Bitcoin has definitely changed the way people think about commerce. Since its inception a decade ago, the Bitcoin platform and its digital coins have given rise to a new way of buying and selling. As just one example, you can now play MegaMoolah.com online using bitcoins instead of hard currency. That would have been unthinkable even just a year ago.
Assuming the original developer of Bitcoin is still alive, he or she must be pretty proud of how far the whole thing has progressed. But maybe there's a bit of disappointment as well. What was intended to be a revolutionary monetary system capable of leveling the global economic playing field is a long way from being a day-to-day means of paying for things.
Part of the difficulty with Bitcoin is that it has become more of a value storage system than a monetary system. This is the direct result of so many investors throwing money in and pushing the price to astronomical levels. At its peak, one Bitcoin was worth nearly US$20,000. Today it hovers between $3,500 and $4,000. Even still, a single coin is out of reach of most people.
None of this has stopped a young Argentinian man who is on a quest to turn Buenos Aires into a city that runs on Bitcoin by default. Information engineering student Leo Beltran, age 19, believes in the future of cryptocurrency for worldwide payments. He is especially high on Bitcoin. He has made it his mission to make merchants aware of the benefits of accepting Bitcoin payments throughout the city.
Addressing the ignorance
Beltran was apparently inspired by a vendor who could not answer the simple question of why her company did not accept Bitcoin payments. Rather than explaining it was inconvenient or technologically difficult, she just laughed off the question without offering a plausible explanation. It was then that Beltran realized that this person probably didn't know anything about Bitcoin.
Thinking about it made him wonder if ignorance was the biggest problem. He eventually arrived at the conclusion that most businesses in Buenos Aires know nothing about Bitcoin or how it works. When someone does speak of it, they see bitcoins as not being real money. And if it is not real, they will not accept it.
Beltran started buying BTC when he turned 18. Now he uses it as his preferred payment system whenever possible. Furthermore, he has come up with a plan to educate merchants in Buenos Aires in the hopes of making the city more bitcoin friendly.
Taking it to the streets
So, how does a teenager without a formal background in economics convince merchants to accept bitcoin payments? Beltran created some inexpensive paper fliers that he uses to take his message to the streets. He says the fliers instantly open the door to conversation. Even if he is not able to get into the details of Bitcoin, he can at least introduce the basic concept.
Just as Beltran thought, most of the business owners he has encountered thus far have been completely ignorant of cryptocurrency in general. But he says the reaction to his campaign has been mostly positive. He says merchants in Buenos Aires show genuine interest in Bitcoin payments once they learn about them.
Buenos Aires a perfect Bitcoin city
While Beltran continues his door-to-door solicitation in hopes of making Buenos Aires a Bitcoin friendly city, others are showing interest as well. Venture capitalists are among them. According to Bitcoin News, investor Tim Draper has been keenly interested in Argentina and Buenos Aires for years. He reportedly advised Argentina's government to invest in bitcoins back in 2017.
One of the things that makes Buenos Aires the perfect city for Bitcoin payments is its incredible diversity. Buenos Aires has been referred to as the 'Paris of South America' thanks to its economic, cultural, and educational diversity. And despite Beltran's insistence that the city is not as crypto friendly as it could be, it ranks number two in the world in terms of the total number of active crypto businesses, behind only Prague.
That is not to say that Buenos Aires boasts the second highest number of merchants accepting Bitcoin. Rather, a Bitcoin business is one involved with Bitcoin in any way, shape, or form. Bitcoin businesses can include software developers, exchanges, and so forth.
Obtaining coin is not easy
Beltran and other Bitcoin evangelists admit that there is another hindrance to overcome above and beyond ignorance: accessibility. Even after he successfully convinces people to consider Bitcoin payments, Beltran has to confront the fact that obtaining coin is not easy.
First off, it is expensive. A single coin is out of the reach of most people. Buying bitcoins becomes a matter of purchasing lower denominations which, right off the bat, gives potential buyers reason to pause. The average user sees the necessity of buying lower denominations of BTC a sign that the currency is too expensive.
The other problem is that obtaining bitcoins requires at least some knowledge of how the technology works. You cannot simply walk up to a currency exchange and trade in your Argentine pesos for BTC. It doesn't work like that. You first have to obtain a digital wallet. That means a preconfigured software wallet or setting up a hardware or a paper wallet. If you choose either of the two latter options, you need some additional knowledge.
Setting up a digital wallet is followed by searching for an exchange where you can buy coins. That means you require some knowledge of searching the internet. You have to know how to compare exchanges to make sure you find the one that best meets your needs. Only after all that do you actually buy bitcoins.
The prospect is a bit easier for merchants in that they do not actually have to buy coins to get started. They can set up a digital wallet and start accepting Bitcoin payments right away. But if those coins are to do them any good, they eventually have to learn the rest of the system.
Converting one business at a time
Beltran is fully aware of what he is up against. He knows he's not going to convert his city to Bitcoin payments overnight. But he also knows that doing nothing will only perpetuate the status quo. Beltran firmly believes in the principle of converting Buenos Aires one business at a time.
We have seen what Beltran wants to accomplish in his city play out in the online gambling space. It wasn't too long ago that you couldn't find an online gambling site that dealt in Bitcoin. Despite Bitcoin proving itself as a monetary system, gambling operators felt it too risky to get involved.
At some point, a gambling operator somewhere decided to take a risk on Bitcoin. Then another one followed. Then another, and another. The number of casinos now dealing in cryptocurrencies continues to grow with each passing quarter. The phenomenon is self-perpetuating now that the word is out. That is what Beltran hopes to accomplish in Buenos Aires.
So, why would a merchant choose to accept Bitcoin payments? The answer is as easy as looking at how online casinos benefit from the payments:
- Security - Cryptocurrency payments are encrypted, immutable, and protected through a proof-of-work requirement. That makes them quite secure.
- Fast - Accept payment via credit card or bank transfer and it could take anywhere from a few hours to a couple of days for the transaction to clear. Run that same payment through Bitcoin or another crypto, and it clears within minutes. Merchants love that kind of speed.
- Diversity - In an online setting, cryptocurrency payments greatly diversify the merchant's reach. They do the same for brick-and-mortar merchants, but not to the same extent.
- Options - Today's consumers value options. The more options you give them, the happier they are. Cryptocurrency represents just one more option to be offered in tandem with cash, credit card payments, bank transfers, and so forth.
- Fees - Because Bitcoin and other cryptocurrencies are decentralized, transactions are made without any bank involvement. This generally means low fees. In some cases, there are no fees whatsoever.
Perhaps the most lucrative aspect of Bitcoin payments is the ability to do something you cannot do with fiat: make a profit on your bank account. It is a matter of paying attention to the current price of Bitcoin on the open market.
Let's say Bitcoin is currently trading at $3,500. You are a merchant with 10 coins. If the price of Bitcoin is up just $30 by the end of the business day, you have made $300 profit. You can cash out that much and put the money in your regular bank account. You just made a profit by doing nothing but accepting Bitcoin payments.
Of course, the chances of losing our very real as well. That's why merchants have to pay close attention to cryptocurrency prices. Nonetheless, excepting bitcoins during a bull market could be extremely profitable.
Mr. Beltran has a big task ahead of them. Perhaps Buenos Aires will be a Bitcoin friendly city five or 10 years from now. If so, he may be able to pat himself on the back in the knowledge that he helped to get things moving.