I Betchya One Bitcoin That My Kids Will Never See a Credit Card in Their Lifetime.

Technology has drastically changed the shopping experience. Yeah, we all know that the Internet has empowered consumers to make better-informed decisions, but just because we have that ability doesn’t mean we are necessarily making better shopping decisions… especially with the temptation of how convenient it now is to shop online using your laptop, tablet, or mobile phone. With how quick and easy it is to make a purchase, you often don’t spend any time pondering if you really need (or can afford) that item.

My dear friend Shane sent me this text a while back – obviously he learned his lesson the hard{alcohol} way:

Shane's text for blog

But despite the increased temptation and easier ability to blow all of our money, there are some really cool things happening with how we can use technology to pay for goods and services.

Take Starbucks for an example: as a barista working at a busy store with a drive through, I have witnessed first hand how paying with the Starbucks mobile app for your latte can really speed up the whole process. 4:00am is an ungodly hour for anyone to be up, and the last thing you want to be doing at that hour is waiting in a slow moving line through the drive through to pick up your morning dose of caffeine. I can tell you that I definitely appreciate the ability to quickly scan a customer’s phone with one hand while with the other handing them their coffee. There’s no waiting for the customer to unfasten their seatbelt, fumble around with glazed eyes looking for their purse/wallet, only hand me a twenty-dollar bill, which I then have to struggle to count out the right amount of change since my brain is also still waking up at 4am (despite having already thrown back a triple espresso before open). Not only that, but all that saved time adds up, so our increased speed and efficiency is allowing more cars to go through the drive through than ever before, earnin’ good ol’ Starbucks even more cash and Starbucks loyalty!

But Starbucks isn’t the only one doing it, even though that’s probably the first company that comes to mind when you think of mobile payment. There’s a small start-up in Boston called LevelUp that offers a mobile payment platform that makes it easier for customers to pay with their phones, eliminating the need for both cash and credit cards. The benefit for companies is that it lowers transaction costs (credit card companies place a pretty hefty tax on transactions), thus increasing revenues, which is very appealing for smaller businesses. Another alternative is Square, founded by Twitter’s Jack Dorsey, and is super cool because not only can you get a free card reader that will plug directly into the headphone jack of a smartphone (mine is  in the mail, on its way!) when you download the FREE Square app, but they’ve managed to make it even easier to say, pay back your friends  (or collect from your friends) simply by sending an email.

Now if you really want to blow your mind, check out Bitcoins. Most people are still skeptical, which they have a right to be since weve never seen anything like this before, but here’s a currency that isn’t backed up by a bank or government, and is generated purely by demand and a network of “miners” – high-end computer users who supply the Bitcoin network with processing power needed to maintain a transparent, running tally of all transactions. The tally is one of the most important ways in which the system prevents fraud, and the miners are rewarded for supporting the system with an occasional helping of brand-new bitcoins.

It’s a hard concept to understand, so here’s a short youtube video that I think does a good job at explaining it:

The crazy thing is that its really taking off – according to an article by CBCnews, right now people are “buying Bitcoins for $183.21 each and selling them for $207.37 to $211.32.” And they didn’t start off carrying such a high asking price – according to an article on techdirt, back in 2009 a grad student bought 5000 Bitcoins for $27 and completely forgot about them until 2013 when Bitcoin started getting media. Only 4 years later those 5,000 Bitcoins had increased in value to $886,000! It’s stuff like this that makes me wish I were super nerdy…

Now companies (mainly in Canada) are starting to accept Bitcoins as a form of payment. There’s even an ATM machine located inside Waves Coffee House in downtown Vancouver that allows customers to convert Bitcoins to Canadian dollars and vice versa. Besides being something new and unique, there is a benefit for companies to use Bitcoins – it can be hard for small companies to afford the tax credit card companies applies to each transaction, and with Bitcoin, there is no tax, making it much more affordable.  It still hasn’t caught on big yet, but take a look at what this couple is doing – spending the first three months of their marriage going on a road trip across the US, using only Bitcoins to pay for food, travel, hotels, etc., and they have a camera crew documenting it the whole way. What a cool way to spend your honeymoon! Check out their journey at http://lifeonbitcoin.com/

Sources:

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