“The first time I was behind the bar and someone asked if we accepted Bitcoin, I kind of laughed,” said Starling owner Fred Johnson. “But after getting the question a dozen or more times recently it got me thinking.”
Johnson has noticed that over the past year the clientele at his west side bar in Sonoma includes more and more young tech workers from the Bay Area.
“We’re seeing a lot of San Francisco and Peninsula people come in who have recently bought houses up here and the Starling seems to be their kind of place,” Johnson said.
Tech executives are used to Bitcoin, Apple Pay and Paypal as a payment options. More and more restaurants and stores worldwide are letting customers pay with alternate currencies.
Already a self-described “low end, amateur” Bitcoin investor, Johnson started researching what would be involved in accepting a cryptocurrency as payment.
While he doesn’t expect that Bitcoin will be a go-to means of payment for a single cocktail anytime soon, Johnson thinks some customers might like to use a bitcoin code on their phone to pay for a private party or to buy a round a drinks for a big group. He’s researching now which platform to use and it hoping to pick a smaller player well-suited to his quirky bar.
“It’s going to be a learning process for us, but it’s a fun conversation piece,” he said.
Buying Bitcoin at your local Lucky’s
Bitcoin arrived in Sonoma at both the Safeway and Lucky supermarkets in 2020. Through a partnership with Coinme, a leader in cryptocurrency financial services, Bitcoin can be purchased with cash at Sonoma Coinstar locations.
Anyone can walk up to the Coinstar kiosk, touch “Buy Bitcoin,” review and accept the transaction terms, and enter their phone number. After inserting bills (no coins or credit), consumers receive a voucher with a code proving ownership of a fraction of a single Bitcoin. There is also a Coin Flip cryptocurrrency ATM at the Discount Cigarettes store at 573 Fifth St. W. in Sonoma.
Coinbase co-founder Fred Ehrsam estimates that 10 percent of people now own cryptocurrencies in the U.S., or roughly 33 million Americans.
So why hasn’t Bitcoin gained traction as a day-to-day currency?
Probably because cryptocurrencies are difficult to understand, difficult to use for small purchases and risky thanks to a wildly fluctuating value.
Tech entrepreneur and Sonoma resident Michael Grippi McQuaid, 36, first invested in Bitcoin in 2016 when a coin could be purchased for $450. On March 11, a single Bitcoin was worth around $55,000. He’s less interested in Bitcoin as a payment mechanism and more as a way to store wealth “and not have it decay the way cash has,” he said.
He started taking the cryptocurrency seriously this year because of changes in the U.S. monetary policy as a result of the COVID—19 pandemic.
“There are 40 percent more dollars in circulation today than a year ago,” said McQuaid. “If you are holding cash, it is being devalued faster than your wildest dreams.”
Bitcoin is the exact opposite. It is a deflationary currency, says McQuaid, because there is a limited supply and no more.
Despite Bitcoin’s more than 450 percent price jump in the last 12 months, Sonoma Wealth Advisor founder Daren Blonski told the Index-Tribune that he expects further appreciation based on Bitcoin’s fundamentals — in particular, its limited supply versus the likely inflation of the dollar.
“Fundamentals suggest that Bitcoin could reach $100,000-$288,000 per coin in the next eight months,” he said. But he also expects a significant pullbacks during that time.
“In other words, expect volatility,” he said. “But there aren’t a lot of other great options as to where to store cash right now.”
But should you buy a beer with Bitcoin?
But neither Blonski nor McQuaid see Bitcoin as a very realistic way to pay for everyday things, at least right now.
“Bitcoin did not reach its $1 trillion market cap because of its viability as a day-to-day currency,” said McQuaid “It’s a clunky way to pay for a cup of coffee. The processing is slow and transactions are expensive. But its current use isn’t its future use… so we’ll see.”
McQuaid does believe that it will likely get easier to pay with Bitcoin over time.
“It’s likely still a few years away, but it’s coming,” he said.
Bar owners aren’t famous for being afraid of risk.
“Bitcoin is a fun ride,” Johnson said. “I can’t help but check the value daily on my phone because the prices swings up and down so dramatically.”
He understand that accepting bitcoin rather than cash means willingly jumping on an economic roller coaster ride. In the 12 months, the value of one Bitcoin has fluctuated between $5,000 and $57,000.
“The volatility is part of the fun,” Johnson said. “A little gulp on our part and we’re ready,” he said.
Contact Lorna at lorna.sheridan@sonomanews.com.