Update 2017/5: Teasenz now accepts Bitcoin!
Though it’s just a minor currency, it’s hot. Bitcoin has gone viral with many news updates spreading over the web every single day and now it has find its way to tea.
For those who aren’t familiar with big coin here’s a definition by Wikipedia:
Bitcoin is a peer-to-peer payment system and digital currency introduced as open source software in 2009 by pseudonymous developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money.Users send payments by broadcasting digitally signed messages to the network. Participants known as miners verify, timestamp, and record transactions into a shared public database called the block chain, for which they are rewarded with transaction fees and newly minted bitcoins.
So how does this relate to tea?
Since recently tea growers in India are working with a U.S-based online tea marketplace to explore the possibility of using digital currency bitcoin in order to avoiding heavy banking fees and to expand international business. Some merchaints facilitates tea purchases between small tea farmers and the beverage’s global connoisseurs, a form of online direct selling, and has signed up a number of independent tea growers in Assam, West Bengal and Bihar. This move is interesting.
For direct-selling companies , however, there are problems with setting up bank wires for the farms. Also, eCommerce business models features a built-in loss of 7 per cent. This figure represents the cost that has to be paid to use major remittance players and cover foreign exchange fees. Therefore more and more eCommerce stores are considering adopting bitcoin as an alternative payment system. Though tea business can definitely benefit from the great publicity by offering bitcoin as a payment method, they should at the same time be careful and keep an eye on political developments.
Take for example today’s news article from Reuters reporting that China’s biggest online marketplace, Taobao, will ban the sale of bitcoins on the heels of a government crackdown against the virtual currency to plug a potential gap in its tight controls on capital flows.
In the past, Bitcoin has also been a subject of scrutiny due to ties with illegal activity. In 2013 the FBI closed down the Silk Road online black market and seized 144,000 bitcoins, which was US$28.5 million at the time.However, the US is currently considered to be Bitcoin friendly compared to most other governments. In Europe, the European Banking Authority has warned that Bitcoin still lacks consumer protections; theft of bitcoins can occur, and chargebacks are impossible.