The intersection of Cedar and Lee Roads in Cleveland Heights is hub for films, trendy restaurants, and artisan shops. And about a dozen of those businesses are embracing the digital currency Bitcoin to drum up attention, and maybe some real-world business. It’s the first so-called Bitcoin Boulevard in the US, after another in the Netherlands. ideastream's Tony Ganzer reports.
Lee Road in Cleveland Heights is an eclectic thoroughfare. Near the intersection with Cedar Road, there is a grouping of trendy restaurants, artisan shops, and one of those is Sweetie Fry. Its menu caters to two American indulgences - French fries and ice cream, and soon it’ll have another distinctive characteristic - patrons will be able to pay in the digital currency Bitcoin. It’s the first so-called Bitcoin Boulevard in the US, where a group of businesses are knitted together by their acceptance of the digital dough.
NIKHIL CHAND: “We’re trying to create a destination, both for local people to maybe be demystified by bitcoin.”
Nikhil Chand’s consultancy CoinNEO is behind the Bitcoin push on Lee Road.
CHAND: “My goal was to bridge that nebulous concept of the Bitcoin with reality and see what happens when you get it in the hands of people in our local communities…but we’re also hoping to draw some Bitcoin tourism especially being a big hub between New York and Chicago and some of the bigger Bitcoin markets”
There are about a dozen companies involved in Chand’s Bitcoin Boulevard US initiative, co-branded with a similar boulevard in the Netherlands. The shops have terminals that allow payment with Bitcoins, for customers who have them. For those who aren’t really sure what bitcoin is, think of it as a new digital “currency that was created in 2009 by an unknown person.” That’s the way CNN Money describes it. Transactions are made with no middle men – meaning, no banks! And no need for a wallet. This is a digital currency that’s stored “in the cloud.”
Keith Logan thinks it’s a great idea for his business. He’s owner of Sweetie Fry, the ice cream shop:
LOGAN: “It’s more of a seeding the market. We get more curiosity than we do people that are spending the Bitcoin.”
One of the major selling points of Bitcoin for him is that it costs him less to process Bitcoin payments than credit cards, for example. Card transaction fees from banks are at least double.
LOGAN: “There’s somewhat of a kind of democratic feel to this currency, and it’s also international. In August the International Gay Games are coming to Cleveland and somebody that’s coming over from Europe can use Bitcoin with zero conversion costs to U.S. currency.”
LISA DUNN: “Our store has always been globally minded, and that appealed to me…the global nature of the currency.”
Lisa Dunn owns Revive, a fair trade clothing shop in Cleveland Heights. She says her artisan vendors come from 13 countries.
DUNN: “Sometimes we have delays and high costs in paying our artisan groups, and there is potential for Bitcoin currency to be a way to pay artisan groups which may not have access to other means of receiving funds in a timely manner.”
Bitcoin is not without its skeptics. FINRA, the financial industry’s self-regulatory authority, has called the digital currency more than a bit risky, because if no merchants accept it, then it will no value.
There are also concerns about security. A Tokyo court last week approved the liquidation of assets associated with Mt. Gox, a major Bitcoin exchange forced into bankruptcy. The company claims it was hacked, and hundreds of thousands of Bitcoins were stolen. But there have been accusations that the implosion of Mt. Gox was the result of fraud. These concerns have not sunk Bitcoin, but they may affect how many folks embrace ideas like the Bitcoin Boulevard in Cleveland Heights.
JOHANNESON: “It’s very Cleveland Heights that we would be latching on to the idea.”
Diana Johanneson is sitting in a coffee shop on Lee Road, and admits she doesn’t really know what Bitcoin is.
JOHANNESON: “I’d be curious to hear what the businesses think about it. If they are signing on to it perhaps they are open-minded to it. Why not give it a try?”
Cleveland Heights has long cultivated its reputation as a progressive minded community. The inner-ring suburb was one of the first cities in America to ban pesticides on city property, became a “nuclear free zone” back in 1987 and, more recently, got national attention as a pioneer in “cash mobs.” In their budding support for a “virtual” currency residents may find themselves again in the forefront …not just of economic convenience but of politics.
Stanford Business School Professor Susan Athey describes the potential this way:
SUSAN ATHEY: “In Europe you can make interbank transfers and the money shows up instantly, and it’s free. In the U.S., if I want to send money from my Fidelity account to my Bank of America account, I’m going to pay money, and I don’t get my money right away. It shouldn’t cost anything to move these electrons around. As you educate consumers that it is possible to move value electronically without fees, we will collectively have less patience with the pace of change with our existing systems.”
The Bitcoin Boulevard U.S. will turn on their Cleveland Heights terminals on May 1.