Tzadik Vanderhoof is desperate for a place to spend his Bitcoin.
So far the only taker he’s found is a friend he’s persuaded to take Bitcoin in payment for a bar tab. But that could change.
Next Wednesday, the Baltimore software developer will join other area enthusiasts of the increasingly popular — and controversial — virtual currency at Betamore in Federal Hill. Their goal: to bring Bitcoin to Baltimore.
The meeting’s organizer is John Devor, a technology entrepreneur who works in the shared space at Betamore. Devor and Vanderhoof have a lot in common when it comes to Bitcoin. They see it as a way for citizens to have more control over their money and bypass fees when transacting or sending large sums. And they both want more opportunities to use it.
“I would love to be able to go down the street and order some Thai food and pay right then and there with Bitcoin,” said Devor. But, he admits, “I think that is a little ways off.”
Good gamble, or gimmick?
Betamore’s founder, Mike Brenner, is a bit more skeptical of the blooming Bitcoin buzz.
For one thing, the currency is volatile. Its dollar value has shot up over the last few months (see chart, page 9A), with a couple of wrenching zigzags. Some worry the technology could disrupt the banking system. And Bitcoin was used on a website, SilkRoad, that was tied to drug dealing.
But Brenner sees potential — especially after Friday’s reports that someone bought 194,993 Bitcoin in a single transaction valued at about $150 million. The completion of such a high-value transaction with no bank involvement or fees, he said, is amazing.
Brenner owns Bitcoin himself — he first bought some after meeting Devor — and he says he’s enthusiastic about hosting the meetup at Betamore. He sees it as an opportunity for innovation. And he says he can envision something like Bitcoin, with a similar protocol, becoming mainstream in the next few years.
So does Vanderhoof. For him, Bitcoin falls at the intersection of several personal interests: software, cryptography, economics and “beating the system.”
Before Devor organized the Betamore meetup, Vanderhoof had thought about organizing one of his own. Vanderhoof, who works for Kelly & Associates Insurance Group, sees Bitcoin as a way to escape governmental influence on citizens’ money, and wants to see it more widely used.
“I’m thinking if I can get some ideas going … I might be able to make it work, some kind of entrepreneurial opportunity around Bitcoin,” he said. “It’s very similar to the creation of the Internet … it turned out to really have a big economic benefit.”
On paper, Brenner’s Bitcoin is worth five times what he paid for it, and he agrees that a form of virtual currency could become common and beneficial in the near future. But he’s not ready to convert many more of his own dollars.
“We’re years away from any legitimate business that would really take it,” he said. “I think that anyone who takes it now, it’s just a gimmick.”
According to coinmap.org, 395 businesses in North America take Bitcoin. A website called Bitpay says they include organic food vendors, coffee shops and retailers of e-cigarettes.
Two of those are in Maryland.
A Baltimore-based retail site, cryptoanarchy.com, found its way onto the map Tuesday. The site sells key chains, T-shirts, magnets and other retail items that promote Bitcoin. Tactical College Consulting, an educational application consultancy based in Stevenson, started accepting Bitcoin last week.
“We’re always evolving in terms of the payment options we offer our clients, and this seems like a logical step,” said Craig Meister, president of 7-year-old Tactical and its only full-time consultant. Until two years ago, when it began using PayPal, the company took only checks as payment.
Tactical College Consulting has a small number of clients — between 75 and 100, said Meister. While many of them are from Maryland, between 15 and 20 percent are from outside the United States.
Regular clients pay anywhere from $5,000 to $20,000 for consulting packages, which can include essay editing and college list development.
“We really do have a lot of clients, both domestic and international, who are on the cutting edge of technology, who are very savvy investors,” he said. “I think it will be responded to probably better than if we were a coffee shop or a shoe store.”
Most of Tactical’s clients make payments at the end of each month, said Meister, so he expects to see soon whether Bitcoin will be useful to them. He’s optimistic.
“As an independent entrepreneur, you try things, you see how it goes,” he said. “It’s nice to be independent in that sense.”