Cryptocurrencies such as bitcoin, a digital currency, are gaining popularity to the point where big and small businesses alike are beginning to accept them.
Laura Alcover, of Alcover Massage in the Village of the Arts, 917 12th Ave. W., is one of the first businesses in Bradenton to open up her “digital wallet” to accept bitcoins the same as other currency, according to coinmap.org, which alerts bitcoin users to area businesses that accept the digital currency.
According to Business Insider, the value of bitcoin has risen 900 percent in the past two years partly due to a growing acceptance and wider usage. More and more industries, businesses in particular, find the currency appealing because it eliminates banking and credit card fees. Major companies such as Overstock.com, DISH network, Mircrosoft, Intuit and PayPal offer bitcoin digital currency.
Unlike the dollar, which can be printed as needed, bitcoin wealth is finite with just 21 million “coins” being implemented. For $100, the bitcoin value is 0.01532 and is worth its proverbial weight in gold. It is essentially like purchasing services with stocks, as the market value of bitcoin and other cryptocurrencies can be volatile.
Businesses settling on a bitcoin price on the day of a purchase could potentially lose or make money depending on the trading value of the digital coins.
“Any type of investment could go wrong, of course,” Alcover said. “After four hard years of working, I have the business running along well. I thought it was an ideal time to announce I’m accepting cryptocurrency because I’m in abundance right now.”
Alcover posted her acceptance of the digital currency on her Facebook page, and “People really started to pick up on that. I saw some people from Sarasota tagging each other, saying they would be coming because of that. It’s always important for Bradenton businesses to attract people from Sarasota.”
The bitcoin map shows a handful of Sarasota businesses accepting the currency and several as you head into St. Petersburg and Tampa. Alcover isn’t sure if she is the first in Bradenton as the map outlines, “But if I am, that’s pretty darn cool because I’m the least likely person to accept bitcoins because I’m not the best with technology.
“But we are definitely at a point in society where technology isn’t old vs. young or even where you stand economically. We’re at a point now where technology is accessible by everybody and anyone can teach you how to use it.”
Alcover said it’s about business owners – hers is an alternative and holistic health service – taking risks and expanding opportunities. Investors like the fact that bitcoin is not regulated by the federal government, but it is drawing the attention of Washington, D.C., and what that does to the value of the coins can make it an uncertain strategy. Bitcoins are drawing federal ire because of their anonymous use and because they have been linked to illicit online activity – users can anonymously make purchases.
Bitcoin was created in 2009 by an unknown person or persons using the alias Satoshi Nakamato. China recently banned the digital currency and while Japan legalized it earlier this year, the country already is pushing for the currency to be regulated.
Jamie Dimon, who heads the financial firm of JP Morgan, was quoted in The Guardian last month as saying digital currencies are only fit for drug dealers and would eventually implode.
“(It) isn’t going to work,” Dimon said about bitcoin. “You can’t have a business where people can invent a currency out of thin air and think that the people are buying it are really smart.”
Kiplinger cites potential downfalls and says the digital currencies will lose money in the event of inflation and also that everything that goes up, must come down. In the case of bitcoin’s rapid rise, “All investments are subject to mean reversion, and bitcoins are no exception. Mean reversion isn’t itself a bad thing, but it’s still worth noting when it comes to investing in bitcoins, specifically,” writes Taylor Schulte, founder and CEO of Define Financial.
That doesn’t make Alcover nervous, however. She said government involvement probably is inevitable but believes the currency’s future is solid and is adhering to the most sound advice about investing, which is invest only as much as you can stand to lose.
“China is already 100 percent paperless with their cash,” she said. “They are fully automated and it makes me wonder if the same thing won’t happen for the U.S. and Europe. Little by little, companies are and will continue to accept cryptocurrency.”
Alcover accepts all traditional payments for her services, but now accepts bitcoins, litecoin and ehtereum, the three most popular digital currencies.