10 ms·

The New York bar that takes Bitcoins

51 points by kunle 14y ago

civilian 14y ago
:/ the article kind of left me wanting more. How many customers have paid using bitcoin in the first week? How much of this a novelty attraction versus an actual payment alternative? Is there a payment dispute system for BitPay? How did BitPay an the bar owners get put in touch? Is there some interesting business development story here?
- dsr_ 14y ago
  It's still not BC as currency, though: the prices are in USD, and then get converted for you. That's probably a good thing from the short term user's viewpoint, as BC is as volatile as a very smelly thing right now. There are all sorts of traps for a long-term user, though.
  - robinh 14y ago
    I'm not very well-versed in economics, but would setting prices to a relatively non-changing BTC value not actually be a good thing to stabilize its value, if enough people were to do that?
    - badgar 14y ago
      What is the incentive to do so? BTC is expected to rise in value over time since it's a deflationary currency. So any sane businessperson should expect to be constantly decreasing the BTC price over time. It's a feature, not a bug.
      - taejo 14y ago
        Yes, but the same effect happens (in the opposite direction) with a normal inflationary currency. Every few months or years, prices change to reflect their new value. When prices are doubling or halving once a week, that starts to get problematic (see interbellum Germany, 2000s Zimbabwe).
- JoshTriplett 14y ago
  > Is there a payment dispute system for BitPay? Almost certainly not, given that Bitcoin intentionally operates the same way cash transactions do. And BitPay specifically mentions that feature on their front page: "With Bitpay you can eliminate the risk of Fraud, Chargebacks, and Identity Theft from internet payments.".
- mrb 14y ago
  It is a small world. Charlie Shrem (CEO of BitInstant) said that the bar founders are some of his childhood friends: https://bitcointalk.org/index.php?topic=170710.msg1775228#msg1775228 https://bitcointalk.org/index.php?topic=170710.msg1775228#ms... BitPay is the #1 Bitcoin payment processor. Either Charlie or the bar founders decided that BitPay was a logical partner. So no unusual story here. Just like in the non-Bitcoin world, initial investors are often your family/friends.
- withoutthis 14y ago
  BitPay must be kidding itself charging 0.99% per transaction. Visa/MC charge us 1.1%
zeteo 14y ago
>Along with his businesses, Shrem is the co-chairman of Bitcoin Foundation, a group that stands for promoting and standardizing the new currency >"When we opened a few months ago, I said that we needed to be the first New York bar to accept Bitcoins," said Charlie Shrem So it's more like "Long-time Bitcoin promoter finally able to accept Bitcoins".
- mrb 14y ago
  Charlie Shrem has been accepting bitcoins for a long time. He founded the BitInstant company.
smackfu 14y ago
As long as you don't keep too much of a BTC balance, the risk seems minimal. I guess the trick is that with a currency that's increasing in value, it's very tempting to keep a large BTC balance.
- patio11 14y ago
  The applicability of this to the wisdom of using Bitcoins to pay for drinks (or anything else) is left as an exercise for the reader.
  - Helianthus 14y ago
    Something I've come to realize is that there are now only two kinds of people: those that have successfully managed that simple exercise, and those that think Bitcoins are the magical future. The 'in-between' has long since faded.
  - deleted 14y ago
    [deleted]
shmerl 14y ago
> Servers bring over a tablet with a BitPay app that lets merchants accept Bitcoins as a form of payment. The app converts the dollar value of the bill into Bitcoins and gives customers a bar code...Customers would use their smart phones to scan the bar code that will deduct the amount from their Bitcoin accounts. BitPay will credit that $15 to the bar. This is kind of counter the spirit of direct P2P of bitcoin. I'd expect the transaction to happen directly between the customer wallet and the wallet of the bar. Why is the intermediary / conversion needed at the time of the transaction?
- caf 14y ago
  The bar doesn't want to price its drinks in bitcoin, and it doesn't want to hold bitcoin either. The BitPay intermediary is needed to display the bar's USD price as a bitcoin price to the customer, and to convert the customers bitcoin payment into a USD receipt for the bar.
  - shmerl 14y ago
    Pricing doesn't need to be in bitcoin, the rate can be obtained at the time of purchase, but the purchase still can happen wallet to wallet. If the bar doesn't want to hold bitcoins - that's a different story of course.
    - nandemo 14y ago
      Of course the bar doesn't want to hold bitcoins. Rent, booze and salaries are still denominated in U$.
      - shmerl 14y ago
        Sure, it doesn't need to hold them forever, but they can manage them in their own pace, instead of instantaneously converting them to $. This is just a sign that bitcoins are still very volatile and don't have wide usage (otherwise the bar wouldn't rush to convert them instantaneously through an intermediary, but instead would find how to use them for their needs as bitcoins, converting them to $ only when needed to pay the salaries and etc.). It's still great that they even offer an option to pay in bitcoins.
misnome 14y ago
It was my understanding that bitcoin transactions took about half an hour to clear? So how can they then say "The transaction happens instantaneously, EVR promises." Or, is this one of those things that has been fixed recently?
- cschneid 14y ago
  It's about trust. The transaction hits the network immediately. Then a miner puts it in a block as soon as right away, or as slow as... several days (if you put a transaction fee, you'll move to the frontish of the line). Once its in one block, every subsequent block is a vote for its authenticity. So, if I accept a bitcoin right away, I open myself up to a fairly trivial double-spend attack. If I wait for one confirmation, it's harder, but still sorta maybe doable. If I wait for several (1-2hours), it's near impossible. Compare with taking cash which may be phony, or a CC which is easily charge-backable, and the business's risk is ... close enough to the same.
  - Hello71 14y ago
    If you wait for one confirmation, it's possible that the attacker may find (or have found) a block by chance before anyone else does.
  - ufmace 14y ago
    Not really. The transaction arriving over the Bitcoin network, which takes around 10 seconds, is the first pass of authenticity testing - it won't work unless the account has the money and the sender has the rights to that account and the nodes forwarding the transaction haven't seen any other spends of that coin since the last block. At that point, doing a double-spend reliably is already hard enough that anyone who can do it probably has much better things to do with the ability than try to skim $20 worth of drinks at a bar. One confirmation, that is, being included in one block, takes anywhere from a few seconds to 15 minutes, probably averaging 5-7 minutes. With that, it's already virtually impossible to double-spend without having enough mining power to take 51% of the current mining network. That's a bit more hashing power than the entire current mining network combined. That'll earn you hundreds of thousands of dollars a day just doing honest mining, and potential double-spend activity well into the tens of millions or more. Again, why bother with that to rip off a $20 bar tab? Or even a $2,000 bar tab?
jellicle 14y ago
While they "take" bitcoins, they do not do any business whatsoever IN bitcoins. Nothing is denominated in bitcoins, the bar never receives any bitcoins, etc. Bar prices its stuff in $, bar gets paid $. The End. It's almost as if the bar doesn't want to reprint its menu twice a day to account for the bitcoin pricing bubble.
- baddox 14y ago
  Heaven forbid bitcoin be used for anything. If you buy them just to sit on them, you're a dirty speculator contributing to the bubble. But if you use them to purchase something, well, there's something wrong with the way you did that as well. I'm not sure what it would take to impress some people.
  - jellicle 14y ago
    My point is that this bar, run by a person who has drunk the Bitcoin Koolaid, is still unwilling to take any of the risk associated with doing business in bitcoins.
    - deleted 14y ago
      [deleted]
billpg 14y ago
"How much is a pint of beer?" "Right now or by the time I finish pouring the drink?"
- baddox 14y ago
  Witty, but I'm pretty sure two adults at a bar can agree on a price without a great deal of difficulty.
namuol 14y ago
What are the implications on taxes? Is this legal?
- josephagoss 14y ago
  As long as you pay tax its fine, anyway for the bar they are accepting USD. Bitpay accepts the transaction and pays USD to the bar, Bitpay worries about the BTC they collected. (The bar never sees any BTC from a customer)
yarou 14y ago
I went out on a Monday night to EVR, met Charlie through a mutual friend. I had no idea that he was involved with Bitcoin at the time, nor that he was planning on accepting it at EVR. Really down to earth guy, plus the free drinks didn't hurt my opinion of him. :)
pdog 14y ago
The news for me is that the founder of BitInstant (and co-chairman of Bitcoin Foundation) also owns a bar in midtown Manhattan.

51 points by kunle 14y ago

:/ the article kind of left me wanting more. How many customers have paid using bitcoin in the first week? How much of this a novelty attraction versus an actual payment alternative? Is there a payment dispute system for BitPay? How did BitPay an the bar owners get put in touch? Is there some interesting business development story here?

dsr_ 14y ago
It's still not BC as currency, though: the prices are in USD, and then get converted for you. That's probably a good thing from the short term user's viewpoint, as BC is as volatile as a very smelly thing right now. There are all sorts of traps for a long-term user, though.
- robinh 14y ago
  I'm not very well-versed in economics, but would setting prices to a relatively non-changing BTC value not actually be a good thing to stabilize its value, if enough people were to do that?
  - badgar 14y ago
    What is the incentive to do so? BTC is expected to rise in value over time since it's a deflationary currency. So any sane businessperson should expect to be constantly decreasing the BTC price over time. It's a feature, not a bug.
    - taejo 14y ago
      Yes, but the same effect happens (in the opposite direction) with a normal inflationary currency. Every few months or years, prices change to reflect their new value. When prices are doubling or halving once a week, that starts to get problematic (see interbellum Germany, 2000s Zimbabwe).
JoshTriplett 14y ago
> Is there a payment dispute system for BitPay? Almost certainly not, given that Bitcoin intentionally operates the same way cash transactions do. And BitPay specifically mentions that feature on their front page: "With Bitpay you can eliminate the risk of Fraud, Chargebacks, and Identity Theft from internet payments.".
mrb 14y ago
It is a small world. Charlie Shrem (CEO of BitInstant) said that the bar founders are some of his childhood friends: https://bitcointalk.org/index.php?topic=170710.msg1775228#msg1775228 https://bitcointalk.org/index.php?topic=170710.msg1775228#ms... BitPay is the #1 Bitcoin payment processor. Either Charlie or the bar founders decided that BitPay was a logical partner. So no unusual story here. Just like in the non-Bitcoin world, initial investors are often your family/friends.
withoutthis 14y ago
BitPay must be kidding itself charging 0.99% per transaction. Visa/MC charge us 1.1%

zeteo 14y ago

>Along with his businesses, Shrem is the co-chairman of Bitcoin Foundation, a group that stands for promoting and standardizing the new currency >"When we opened a few months ago, I said that we needed to be the first New York bar to accept Bitcoins," said Charlie Shrem So it's more like "Long-time Bitcoin promoter finally able to accept Bitcoins".

mrb 14y ago
Charlie Shrem has been accepting bitcoins for a long time. He founded the BitInstant company.

smackfu 14y ago

As long as you don't keep too much of a BTC balance, the risk seems minimal. I guess the trick is that with a currency that's increasing in value, it's very tempting to keep a large BTC balance.

patio11 14y ago
The applicability of this to the wisdom of using Bitcoins to pay for drinks (or anything else) is left as an exercise for the reader.
- Helianthus 14y ago
  Something I've come to realize is that there are now only two kinds of people: those that have successfully managed that simple exercise, and those that think Bitcoins are the magical future. The 'in-between' has long since faded.
- deleted 14y ago
  [deleted]

shmerl 14y ago

> Servers bring over a tablet with a BitPay app that lets merchants accept Bitcoins as a form of payment. The app converts the dollar value of the bill into Bitcoins and gives customers a bar code...Customers would use their smart phones to scan the bar code that will deduct the amount from their Bitcoin accounts. BitPay will credit that $15 to the bar. This is kind of counter the spirit of direct P2P of bitcoin. I'd expect the transaction to happen directly between the customer wallet and the wallet of the bar. Why is the intermediary / conversion needed at the time of the transaction?

caf 14y ago
The bar doesn't want to price its drinks in bitcoin, and it doesn't want to hold bitcoin either. The BitPay intermediary is needed to display the bar's USD price as a bitcoin price to the customer, and to convert the customers bitcoin payment into a USD receipt for the bar.
- shmerl 14y ago
  Pricing doesn't need to be in bitcoin, the rate can be obtained at the time of purchase, but the purchase still can happen wallet to wallet. If the bar doesn't want to hold bitcoins - that's a different story of course.
  - nandemo 14y ago
    Of course the bar doesn't want to hold bitcoins. Rent, booze and salaries are still denominated in U$.
    - shmerl 14y ago
      Sure, it doesn't need to hold them forever, but they can manage them in their own pace, instead of instantaneously converting them to $. This is just a sign that bitcoins are still very volatile and don't have wide usage (otherwise the bar wouldn't rush to convert them instantaneously through an intermediary, but instead would find how to use them for their needs as bitcoins, converting them to $ only when needed to pay the salaries and etc.). It's still great that they even offer an option to pay in bitcoins.

misnome 14y ago

It was my understanding that bitcoin transactions took about half an hour to clear? So how can they then say "The transaction happens instantaneously, EVR promises." Or, is this one of those things that has been fixed recently?

cschneid 14y ago
It's about trust. The transaction hits the network immediately. Then a miner puts it in a block as soon as right away, or as slow as... several days (if you put a transaction fee, you'll move to the frontish of the line). Once its in one block, every subsequent block is a vote for its authenticity. So, if I accept a bitcoin right away, I open myself up to a fairly trivial double-spend attack. If I wait for one confirmation, it's harder, but still sorta maybe doable. If I wait for several (1-2hours), it's near impossible. Compare with taking cash which may be phony, or a CC which is easily charge-backable, and the business's risk is ... close enough to the same.
- Hello71 14y ago
  If you wait for one confirmation, it's possible that the attacker may find (or have found) a block by chance before anyone else does.
- ufmace 14y ago
  Not really. The transaction arriving over the Bitcoin network, which takes around 10 seconds, is the first pass of authenticity testing - it won't work unless the account has the money and the sender has the rights to that account and the nodes forwarding the transaction haven't seen any other spends of that coin since the last block. At that point, doing a double-spend reliably is already hard enough that anyone who can do it probably has much better things to do with the ability than try to skim $20 worth of drinks at a bar. One confirmation, that is, being included in one block, takes anywhere from a few seconds to 15 minutes, probably averaging 5-7 minutes. With that, it's already virtually impossible to double-spend without having enough mining power to take 51% of the current mining network. That's a bit more hashing power than the entire current mining network combined. That'll earn you hundreds of thousands of dollars a day just doing honest mining, and potential double-spend activity well into the tens of millions or more. Again, why bother with that to rip off a $20 bar tab? Or even a $2,000 bar tab?

jellicle 14y ago

While they "take" bitcoins, they do not do any business whatsoever IN bitcoins. Nothing is denominated in bitcoins, the bar never receives any bitcoins, etc. Bar prices its stuff in $, bar gets paid $. The End. It's almost as if the bar doesn't want to reprint its menu twice a day to account for the bitcoin pricing bubble.

baddox 14y ago
Heaven forbid bitcoin be used for anything. If you buy them just to sit on them, you're a dirty speculator contributing to the bubble. But if you use them to purchase something, well, there's something wrong with the way you did that as well. I'm not sure what it would take to impress some people.
- jellicle 14y ago
  My point is that this bar, run by a person who has drunk the Bitcoin Koolaid, is still unwilling to take any of the risk associated with doing business in bitcoins.
  - deleted 14y ago
    [deleted]

billpg 14y ago

"How much is a pint of beer?" "Right now or by the time I finish pouring the drink?"

baddox 14y ago
Witty, but I'm pretty sure two adults at a bar can agree on a price without a great deal of difficulty.

namuol 14y ago

What are the implications on taxes? Is this legal?

josephagoss 14y ago
As long as you pay tax its fine, anyway for the bar they are accepting USD. Bitpay accepts the transaction and pays USD to the bar, Bitpay worries about the BTC they collected. (The bar never sees any BTC from a customer)

yarou 14y ago

I went out on a Monday night to EVR, met Charlie through a mutual friend. I had no idea that he was involved with Bitcoin at the time, nor that he was planning on accepting it at EVR. Really down to earth guy, plus the free drinks didn't hurt my opinion of him. :)

pdog 14y ago

The news for me is that the founder of BitInstant (and co-chairman of Bitcoin Foundation) also owns a bar in midtown Manhattan.