Racked is no longer publishing. Thank you to everyone who read our work over the years. The archives will remain available here; for new stories, head over to Vox.com, where our staff is covering consumer culture for The Goods by Vox. You can also see what we’re up to by signing up here.
"Will you be paying in cash, credit, or Bitcoin?"
That's what Hester Street Fair holiday market vendors could have said to their customers this month, when the fair became the first market of its kind in New York to accept Bitcoin as a form of payment. Not familiar with the universal online currency (or maybe you missed the Silk Road bust from October)? The company bills itself as "the simplest way to exchange money at very low cost."
In theory, it's a great idea. "You've got people coming to the market from London, or Paris, or South America," said Stephanie Wargo of BitPay, the merchant processor that handles Bitcoin transactions. "They don't have to worry about transferring their money to US dollars … With Bitcoin, it does everything for them." But as of today, the market's penultimate day, not a single customer has paid using Bitcoin.
"It's less common for people to be using it in person" as opposed to on the Internet, said Suhyun Pak, the co-founder of the Hester Street Fair. However, "we did have several people come in and ask about them."
Though Bitcoin is growing in popularity, there's only six million worldwide users. That's less than one-thousandth of the world's population. And the company doesn't have its users broken down by demographics, so we don't know how many are in the New York area—or how many shop at holiday markets.
Pak also speculates that people are holding onto their Bitcoin currency because of its fluctuating conversion. As of press time, 1 Bitcoin is equal to approximately $660 US dollars—at the end of November, it was valued at $900, its highest ever, so they may be holding out for another spike.
But the lack of Bitcoin use at the market isn't causing any trouble for the vendors who signed up to use it. "The benefit in accepting them is having another means of transacting that might be appealing to certain people," said Charles Chessler, a photographer who is accepting Bitcoin at his booth. And with the market handling all transactions with BitPay, Chessler and other vendors didn't have to worry about setting up with Bitcoin themselves.
The physical transaction between customer and vendor is pretty simple, said Wargo, if it were ever to happen. A shopper just opens up her virtual "wallet," and pushes the Bitcoin currency to the vendor by scanning their premade QR code. "That's why Bitcoin is so much more secure," explained Wargo. "No one's actually going into your account and touching your money."
And vendors should find it appealing because of its minimal transaction fee. Other common mobile payment devices, like Square, charge "upwards of 2% or 3% of that sale for the transaction, whereas with us … it's 1% or even pennies," said Wargo.
If Bitcoin is the currency of the future, perhaps Pak and the Hester Street Fair are a bit ahead of their time. "People are interested in it right now, so it's a good time to test the waters," said Pak. Sigh—maybe 2014 will be its year. Either way, be sure to check out the market at the Eventi Hotel before it closes for the season tomorrow evening.
UPDATE: During the last day of the market, not one, but two Bitcoin transactions took place, according to Pak. One customer paid $20 for jewelry, while another purchased a photograph print from Chessler for $450.
· Last Call: Catch These Holiday Pop Ups Before They're Gone [Racked NY]
· What to Do, Where to Shop, and What to Buy This Week [Racked NY]