Understanding Crypto - Spending Coins
Everyone is talking about cryptocurrencies as something to invest in. Something to buy low and sell high. But that is rapidly changing, as the whole world is thriving towards actually using cryptocurrencies in their daily purchases. But what can you actually buy with coins in real life? This week we will see how companies try to find themselves in the “new market”.
We are starting with the food industry, as that is where the first registered crypto purchase was made. In the year 2010, Laszlo Hanyecz bought two pizzas from another person he found on an internet forum. He paid 41 dollars for both pizzas. Or 10,000 Bitcoins. Right now, when this is being written, 10,000 Bitcoins are worth more than 500 million dollars. While it might seem like a tremendous waste, Laszlo wanted a pizza then, ate it then, and has stated that he doesn’t regret it now. And it is actually because of people like Laszlo, the pioneers, that cryptocurrency is valued so much now.
There are now countless cafes and fast food places that accept bitcoin as payment. But it is not only small shops that do this. Starbucks (who were one of the first to implement mobile payments), has announced that you will be able to buy coffee with Bitcoins. Giants like Burger King, Baskin Robbins, Subway and countless others have been experimenting with cryptocurrencies since 2013.
High value items
It is easier for those who sell more expensive items, as transactions are not as many and the transaction cost is not as big compared to the item’s value. The leading online gold seller in the USA, JM Bullion, accepts Bitcoin, Bitcoin cash and Ethereum as payments and they are not shy about it. Elon Musk has famously stated that the Tesla company will accept Bitcoin as a payment. And crypto early adoption was just a logical step for Newegg, the popular seller of computer parts, as virtual currency enthusiasts and computer users are all in the same market. That is also why the virtual distributor of video games also accepted Bitcoins, even if for a short while. Unlike Humble Bundle, that still accepts all Bitcoin payments.
And everything else
And that is just the tip of the iceberg. An iceberg that looks quite strange when you look at it. But that is because it consists of many individual early adopters and believers, who offer their products and services in exchange for cryptocurrencies. So what can you do? You go wild! Buy a tropical island! Buy an airplane ticket to get there! Learn more about blockchains from the University of Nicosia! Buy tickets to a football game! Get a lobster! And you know what? By this time you might as well fly to space with cryptocurrencies.
All of these services, at the time of writing, accept Bitcoin as payment directly. But even then it is just the smallest part of the market, as most of the deals done with Bitcoin are through third-party services. You can shop almost everywhere with the help of Bitcoins, be it Amazon, Bestbuy or Walmart if you only enter one of the many gift card shops, buy the gift card with cryptocurrencies and then use it in the shop of your choosing. Or you can go directly to Overstock.com and buy anything your heart desires. They have everything. Yes, even this lovely kitchen sink.
The nature of the crypto market
There are not too many companies that have introduced a way to pay with cryptocurrencies and left it like that for years. Usually these have been temporary promotions and short campaigns. Burger King has had many approaches to the crypto market, even made their own coin that has no value as of now. Why is it so that the groundbreaking new innovation is taking such small steps forward?
It is not easy to be an icebreaker. You are bound to confuse not only the governments and their tax revenue offices, but you also need to convince your shareholders. And that is not an easy task, as most of the big companies want to continue doing the sure thing that has worked till now. It takes a wild and a bit crazy CEO to go ahead and defend what he thinks will work when he can’t prove it with a flowchart showing the previous 20 years.
But that is not all. The owners of Overstock.com admit that their revenue from cryptocurrencies is really not that big. Simply because the people who invest in virtual money are not the same people who care about the embroidery of their curtains. And even if you do, would you spend Bitcoin now that the cost of it is on the rise?
The market is new. No one knows the rules yet. Everyone is still waiting on what the regulations will be and how will you be able to work out things like “refunds” if someone has paid in crypto. But one thing is clear as day - people constantly have been reaching in this direction even when it is all so new. So it just makes you wonder. How grand will the market be when this dust settles.
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