By James Shotwell, Social Media Coordinator of the media distribution service Haulix.
Cryptocurrency is a hot topic right now, and there is not a doubt in our minds that it will be a big focus of independent musicians in the years to come. If you have any questions about the content of the blog, or if you would like more information regarding the distributional services offered by Haulix, please email email@example.com and share your thoughts. You can also find us on Twitter and Facebook.
So, what is Bitcoin?
Good question. If we are going to talk about something futuristic we might as well make sure everyone understand what it is that we are trying to discuss. Bitcoin is a distributed peer-to-peer digital currency that can be transferred instantly and securely between any two people in the world. It’s like electronic cash that you can use to pay friends or merchants. Every purchase made is immediately logged digitally on a transaction log that tracks the time of purchase and who owns how many bitcoins. This log is referred to as a ‘block chain,’ which bitcoin professionals (known as ‘miners’) then use to review and confirm the facts of various transactions. In return for their services, miners are often paid fees by the vendors/merchants of each transaction and are also given physical, minted bitcoins.
For more information on the history of Bitcoin, click here to experience a New York Times’ created timeline of the currency’s existence.
Who uses Bitcoin?
Another good question. Since its debut several years ago, Bitcoin has mainly been used by speculators who used the emerging platform as a way to make money by buying bitcoins at lower prices and selling them at higher prices. Over the last year, however, there has been a large amount consumers - especially those in their late teens and twenties - have begun adapting the currency to their every day lives. Companies like Overstock and Reddit were the first to accept the currency, which helped push the cryptocurrency into the public eye. In recent months the list of companies now accepting Bitcoin has grown to number in the thousands, and even includes music companies like Run For Cover Records.
To further explore how Bitcoin has made an impact in the music world, we spoke with Run For Cover Records’ founder Jeff Casazza about his experience with the latest digital currency:
H: When did Run For Cover initially decide to begin accepting Bitcoin, and where did the idea originate?
J: Alex Henery who works with us, and our friend Kevin who runs Topshelf are super into Bitcoin stuff. We were at SXSW hanging with our friend Dave who is also really into Bitcoin and they got talking about it. I just thought we should do it, even if no one uses the option, it will at least be funny to say we accept Bitcoin. I thought we might be the first record label to do it, but low and behold the EDM scene has one upped us again.
H: How hard was it to implement a system for bitcoin into your current online store? Did you hit any unforseen bumps or roadblocks during the update process?
J It was extremely easy actually. In fact, I did it myself in only a few minutes.
H: Have you received many orders using bitcoin as payment? You do not need to go into specifics necessarily, but do you still feel it was an endeavor worth pursuing?
J: We have gotten orders through it, mainly larger orders I believe, but its not an overwhelming amount. People who are into computers and technology just like the option, I think. It doesn’t hurt us or cost anything to give people the option, so why not?
H: As far as paying bands their cut from sales, does accepting Bitcoin complicate the process at all? Did you speak with the bands on RFC before adopting technology to accept that form of payment?
J: No, not at all. The money is immediately converted and everything runs as it would as if they paid with a CC Or Paypal.
H: Has anyone spoken against the decision to accept bitcoin, either in house, on your roster, or in the world at large?
J: Everyone here is all about it. Feedback online was interesting. There was a lot of “that’s fucking stupid” and people thinking that we were joking. It’s beyond me why accepting an alternative form of payment would bother anyone, but it seemed to.
H: Do you think Bitcoin will still be around in five years time? If so, will it grow in popularity?
J: Hard to say. I am pretty confident open source cryptocurrency will be a much larger phenomenon in 5 years. if not Bitcoin, something very similar, if not just a regulated version of Bitcoin.
H: Would you recommend that independent artists begin accepting Bitcoin in exhcange for merch/music? Why or why not?
J: At this point I don’t think it would have a huge affect either way. The EDM scene seems to be proponent for Bitcoin in general, but I haven’t really seen it spill over to other genres. In the future I think that will change, but again, whether it’s going to be Bitcoin or something similar is hard to foresee at this point.
This all sounds good, but how do I get started?
The wonderful thing about Bitcoin being a product of the internet is that there are countless guides, walkthroughs, and related how-to content already in existence across the net. If you would like to learn about how easy it can be to equip your store with the materials needed to accept Bitcoin, as well as all the supplementary information regarding currency conversion, pricing, and marketing tools, click here and commit every line on the corresponding page to memory.
If I decide to skip Bitcoin, will my sales take a hit?
Given Bitcoin’s relatively short existence, it’s unlikely your sales will see any kind of immediate hit as a result of your decision to forego Bitcoin acceptance. As popularity and familiarity with cryptocurrency increases, however, you may start to see a change take place. Bitcoin is still very much an infant in the world of currencies, and it’s future has yet to be set in stone.