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Bitcoin slips into local scene

BY NOELLE ALKHAWAJA | FEBRUARY 13, 2015 5:00 AM

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University of Iowa transfer student Cameron Schorg calls himself an advocate for the bitcoin.

He sees it as such an interesting innovation that he started a club at the University of South Carolina centered on the currency. Now, he wants to do it here.

“It’s just a new currency, a new technology,” Schorg said. “You have the U.S. dollar, Japanese yen, European euro, and the Internet bitcoin.”

Bitcoin is a type of crypto-currency —  currency that uses coding via Internet — through which users can send very small to very large amounts of money quickly, securely, and with little to no transaction fees, Schorg said.

Bitcoin grew in popularity last year.

After years of a downward spiral into irrelevance, bitcoin surged in popularity with funding from corporations such as Facebook and Horowitz and Co. as well as the New York Stock Exchange.

In fact, in the last year or so, more than $500 million of capital funding was pushed toward bitcoin-related companies, Schorg said.

Here in the Iowa City/Coralville Area, there are businesses willing to try it out, including the Watch Co.

“It’s going to be the future, hands down,” said Brandon Baines, the manager of the Watch Co. at the Coral Ridge Mall. “Basically, we believe that everyone at some time will run off the same currency.”

The business started accepting bitcoin roughly six months ago. It doesn’t charge transaction fees, and management thought it would become a common payment method.

“We are, to my knowledge, the first business in the Coralville area to accept bitcoin,” Scott Birney, the general manager of the Watch Co. said. “Everyone who passed by and saw that we accept bitcoin, they get excited to have somewhere to spend it locally.”

The currency has found home in national retailers, too.

Target, Subway, and Victoria’s Secret all accept bitcoin; however, the idea has not been adopted as frequently in the Midwest as in other parts of the country.

“Most of the bitcoin companies are happening around coasts,” Schorg said. “The majority of them are in the Silicon Valley right now and big port cities.”

On the other hand, bitcoin did not work out as well for one local business.

“For a small restaurant, it’s just not worth it,” said Devon Friese, a manager of Devotay, 117 N. Linn St. “With bitcoin, people wouldn’t tip. They would just pay the tab and leave.”

Devotay once accepted bitcoin but recently stopped.

Because a restaurant’s business model so heavily relies on customers tipping their servers, the bitcoin wasn’t a good match for Devotay, Friese said.

“Maybe if they tailored it with a greater ability toward restaurants, such as a gratuity slot, then you would see more restaurants using it,” Friese said.

Overall, bitcoin could affect how consumers pay for goods locally and nationally.

“It’s pretty astronomical, really,” Schorg said. “I call it the future of money.”


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