Bitcoin is not just speculation, it’s also a way to pay for products and services.
Introduced in 2009, bitcoin is a digital currency, or cryptocurency, not backed by any country’s government. The currency that only exists on the internet has been growing in popularity over the past year and a half.
Now, a couple businesses in the capital city are starting to deal in bitcoin and accept it for payment.
In the Alaska Robotics shop in downtown Juneau, shelves are lined with comic books and graphic novels, local art hangs from the walls, and kids talk about Minecraft.
“Do you have any comic books about Minecraft?” a young customer asks shop owner Pat Race.
“Oh, that’s a good question. I don’t think we do… ” Race replies checking his inventory, but he sees that such a comic book does exist and says he’ll order it.
“It’s kind of sciencey,” the customer explains. “You put sand in a furnace and make glass”
Besides Minecraft, another hot topic at the shop is bitcoin. Owner Pat Race got his first bitcoin last spring. “I sent a MoneyGram off to some Eastern European country and then my bitcoin appeared in some account.”
Race bought $150 worth, which, at the time, equaled one bitcoin. Since then, the value of bitcoin has fluctuated. “Back at the beginning of 2013, the price was about $18-$19 for a bitcoin and it peaked at about $1,242 in mid-Nov. and then immediately crashed down to almost $500 in Dec. and is back up to about $800-$850,” Race explains.
Race wants to incorporate bitcoin into his business.
“I would like to adopt bitcoin here at the store just because I think it will emerge as a global currency. And I don’t know if specifically it will be bitcoin but I think some kind of cryptocurrency is in our future,” he says.
Alaska Robotics recently advertised its first item selling for bitcoin – a limited edition print of Miley Cyrus riding a bitcoin with drones flying overhead. It costs .04 bitcoin. That’s the equivalent of roughly $30, and Race is only accepting bitcoin.
He’s not the only business owner in Juneau embracing cryptocurrency. In the window of Gold & Silver Exchange at Nugget Mall, a sign reads, “bitcoin – BUY/SELL”
“It’s only been there three weeks but it’s gotten a lot of attention, ” says owner Dylan Hammons. He’s only sold bitcoin to one person, but he’s not worried. He considers his shop the hub of the bitcoin community. “There’s a lot of talk about bitcoin. I’ve been talking about bitcoin pretty much nonstop for the last month and a half since it shot through the roof, so I’m chatting everybody up about it. There’s a lot of people that are showing interest. People are aware of it now.”
Hammons says some people who got into bitcoin a couple years ago are now bitcoin millionaires.
“From what I hear, there’s actually a bitcoin millionaire walking around town here, so that’s pretty big news,” Hammons says.
When asked if he was the bitcoin millionaire, Hammons replies, “No, it’s not me. I wish it was.”
Hammons hopes to capitalize on educating others about bitcoin, specifically other Juneau businesses. “The more people get bitcoin into their head, the more they’re going to want to spend it. So, as time goes on, more people are going to be coming into their shops and asking, ‘Hey, do you guys take bitcoin?’ And then the businesses are going to be like, ‘Oh hey, wait a minute, we better figure this thing out.’ So then they’re going to be calling people and that’s where I come in and I go and show them how to do it.”
Northern Economics Senior Economist Jonathan King is surprised with the bitcoin activity in Juneau businesses. “Wow,” he says, “they’re starting to accept bitcoin, huh?”
He doesn’t know of other Alaska businesses doing it, but thinks those that are may be ahead of the curve.
“It’s really interesting and definitely puts those businesses out on the leading edge of a new frontier,” King says.
With that, he says, comes inherent risk, “If you end up in a volatile currency that changes value rapidly, you could end up a big winner or you could end up a big loser.”
The idea of alternatives to traditional currency has been around for a while, but King says bitcoin is something different:
“You can get online, you can do business with somebody in India, you can do business with somebody in China, or you can do it locally if you can find somebody who’s willing to take them, and I think that’s what makes it different. It’s probably one of the first internationally exchangeable alternative currencies.”
King anticipates regulatory hurdles when it comes to taxes. “The U.S. Treasury is probably going to be want an accounting of the exchanges that occurred with bitcoin and they’re probably going to want to get paid in dollars.”
Alaska Robotics owner Pat Race isn’t too worried about that yet. He admits the concept of accepting bitcoin is a bit gimmicky at this point, “but it’s also a technology that I want to support. I think that tourists that come in and say, ‘Oh wow, I found this shop in Alaska that took bitcoin’ – I think it will be a very limited – but those people will be excited to see it.”
This summer, Race plans to accept bitcoin for everything in the store, which means soon you can go into Alaska Robotics and buy a Minecraft comic book with a simple scan of your smart phone.