On Saturday, the retail shop at Philadelphia Brewing Company in East Kensington was bustling with customers who came for one reason: to spend bitcoin.
Bitcoin, a virtual form of currency, used to be accepted for purchases mostly by online merchants, but in recent months, more brick-and-mortar businesses in Philadelphia—especially in the River Wards-—are starting to embrace the technology.
In early January, Philadelphia Brewing Company became the first brewery in the nation to do business with bitcoin.
About 20 businesses in the city accept bitcoin, according to coinmap.org, and nearly half of those are in the River Wards.
The trend may be in part thanks to Fishtown resident Jason DiLuzio, who introduced the brewery and other local merchants to the idea of doing business with bitcoin.
“It didn’t make sense for us not to do it,” said Nancy Barton, a co-owner of the brewing company. “It’s just another option of payment.”
Bitcoin has been called “gold for nerds.”
It was invented in 2009 by an anonymous creator. There’s a finite supply of bitcoins and they can be purchased or “mined” by using software to solve math problems.
It’s decentralized, meaning no government or single entity controls it, and transactions take place peer to peer, without a middleman like a bank or credit card company.
As of Saturday, one bitcoin cost $823.32, according to coinbase.com. One year earlier, it was worth $20.50.
To do business with bitcoin, Philadelphia Brewing Company uses a payment processor called BitPay. To make a purchase, the customer scans a QR code on the brewery’s computer with his or her smartphone.
The money is instantly converted into U.S. dollars and deposited into the brewing company’s bank account for a 1 percent fee. (Credit card companies charge the brewery 3 to 4 percent, according to Barton.)
“It’s kind of weird to get your head around because you’re not touching anything,” Barton said. “But then it shows up in the bank, so it’s pretty neat.”
There may not be many people using bitcoin yet—there are about 100 people in BitcoinPHL, a meetup group—but the group is passionate and growing.
They have arranged “bitmobs” where they show up in a group to buy things from a local business that accepts bitcoin.
On Saturday, Philadelphia Brewing Company cleared almost 20 bitcoin transactions, totaling $421. Many of those transactions were from new customers.
At the brewery on Saturday, DiLuzio said Philadelphia could become the Silicon Valley of bitcoin. The meetup group organized in the fall, he said, and that got the ball rolling.
“There’s this network effect,” he said. “The more businesses accept bitcoin, that will encourage other businesses to accept bitcoin.”
Other businesses in the River Wards where customers can spend bitcoin include Higher Grounds Café in Northern Liberties; Street Glitter Gallery, Pizzeria Beddia and Periphery Gallery in Fishtown; Chappelle Guitars and Gearforms: Industrial Americana & Salvage Co. in East Kensington; and Norman Porter Jeans just west of Fishtown. You can also buy real estate properties in the area with bitcoin at BitcoinProps.com.
DiLuzio and Kristov Atlas, another member of BitcoinPHL and the author of Anonymous Bitcoin: How to Keep All of Your Bitcoins to Yourself, both said they think that bitcoin is on its way to the mainstream.
“A couple years from now, the question of who should use bitcoin will be silly,” Atlas said. “Everyone will be using bitcoin.”
At the brewery’s checkout counter on Saturday, while some people waited in line to spend their bitcoin, others expressed surprise and asked what it was.
Rich Godwin, 24, of Cherry Hill, used bitcoin to buy a case of beer and two pint glasses. He also recently bought a hand-made hollow body electric guitar with bitcoin at Chappelle Guitars.
“I do think we’re at a tipping point,” he said. “I think people are always skeptical and unwilling to change, but I’ve realized I’d rather embrace it than sit in the backseat. This is just the beginning.”