Wednesday, October 01, 2014

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Show Me the Money: More Businesses Accepting Bitcoin as Currency

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TWC News: Show Me the Money: More Businesses Accepting Bitcoin as Currency
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Bitcoin burning a hole in your virtual wallet? Turns out you can spend it in more places than you might think. NY1's Tara Lynn Wagner filed the following report.

"September of last year, we had about 10,000 merchants. Now we've got 30,000 so we've tripled in seven months," says Tony Gallippi, CEO and co-founder of BitPay.

A bakery in Durham, North Carolina accepts bitcoin. So does Bootleg Mannings, a Staten Island bar and grill.

"I just thought it would be really cool if we could get people in here using bitcoins," says Kelly Manning, owner of Bootleg Mannings.

Perhaps one of the biggest players to enter the mix, however, is Overstock.com.

"The first day when we launched it, about 2.5% of our sales revenue was in bitcoin," says Jonathan Johnson, Chairman of the Board at Overstock.com.

The discount online retailer started accepting the digital currency in early-January. They hit the million dollar mark eight weeks later -- with a bulk of that money coming from first time customers.

"By the end of the year, we'll probably do $10 or $15 million in bitcoin revenue" Johnson says.

Proponents say bitcoin can help boost a business' bottom line in a number of ways.

"There's really no disadvantage to accepting it. They don't get charged the credit card fees. They also get access to this new economy. They don’t have any fraud risks," says Paul Puey, CEO and Co-Founder of AirBitz, a bitcoin business directory and wallet.

That's because they say no one can make a purchase using a stolen bitcoin they way they can with a stolen credit card—a common situation that costs businesses a lot of money.

"They are inevitably responsible for returning that money even though someone walked off with their product. Bitcoin—again, much much more fundamentally stronger security from that standpoint," says David Ripley, CEO of Glidera, another bitcoin startup company.

Of course, what's far from secure is the value of bitcoin. To address that concern, companies like BitPay have set up platforms to allow businesses that accept bitcoin to immediately convert it back into cash.

"Most of our merchants choose to just get settled to their bank account. That way they don't have any volatility risk up or down of the price of bitcoin, they don't have to worry about it," says Tony Gallippi, CEO and co-founder of BitPay.

That's the final note. Whether or not bitcoin is actually good for business, it is business. One look around the exhibitor hall at the recent Inside Bitcoins Conference proves this is an emerging marketplace with plenty of entrepreneurs looking to stake a claim.

"Every other industry, right, you work to seek out a niche and in bitcoin the niches are all giant canyons," says Austin E. Alexander, Deputy Director of the Bitcoin Center in New York City.

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