Real coins or Bitcoin: Which do you prefer when you travel?
Bitcoin -- the alternative currency created in 2009 by an unknown founder -- has been making headlines, and not always for positive reasons. But even as the currency's potential suffered a blow following the collapse of Mt. Gox, the first big Bitcoin exchange, some early adopters in the travel and sports industries are still bullish about the value of this new way of doing business.
These are a few of the travel- and sports-related companies that accept Bitcoin:
Costa Rica Travel Market: After first hearing about Bitcoin, Monica McIntyre -- director of Costa Rica Travel Market, an online marketplace for Costa Rica hotel deals -- became "fascinated," she said, "by the idea of a payment method that would allow us to reduce transaction fees from an average of five percent to one percent."
Coming from Latin American economies, where you get paid for credit card transactions up to 30 days later, where you pay up to seven percent for credit payment transactions and where the bureaucracy of banking obstructs business operations, Bitcoin seemed like the perfect alternative to the tilted payment systems institutionalized in the real world.
CheapAir.com: The travel Website CheapAir.com is another business that has has found the Bitcoin concept promising. "The idea [to begin using the currency] originated when a customer asked one of our travel advisers if we accept Bitcoin," said Jeff Klee, the CEO of CheapAir.com. "I got wind of it and thought it sounded like an interesting idea. So I did some research to determine how feasible it would be, found out it would be very doable, and we decided to give it a try."
Sacramento Kings: This year, this California-based basketball team became the first major professional sports franchise to accept the alternative currency. Ben Gumpert, senior vice president of marketing and strategy for the Sacramento Kings said:
Bitcoin provides a convenient, cashless and frictionless transaction never before seen by NBA fans. It fits with our broader mission. From Google Glass to drones to Bitcoin, we're always looking for the most innovative and cutting-edge technologies to further improve our fans' experiences.
Response from the Public
The feedback from accepting Bitcoin, according to Klee, has been positive. "We cannot be more thrilled with the results since we started accepting Bitcoin," he said.
On the technical side, things have worked really well. The integration was straightforward and there have been very few glitches -- no significant ones at all. From a customer standpoint, our announcement was very well received from the beginning, and we've gained quite a few new customers because of it.
Gumpert reported that the response has been "very positive" to the Sacramento Kings's introduction of Bitcoin. "We have seen purchases by our fans across a number of products," he said. "We've also had a number of teams and several local businesses reach out to us asking for advice and telling us they're now considering Bitcoin."
The Future of Bitcoin
So will you soon be using alternative currency to make all your travel purchases? Probably not. In spite of his optimism, Klee predicted that it will take a while for some segments of the travel industry to adopt alternative payment options like Bitcoin. "I think it will be a while before Bitcoin acceptance becomes widespread in the travel industry, particularly with the airlines," he said.
First of all, there is a lot of legacy technology in place that makes it difficult to do something like introduce a new form of payment. I also think the airlines are pretty conservative by nature and, in most cases, it's not in their DNA to move quickly on something like this. On the other hand, if Bitcoin use becomes more widespread, I think airlines stand to gain tremendously.
In spite of recent headlines, Gumpert remains confident about the future of Bitcoin. "Every new emerging market experiences setbacks," he said.
We don't believe one failed company signals the end to Bitcoin. We are confident in Bitpay, the Kings payment processor. As we do in all aspects of our business, we will continue to monitor and make adjustments as needed, to ensure the ultimate protection for our fans.
McIntyre also believes this is the start of something big. "Yes, [the collapse of] Mt. Gox was a hit to the image of Bitcoin, but only in the eyes of those who still do not understand the different dimensions and benefits of the system -- i.e. a currency, a payment system, a digital ledger," she said.
I think the incident will polarize a bit further the current positions: for those who like and understand Bitcoin, the incident might be seen as part of the growing curve of this innovative tool, something that will enable to correct and strengthen; for those who have been skeptical all along, the incident is a great 'I told you so.' But all in all, the incident will be forgotten soon, and Bitcoin will survive in a stronger form. Crypto-currencies are the future of digital payments. It might be Bitcoin or it might be called something else, but there is no stopping this, just like there was no stopping the new world the Internet opened up.