Living On Bitcoin In 2019: Renewal Of Experiment
Seeing how the market changes over time, it's easy to forget that cryptocurrency is a means of payment, not just an investment asset. At least bitcoin that has become the first implemented cryptocurrency was originally conceived as a decentralized alternative to traditional currencies. But how often is it used in everyday life just like fiat — for paying bills, and making purchases? Rarely. And the main reason is that bitcoin is not sufficiently known as another possible payment tool. Fortunately, it's not an obstacle for true enthusiasts!
In 2013, Forbes employee Kashmir Hill decided to live for one week using only bitcoins as a means of payment. Back then, when bitcoin rate was just starting to increase, its price ranged from $90 to $150. For seven days, the journalist spent 4.85 BTC — seems like a reasonable amount leaving out the fact how much the same coins cost now. Interestingly, Hill decided to repeat the experiment one year later to show how society’s attitude towards bitcoin had changed, if at all.
2013 vs. 2014
From May 2013 to May 2014, BTC price exceeded $1000 for the first time. As Hill noted, it wasn’t surprising that much more people already knew about bitcoin in 2014. It was less problematic for her to pay for food, transport or rents with bitcoins. The experiment took place in San Francisco both times, and here are the main difficulties that Hill faced during the first one:
The journalist was forced to ride a bike because she could not pay for public transport or taxi. This was no problem with commuting from home to workplace, but Hill could not get out of the city considering long distances and hilly terrain. Though, she managed to rent a bike from her friend for 0.25 BTC.
For almost the entire week, Hill had to eat food from only a few delivery services that supported payment in bitcoins. She often skipped breakfasts because food delivery opened around 10:00 AM and their services cost 0.3 BTC. The bottle of wine bought by Hill during the experiment cost her 23.55 BTC (about $90,000 at the current rate).
The apartment owner didn't want to accept an “unknown currency” as rent payment. Hill had to move out to live in a hostel for a few days so that the experiment would be accurate. Needless to say, this didn't make her happy.
As a result, in these seven days, Kashmir Hill had to move to another place and lost a few pounds because of the forced “bitcoin diet”. The situation was different in 2014, when much more people already knew about bitcoin and many companies were ready to accept the cryptocurrency as a means of payment. During her second experiment, Hill was able to take a taxi using the local service Lyft, could choose a cafe to have lunch and place to have fun, and didn't change her apartment.
At the same time, the lack of places accepting bitcoins was still a problem in 2014. But the main trouble was high commissions. In order to get a quick service, it was necessary to conduct a transaction as soon as possible, which might cost more than the purchase itself. As Hill said, she forgot about bitcoins after the experiment was over. Yet, there was a person who decided to repeat her experience.
Experiment in 2019
It's logical to assume that living on bitcoin for a week would be much easier in 2019, since almost everyone knows what crypto money is. But Colin Harper, an editor in Bitcoin Magazine, proved that it is not entirely true. He had the same experimental conditions as Kashmir Hill: to live on bitcoin in San Francisco for a week. The result wasn't as rosy as his enthusiasm at the very beginning.
What has changed in 2019?
- There are fewer bitcoin-friendly places in San Francisco in 2019 than five years ago.
- Bitcoin ATMs are overrated, unlike gift cards that are very helpful.
- Some merchants, that introduced the main cryptocurrency as a means of payment in their stores a few years ago, refuse to use it now. And they get annoyed when hearing the question “Do you accept bitcoins?”.
- The number of places accepting altcoins has increased though. For example, there is The Boba tea shop, where you can pay with many cryptocurrencies except for bitcoin.
- A general trend shows that the interest in blockchain technology and altcoins is much higher than the interest in bitcoin.
There are still a lot of Bitcoin enthusiasts now, but many of them perceive the main cryptocurrency as a store of value. On the first day of his living-on-bitcoin experiment, Colin Harper met with Jeremy Gardner, a crypto investor and founder of the blockchain platform Augur. Gardner immediately declared that the experiment wasn't a good idea as 2019 wasn’t the best time to spend BTC.
“The point is to get people to think about bitcoin, not spend it. I don’t think it’s good for that. It’s not meant to be used like cash”.
- Jeremy Gardner
As you can see, the bitcoin infrastructure is much less developed than we could expect, at least in San Francisco. Of course, results might have been quite different in another regions or countries. However, these seven days are indicative. The time when living on bitcoin will be common, and not just a journalistic experiment, may never come. It's hard to say, whether bitcoin is really a store of value, or it's just hungry-for-money traders who made the coin into what it is by shaking the market. Either way, we have altcoins at our disposal, so perhaps the times of a perfect decentralized cryptocurrency are still ahead.