One Halifax business owner is hoping to draw people to his convenience store by offering something few other businesses in the city offer: Bitcoin.
“I’m always looking for new gimmicks or something different than what other stores are doing because we don’t want to be a regular corner store,” says Daily Sweets Kwik Way owner Danny Baldwin.
The Oxford Street business got a Bitcoin machine, which works like a cash ATM, on Nov. 22.
Cryptocurrencies, like Bitcoin, are digital assets that can be exchanged for currency. While a single Bitcoin might be worth thousands of dollars, it can be divided into 100 million pieces and sold. Bitcoin briefly hit a record high value of $14,756 on Wednesday before falling to $13,590 by Friday.
Bitcoin users can make transactions with other users directly, or can use a third-party exchange for quicker and more convenient transactions. Machines like the one at Daily Sweets work through exchanges.
The machine at Daily Sweets is operated by Coin Nation ATMs. The company installed another one at Alexandra’s Pizza on Queen Street on Wednesday.
Customers can engage in transactions as small as $20 and as large as $9,000. Unlike online Bitcoin transactions, customers can pay with cash. Users are charged a 10 per cent transaction fee.
Akram Ayach, director of operations for Coin Nation ATMs, provided a demonstration. He took out his phone and opened an app that connects to the digital wallet that contains his Bitcoin.
He scanned a QR code on his phone that connected the machine to his wallet. He inserted $20 and was given the option to purchase the amount of Bitcoin that represented at the time. It was accepted and he was given a receipt. Within 10 minutes an email confirmed the transaction had been successful.
James Patriquin, a PhD student at Carleton University researching cryptocurrency, says only people with Bitcoin will likely be interested in the machines.
“The only real reason I would want to use a Bitcoin exchange is if I already owned Bitcoin, and the price was collapsing and wanted to dump it immediately,” he says.
Patriquin believes that trading Bitcoin online is better, as it avoids extra fees if done without an exchange.
“Unless the convenience factor is an immediate concern, there are better ways to trade in Bitcoin, for sure,” he says.
Patriquin also points out that unlike cash ATMs, Bitcoin terminals aren’t regulated by the federal government or a bank.
Halifax had two machines installed in 2014. One was at Durty Nelly’s pub and one was operated by the Dalhousie Cryptocurrency Club in the Student Union Building at Dalhousie University. Both have since been removed.
Ayach says that previous machines in Halifax were kiosks created by students. The ones operated by Coin Nation are made by a company that manufactures ATMs and Ayach says are as physically secure as cash machines.
For those worried that Bitcoin could be stolen by hackers, Ayach says that blockchain, the technology that allows Bitcoin to run, is completely secure. Instances of Bitcoin theft have been isolated to the exchanges that facilitate transactions.
“There’s no person or corporation on Earth with half the amount of computational power that it would take to subvert the Bitcoin network,” says Patriquin.
According to Ayach, the appeal of purchasing Bitcoin is similar to anyone interested in purchasing a commodity.
“People who invest in gold, the appeal is to generate money over time when the price fluctuates. The same applies to Bitcoin,” says Ayach.
On the other hand, Baldwin likes what Bitcoin represents to him: an opportunity.
“As a business person, it’s more interesting to me as a new way to make money,” he says.