Early Adopters of Bitcoin Happy With Decision
By Clay Jackson, Veterinary Practice News
Posted: January 30, 2014, 11:50 a.m. EDT
Dogma Portraits, an online pet portraitist, and Vetco, a New Mexico animal hospital, are as different as pet businesses come. But these disparate businesses have one thing in common: They accept bitcoins.
First issued in 2009, bitcoin is the ballyhooed digital currency that is slowly making inroads in the retail arena. More than 12 million bitcoins were in worldwide circulation as of early January at a fluctuating value of about $800 each.
While Vetco and Canada-based Dogma accept conventional forms of payment, they gladly take bitcoins despite continuing questions about the cryptocurrency’s volatility and security. It is referred to as "cryptocurrency” because cryptography is used to control the creation and transfer of money.
Cindy Houghton, Vetco’s owner, made news in December when she started accepting bitcoins as payment for veterinary services. BitPay, a bitcoin-processing company, reported that Vetco was the Atlanta company’s first veterinary customer.
Vetco owner Cindy Houghton, left, with staff veterinarian Sonja Sims, DVM. The Albuquerque, N.M. clinic was the first veterinary hospital to sign on with BitPay.
Vetco marketing director Lauren MacEwen recalled approaching Houghton about becoming a bitcoin business and hearing her boss ask, "I wonder if any of our current clients are using bitcoins?”
"Bitcoiners have pets, too, and there are fiscal advantages as well,” MacEwen responded.
For example, the processing fees are lower. BitPay charges 1 percent of the transaction amount, with lower rates for higher volumes. Credit card companies, by comparison, may charge as much as 5 percent.
The turnaround is also fast. Funds may be deposited in a business account within a day.
The pet industry has only begun to dip its toe into the bitcoin pool. Out of thousands of merchant customers, BitPay has only a handful, besides Vetco and Dogma, that could be described as pet-related.
Vetco is certainly ahead of the curve. The American Veterinary Medical Association reported receiving few, if any, bitcoin inquiries from its 84,000 member veterinarians.
The bitcoin industry shows no signs of abating.
"BitPay currently has more than 16,000 merchants and is adding more every day,” said Stephanie Wargo, BitPay’s vice president of marketing.
The company processed more than $100 million worth of bitcoin transactions in 2013.
Bitcoin has yet to catch on in the pet and veterinary industries for another reason: It is relatively unknown outside of tech circles.
"We haven’t heard from our members yet about bitcoin,” said Andrew Darmohraj, executive vice president and chief operating officer of the American Pet Products Association in Greenwich, Conn. "It is still such a new process, I think it will take some time before it catches on in the pet industry.”
He urged pet product sellers to do their homework.
"In theory, if it saves on transaction fees and simplifies how payments are handled, it will be a good thing,” he said.
For Cliff Blank, who turns pet photos into portraits, signing up with BitPay so he could begin accepting bitcoin was an easy decision. In fact, his hometown of Vancouver, British Columbia, claims to have the world’s first ATM machine designed to both accept bitcoin deposits and spit out dollars to anyone who wants to cash in.
"I knew there was a growing interest in bitcoin after learning more about the technology at a meet-up,” Blank said.
Like Houghton, Blank likes the lower transaction fees.
"Bitcoin is borderless, too, so I save on international currency exchange rates,” he said. "It’s offering another option for my customers and tapping into emerging markets, so why not?”
What does the rank-and-file customer think?
Marcy Brody scheduled an appointment at Vetco for her Chihuahua soon after hearing that the Albuquerque clinic was a bitcoin merchant.
"I was ... proud that my vet clinic is taking bitcoin,” Brody said. "Not many local businesses take it yet.”
Brody also sees bitcoins as an investment, noting, "They keep going up in value despite the occasional crash.”
As the digital currency gains in popularity, BitPay’s Wargo predicted the volatility in bitcoin’s ever-changing value will lessen as more users jump on board.
"Bitcoin is volatile because it is thinly traded,” she said. "As the market gets more liquidity, this volatility will level out.”
Pragmatists see enough risk swirling around bitcoins to take a more cautious approach. The most pressing concerns are the currency’s potential popularity with criminals and its deflationary nature—only 21 million will ever be in circulation.
The bitcoin network confirms transactions every 10 minutes to prevent fraud.
"You generally have to wait for five to six transaction confirmations before you’re sure that the money hasn’t been double spent, and that can take up to 40 or 50 minutes,” Roger Willis, a spokesman with the consulting firm Ernst & Young, told TheGuardian.com.
For Vetco’s Houghton, bitcoin transactions are easy. Customers may use a smartphone app to complete a payment.
"The customer simply tells us they want to pay in bitcoin and then they scan the QR code, and that’s it,” she said.
Since announcing Vetco’s entrance into the bitcoin world, Houghton has heard from other New Mexico bitcoiners.
"We had three inquiries in the first week and a half, and we are expecting more once it reaches the local news,” Houghton said.
Dogma Portraits has gotten some attention, too.
"I started offering bitcoin payments a couple of months ago, and so far I’ve sold a couple of portraits through bitcoin,” Blank revealed.
In Blank’s worldview, cryptocurrencies like bitcoin represent a new dawn for e-commerce.
"I don’t think it’s too early to start thinking about ways to implement bitcoin,” he said. "The public awareness is only growing. Online shopping was once feared, but look at our attitudes toward it now.”
He is so enamored with alternative currencies that he is considering other payment options.
"I’m watching Dogecoin, whose creator was obviously inspired by the shiba inu breed of dog,” Blank said.
"It’s also a natural fit with my Dogma Portraits brand and maybe the pet industry in general.”
Blank foresees a day when consumers’ digital wallets contain many different e-currencies.
"The checkout process could just convert everything on the fly, making it seamless for the customer,” he predicted.
Words like "fad” have been used to describe bitcoin and other electronic currencies, but Blank, Houghton and MacEwen disagree.
"Bitcoiners understand that for the virtual currency to survive they have to commit to it as a community, and they are committed to bitcoin,” MacEwen said.
Added Blank: "I’ve had referrals because of it. Marketplaces are popping up all over the Web catering to businesses specifically offering bitcoin payments.”
Indeed, Overstock.com, a billion-dollar business, announced in December that it would begin accepting bitcoin by mid-2014.
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Early Adopters of Bitcoin Happy With Decision
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