In mid-May, a single bitcoin was worth almost $8,300. But when the cryptocurrency was in its infancy in 2010, computer developer Laszlo Hanyecz made history by doing one of the first commercial transactions ever with bitcoin. Hanyecz paid a total of 10,000 bitcoin (worth $25) to buy two pizzas from a small shop in Florida. Those 10,000 bitcoin would fetch more than $80 million today—and recent rates aren’t even the highest the cryptocurrency has reached in the last year. It peaked at roughly $19,000 per bitcoin in mid-December.
To clarify: Bitcoin is just one type of cryptocurrency—a digital currency that uses encryption codes to verify and transfer funds. Cryptocurrency is not issued or regulated by a central bank, but rather uses blockchain technology as an independent ledger system (for more on blockchain, turn to p. 71). Of the dozens of cryptocurrencies in existence, bitcoin is the most ubiquitous and buzzed about.
But despite the growing popularity of cryptocurrency, many U.S. restaurants are still grappling with the question of whether or not they should accept such monies.
Some major chains have dipped their toes into the water, but for the most part they’re few and far between. The owner of a few Hooters franchises announced in early January that some of its restaurants would be accepting bitcoin, for example, while KFC Canada briefly accepted bitcoin for a cryptocurrency-themed bucket of chicken.
At least for a time, a Subway restaurant in Allentown, Pennsylvania, accepted bitcoin, but that may no longer be the case, says Emily Rossi with public relations firm Ruder Finn, which counts Subway as one of its clients.
“Each local Subway restaurant is independently owned and operated, and it is the individual franchisee’s decision to accept bitcoin,” Rossi says. “It seems that the one restaurant that was accepting bitcoin may no longer be accepting it. Again, though, it varies by restaurant since each is independently owned and operated, so it’s up to each franchisee, not headquarters.”
Aaron Bush, an analyst who follows cryptocurrency trends for the Motley Fool, says it makes sense why the trend hasn’t caught on in the quick-service and fast-casual space. For one, most consumers do not have bitcoin or other cryptocurrency, and those who do may not know how to spend it. Transaction times can also be slow, and usage fees may be prohibitive for retailers.
“Of course, much of this can change with greater development. Scalability and UX are two key factors teams around the world are working on,” Bush says. “Crypto’s killer app almost definitely won’t be restaurant payments, but as projects like bitcoin improve speed and fees, the potential for this use case should gain appeal in certain circles.”
Restaurant tracker website BitcoinRestaurants.net lists more than 80 restaurants in the U.S. that already accept bitcoin. But like the Allentown Subway, several have since backpedaled.
One concept that has stayed the bitcoin course is another pizza joint. Buffalo Pizza & Ice Cream Co. in Sacramento, California, began accepting the cryptocurrency three years ago. Co-owner and director of business development Brian Fischer says Buffalo Pizza & Ice Cream was likely the first restaurant in the city to do so. He adds that even today, few merchants utilize that option—parsing out just how many do can be tricky given the pseudo-anonymous nature of bitcoin.
According to a recent report from BitcoinMarketJournal.com, the number of businesses accepting bitcoin hovers globally somewhere between 13 million and 28.5 million.
Still, Fischer says he sees it as a way for the restaurant to support those in the community who are willing to experiment with bitcoin.
“I think there are a lot of people with a lot of bitcoin, but they don’t have many places to spend it, which to me is kind of sad because I think people should encourage experimentation,” Fischer says. “And it really is easy to take. It’s like five minutes to set something up.”
Fischer adds that it would be easy for some larger restaurant chains to accept bitcoin since it requires little training. Buffalo Pizza & Ice Cream Co. uses an app integrated with its point-of-sales system to conduct the transaction.
Daniel Sim, owner of Lean Crust Pizza in Brooklyn, New York, says his restaurant has been accepting bitcoin for five years.
“In 2013, in its media heyday, we were probably averaging 25–50 transactions a week, and then, after November 2013, it just kind of hit the brakes really hard and really just stopped,” Sim says.
Transactions at Lean Crust Pizza have not returned to that level, even amid the most recent bitcoin fever, which sent the value skyrocketing. Sim believes the currency’s appreciation has contributed to the decline in its use for smaller transactions. In 2013, bitcoin was trading at about $40 per coin, making it a much more proportional currency for something like food purchases.
Still, Sim, like Fischer, believes in the potential of bitcoin. He says credit cards are obsolete technology, and the world simply needs to catch up to the times.
“Right now, [bitcoin] is being traded as a stock or a commodity, but at the end of the day, what it was designed to be was a currency,” Sim says.
Sim adds that while some businesses elect to convert cryptocurrency payments to U.S. dollars immediately, he has kept that money in bitcoin. His parents, who are also business owners, have done the same. Despite the market volatility, they’ve both been pleased with the results.
“To this day, my parents couldn’t tell you anything about bitcoin, but they will tell you how much they love it,” he says.