Bitcoin has arrived in Memphis.
Businesses in the Memphis area and slightly beyond that are now accepting payment in the form of the new digital currency include Memphis IT Works, an information technology consultancy. The company, which provides systems management for companies of various sizes as well as offering computer safety consulting and testing, joins thousands around the country now accepting bitcoin, a number that’s continuing to grow.
Edward Rothman, Memphis IT Works principal, is a bitcoin enthusiast. His company accepts payment in the form of the currency, partly because of its ease of use.
Memphis IT Works principal Edward Rothman, who also has worked as a corporate chief information officer, is a bitcoin enthusiast who estimates he’s spent more than $10,000 in bitcoins since he started using them. His company accepts payment in the form of the currency, he added, partly because of its ease of use.
With bitcoin, no physical money is exchanged. Bitcoins are transferred from a kind of electronic wallet. And there’s not really a learning curve for anyone familiar with digital mobile payments.
Rothman’s customers scan a QR code attached to their invoice to transfer bitcoins to Rothman’s company.
For now, it’s still a small slice of the payments he receives, but he likes it for reasons that include the transaction fees being “extraordinarily low.”
“From my perspective, it was very easy to do,” Rothman said. “It’s very easy to get set up to take bitcoin payments and very easy for clients who have bitcoins to be able to send them to me. It’s another route to market for people, and it saves people from sending checks or using credit cards. It also has the advantage of not requiring you to go to the bank. Intrinsically, it’s no more complicated to use than your Starbucks card.”
In recent days, Congress has held hearings about the currency, the anonymous nature of which made it somewhat controversial earlier on. While the currency is free from being influenced or manipulated by a government or central bank, since bitcoin has no central authority, its price also has seen wild fluctuations in recent days.
And it remains to be seen how far the concept of a network effect can carry bitcoin. A network effect refers to the dynamic that’s evident when something becomes more useful as more people use it – the telephone, for example, is not useful if only one person is involved.
Similarly, bitcoin is now starting to be used by a wide swath of businesses and for a range of purposes. One example, according to a CNN report, is hundreds of merchants that accept bitcoin will join in the Black Friday celebration by selling items like clothes, Christmas trees and Web domains. It’s the second so-called “Bitcoin Friday.”
A state representative in New Hampshire is accepting bitcoins as campaign contributions. In a letter to U.S. senators, Federal Reserve chairman Ben Bernanke wrote that virtual currencies like bitcoin “may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
“I’ve been using bitcoin for quite a while – for about a year and a half now,” Rothman said. “I guess you’d say I’m an early adopter. The nice thing about it is it’s based on immutable mathematics. So you can have ultimate trust in it, because math doesn’t change. You can also have ultimate trust in it because you can disburse the bitcoins with much greater speed than you could anything else.”