Depending on whom one asks, Bitcoin is the future of currency, a useful tool for conducting transactions with vast untapped potential, or a speculative bubble of no lasting consequence. Enthusiasm for Bitcoin also signals various commitments, as Tyler Cowen notes, such as for libertarianism and technological optimism. Bitcoin has had a big week, with Overstock.com agreeing to accept it and The Chicago Sun-Times trying out a Bitcoin paywall.
The less obvious uses of Bitcoin are also intriguing. Writing at the Umlaut, Eli Dourado explains how the programming language that makes Bitcoin work opens up all kinds of possibilities, including contracts, micropayments, and proof of identity. It’s enough to convince me that Bitcoin or a successor cryptocurrency will likely be increasingly relevant and that it’s worth getting familiar with how to use it. And though I’ve in all likelihood missed my chance to strike it rich, there are far worse gambles than speculating on Bitcoin from my living room. It’s cheaper than Vegas and the drinks are better.
But if one is holding on to bitcoins for any reason beyond speculation, one will eventually want to spend them. There are lots of ways to do this online. Transfers between friends are also easy. But what about a night on the town? Where can one go to, say, turn bitcoins into beer?
To find out, my friend Tom and I consulted CoinMap.org to plot an evening out in Portland exclusively patronizing businesses that accept Bitcoin. As one might expect, it gets a little weird.
Sadly, we weren’t able to experience what likely would have been the weirdest stop on our itinerary. At Float On in southeast Portland, customers exchange dollars or bitcoins for 90-minute sessions in a sensory deprivation chamber, floating in complete darkness and silence. Float On’s FAQ promises that floaters will not drown, that it’s not New Age mumbo-jumbo, and that “only a small percentage of floaters turn into proto-human monkeys.”
Would I hallucinate a UFO abduction, be inspired to take up impressionist painting, or perhaps receive a vision of Bitcoin’s future value? I didn’t get to find out. Float On was booked until 2 am the night of our adventure, which was a little later than we were willing to commit to. The business closed for renovations the following day, promising to re-open in February. I was looking forward to this, but it will have to wait for some other time. I suppose it’s good to know for future reference that if one craves sensory deprivation at two in the morning, there’s a place in Portland to find it.
Our first stop instead was browsing the Mirador home goods store on southeast Division street, which was pleasant, if not quite as mind-expanding as a plunge into sensory deprivation. The store offers everything from standard pots and pans to more Portlandian items like home cheese-making kits. Tom picked out a cutting board and a cocktail strainer, and I made my first Bitcoin purchase, a small brush for cleaning out metal straws. I’d been needing one of those!
The checkout process at Mirador was the smoothest of all the places we visited. The clerk rang up our orders, then used a computer to generate a QR code containing a unique Bitcoin wallet address and the total price of our purchase. We simply held our phones up to the screen, approved the transfer, and the transaction was completed within seconds.
Our next stop was just two blocks away at Papa G’s vegan organic deli, which offers dishes such as a tofu dog, tempeh reuben, and house “nochos.” While the aromas at Papa G’s were enticing, we were not its target demographic and spent a while mulling our options. Eventually we settled on a couple of their house made drinks, a hibiscus cooler and ginger beer kefir. These were both good and refreshing. For those seeking harder stuff, the deli also offers a selection of bottled beers.
Checkout was completed by scanning a QR code taped to the register that is linked to a Bitcoin wallet controlled by the owner. This was fast and easy, but leaves the staff without a direct way of verifying the transaction.
A few minutes north is Madison’s Grill, a place I’d passed by many times but never visited until last week. Madison’s began accepting Bitcoin at the urging of local enthusiasts and hosts the Portland area Bitcoin Meetup group. The menu offers standard pub fare like burgers and fish and chips, and the fourteen-handle tap list includes both familiar brands and a rotating selection of craft beers, among them Awesome Ales and No-Li on our visit. This is easily the best place to convert bitcoins into beer in Portland. Given the rise in Bitcoin’s value from when I first bought in a few days before, my beer was essentially free.
We ended up sitting next to the owner, Steve Brown, an outgoing guy who’s having fun with his experiment being the first full-service bar and restaurant in Portland to accept Bitcoin. Though not yet a huge part of his business, the venture does seem to be paying off with new customers and press.
Madison’s is also notable for being the only place on our crawl that has found a way to integrate tips into their Bitcoin transactions. These are recorded by wait staff and factored into their paperwork at the end of the night, much like a credit card tip.
No tour of Portland is complete without a visit to food carts, so our next stop was Whiffies Fried Pies in the pod at southeast 12th and Hawthorne, just one block away from Madison’s. Whiffies makes sweet and savory fried handpies that I’ve enjoyed many times in the past. Tom and I both opted for the BBQ brisket and mozzarella pie, which came out steaming hot and delicious. This is my pick for the best place to trade bitcoins for food in Portland.
Just like at Papa G’s, checkout here was completed by scanning a QR code linked to the owner’s account.
Along with its coffee shops, breweries, and food carts, Portland’s hospitality industry is famous for its strip clubs. Out of town guests make a point to visit them, the local alt-weekly reviews their steak offerings, and the likes of Tyler Cowen and Josh Barro comment on their economic strategies. While there are plenty of sleazy ones, others feel like good dive bars that just happen to have naked women in them. It’s a strange dynamic, perhaps best summed up like this: In other cities, you go to the strip club and don’t tell your wife. In Portland, your wife invites you.
Thorough research demanded that we conclude our evening at the Kit Kat Club, a new bar that claims to be the first strip club to accept Bitcoin. (This is only the second nerdiest reason I’ve gone to a strip club, the first being the time I went to the Boom Boom Room to see magician Reed McClintock perform card tricks.)
Implausible as the idea seemed, we hoped that this might mean that one could tip performers in Bitcoin, perhaps through creative use of tattoos and QR codes. Alas, that isn’t the case, and for obvious reasons they don’t want customers using phones that could just as easily be recording video as transferring currency. That aspect of the business remains a cash affair. (That said, it seems that an enterprising, tech-savvy dancer could set herself up to accept Bitcoin individually. Paging Lynsie Lee.)
The bar incorporates aspects of cabaret, with an emcee and themed performances, but it’s still very much a strip club. The staff was fun and friendly. Stumptown Dumplings offers food; their pork dumplings with chili hoisin were pretty good, though they require a separate non-Bitcoin transaction. My only knock against the place would be the beer selection, which is bottle-only and dominated by mass market lagers. Is there much of an overlap between people who spend bitcoins and people who go to strip clubs? I have no idea, but if there is, Kit Kat is the club they’re looking for.
Below, a few assorted thoughts and observations from our Bitcoin crawl…
Ease of use: Getting set up with Bitcoin was easy. I signed up with CoinBase for my primary account, linked that to my checking account to purchase Bitcoin, and transferred Bitcoin to a Mycelium wallet on my cell phone to spend while we were out.
Integration: Though all of our transactions went smoothly, Bitcoin payments aren’t yet easily integrated into the point of sale systems of the places we visited. In some cases, the money was sent to an owner who wasn’t on the premises. Staff could potentially verify transactions by watching a customer’s phone screen, but this is hard to monitor closely. At Madison’s they asked for a name and phone number as back up. Right now people paying with Bitcoin are early adopters and trust is high, but better integration with POS systems would make bar and restaurant use of Bitcoin more secure.
Tipping: As mentioned above, Madison’s was the only one of the four bars and restaurants we visited that factored tipping into their accounts. At every other stop we needed cash for tipping staff, making it impractical to spend a night out using only Bitcoin. (However if a restaurant wanted to switch to a percentage service charge model, that would be easier to handle.)
Privacy: I think that only one of the businesses we patronized generated a unique address for each Bitcoin transaction. Since the blockchain documenting Bitcoin transactions is public, anyone who knows the address used by a business can see how much money it has received. Right now this is a small enough part of their volume to be of little concern, but if Bitcoin becomes more popular one can imagine that they may not want to broadcast their sales so easily.
Volatility: It should go without saying that the volatility of Bitcoin prices is a concern for businesses to consider. Right now, I doubt many local businesses would have any trouble converting their Bitcoin receipts to dollars if they don’t want to carry a large balance. On the other hand, if they’re optimistic about Bitcoin’s future value, they may want to hold on to them.
New customers: Perhaps the best reason to start accepting Bitcoin now is to attract new customers. There are people who want to spend bitcoins and they currently have few options for where to do so. There is a benefit to being one of the first in an industry to accept the currency, both for being discovered by new clients and for getting press coverage. Even if one is skeptical of Bitcoin and rapidly converts all sales to dollars, it could be worthwhile to get on board before competitors do.
Advantages over credit cards: Credit card transactions take time to post, they can be reversed if a customer protests, and the associated fees are significant. Standard Bitcoin transactions are fast, irreversible, and cheap. (It is possible to structure Bitcoin transactions so that they can be arbitrated and reversed, but getting a refund for a standard exchange requires the retailer’s consent.) I doubt Bitcoin will replace Visa anytime soon, but these are advantages for a small business to consider.
One additional way restaurants might use Bitcoin is to hold reservations. Popular restaurants lose revenue when a reserved table sits empty. Even if a restaurant takes a credit card number to charge in the case of a no-show, it’s possible that the customer will contest the payment. Restaurants could instead require a deposit of Bitcoin to hold a table and then either return it when the party arrives or deduct an equivalent amount from the bill.
Taxation: Perhaps the biggest disadvantage to accepting Bitcoin is figuring out how to factor it into one’s taxes. This seems to be a gray area at the moment and could get complicated.
Bottom line: There’s a lot of room for expansion when it comes to accepting Bitcoin. Integrating it into one’s business will probably get easier over time, but there are also advantages to being among the first to try it out.