Bitcoin Explained, For Meeting Planners

bitcoin

What Is It?

Bitcoin is a decentralized, digital “cryptocurrency” powered by a vast computer network. It’s been recognized as a currency by the European Union, yet China recently closed cryptocurrency exchanges serving its local markets—where more than 80 percent of the world’s Bitcoin transactions and financing activities were taking place until recently. Pan Gongsheng, vice governor of the People’s Bank of China, told a financial meeting over the weekend that Bitcoin is a bubble waiting to burst, like “tulip mania” in the 1600s and the dot-com crash.

Why Do We Need It?

Blockchain, the technology that underpins it, is “a machine for creating trust,” as The Economist puts it. It lets people who do not know (or trust) each other execute a secure transaction. It does this for a small fee, but without having to go through a bank or other central authority.

Why is this important? Meeting planners can potentially save money by paying in Bitcoin. Think of every transaction where a planner would typically pay via credit card or, say, PayPal. If a hotel accepts Bitcoin in payment, planners could potentially negotiate better prices by reducing the cost of fees third parties typically charge for processing transactions. Similarly, savvy planners can potentially use price fluctuations in Bitcoin to their advantage.

Can We Trust It?

The Economist says yes: “Bitcoin’s blockchain ledger prevents double-spending and keeps track of transactions continuously…Any attempt to tamper with any part of the blockchain is apparent immediately.” Bitcoin’s risk is its price volatility.

How much does the value of Bitcoin fluctuate?

In July 2010, 1 Bitcoin was worth 8 cents. After a rapid rise in value in 2013, the cryptocurrency’s value more than halved by mid-2015. A year ago, a Bitcoin was valued at about $765. Today, one Bitcoin is worth nearly $11,500. There are 16,720,225 Bitcoins in circulation.

Who Accepts Bitcoin?

The list grows longer by the week. Many hotels now accept Bitcoin—as do some casino slot machines. Bitcoin.travel has one of the most comprehensive lists of businesses that use Bitcoin, according to Forbes. It offers accommodation, apartments and attractions around the world. Expedia accepts Bitcoin payment through a partner, Coinbase. Expedia’s website states, “To complete your booking, you will be re-directed to Coinbase’s website, where you will see the total cost of your booking in Bitcoin, based on an exchange rate set by Coinbase. The Bitcoin price for your booking will remain valid for 10 minutes. If you do not initiate a payment during this time, the Bitcoin exchange rate will be updated and the Bitcoin price for your booking may change.”

OwlTing, a Taiwanese technology company, announced today it has launched the world’s first blockchain hotel management service. It plans to be in 30,000 hotels and hostels in the United States, Taiwan, Japan, Malaysia by 2019. Among other services, the software supports PayPal, Stripe, WeChat, Alipay, Apple Pay, Bitcoin and “other cryptocurrencies in the future.”

How Can Bitcoin Be Acquired?

The easiest way is use Coinbase’s app, which lets anyone trade in Bitcoins. A much harder way is to become a Bitcoin miner, which now requires purchasing custom mining hardware. Mining is actually the process of verifying other Bitcoin transactions, which users are rewarded for. To be worth it, mining requires a powerful gaming computer, says Wikihow.com.

The Bottom Line Here?

Be aware of Bitcoin, but beware.