Digital currency Bitcoin has been making headlines recently and attracting local business interest as its overall value soared rapidly to US$1billion.
Adam Soltys runs Vanbtc.ca, a website that provides software for businesses to accept Bitcoins, and buys and sells the currency (see sidebar on how the service works).
He described Bitcoin is an open-source digital currency with low or zero processing fees that enables peer-to-peer transactions and worldwide payments.
“The supply of Bitcoins is mathematically limited, so its value is only driven by demand and cannot be debased by increased supply.”
There is no central authority or government issuing or regulating Bitcoins, nor do users need a bank. Bitcoins can be exchanged for real money, and they can be used to make transactions that are difficult to trace, offering privacy to their users.
The surge in demand for Bitcoin has been linked with the financial crisis in Europe. On March 19, around the beginning of the Cypriot bailout, one Bitcoin was worth US$47 – but on April 9 it reached a high of US$200. Its price has since fluctuated wildly.
Engineer named Satoshi Nakamoto started Bitcoin in 2009. The currency’s name is believed to be a pseudonym for the person, or group of people, who invented the original software.
Bitcoin has been gaining momentum not only in Europe but also in Canada. Entrepreneur Taylor More listed his two-bedroom Alberta bungalow with a Bitcoin price, asking for the equivalent of $405,000 in Bitcoins.
And it’s not just real-estate sellers that see the potential in Bitcoins. Soltys said the number of people contacting him to buy and sell Bitcoins has been growing rapidly. However, he said most people he speaks with about Bitcoin are skeptical about it.
But several businesses in B.C. have started to accept the currency. Cheyne Mackie, project manager of Vancouver-based No Limit Landscaping, decided to accept Bitcoins because he was fascinated by the experiment.
“I think Bitcoins are one of the most important and disruptive technologies in the world today,” he said. “It’s what the world needs.”
Thus far, however, Mackie has had only one job paid for in Bitcoin.
“I don’t really expect a lot of payments in Bitcoin, but if I can spread the word by accepting it or influence other companies to accept it then I am happy to do so.”
Another B.C. business to embrace it is Victoria restaurant Cabin 12, whose owners are friends with Soltys.
Restaurant co-owner Dan del Villano said Cabin 12 has done only about $100 in Bitcoin trade since starting to accept the currency two months ago.
“[Vanbtc.ca’s] system is really simple, and … simplicity is important because my servers are already juggling a lot of tasks.”
So is this just an Internet fad or can Bitcoin change the way we do business? Greg Moore, a currency strategist at TD Securities, said, “It’s at a point where it may be beyond use as a means of exchange for goods and services. It’s hard to see at this point how it becomes a very broadly used mode of exchange.” •
