A Nanaimo-area thrift store is the first in town to conduct business in bits and bytes with cryptocurrency.
Brad Nelson, co-owner of Treasure Island Thrift Shoppe, located in Village Square in Cedar, is taking Canadian money plus Bitcoin and Dogecoin at the virtual currencies’ going rates.
The store started taking payments in virtual money, also known as cryptocurrency Wednesday, giving customers another payment option alongside cash, Visa, Mastercard and American Express.
“I’ve been looking at cryptocurrency for a little while now and those are the two that I decided to go with simply because Bitcoin has an intrinsic value – people have understood its value,” Nelson said. “Of course, it’s value isn’t backed. It’s based on supply and demand.”
Virtual currency is money that can be used online to purchase products and services, similar to any other currency system.
Cryptocurrency was introduced in 2009 and is becoming more widely accepted although it has had some controversy surrounding it, not because of the currency itself, but because it was quickly picked up as a way of financing illicit activity. In 2013 the U.S. Federal Bureau of Investigation shut down Silk Road, an online black market, and seized 144,000 bitcoins valued at the time at more than $28.5 million US.
A bitcoin or dogecoin has a trading value relative to standard currency. One bitcoin is currently trading somewhere north of $290, but instead of being backed by a commodity, such as gold or oil, a cryptocurrency’s value is based on demand for the currency itself.
Bitcoins are broken down into fractions to represent smaller denominations. One millibitcoin, for example, equals 1/1,000th of a bitcoin.
Dogecoins, while gaining in popularity, are currently trading at the much lower value of about 12 cents.
Countries like Canada and the U.S. are considered bitcoin-friendly markets.
Vancouver recently had its first bitcoin ATM machine installed in which cash can be withdrawn based on bitcoin accounts. Large companies that accept bitcoins include Overstock.com, TigerDirect and Zynga. The University of Nicosia in Cyprus is the first accredited school to accept bitcoins for tuition payments.
“There was a bitcoin crash not too long ago and, I don’t remember the name of the company right now, but there was a tech company that picked up a whole bunch of bitcoin and that shot the value back up again,” Nelson said.
Even though most of their customers don’t buy products from the store online, there are potential customers as far off as Scotland and Chicago, Ill., who expressed interest in buying products online using cryptocurrency. The added payment method could spark more sales and interest in the store, which has expanded to include home and office furniture and other products.
There is nothing illegal about trading in a virtual currencies, Nelson said. He simply converts the currency to Canadian cash and pays taxes on the converted value.
Nelson said he believes he is the only company in Nanaimo to trade in cryptocurrency although several companies in Victoria, Parksville and Port Alberni trade in it as well.
Cryptocurrency payments are processed using smartphone technology by scanning quick response codes and then the user types in the purchase amount, which is transferred almost instantly to the merchant’s account.
The process is otherwise similar to a regular debit or credit card transaction.
“The only difference is rather than ringing the cash through the till or my card reader, I’ll be ringing it through on the smartphone and then ringing the transaction through the till,” Nelson said.
For more information, please visit https://bitcoin.org or http://dogecoin.com.