Exploring Bitcoin Payments at Quartz
Since Quartz added local currency support to our payments page for the UK, India, and Japan, I’ve been thinking about how Bitcoin could help Quartz offer subscriptions in more parts of the world.
Bitcoin is a cryptocurrency that can be exchanged over the internet without a bank, customs agency or credit card corporation. Over ten years old, bitcoin appears to be making space for itself in larger economies. Just last week, Germany and South Korea passed legislation recognizing bitcoin trading as an industry to be taxed and regulated.
If Quartz were to accept bitcoin payments, we could offer subscriptions to Germans and South Koreans without needing to develop interfaces for each country’s currency. In other words, we could treat bitcoin like a global currency.
However, there is some debate about whether bitcoin should be thought of as a currency or instead as a store of value like gold. What makes bitcoin similar to gold is that it has a fixed supply. Just like the amount of gold we can extract from the Earth (and maybe asteroids) has a physical limit, only 21 million bitcoins can ever be mined from the algorithm that controls bitcoin distribution.
The bitcoin algorithm currently allows 12.5 bitcoin to be mined each day. Every four years, the daily amount of bitcoin distributed to miners halves, so once the next halving occurs, 6.25 bitcoins will be mined each day. Halving makes bitcoin scarce and distinguishes bitcoin from fiat currencies, as governments have the authority to mint new bills, which increases inflation and reduces a currency’s buying power over time.
In 2017, several months after the 2nd halving, demand for bitcoin increased after the supply decreased, and the price for a single bitcoin rose from about $1,100 in April to $20,000 by mid-December. Intense price volatility followed, and bitcoin eventually crashed to $3,200, before retracing ranges from $6,000 to $12,000 in the last year.
Bitcoin’s volatility remains a challenge for businesses and greater adoption. For instance, if Quartz were to accept bitcoin payments, Quartz would need to decide whether to convert bitcoin to dollars during a subscription purchase or to accept bitcoin directly from our readers. Accumulating bitcoin reserves would expose Quartz’s business to price fluctuations but could provide benefits over time from bitcoin’s halving as other currencies potentially inflate.
Another challenge for accepting bitcoin is the licensing process. As a business in New York City, Quartz would need to be approved for a BitLicense. Getting approved for a BitLicense requires the state to verify that a business refrains from committing financial crimes and responsibly handles its customers’ funds. The process can take months of documentation and audits, and approval is not guaranteed.
Finally, there is some UX to think through. The Quartz subscription payment page has accumulated more buttons as the company integrates different payment methods. We’ve explored adding services like PayPal, and any design solution that includes bitcoin needs to balance giving readers choice without overwhelming them with those options. Stay tuned for further developments as we continue to explore.
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