In the past year, crypto-currencies in general, and Bitcoin in particular, have drawn a lot of media attention. Despite the fact that bitcoin has experienced an eight-fold increase in the past year ($600 a bitcoin in September 2016 to just under $5,000 a bitcoin in September 2017), financial experts are still wary of bitcoin’s volatility.
An internet search will yield widely varying opinions. From silicon valley business magnets who herald bitcoin as shepherding in the new age of finance to investment advisors decrying bitcoin’s tumultuous and unregulated journey, sorting fact from fiction is challenging at best.
In an effort to establish their companies as front-runners in the burgeoning world of crypo-currency, several brand-name businesses have integrated bitcoin payment for their goods and services:
Overstock.com – In January 2014, Overstock partnered with bitcoin exchange, Coinbase, to accept bitcoin for Overstock transactions.
Dish Network – In May 2014, Dish announced that in an effort to “Listen to customers and provide them with the choice and convenience they want,” bitcoin would be offered as a payment option for Dish services.
Microsoft – In December 2014, the tech giant offered an option to use bitcoin to purchase content in Windows and Xbox stores. Microsoft also launched the Azure Blockchain as a service platform that allowed large-scale businesses to use bitcoin to facilitate financial settlements.
Intuit – The software giant behind Turbotax and Quickbooks BitPay announced integration of bitcoin payments into the QuickBooks PayByCoin service in late 2014.
Paypal – In September 2014, PayPal announced that it would begin accepting bitcoin as payment via its integration with Braintree.
Though Adventure Bound lacks the financial stature of the corporations listed above, the store’s owner, John Rounds, is bullish on the opportunities presented by Bitcoin and its sister crypto-currencies. Adventure Bound is located in the small cosmopolitain community of Ellicottville, NY, just one hour south of Buffalo’s border with Canada. Ellicottville boasts a high number of visitors and second home owners from Toronto and other parts of Canada,
“Almost every week, and sometimes several times in one day, I have Canadian credit cards that are incompatible with our payment processing system,” says Rounds. “It creates stress at the register and is potentially damaging to relationships with our customers. Bitcoin offers a solution to seamlessly transact business in a peer-to-peer environment. It’s not “your” currency or “my” currency anymore. It’s “our” currency.”
When asked how he handles the volatility of bitcoin’s value, Rounds says that he can immediately convert bitcoin transactions back to USD. Or he can choose to hold them in his bitcoin wallet. When Overstock started taking bitcoin as a means of payment, they committed to carrying 5% to 10% of bitcoin as reserves. Those reserves are now worth over eight times their original value. Adventure Bound will follow a similar strategy in converting bitcoin to USD to pay suppliers, employee salaries and rent. But a small fraction will be held as bitcoin with the expectation that this payment method will continue to increase in popularity and its market value will rise.
When asked if accepting bitcoin transactions is risky, Rounds replies, “Sure. But it’s an acceptable risk. Kind of like owning a retail store!”