Why shops in Norway decide to accept Bitcoin

After we started to accept Bitcoin in 2014 february we became curious what motivates other shopkeepers and service providers in Norway to turn their attention to Bitcoin. We interviewed everyone to share their experiences and expectations with the crypto-currency.

First a quick overview of the places that accepts Bitcoin in Norway:

Aktivisten kafé – a small cozy café in the hipster district of Oslo
Zodo/Viralvoi – marketing agency
Wish AS Opplevelsesgaver – Experience gifts
FixMyi – repairing service for Apple products
Host1 AS – webhosting and other IT services
Mediehuset Tek AS – a company making specific softwares
Justcoin.no – Scandianvian trading center to buy and sell Bitcoin itself
Iterate AS – that’s us
iPhix – repairing Apple and Samsung products
WAU – travel and technology agency
www.bitlasers.com – worldwide seller of handheld laser and laser-accessories.
Camping Dalen & Camping Dalen Shop: Listed as two in Coinmap, but in fact it’s one.
Ecoin – an inactive costumised map to list places where Bitcoin is accepted. Doesn’t function as a shop to buy products and services
Holiday House Nybergsund, Norway
Brattlia Økogård – Organic farm

Aktivisten Cafe in Oslo. They also accept Bitcoin. Photo Credit: Scott Cadman.

Aktivisten Kafé in Oslo. They also accept Bitcoin. Photo Credit: Scott Cadman.

What motivates a business to accept Bitcoin?

If you happen to be a business owner you might find some inspirational thoughts among the answers:

“Bitcoin is between you and me and there is no bank in between. Same as cash. I don’t like that when you use cards everyone can see where you use it and what you buy with it. Also: accepting Bitcoin is much cheaper than having a payment terminal.”

“To be among the early adopters, test new payment methods and to offer “non-traceable” transactions.”

“We wanted to offer an additional payment service via the web that is not dependent on PayPal / VISA / MasterCard. This started as a test project that worked very well, thus resulting in that we decided to accept Bitcoin permanently.”

“At first bitcoin was the only form of payment we accepted. This was the time when very few had heard about bitcoin, so we wanted to “spread the word”, especially in this niche we do (hobby lasers). I believe we have succeeded, because the largest laser hobby store in the world and several of our suppliers of components have started accepting bitcoin too.”

“This could be the future way to pay, so why not try? One has to start somewhere.”

“One of our clients is a Bitcoin enthusiast and he insisted that it would be great if we accept it. So we decided to do so. No payments happened so far in Bitcoin, but it’s interesting to see where it takes us.”

“We see great advantages of a global currency for companies who do international business. It operates with low costs regarding transactions and integration, and payments are fast and easy. It’s also a new exciting market with many passionate users, and furthermore: it is a new platform that fosters a lot of innovation.”

“Bitcoin was implemented as open-source solution for clients and as a strategy to gain more visibility.”

“We love technology and we believe that the technology Bitcoin is based on has a future in the world of payment.”

Tl;DR: non-traceability, low operational costs, technical interest, client’s need, marketing value

 

How often do you have customers paying with Bitcoin? What percentage of your total income came from Bitcoin in the past 12 months?

Bitlasers established their business based on Bitcoin-only transactions, and by this they are the only ones who account significant income in Bitcoin.
One shop reported to receive less than 5% of their revenues in Bitcoin.
A third shop says that by the total turnover Bitcoin makes only an insignificant amount (less than 0.1%).
The rest of the shops either did not registered a single Bitcoin-payment or had very few low-volume payment in the last twelve months.

Timeline of shops opening up to accept Bitcoin.

Timeline of shops opening up to accept Bitcoin.

What do you think about the future of Bitcoin?

All of the shops we asked see a bright future in Bitcoin payments. They state that the usability for online transactions is really good for and it is very suitable for small and medium-sized transactions. Some said that Bitcoin is more suitable for payment than credit card or cash. Some believe that when the price of Bitcoin stabilizes we will see an increase in transactions and we can expect a steady growth in the number of users.

“In the worst case Bitcoins will merge into to a similar but much better platform.”

Almost all of them mentioned however, that in order for Bitcoin to succeed we need more places that accepts it as payment, and more people to spend it.

“Bitcoin is an evolution in finance created by people like you and me, and just like the wildlife, the payment method that best suits prevail over those that don’t evolve with the changing times.”

Gitle Mikkelsen, Bitlasers

Meanwhile here is how every-day life people relate to Bitcoin

Although Hans Christian Holte, director general of taxation says that Bitcoin is not a currency, Scandianvia’s biggest Bitcoin exchange place Justcoin.no reached nearly 67 000 registered users since they opened in 2013 spring. This sounds like rapid growth, but it also means that only around 1% of population of Norway has bitcoin. (Norway has 5,136,700 inhabitants based on 2013 demographic data).
We did a research by interviewing randomly chosen people of all age in the streets of Oslo to find out more about Norwegians’ knowledge about Bitcoin and willingness in using it as payment. We also launched an online survey with the same questions, targeted to people living in Norway. It turned out that 46 % of the people have never even heard about Bitcoin.

“Unfortunately, it is currently almost exclusively used as object for speculation and not for buying and selling… For Bitcoin to succeed we need more places to accept it, but also consumers to use it. It will take time “
Robert Grinde – Wish AS

And I personally think it will take a LOT of time. While transferring Bitcoin online takes just as little as transferring any other currency through your net-bank, Bitcoin has some serious usability issues when it comes to point of sales payment. Paying for a coffee at a bar with cash or credit card takes around 10 seconds, but if you want to pay with Bitcoin it will literally take minutes as you have to do an online transfer and get verified by the seller.
But as we said in our previous post it is nevertheless a great fun to be with, experiment and watch where it will grow.

Why we accept Bitcoin

Since its launch in 2009 Bitcoin has become accepted in increasing numbers of shops and services around the globe. As of writing this post there are 9326 places listed on spendbitcoins.com and 4359 on coinmap.org. If you happen to have Bitcoins, you can use them to pay for pizza, manicure, artworks, web hosting, geeky t-shirts, online dating and even Space travel. But why did an IT consultancy (aka: we) decide to accept Bitcoins, and to deal with it at all? Few weeks ago an article was published in a local news-site (in Norwegian) about us accepting bitcoin where we gave some reasoning. We thought to take it one step further and talk a bit more about the “why” behind it.

 

Because Community

It all started with our developer Jakob, who showed great interest in Bitcoins. Since then we held sessions both internally and openly about introducing Bitcoin to people (see picture). For free, because sharing is caring. Here in Norway Bitcoin enthusiasts just started to form nests of interest. Here is one facebook group operating in Norwegian and this meetup group mostly in English.

Bitcoin for beginners - intro to the “what” and “how” of Bitcoin

Bitcoin for beginners – intro to the “what” and “how” of Bitcoin

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How to secure your Bitcoin wallet

Assuming that you have already invested some money in Bitcoin you need to decide now how to make them safe.

Bitcoins are associated with an identifier called an address which is an alpha-numeric string. Every Bitcoin address consists of a public key and every public key has a corresponding private key. With the private key you can prove that you are the owner of the Bitcoin address and you can sign transactions to spend the bitcoins.

If someone steals your private key, he has full access to all the bitcoin connected to that address. Needless to say, you need to figure out how to secure it.

Example of a Bitcoin address: 1CC3X2gu58d6wXUWMffpuzN9JAfTUWu4Kj
Example of a private key: 5Kb8kLf9zgWQnogidDA76MzPL6TsZZY36hWXMssSzNydYXYB9KF
Example of a public key: 0450863AD64A87AE8A2FE83C1AF1A8403CB53F53E486D8511DAD8A04887E5B23522CD470243453A299FA9E77237716103ABC11A1DF38855ED6F2EE187E9C582BA6

The private key and public key are stored in a wallet. Wallets can be either offline or online.

Online wallets

An online wallet is, as the name suggests, online. The private keys are on the internet. You must choose to trust a third party that takes care of your keys. You trust that they do not run away with them or get hacked.

The online wallet service inputs.io got hacked and their customers lost a total of 4100BTC.

I don’t recommend using an online wallet for any larger amount of money. It is more suitable for smaller amounts intended for spending because its accessible from everywhere you have an internet connection. One online wallet that has good reputation is the open source blockchain.info. There is another open source service called coinpunk.com that currently is in  beta, but it has great potential.

Offline wallets

An offline wallet is a wallet that is generated and stored on an offline computer to minimize attack surfaces. Offline wallets provides the highest level of security for your bitcoins. To get started, download a wallet application and transfer it to an offline computer via an USB-memory. There are many wallet applications, but the most secure and stable ones in my opinion are armory and electrum

To be completely safe I recommend using a clean install of Ubuntu (remember to check md5 hash) with the network card physically removed. That way you minimize the possibility of having malware on your computer. An excellent in depth tutorial on how to do this can be found here: http://falkvinge.net/2014/02/10/placing-your-crypto-wealth-in-cold-storage-installing-armory-on-ubuntu/

As you can see it requires some technical competence to store your Bitcoins at the highest level of security. Even people that have the required background might be hesitant, simply because it is so time consuming.

But there are solutions to this problem. One interesting project is Bitcoin Rezor (http://www.bitcointrezor.com/). It is a hardware wallet that gives the highest level of security for Bitcoins, and is user friendly at the same time. Right now it is under development and the first beta version has been shipped. You might do good to get your hands on one.

In the meantime, you must figure out what level of security you need for your Bitcoins.

Good luck!

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Interested in learning about Bitcoin? We invite you to join a Miniseminar on the 6th of march at 8 am in our office in Oslo. In 45 minutes you will get to know the “What” and “Why” of Bitcoin. Free to attend. Talk will be in Swedish, unless the audience decides otherwise. Check and subscribe here.