What can bitcoin buy in N.H.? Gas, lunch and legal services, for starters
Several weeks ago, the Wall Street Journal carried news of a couple who tried to live off bitcoin, a digital currency in its infancy, for 101 days across three continents. The duo may have struggled less had they confined their experiment to New Hampshire.
Here, bitcoin will buy you gas in Twin Mountain, lunch at a Newmarket cafe, martial arts lessons in Derry and a night’s stay in Fitzwilliam. You can use bitcoin to buy hay, computer services or a chain saw through New Hampshire’s Craigslist site. You can contribute to the election campaign of Rep. Mark Warden, a Manchester Republican who is reportedly the first sitting elected official in the country to take donations by bitcoin.
One of the first bitcoin ATMs was created in Manchester. And as of this month, clients of Martin and Hipple law offices in Concord can pay their legal bills in bitcoin.
“I’ve had a lot of people ask me over the last year if I accepted it,” said Seth Hipple, one of the firm’s partners. “I had only a rudimentary understanding, so I said no. Then I did more research. Currency needs to be liquid, and bitcoitn is very easy to spend.”
What’s harder is explaining how bitcoin works – even with the help of several online primers, including one titled “Explain Bitcoin Like I’m Five.”
Bitcoin is a virtual currency introduced in 2009 that changes hands digitally, directly between a buyer’s online “wallet” and a seller’s online “wallet.” To that extent, it sounds like PayPal, but there are significant differences. Bitcoin isn’t insured or passed through a bank.
Instead, encrypted transactions between bitcoin accounts travel over a public computer network and are not considered verified until the complicated mathematical encryption on each transaction is “solved” by one or more of the computers in the network. The computers within the network are owned by individuals who are rewarded in bitcoin when their computer software is the first to crack the encryption code.
The creator (or creators) of bitcoin has never been identified beyond the fictitious name Satoshi Nakamoto. The first bitcoin purchase was recorded in 2011, when a single bitcoin was worth .003 cents. As the media attention on bitcoin has grown, so has the currency’s value. Yesterday, a single bitcoin was worth $848, according to online exchange websites.
The currency’s volatility and unregulated nature has held special appeal for speculators and Libertarians, respectively. With so many Libertarians in New Hampshire – including the Free Staters who have relocated here – it’s maybe no surprise that bitcoin has a following here. A weekly bitcoin “meetup” in Manchester attracts 20 to 30 people many weeks, said Zach Harvey of Manchester, who with his brother Josh produces bitcoin ATMs through their company Lamassu Bitcoin Ventures.
It was the enthusiasm Harvey saw at those meetups that inspired the ATMs Lamassu unveiled last year at a liberty-minded conference in New Hampshire. The machine accepts dollars, converts the value of the cash into bitcoin and then sends the bitcoin to the user’s account. Lamassu has sold about 45 of its $5,000 machines and has orders for an additional 100.
Harvey, 34, said he pays his employees, some of whom are in Germany and Portugal, in bitcoin, and buys some of the company’s supplies with bitcoin. Harvey believes the interest in bitcoin will continue to grow in 2014, in part because it is so easy to exchange bitcoin globally. “It just gets more and more exciting,” he said. “You start thinking, ‘What will this mean for commerce and trade?’ This will be like the way the internet changed the way we deal with information.”
Warden, the state representative from Goffstown, began accepting bitcoin for his 2012 election after his campaign employee asked to be paid in bitcoin. “I said, ‘It sounds great. What do we do? I have no idea,’ ” Warden said.
Visitors to Warden’s website, markwarden.com, still see a variety of ways to contribute, including bitcoin. Because the value of bitcoin can fluctuate so wildly, Warden uses the online exchange site bitpay.com to convert the bitcoins to dollars within 24 hours. Warden said he also worked with the New Hampshire secretary of state’s office to ensure the bitcoin donations followed campaign reporting laws.
Matt Fox, 38, owns Liberty Acres, an inn with a few rooms in Fitzwilliam. He accepts payment in bitcoin. He also sells odds and ends on Craigslist for cash or bitcoin. He was advertising a chain saw last week that ultimately sold for cash. But he said he has sold other times, including skis, for bitcoin. He bought his first bitcoin, which is most easily done online, for $20.
He became interested in the currency for political reasons: he liked the unregulated nature of the currency. “But now it’s a handy tool,” he said. “It’s like sending cash (to someone) with no fees. It’s immediate. Paypal can’t touch it in terms of how low the fees are.”
Fox said he views bitcoin like an investment. He’d never convert all his money to bitcoin, he said, for fear of losing it if the market crashed. But he wants to see bitcoin grow to become a real alternative to banks.
“It can put a little power in the hands of each person instead of all the power in the hands of one person,” he said.
To see where bitcoin is accepted in New Hampshire and beyond, visit coinmap.org.
(Annmarie Timmins can be reached at 369-3323 or email@example.com or on Twitter @annmarietimmins.)