We’re excited to be joined by a Serial entrepreneur, Pete Martin from Votem.
It seems like only 5 minutes ago that hearing the term ‘cryptocurrency’ meant you had to do a Google search, bypass swathes of misinformation or ask your most clued-up and techy friend what this concept was all about.
Now, every man and his dog owns 0.01 Bitcoin, encourages all of their friends to sign up to Coinbase and acts like a financial advisor.
Beyond the jokes, cryptocurrency is serious, as demonstrated by the $425bn+ market capitalisation. Whilst money has been poured in, and early adopters have benefited, we are being asked this same question over and over –
‘Can you run a business with only cryptocurrency?’
Finding examples of businesses who only accept cryptocurrencies was actually a lot harder than we thought it would be. We had to ask around, do a lot of Google searching, and appeal to Quora (more on that later). Ultimately, we found several examples:
This Bitcoin only café in the capital of the Czech Republic was set up by crypto-anarchist collective Ztohoven, which translates as ‘Frozen’. The idea behind this café is to introduce Bitcoin and the concept of cryptocurrencies to the average person on the street, according to a barista who has a virtual wallet chip implanted into her wrist. A flat screen on the wall monitors the price of Bitcoin and a hole-in-the-wall machine by the entrance allows you to exchange cash for Bitcoin.
Inspired by Bitcoin Coffee in Prague, Nash Basel set up his own ‘crypto café’ on Aungier Street in Dublin. He had made some big profits in 6 months of cryptocurrency trading, sold out, and opened the café – his second in the area. Signs on the wall say ‘Hodl 4 life’ and a Coinbase stream of crypto-prices can be found on a screen. Whilst Nash’s intention was to make the café crypto-only, it hasn’t worked out that way, and despite accepting both Ethereum and Litecoin, he has had only 20 paying customers as of Feb 2018, and so decided to accept cash too. The thought is there, it’s still absolutely commendable. Good luck Nash!
This is a bit different, but it certainly leverages the privacy of cryptocurrencies and virtual wallets. It’s a Las Vegas Strip Club that accepts Bitcoin, and they have some hilarious marketing material, including posing dancers with theoretical Bitcoin manuals (see below). The idea came from martial arts expert Nick Blomgren, who wanted a more secure way for men to keep their strip club trips secret from their wives and partners. Even more bizarrely, you can pay for dances by scanning the barcodes on the strippers’ bodies, and get a 20% discount for doing so. Blomgren claims that this benefits the dancers, as some banks will shut down the accounts of those who work in the adult entertainment industry.
Again, this business is not crypto-only, but it’s close, and becoming increasingly popular.
Getting FIAT can be an issue. For businesses with physical premises, setting up standing orders to pay bills and suppliers is a major issue. To do these things, you have to sell your coins, it’s as simple as that. Until utility companies start accepting crypto, it will stay this way.
By only accepting crypto, you cut out a huge portion of the market. However, if you have faith in the market’s potential for growth, you can undercut large companies, charge a lower price, and use this as an incentive to get people to buy crypto.
Tax is complicated in the crypto world. In the UK, you would only have to pay tax on your crypto-assets when you convert them to FIAT… unless you’re using that FIAT money to pay expenses. So, if you keep all profits as crypto, and pay all expenses as FIAT, you will run at a loss whilst making a profit. Confused? Rightly so.
Online businesses are, right now, the most likely and best facilitated for accepting cryptocurrencies as a form of payment. Brick and mortar businesses are going to need more time to adopt, because if you rely on customers walking in off the street, you rely on everyone having crypto-assets, and this is not true yet. We believe that eventually, enough people will hodl crypto to allow for crypto-only brick and mortar businesses, but it may take a long time to adopt.
Online businesses selling digital assets, like ebooks, video tutorials or web services are even better placed, as they have no physical overheads for these products, and so can exchange digital products or services for digital currencies.
Litepay is one of many solutions, but in our opinion, it’s in the top 1% for the crypto-to-fiat exchange market. It is a payment processor that exchanges Litecoin for Government fiat anywhere in the world, cross-border, international, and with an emphasis on being easy-to-use for businesses who want to accept crypto-payments.
Litepay solves two problems – sellers who want to sell in crypto but end up with fiat, and the volatility of the market forcing losses on customers. In fact, the system converts Litecoin to fiat immediately, so sellers are not at risk of fluctuating prices. Litecoin has appreciated in value tremendously in recent times, and those who have it, want to use it, and those who want it, want to accept it.
Here is the top answer, from Franco Muñiz, Crypto enthusiast and investor.
“Yes, of course you can. But…there are limitations.
Do you mean running a business accepting only crypto as a payment method? Or maybe building it based on blockchain? Sure, you can. But you’d be limiting your reach to a relatively small audience. Also, cryptocurrency is meant to build decentralized services, so you won’t be precisely owning everything you make, it’ll be managed by the whole blockchain.
Crypto is still on it’s “dial-up” phase (remember when the internet made all these sounds and you couldn’t use it while someone was using the phone?), which means:
1- Not a lot of people use it. Nowadays it’s not a matter of accessibility, it costs nothing to get a wallet and all you need is a phone, PC, or any device with internet access. The problem is that crypto hasn’t yet been accepted as a currency by most people. Most of them think it’s just a bubble or only an investment method to get rich (or broke) quickly.
2- It doesn’t really have a use, because it’s still controlled by whales (people with a lot of money, even billions, controlling the market as they wish). Yeah, it works and everything, but did you notice what happens when Bitcoin goes down? Every altcoin goes down. No matter if it’s a token or a coin, if it has a great usage or an already working product, they’re all Bitcoin-dependant. And this problem won’t end until crypto gets more audience and it’s more reliable. We probably all agree that some, or most of our friends/family members don’t understand this world and just disregard it.
There are already a lot of companies using blockchain. One of my favorites is Dent. While still only available for Android/iOS just on USA and Mexico, it has an already working product. You can sell your unused mobile data every month, for Dent inside the app. Then, if you’re in need of data, or you travel to a country with a supported mobile carrier (yet to happen), you will be able to buy data super cheap and in a matter of seconds. No more expensive roaming. But as 99% of the coins, this one goes down if Bitcoin goes down.
So yeah. You can create your own coin/token, start an ICO, get some millions, and build a company based on the blockchain. It’s a great challenge and a modern/innovative project, but it’s still really early in crypto and if you intend to provide useful and common services, don’t expect your company to grow with the same audience other “normal” business may have.
If your intention is to make your company big, and earn money, you can start today with blockchain and see results in the long term, or you can run a business (anything other than crypto) and be able to go big, or, on the other hand, get knocked out by crypto in few years.
Thanks for reading! Any questions? email us firstname.lastname@example.org
Unless you’re directly investing your money in carbon reduction systems or projects, it’s most likely that each time you spend money, you are increasing your carbon footprint. When you buy something from the internet, think of the process of events to make delivery possible, when you buy a tomato in your local shop, think of its supply chain and not only how it got to your shop, but the energy taken to grow it. Every action you make with your money causes a domino effect, and the file tile is carbon emission.
This is true for traditional currencies, like the dollar, pound or euro, but is it also true for cryptocurrency? In this article, we are going to try and find out.
Wealth equals responsibility. The richest people in the world have the highest carbon footprint. In cryptocurrency terms, the biggest miners in the world have the largest ecological footprints due to energy consumption. The things you spend money on directly have a carbon value, but for crypto it’s harder to measure, as it’s all to do with processing transactions. One Bitcoin transaction could power an LED bulb for 500 hours.
In the real world, the most carbon negative way to spend your pounds are on budget flights, which many of us are guilty of. In the crypto world, the most carbon negative activity you can do is to mine Bitcoin. In truth, we should be looking to move away from Bitcoin, and support alternative technologies like IOTA that can be carbon neutral innovation tools.
Central printing facilities don’t often release the figures on their activities. They may say the cost of materials, but they won’t say how much has been released, or, they may release statistics over a long period of time so that short-term data cannot be extracted. For this reason, the cost of printing comes with limited information. What we do know is that financial experts in the UK estimate that the new £5 notes cost about 3p each to produce. We also know that the government spent £75 million producing these notes, so if we assume that the entire £75m is absorbed by production, that makes £2.475 billion split in 495 million separate notes.
The new UK £5 weighs 0.7 grams (the paper notes are 0.9g), that gives us 346.5 tonnes of plastic notes. The notes will last 2.5 times longer, but cost 50% more to make than paper notes, meaning overall there are definitely benefits to this transition. However, transitioning equipment like ATMs and self-service checkouts will cost the British consumer £236 million, or about £4 each, so that’s something to consider too.
What is the environmental harm done by producing 346.5 tonnes of plastic banknotes, the energy required, the distribution, the machinery, the changes to technology and the energy required for people to go and exchange their old notes? Well, we don’t know for sure but it’s pretty large. If anyone has the formula for calculating this we’d love to know, just email email@example.com
The mobile and digital payment technology, wireless transactions and cryptocurrencies payments accepted in more and more places, it seems like cash is on its way to becoming obsolete. Whilst cash is redundant for some, it does play an important role in society, especially for small businesses who work on a cash basis.
In Europe, on average, the number of ATMs is declining by 6% each year since 2010, according to Link, the network that connects most of the UK’s cash machines.
However, the decline in ATM usage is actually threatening bank branches, who are not needed as much, due to online and mobile banking, as well as the lessening use of cash. In theory, if the branches continue to close, they may, in fact, start improving ATMs and making them smarter, automating the processes that in-branch staff usually provide.
There’s both the potential for a world without ATMs, or a world in which ATMs do far more than just dispense cash. As it stands, we don’t know which way it will go. What we do know is that the carbon footprint and environmental damage done by banks would be a lot lower if they had fewer branches, more Smart ATMs and the ability to offer services linked to Cryptocurrencies.
Did you know? In Russia, deposits by security vans delivering cash to stock up machines have been cut in half by allowing customers to deposit money into their accounts via ATM. The environmental impact of halving all of these road miles is considerable.
Already there are companies like Monaco and BitPay Card offering cards that hold both traditional and cryptocurrencies. With Monaco, the accounts are free, offer exchanges at fair prices and even give 2% cashback of MCO, their own token, on crypto transactions. With this service, you are able to avoid bank fees (hooray), get real exchange rates (woop) and make instant exchanges and transfers (awesome).
The current crypto-sphere is far more accessible for people who want to save or trade, and a bit more confusing or frustrating for those who want to spend. Even VISA, the leading global payment solution put a blanket ban over crypto-cards, assumedly until there is more knowledge and legislation in place about their usage.
A world with crypto-cards might look very similar to the world we live in today. Cash withdrawals, contactless payment, and chip and pin services could all feature. Additional benefits could be that your mining activities are linked to your account, and so a regular stream of coin tops up your ‘bank’ balance.
The answer to this question lies solely in the crypto that you are using. If the token is Bitcoin, it’s likely that the environmental footprint is greater than traditional money. If it’s Ethereum you’re spending, the power consumption for transactions is just 8% of that for Bitcoin, though Bitcoin is worth around 10 times Ethereum, so it almost balances out. Litecoin also uses about 1/10th the power of Bitcoin for transactions (though you’d need around 60 litecoins* to equal one BTC).
*Cryptocurrency values are highly volatile and the figures stated in this article are liable to change
Bonus: Do you like talking about money? We interviewed a crypto-millionare on the podcast. https://www.cryptopulse.co.uk/episode-12/Listen here.