Cryptocurrencies are gaining traction and it’s hard to argue otherwise. They are, however, still far away from becoming a generally accepted means of payment, like any currency is supposed to be. Let’s have a closer look at what you can get for your crypto today.
The U.S.-based furniture e-shop Overstock features on a leading position in most charts of major retailers who accept cryptocurrencies. The main reason is that in 2014, Overstock was one of the first large mainstream retailers who started to accept bitcoin.
Sandwiches and hotels
Subway, an American sandwich chain, has been accepting bitcoin payments for about as long as Overstock. And even such a conservative company as Microsoft has had a respectable history of accepting bitcoin. While you can’t buy everything from the software giant’s offer for bitcoins, you can, for instance, recharge your XBox game account with a bitcoin wallet, which creates a sufficient intersection of the set of Microsoft clients and the set of bitcoin owners.
Another company – CheapAir – lets you buy flight tickets or book a hotel room with bitcoins, which means you can arrange holidays without pulling a credit card or a single banknote from your pocket.
Paying with bitcoin is not an American thing only. For instance, the Czech Republic’s largest e-shop Alza.cz, which operates in several Central European countries, introduced bitcoin as a payment option in spring 2017. The interesting fact is that, theoretically, Alza’s customers can use bitcoins to pay for the most expensive item that the e-shop offers – the luxury Tesla Model S e-car, which sets you back more than 100,000 euros.
However, the company’s representatives say that, in practice, bitcoins are typically used for purchasing computer sets or IT components required to mine cryptocurrencies.
Just a couple of steps from Alza’s Prague headquarters, you will find Paralelní Polis, a café operated by the Institute of Cryptoanarchy. You may ask why a small local café is worth mentioning alongside international giants such as Subway. The reason is that, unlike elsewhere, bitcoin is not an alternative to national currency here – you cannot pay for your coffee with Czech Korunas or Euros in Paralelní polis. You can only pay with cryptocurrencies.
Stop the fluctuation
A good currency should be stable and have minimum transaction costs. In early 2018, bitcoin fulfilled with neither of these criteria. Bitcoin’s volatility was huge and the exchange rate to US dollar fell from almost USD 20,000 to about USD 6,000, fluctuating by double-digit percentage in a short period of time.
At the same time, each transaction was charged by a hefty fee amounting to dozens of dollars. In such a situation, it made no sense to pay for your snack with bitcoins.
The response was twofold. For instance, Microsoft and other retailers temporarily stopped accepting bitcoins. Others (such as Alza and Paralelní Polis) responded by starting to accept other cryptocurrencies, such as Litecoin, which proved a more suitable means of payment at the time.
In a couple of weeks, the situation “solved itself” through several technological improvements and cooling down on exchanges, which pushed the average transaction fee back to fractions of a dollar. The positive accompanying effect of this development was that retailers increasingly started to accept other cryptocurrencies on the their terminals.
At the end of last summer, Virtual Coin Squad claims that out of 52 large companies that accept bitcoin, 25 also accepted litecoin, 15 dash or dogecoin, 14 bitcoin cash, 13 ethereum and 12 monero.
It remains to be seen where we are headed from here. The developments described in this article are a source of optimism, that cryptocurrencies will gain wider acceptance as a non-intermediated means of payment.