarians and proponents of the Free State Project, which encourages people to move to New Hampshire and make the state a model of limited government. One of the first Bitcoin ATMs, where customers can insert cash to have bitcoin added to their online wallets, was created in Manchester. After the online retailer Overstock.com began accepting Bitcoin, it published data on where most of the purchases were taking place, and the Granite State topped the list.
Ian Freeman, a Keene radio host and activist and blogger on FreeKeene.com, said both his radio show and the organization began accepting Bitcoin donations and using it for expenses early on.
“I would say that it was more of a natural thing,” he said. “We were pretty early adopters, and every since the liberty movement has started using it people have become very interested.”
“It puts the power of money back in the hands of the people,” he said.
In the same breath, Freeman also has to mention Bitcoin’s other upside: it’s easy to use.
“Pretty much every time I go to Corner News I pay with Bitcoin just because I can,” he said.
What happens after the customer leaves the store, though, is still a bit of a mystery to Mastrogiovanni and many Bitcoin followers.
The back-end processes of Bitcoin transactions were designed in 2009 by its mysterious creator to be extremely complex. That keeps the value up and limits the amount of bitcoins that can exist in the market.
When one of Mastrogiovanni’s customers scans the QR code on her phone to create a transaction, that transaction then gets posted on the currency’s online hub (a public list of all Bitcoin transactions worldwide) to be validated by a network of people running highly specialized software, often on custom-made, high-speed computers. The computers must then solve a math problem to authenticate the Bitcoin and add it to a running chain of Bitcoin transaction before it can move the money into Mastrogiovanni’s online wallet.
The process is known as mining, and the miners — the people whose computers complete the encryption first — make a profit in Bitcoin for every problem their computers solve.
Matt Fox, the owner of Stone Farm, an inn in Fitzwilliam, said he also began accepting Bitcoin from customers several years ago for ideological reasons; he thought of it as an exciting experiment.
“I’m kind of a tourist when comes to money, and I’m kind of an econ nerd,” Fox said.
Now, it’s a matter of convenience.
“It’s fast, it’s great,” he said. “It’s money that people are using, and I want to have a little bit of it.”
Fox said that between 15 and 20 percent of the business at the inn gets paid for in Bitcoin. Sometimes, he turns around and buys things with it. If he needs some cash to pay a bill, he’ll sell Bitcoin to someone offering dollars in exchange online.
“When the cable bill comes up, I can sell .009 bitcoin or whatever for cash,” he said. “You can usually throw it out there and someone will want to buy it.”
In addition to Corner News, Moda Suo Hair Salon in Keene accepts Bitcoin. Tyler Rogers, a manager at the salon, said only three or four customers have used it. Carroll Garden Center in Marlborough also accepts it, but no customers have used it in the store, a manager said.
Fox, who follows Bitcoin and cryptocurrency use closely, said the handful of businesses that advertise they accept Bitcoin represents a small proportion of the Bitcoin business in the area.
“What you see there, I know, is a fraction of what there is,” he said.
Getting more bricks-and-mortar stores to accept the currency can be a challenge because store owners don’t always trust it as much as online vendors do, Freeman said.
“Getting into a physical location is a little more complicated than using it online,” he said.
At Corner News, customer Ian P.R. Casey of Keene said he uses Bitcoin to buy things online, often because vendors offer a discount to customers paying with Bitcoin and because he thinks it’s more secure. But he was unsure whether he would use it in a store, even a Bitcoin-friendly place like Corner News.
“I wouldn’t know how to use it, to be honest,” he said.
Libertarians aren’t the only people interested in Bitcoin’s future, by far. Last week, computer giant Dell became the biggest company to start accepting the currency. Some of Silicon Valley’s biggest venture capitalists have put money in Bitcoin startups.
The total value of the Bitcoin market is still only around $8 billion. The dollar value of a Bitcoin has jumped around in the past few years, soaring to more than $1,000 in November 2013 and reaching a low point this year over March and April after Mount Gox, the most popular Bitcoin exchange, was hacked in February and later when Chinese authorities announced in April they were shutting down Bitcoin exchanges in that country.
Because it’s a small portion of Mastrogiovanni’s business, she said doesn’t worry too much about its ups and downs. She occasionally converts her small amount of Bitcoin into dollars for safekeeping, but mostly lets it sit in her wallet to appreciate and depreciate with the market.
“It’s just an experiment,” she said. “I’m not sure I understand it and I’m not sure what the future will be, but it’s interesting. It’s like anything else; when your customer gives you a request, you try to do it.”
