Local News

Local Durham bakery accepts bitcoin despite shaky future of currency

Posted February 26

— The high-profile collapse of bitcoin exchange Mt. Gox on Tuesday has some people wondering if the experimental currency is already dead, but one Durham business said it's still committed to bitcoin.

Rise Bakery, at 8200 Renaissance Parkway, started accepting the virtual currency as payment last week after owner Tom Ferguson said he got tired of paying credit card fees to banks.

"We just recently raised the minimum wage here to $10.10 an hour, so if we can lower what we're paying in fees, we're winning," he said.

Bitcoin is currency used via smartphones, tablets or computers and is neither issued by a bank nor regulated by the United States government.

Jameson Lopp uses bitcoin and said the lack of third-party oversight is what makes the currency great because users set the value themselves. 

"People say bitcoins have value, and they then transfer them amongst each other in exchange for other goods and services," he said. 

But the value of bitcoin has been volatile. In December, one bitcoin was worth about $1,200. When Tokyo-based Mt. Gox, one of the largest bitcoin exchanges that existed, closed on Tuesday because of a system hack, the currency was worth only about half that much.

Now, just under 750,000 bitcoins - with a value at some $375 million - are missing, meaning the people who held them have no recourse.

But Lopp says this story is more about Mt. Gox as a company than bitcoin as a currency.

"We're basically letting this incompetent company fail and better companies are going to replace it," he said.

Despite the unclear future of bitcoin as it struggles to become a viable currency, Ferguson said he's trying to do his part to keep the currency alive and thriving. He said more than 20 people have used bitcoin to purchase items from Rise since Friday. 

For those interested in getting into bitcoin, it can be complicated. Lopp said potential users need to learn about it before taking the plunge. To find more information about bitcoin in the area, a group called the Triangle Bitcoin Meet-up holds meetings teaches people about it.

Bitcoin Crash Course:

- The currency, which is basically lines of computer code that are digitally signed each time they travel from one owner to the next, was launched in 2009 by anonymous person or group of people.

- Bitcoin operates outside of traditional banking systems, allowing users to set their own price and make purchases directly without a middle man. Initially, the virtual currency was traded back-and-forth, but when the market strengthened, the value of each bitcoin increased.

- A network of tech-savvy users called miners keep the system honest by pouring their computing power into what's called a "blockchain." The blockchain prevents rogues from spending the same bitcoin twice, and the miners are rewarded for their efforts the occasional bitcoin gift. As long as miners keep the blockchain secure, counterfeiting shouldn't be an issue.

- An exact number of bitcoin users is unknown, but it's estimated that about 60,000 to 70,000 bitcoin transactions happened in the past year.

- Creating a bitcoin wallet, a website or program that stores a person's bitcoin, allows users to make transactions. After a wallet is made, people can ususally buy bitcoin directly with any other currency. 

23 Comments

This story is closed for comments. Comments on WRAL.com news stories are accepted and moderated between the hours of 8 a.m. and 8 p.m. Monday through Friday.

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  • jamesonlopp Feb 27, 12:56 p.m.

    So let's see, he gets a net amount from the credit card company which is convertible to cash,... View More

    — Posted by Hill55

    More clueless Bitcoin comments. When he accepts Bitcoin he instantly transfers in to cash via... View More

    — Posted by Minarchist

    Very interesting perspective that is missing from the article.

    I still find Ferguson statement... View More

    — Posted by glarg

    I interpreted his statement to mean that he's winning as a business owner by saving money and his employees are winning because he's better able to afford to pay them more. But you're right in that the magnitude of the 'win' will be dependent upon the volume of sales that he can make via Bitcoin.

  • glarg Feb 27, 12:47 p.m.

    So let's see, he gets a net amount from the credit card company which is convertible to cash,... View More

    — Posted by Hill55

    More clueless Bitcoin comments. When he accepts Bitcoin he instantly transfers in to cash via... View More

    — Posted by Minarchist

    Very interesting perspective that is missing from the article.

    I still find Ferguson statement lacking in logic:
    ""We just recently raised the minimum wage here to $10.10 an hour, so if we can lower what we're paying in fees, we're winning,""

    If you are paying 4% less in fees that is 'winning' regardless of what you labor costs is. If you want me to believe that lower fees some how made up the labor differential, I'm not going to buy that. That would have to be way more volume, and bitcoin volume, than I think a donut shop does.

  • Minarchist Feb 27, 12:00 p.m.

    "The truth is dogecoins are the real currency of the future."

    Highly unlikely. I would put my... View More

    — Posted by Minarchist

    I like the idea of Proof of Stake, though my observations have indicated that the only people... View More

    — Posted by jamesonlopp

    yes the Scrypt algorithm is more miner friendly. They are, as of now, resistant to ASIC. So I believe long term a coin using Scrypt would be more energy efficient and secure being anyone could mine with a CPU/GPU.

  • bradwheeler2 Feb 27, 11:28 a.m.

    You have to be incredibly naïve if you think that if Bitcoin or a variant of it becomes... View More

    The reasons people would accept cryptocurrency address real problems people have today - namely that it's promises to be fast, cheap, and secure. Credit card breaches at major retailers show that our current payments models leave a lot to be desired - and as such are expensive to administer.

    Additionally, there are next-generation possibilities like digital asset registers, digital contracts, micropayments, and the prospect of banking services for the other 6 billion. But right now most can think of Bitcoin as being an e-cash system.

    One thing to keep in mind - if the technology continues to be fast, cheap, and secure - there's a good chance that companies you already trust today might begin to use this technology themselves.

  • jamesonlopp Feb 27, 11:10 a.m.

    "The truth is dogecoins are the real currency of the future."

    Highly unlikely. I would put my... View More

    — Posted by Minarchist

    I like the idea of Proof of Stake, though my observations have indicated that the only people who care about a cryptocurrency's mining algorithm are the miners themselves. I'm of the opinion that crypto users don't really care about mining efficiency.

  • Minarchist Feb 27, 11:01 a.m.

    "The truth is dogecoins are the real currency of the future."

    Highly unlikely. I would put my money on Peercoin being it uses a Proof of Work / Proof of Stake system and Scrypt algorithm. Probably too "nerdy" for you. Just stick with your dollar that has lost 98% of its value since its creation in 1913. I rather be a "nerd".

  • Minarchist Feb 27, 10:43 a.m.

    Wow look at all these nerds defending their internet monopoly money. I love the comparison to... View More

    — Posted by Concernedforourkids

    How do you send Monolpoly money from the USA to GErmany in seconds, for pennies without it being stolen, counterfeited, or double spent? Please advise. Thank you.

  • daveparrish Feb 27, 10:40 a.m.

    Great job with the story. My wife and I were watching the news last night and "bitcoin" was mentioned. I said out loud "Did they say 'Bitcoin'?!" I am excited that bitcoin is getting some coverage locally because I think it could help out many small businesses in the area, especially when dealing with international payments. Thank you for covering bitcoin!

  • jamesonlopp Feb 27, 10:31 a.m.

    Wow look at all these nerds defending their internet monopoly money. I love the comparison to... View More

    — Posted by Concernedforourkids

    The great part about cryptocurrency is that we need not defend it. It has value because a community of people have come together and agreed upon its value. If you are not participating directly in this community, you cannot harm it. However, we are happy to educate others about how it works.

  • Concernedforourkids Feb 27, 10:25 a.m.

    Wow look at all these nerds defending their internet monopoly money. I love the comparison to the dollar during the Lehman collapse.

    The truth is dogecoins are the real currency of the future.

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