Some thoughts on cryptocurrency and the global travel industry:
- Cryptocurrency, like bitcoin, is a truly global currency. One bitcoin will always be worth one bitcoin no matter what corner of the globe you’re in. No need to worry about those pesky exchange rates when exchanging between the hundreds of different fiat currencies. Paying with bitcoin, along with other cryptocurrencies like ethereum, ensures that you cut out the exchange middleman and save money while doing it.
- Cryptocurrency is something that can be earned from any corner of the globe with an Internet connection. You can do business with someone from Japan, who is accustomed to using the Yen as currency, just as easily as doing business with your neighbor thanks to global, P2P currencies such as bitcoin and ethereum. No need to set up a foreign financial branch for your company or arrange any international money transfers, both of which are costly and time-consuming. This is like the Internet on steroids. Whereas the Internet allowed for people and businesses to connect with anyone around the world instantly, we still had to rely on old, slow infrastructure to send anything of value. Blockchain allows people to send anything of value instantaneously to any corner of the globe and done so without the costly intermediaries. This level of global efficiency is truly unlike anything we’ve ever seen before and it scares the pants off a lot of people.
- Cryptocurrency is really, really easy to travel with as your money is readily accessible from any computer or phone of your choice from anywhere in the world. No need to carry around a physical wallet ever again, except for having to have ID with you but soon even that will be something that migrates onto the blockchain. Companies like Civic and uPort are already making great progress in the digital ID area.
The above reasons are why I believe traveling on crypto is a superior way to travel when compared to traveling with fiat money. I will say though, however, there are two glaring issues right now that come with spending cryptocurrencies while traveling and those are their crazy volatility and the fact that they’re currently not accepted at a whole lot of companies, though that number is increasing every day. I believe that these two issues actually go hand-in-hand and one of the primary reasons why companies don’t’ accept them is because of their volatile nature. Because cryptocurrencies are a brand new asset class, the market is still trying to figure out how to value them properly. Should one bitcoin be with a million dollars or one dollar? Who the hell knows that answer. Like any new asset class, the market is still trying to figure that answer out and as such cryptocurrencies are known for their gut-wrenching price swings. If you have a high-risk tolerance for investing, cryptocurrency is your game. If you’re among the faint-of-heart, avoid them like the plague. It’s for this reason that many businesses don’t accept them as payment for their goods and services, as well as the fact that there’s a steep learning curve to figuring out what they actually are. I believe over time, however, as institutional money begins to enter the space (CNBC article surveyed financial firms around the country and found that 20% of them are looking to trade digital currencies within the next year) and the right regulatory framework is put into place, then their volatility won’t be so extreme, which will, in turn, lead to businesses accepting them as a means of payment.
As of now, due to their volatility and lack of regulatory framework, very few large businesses accept them, with some notable exceptions like Overstock.com, Dish Network, Expedia.com for hotel bookings, Microsoft and CheapAir. Most large companies have shareholders to answer to, slim profit margins and some are publicly-traded so every business decision made, they have to be able to justify to their stockholders. Accepting cryptocurrency as payment for their goods and services is a risk that most large corporations aren’t willing to take at this stage of the game. Now from my experience traveling the coast of Australia, some small businesses are much more willing to take that risk, which is what I’d like to talk about now. How I lost my Bitcoin virginity and spent it on REAL-LIFE, ACTUAL THINGS! And it couldn’t have been at a cooler place.
Recognize that building? Yes, it’s the Opera House in Sydney, Australia! And no they do not accept cryptocurrency for their shows yet. The first place I actually managed to spend cryptocurrency in real life was a little hole-in-the-wall bar a few minutes away from the Sydney Opera House. Spawn Point Bar was my first real transaction with cryptocurrency, and the place couldn’t have been more fitting.
It was a video game bar!!! And I’m not talking about your dungeons and dragons games or people LARPing all over the place (although I wouldn’t be surprised if anyone were). No, I’m talking about you’re old school, classic Nintendo 64 and NES games, ya know, the games that get us 90’s babies as giddy as little school girls. Classic games like Super Mario Bros 3 for the original Nintendo.
Or maybe James Bond for the Nintendo 64…. I remember many a broken controller from playing this with friends during my childhood.
Or perhaps you young kids want something a bit more modern like Mario Kart for the Wii?
Yeah, you could say it was love at first site. TV’s everywhere, classic games galore, beer on tap… hell, they even had a tv mounted on the wall displaying the prices of the hundreds of different cryptocurrencies being traded.
So I went to up to the bar, determined to spend my crypto in real-life for the first time. I go up and I ask the guy, “This is my first time spending crypto, what is your most insta-worthy drink?” and he says to me, ” I’d probably go with the Rainbow Road.” “I’ll take one of those,” I reply. So he goes to work whipping up some concoction, I myself, not entirely sure what was going into it. And the finished product:
The bartender even held a light above it for dramatic effect. Going to pay for the drink, the guy pulls out the bars ipad and opens the restaurants cryptocurrency wallet. “That’ll be 0.00001718 bitcoin.” Bitcoin was trading at $10,642 at the time, which amounted to around $13.39 USD. So I open up my cryptocurrency wallet app, scan the barcode he had presented me on the ipad, and boom, transaction finished. The bitcoin was transferred from my wallet to his, near instantly. I felt so futuristic, albeit a little nerdy.
Though not the most masculine drink I’d ever ordered, it was delicious nonetheless. I realize that the older I get, the fruitier the drinks I enjoy, and the less I care about people judging me for it. Anyways, after I finished my delightful rainbow beverage, I buy a couple beers (mainly to salvage what was left of my man card) using various other cryptocurrencies like litecoin and ethereum. Every transaction was settled quickly and painlessly. A pretty awesome first experience.
I didn’t get the chance to speak with the owner of the bar as he wasn’t there, but I did get to have a long chat with a couple of the bartenders who had worked there for a few years. Here’s what I found out:
- How long have you been accepting cryptocurrencies?
- For about 3 years, but they’ve been converting most of it back to fiat because of the volatile nature of it. They originally only accepted bitcoin, but now accept over 50 different cryptocurrencies.
- Why did the bar start to accept cryptocurrencies?
- One of the owners of the business, an IT guy, was super into blockchain and cryptocurrencies, especially ethereum and wanted to accept them at Spawn Point Bar. He saw them as a small risk with big upside potential.
- What kind of success has your business seen from accepting cryptocurrencies?
- They haven’t been huge for the businesses bottom-line as most people still don’t pay with them, but they do get customers that only pay with cryptocurrencies.
- What do you think the future of cryptocurrencies looks like?
- Some of them will for sure succeed in the long-run, but not all of them. Nobody knows what ones those will be. Blockchain is already revolutionizing the world and will be for some time.
Spawn Point Bar is truly one-of-a-kind and a must-stop for any cryptocurrency, blockchain enthusiast who happen to be in the Sydney area, but beware, you just might end up spending all night there trying to beat that damn Bowsers’ lava castle level. That definitely didn’t happen to me….
*Disclaimer: We will never give out investment advice. We simply seek to provide the tools and resources for individuals and small business to take advantage of the crypto economy