Using Bitcoin in Restaurants and Pubs

Using Bitcoin in Restaurants and PubsA long time ago, cash was king. Then along came credit cards and the ability to pay without cash. Now bitcoins are starting to show up in increasing numbers of pubs and restaurants.

Bitcoin is digital currency. Bitcoin.org defines it as “Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet.”

It’s now making its way offline and showing up in plenty of brick and mortar places, even including farmers’ markets and lemonade stands, according to NPR’s The SaltOrder Up! Food Businesses Find an Appetite for Bitcoin.

Getting Bitcoins

There are a number of exchanges at which you can buy bitcoins for cash, wire transfer, check, or credit or debit cards. To use them outside of the Internet, a mobile app provides a bitcoin wallet that allows you to make or receive a payment. Bitcoin.org states that at the end of August 2013, the value of all bitcoins in circulation exceeded $1.5 billion (U.S.) with millions of dollars’ worth of bitcoins exchanged every day.

The combination of algorithms, behind-the-scenes mathematics, and cryptography is quite complex, but to draw an analogy: You don’t need to understand TCP/IP to successfully send an email. In the same way, you don’t need to understand what’s going on behind the scenes in order to spend and accept bitcoins as payment.

You can use the same exchanges to turn bitcoins back into currency, and that can be the currency of your choice, including dollars, Euros, and more.

Bitcoin Benefits to Restaurants and Pubs

One of the primary benefits of accepting bitcoins is that it’s free to accept them without chargebacks or fees and with much lower transactions costs, usually one percent. Bitcoin.com states, “You can make and receive payments using the Bitcoin network with almost no fees. In most cases, fees are not strictly required but they are recommended for faster confirmation of your transaction.”

If you’ve ever had problems with chargeback fraud on credit card payments, bitcoins erase that. Bitcoin payments are irreversible. As an emerging technology that’s gaining ground and picking up speed, accepting bitcoins can provide you with greater visibility and a marketing angle that your competitors may not be able to leverage. Owners of bitcoins, made up predominantly of the tech-savvy generation, are often looking for places to spend them.

Perhaps the biggest benefit of accepting bitcoins is that you are giving your patrons the option of paying the tab in the way they prefer. If you’ve been around for a while, the decision is similar to the one you made decades ago when you opted to accept credit cards.

Payment choice is the very reason owners of Peruvian Brothers, a food truck operation in D.C., choose to accept bitcoins. Co-founder, Giuseppe Lanzone said, “We’re all about allowing our customers to purchase their food any way they’d like, and now, having them pay with bitcoin is a different way to do it.” (Quoted in The Salt article.)

The Other Side of the Bitcoin

Although another food truck owner in Minneapolis made its first bitcoin transaction when one bitcoin was valued at $80 and it jumped to $800 when interviewed for The Salt’s article, there is a great deal of bitcoin value fluctuation. As of writing this blog, the value of a bitcoin stands at $640.00. Its value volatility far exceeds that of gold, and it’s certainly more volatile than good ol’ cash.

For that reason, many food service operators who accept bitcoins for payment exchange for dollars shortly after the transaction or at the close of business each day.