Since its unveiling one week ago, almost $100,000 in Canadian dollars has been exchanged for bitcoins at the world’s first Bitcoin ATM, located at Waves Coffee House on Howe Street in downtown Vancouver.
Bitcoin is a virtual currency which has been gaining traction as an investment asset and viable alternative to legal tender. In January this year, one bitcoin was worth about $130. On the heels of several high-profile press stories, including headlines of a Norwegian man who forgot he had purchased $27 in bitcoins a few years ago and found that they were worth nearly $887,000 today, the value of one bitcoin has skyrocketed to $240 today.
Business student Michael Yeung, founder and president of the SFU Bitcoin Club, has put SFU’s name in press outlets across the world with his involvement in promoting and facilitating the transition of Bitcoin into the mainstream.
He sees Bitcoin as a particularly strong disruptor of money services like Paypal and Western Union (which currently hold monopolies in their respective markets) but also, eventually, for credit cards and others used for many of our daily transactions. Fees are much lower, at about one per cent compared to 3.5 to five per cent with existing financial services. The fee is returned to the persons who “mined” the bitcoin.
Yeung feels that growing Bitcoin as a mainstream currency will change the way people, particularly young people, think about money. According to Yeung, because there is only a finite number of bitcoins (21 million in total) that can be mined, “the value of a bitcoin will only grow. This means that people are less likely to spend it unnecessarily.”
Yeung stated that this is the opposite of today’s economy, in which governments stimulate the economy by putting more money into the circulation. “This means that the money in your bank account loses value, which incentivizes people to spend it before that happens.”\
Yeung has his sights set on SFU eventually accepting bitcoins as payment for tuition fees.
Currently, the goal of the SFU Bitcoin Club is to push for the implementation of Bitcoin infrastructure, such as point of sale systems at campus businesses and Bitcoin ATMs on site. To this end, Yeung has begun approaching members of SFU’s administration.
Beyond simple transactions, Yeung has his sights set on SFU eventually accepting bitcoins as payment for tuition fees, much like Draper University has recently done. Draper University is currently the only university in the world that accepts bitcoins, in addition to accepting other non-conventional payments, such as shares in a student’s business or an in-kind donation of skills to the university.
For now, Yeung said, the SFU Bookstore and Chartwell’s would be a good start. “Doing this would put SFU on the world map,” he said. Yeung is also in early talks with the SFSS regarding the acceptance of bitcoins by SFSS-owned merchants and is teaming up with former SFSS director Kyle Acierno to present the idea to SFSS’s Commercial Services Review Committee. “So far we have just approached the chair, Jade Andersen, who is knowledgeable about it, and open [to the idea],” said Acierno.
Barrier of entry to accepting bitcoin payments is extremely low, requiring a merchant to simply register with a service, like Bitpay, and have their unique QR code on hand for customers to scan with their smartphones. A larger concern of merchants who may want to accept bitcoin payments is the volatility of the currency.
There are several methods to reduce seller-side risk by protecting them from any drops in the value of bitcoins — however, this protection also insures them if their value rises. “Low risk, low reward,” said Yeung.
At the end of the month, the SFU Bitcoin Club will also be hosting the first Bitcoin event, where attendees will be able to purchase bitcoins directly from Bitcoin Co-op members and be given a tutorial in sending money, with the option of actually sending money to a charity. Proceeds will go to Schools Building Schools, which currently receives a one dollar levy per semester from each SFU student.
