Have Bitcoin To Burn? Next Stop Could Be The Farm | WAMU 88.5 - American University Radio

NPR : News

Have Bitcoin To Burn? Next Stop Could Be The Farm

For food producers who sell directly to consumers, credit cards are both a blessing and a curse.

They're a way to do business with cashless customers, but 3 percent of every credit card sale is usually charged to the farmer as a transaction fee. That adds up in a high-volume, low-profit business like agriculture.

The extra fee has farmers looking for a solution to save money; a few are finding one in Bitcoin.

Bitcoin is a type of cryptocurrency: digital money that doesn't exist in the physical world. There are almost 12 million bitcoins worldwide — worth about $4 billion — that can be sent to or received from anyone with a Bitcoin wallet.

A Bitcoin wallet, just like a home, has a unique address. For a farmer accepting Bitcoin, customers with the currency would type in the amount to send (yes, the wallet is accessible through smartphones) to the farmer's wallet address and hit send.

One farm open to the idea is La Nay Ferme in Provo, Utah.

Owner Clinton Felsted says he began using Bitcoin when a crew for the documentary Life on Bitcoin approached him about accepting the currency. Now he's working on a more user-friendly Bitcoin payment method that should be up and running by February for consumers buying his fruits and vegetables.

It's the invisible nature of the currency, he says, that interested him.

"Taking money with you is a real risk, and it's a real security problem," he tells The Salt. "With Bitcoin you can take it anywhere with no risk. If I ever need my money, I don't need to find an ATM machine."

But with few other businesses accepting Bitcoin, Felsted converts it back into U.S. currency for a lower fee than he'd be charged accepting credit cards.

Bitcoin is most popular in the U.S., but farmers outside the U.S. are warming to it as well. One of the first to sell greens in exchange for virtual currency lives in Argentina.

Two years ago, organic farmer Santiago Zaz started the Tierra Buena Network to deliver produce to customers from his and his neighbors' farms. That got him interested in creating a website for online purchases.

With the help of his friend and software developer Nubis Bruno, they created one of the first produce-for-Bitcoin websites, Tierra Buena. Bruno says to date, a steady 1 in 10 sales comes in the form of Bitcoin.

Just like Felstad converting his bitcoins into U.S. dollars, Bruno says the farmers using the Tierra Buena site are converting it into Argentinian pesos.

Garrick Hileman with the London School of Economics, agrees that Bitcoin makes sense for farmers reliant on credit card transactions for sales. Using bitcoins over credit, he says, equals to keeping that 3 percent revenue per sale otherwise lost.

And it could actually be more than that. Last week, one bitcoin was worth almost $240. Today it's worth $345.

A few big tech companies, like OkCupid and Foodler, accept Bitcoin. But good luck paying utility bills or going mall shopping with it. The currency's volatility tends to scare big companies with more to lose than small companies, Hileman says.

"Small businesses can take the risk with an emerging alternative currency," he says.

The upcoming documentary Life on Bitcoin shows farmers at a Salt Lake City market willing to take a risk with Bitcoin. In this YouTube video clip, many agree to accept it as payment right away. (A farmers market in San Diego accepts it, too.)

With more small-business owners discovering a way around transaction fees through Bitcoin, Hileman says, it has the chance to grow. He already sees it happening. That's why, Hileman says, "we are seeing a boom in Bitcoin's price in spite of the shutdown of Silk Road [a shadowy black market site]."

For customers, he adds, the rise of Bitcoin could mean lower prices. Often farmers charge more on credit card purchases to cover their losses.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

NPR

Misty Copeland Becomes First Black Principal Dancer At American Ballet Theatre

Misty Copeland has been promoted to top dancer at the prestigious American Ballet Theatre in New York. She is the first African-American female principal dancer in the company's history.
NPR

Why You Should Thank A Caterpillar For Your Mustard And Wasabi

Eons ago, cabbage butterfly larvae and the plants they eat began an evolutionary arms race. The result: "mustard oil bombs" that give the plants, and condiments we make from them, distinctive flavors.

NPR

Export-Import Bank Set To Expire At Midnight After Congress Fails To Act

The Export-Import Bank, which helps to finance trade deals for U.S. companies, needed Congressional reapproval by June 30, but Congress didn't act. Now the bank is living on borrowed time, thanks to an anti-crony capitalism campaign driven by Koch organizations and other conservative groups.
NPR

Flood Maps Can Get Much Sharper With A Little Supercomputing Oomph

Entrepreneurs are turning to Oak Ridge National Lab's supercomputer to make all sorts of things, including maps that are much more accurate in predicting how a neighborhood will fare in a flood.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.