The Urbanite – Jon Liedtke – Feb. 26, 2014
Nobody likes having to pay for beer, least of all with hard earned money. But one local establishment is shaking things up by accepting Bitcoin, an online crypto-currency, as one way to pay for a cold pint of brew.
The Windsor Beer Exchange offers an almost exclusive craft beer selection and an internal stock market which affects beer prices depending on demand. Just when patrons are getting used to the unique marketplace concept, the bar is starting to accept Bitcoins as payment.
“It’s a digital currency,” said AJ Vanden Berghe of Bitworks, who is setting up the system for the Windsor Beer Exchange with his business partner Colin McMahon. “It’s a system that’s built to make payments on the Internet easier [since] credit cards, fiat currency, everything we use today, it wasn’t built for the internet, it was built for an older system.”
At the time of printing, there are approximately 12 million Bitcoins in circulation worldwide with each Bitcoin valued at $609. The total valuation of the crypto-currency globally equals roughly $7.5 billion.
Bitworks has raised $30,000 in investments in a one-month period and provides two services to customers: setting up the ability for businesses to both accept and mine— to labour for— Bitcoins.
Bitcoin transactions are encrypted to protect them from hacking, and are facilitated through a verification process which relies on volunteers to hook their computers up to the Bitcoin network to verify each financial transaction.
“All the computer is doing is verifying all the other millions of transactions that are happening throughout the system,” said McMahon. “If I send Bitcoins to you, all the other people that are mining for Bitcoins, what those mining computers are doing is verifying that transaction.”
McMahon has paid both his personal Enwin Utility and Union Gas bills with Bitcoins through a third party exchange. “You can pay all your bills throughout Canada, anything that you can pay through a Canadian bank, any bill that you can pay online, you can pay with Bitcoin now.”
“Bitcoin is the intersection between finance and technology, which are the two things which people understand the least and frighten people the most,” said Vanden Berghe, who acknowledged there is currently vast concern about the security of digital currency.
However, according to McMahon, the only fraud which has occurred in relation to Bitcoin has been traditional theft, which all currency is susceptible to. “People have hacked into websites that store cryptocurrency. There has not been any negative impact on [Bitcoin] itself … it hasn’t been able to be hacked.”
In fact, Bitcoins themselves cannot be hacked according to Vanden Berghe because the transaction process itself requires constant verification.
Bar owners can benefit from Bitcoins in multiple ways: accepting Bitcoins helps to promote and differentiate the business, mining Bitcoins helps generate revenue and Bitcoin transactions cost less to process than Interact or other digital payment methods.
“The percentage bar owners pay for Interac debit and credit is more than Bitcoin,” said Vanden Berghe. “The cost per transaction for Bitcoin is ridiculously less.”
Josh Olsen, co-owner of The Windsor Beer Exchange, explained he was excited to implement Bitcoin transactions as he hopes that it’ll help generate additional interest in his bar.
“It’s something new,” said Olsen. “To me honestly, I only care about the publicity from it. I only know as much about Bitcoin as I learned [at this interview]. It’s something to do, get our name out there more…”
When asked whether or not his audience would be receptive to Bitcoin, Olsen conceded he had no set expectation. “I don’t know … but I think you put the option out there.”
Jonathon Liedtke is the managing editor of The Urbanite, Windsor’s alternative newspaper. He is also a member of Windsor’s “Punk with Horns” band The Nefidovs, and as such, is committed to enhancing and sustaining the arts community.