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A new way to pay

// Andrea Hirji
// Andrea Hirji

In a rented boardroom downtown in January, Bitcoin Pete told 14 people they have a front-row seat to the most valuable asset on the planet.

It was a meeting of the Bitcoin Edmonton Meet-Up Group, which brings together entrepreneurs, gamers with time to kill and curious investors who want to know more about Bitcoin, a volatile but valuable new digital currency.

“I feel like it’s the best opportunity to teach people about the benefits that are coming in the new digital economy,” says Peter Dushenski, the man behind the “Bitcoin Pete” nickname.

Dushenski, a former health inspector from Edmonton, organizes the get-togethers and runs bitconomy.ca, a company that designs retail systems in order to allow businesses, like Remedy Cafe, to accept Bitcoin as payment. Currently, Remedy is Bitconomy’s flagship business, but Dushenski is in talks with more and hopes to set up 100 companies on Bitcoin by the end of the year.

Bitcoin became operational in 2009 and exploded in value by nearly 800 percent in 2013. Bitcoin traded at $13.12 CAD on the Canadian Virtual Exchange in January 2013 and hit a high of $1047 by December 4 of the same year.

But Bitcoin’s value also fluctuates widely. After the Republic of China announced on December 5 that Bitcoin could not be used by banks as legal tender currency, its value fell almost 30 percent in two days. It dropped by more than $100 on December 18 before making it almost all the way back two days later. On January 25 it traded at $881.

More than a few of the people around the table during introductions were long-term holders, or people who are determined to ride out the short-term peaks and valleys. Some owned small online stores that used bitcoin as a payment option, others were precious-metals investors looking to add to their portfolios, and a few were just curious.

Candy Davis, a 28-year-old accountant, got involved last spring after hearing about Bitcoin mining in her online-gaming groups. Bitcoin can be generated by “mining,” which means running software on a computer in order to help process the worldwide Bitcoin network.

“It was a difficult process at first,” Davis says. “I don’t have a good background in that, so think it was kind of frustrating to set up at the beginning. It turned out well.”

The meeting was Davis’s first chance to meet Bitcoiners in person.

“I didn’t know there was so much interest locally,” she says. “It seems really energetic, the community here, but I had no idea.”

After the meeting, the group moved to Remedy Cafe for the unveiling of a new product developed by Ashley Fulks, one of the group’s members. Fulks, who worked in IT for the energy industry before becoming a Bitcoin broker last spring, developed a gift card called CoinTap, which is now sold at Remedy. The card, worth $55.50, can be exchanged online for $50 worth of Bitcoin.

Fulks, a 34-year-old from Beaumont, talks about Bitcoin as a currency owned by the people, as opposed to governments. He doesn’t worry about regulation impacting Bitcoin.

“Regulation can come down, but I think Canada is very smart about it and very open about it,” he says.

Kyle B Murray, a marketing professor at the University of Alberta who specializes in consumer psychology, thinks the idea has more legs as a currency, but it may still take years to catch on.

“The analogy that I often use is that if you remember when the chip started first going in on credit cards, that’s a technology that Visa and MasterCard had for a number of years,” Murray says, adding that Bitcoin needs to become more user-friendly. “Either Bitcoin would have to evolve substantially, or there’s another virtual currency similar to Bitcoin that’s going to replace it.”

Risk remains a factor for Bitcoin as an investment.

“Even calling it an investment is probably the wrong term, given how speculative and volatile it is,” Murray says. “It’s probably closer to gambling.”

But it’s worked for Remedy, which has just cashed in Bitcoin it collected during three months of retail for $14 000.

“No one was doing it, and someone was going to have to start it somewhere,” says Remedy owner Sohail Zahadi, who notes Bitcoin’s brought in customers from out-of-province. Zahadi says it was a $2000 investment to get started with Bitcoin, and he plans to expand the service to include a Bitcoin ATM.

Davis, as an accountant, wants to adapt to the market so she can help clients with it, but also called it a gamble to invest.

“It’s really volatile and it’s really new and it could go in any direction,” she says. “I think it has an equal chance of failing as it does of succeeding.”

Fulks says the growth is not going to go away and is 100-percent committed to virtual currencies, but not necessarily Bitcoin.

“I see it as a snowballing effect, and only being a matter of time until virtual currencies are a very common thing,” he notes.

Dushenski and the meet-up group are organizing an event on February 15 called CoinFest, which will include information sessions, a DJ and a poker tournament where participants can earn their first Bitcoin.

Andrew Bates
andrew@vueweekly.com

 

 

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