Ever since the rise of the credit card, cashless societies have been predicted as inevitable.
But what about a society where most financial transactions are not only electronic, but not based on any physical currency whatsoever?
That’s the idea behind Bitcoin, a virtual currency which is gaining ground across the globe – including in Waterloo Region.
Capacity Waterloo Region, a charity that supports social innovation, began accepting Bitcoin donations Tuesday.
In just 24 hours, they received 1.2 bitcoins – currently equivalent to about $1,000 in Canadian money.
Andrew Wilding, the organization’s director of operations, calls the news “encouraging”.
But not everyone’s seeing as much success.
Ashley Hanna makes soap, then sells it online and at the Kitchener Market.
She has recently started accepting Bitcoin payment – and while she’s bullish on the technology, she hasn’t had much take-up yet.
She points to cultural acceptance as the main reason for that – saying Canadian consumers aren’t yet as willing to spend Bitcoins as consumers in Europe and Asia.
“In Canada, I think that it’s just beginning,” she says.
Businesses and charities do see one big advantage to Bitcoin over traditional cash – the lack of credit card fees that can take a big bite out of profit margins and donation amounts.
“It’s much more affordable,” says Wilding.
Not having to deal with fluctuating exchange rates is another benefit, Hanna says – a Bitcoin is a Bitcoin no matter where its owner is situated.
The rise of Bitcoin is even giving birth to new businesses geared specifically to people who use the currency.
Gareth MacLeod is co-founder of TinkerCoin, a local startup designed to make it easier for people to access Bitcoins.
While breaking into the Bitcoin market normally involves running a computer for a long time or waiting for weeks to be approved to an exchange, TinkerCoin buys Bitcoins on a customer’s behalf.
To give a sense of scale, the company will only buy up to a maximum of $25 CDN – or 0.02 Bitcoins.
Even with only 0.02 Bitcoins, MacLeod says there are thousands of online retailers and subscription services where the currency could be used for purchases – purchases that could cost slightly more than $25 if done through traditional methods.
“The way you interact with money these days, it’s almost all digital anyway. It’s balances in your online banking or on your credit card,” he says.
The world’s first Bitcoin ATM opened in Vancouver last fall.
In its first week, it saw $100,000 worth of transactions – measured in Canadian dollars, that is.
