This series looks at technologies that will be game-changers for small business, particularly firms whose staffs are highly mobile and where travel is part of the game.
Bit by bit, Anthony Di Iorio expects that you'll change the way you pay for what you buy.
He's convinced that bitcoin – the edgy, virtual, digital currency or "cryptocurrency" – will start making its way into mainstream business and commerce.
Mr. Di Iorio is founder of the Bitcoin Alliance of Canada, dedicated to promoting the cryptocurrency. He points with pride to a bitcoin dispensing machine in the foyer of his office at Decentral.ca, a downtown Toronto "business acceleration space" that he shares with young lawyers, entrepreneurs and tech innovators.
"You can get in for five bucks," says his colleague Arthur Traviss Corry, Decentral.ca's managing director. The machine looks like an ordinary ATM, except you connect to it with your smartphone.
You feed in cash and it transfers the same amount to a QR code on your phone, which is now your bitcoin "wallet."
You can use bitcoin by flashing the QR code at a participating merchant's machine, or, if purchasing online, to a computer screen, tablet or a second smartphone that can read the code. The payment goes through without any third-party processor, such as a bank or credit card company.
Merchants save processing fees and aren't subjected to credit card fraud, because once the bitcoin goes through, the money is in the merchant's hands. For consumers the advantage is that you don't have to carry a wallet or credit cards – just your phone.
With its libertarian architecture – there's no central bitcoin authority – and the ability to cross borders via cyberspace, it's still looked at warily by banks and national revenue departments around the world, concerned about the issues of money laundering and tax evasion.
Bitcoin, which has smaller cryptocurrency peers including Ripple and Litecoin, may be in the early-adapter stage but this will change fast, its proponents believe. So far there are just four or five bitcoin ATMs in Canada, but acquiring the digital currency by machine is but a small part of an emerging business story.
"It's the technology behind Bitcoin that's amazing, not the bitcoin itself," says Mr. Di Iorio. Bitcoin can be purchased in small amounts online as well as at ATMs, and it's starting to make inroads with consumers, he and Mr. Corry say.
The reason that bitcoin will catch on is that it's a form of decentralized file sharing, they explain.
"Remember Napster?" Mr. Corry says. The online music sharing system was "centralized file sharing," which made it relatively easy to shut down. bitcoin is more like Bit Torrent – the decentralized system that confounds music and movie producers because it downloads using "bits" of files from all around the world, changing constantly.
Bitcoins are created by the worldwide file-sharing network using an algorithm, not by individuals or central banks with printing presses or mints. There's an international consensus among the bitcoin cybercommunity that just 21 million bitcoins will ever be produced; their value will be divided accordingly into national and regional currencies, so you can buy a few dollars worth at a time.
Proponents concede that this is abstract and confusing, but then so is the idea that a piece of paper with the Queen's picture on it can be exchanged for something.
Bitcoin is still deeply controversial. When a Japanese bitcoin exchange called Mt. Gox filed for bankruptcy protection last April, about $450-million of investors' Bitcoin holdings were wiped out overnight.
"What happened in Japan was a third-party failure," Mr. Corry says. "As an investment, I consider it kind of a wild tech stock right now." As a tool for consumers it's different, he insists.
The Mt. Gox bankruptcy is like someone stealing your wallet, he explains. People who stored their bitcoin with Mt. Gox left it in an unsafe place that they didn't properly check out. Downloading a few bucks to go out to dinner won't cause this problem; once you put the bitcoin into your own device, it's safe as long as you don't lose your phone or tablet.
Ordinary consumers can use it to buy an increasing variety of goods and services, Mr. Corry says. With bitcoin you can now purchase computer equipment, sports tickets, meals, and even, ironically, the latest album from rap artist 50 Cent (not exactly a bitcoin-sounding name).
Travel agency Expedia.com announced on June 11 it will start taking bitcoin payments for hotel rooms and is looking into extending the service to flights, car rentals and other packages, once it's sure the system runs smoothly.
The Smoke Bourbon Bar-B-Q House in Toronto is another business that has also recently begun accepting bitcoin. The response has been positive, says owner Tony Gallippi, also co-founder of a Bitcoin processing company.
"We get a lot of people who actually do use it. Travellers coming to Toronto are attracted to the idea that we take bitcoin, and we get people who try us who wouldn't have thought of coming until they heard we take it."