Starbucks Accepting Bitcoin – How This Could Increase Bitcoin’s Adoption

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Recently, we reported that the giant Starbucks may accept Bitcoin as a payment in 2019. This came as a result after the august news, where Starbucks said that people may convert digital currencies at Starbucks into U.S. Dollars. Cointelegraph & QZ accurately reported what Starbucks wanted to say with their announcement:

“Rather the exchange will convert digital assets like Bitcoin into US dollars, which can be used at Starbucks.”

Which let’s face it, its even better than the news that people interpreted. So, Starbucks may not accept Bitcoin – probably due to the regulations & volatility. Instead, they will offer their customers the chance to convert Bitcoin into USD and purchase coffee – if they want. Basically, they will act as a Bitcoin ATM – which will convert the digital currency into FIAT and then let the client decide if they want to purchase a coffee or not.

How Big Could This Be?

In a trip last year, I met a wealthy programmer in Haifa, Israel. I asked him if he knows about Bitcoin and what he is. He looked at me with a remorseful face telling : Yea, I used to own a couple of them in 2013. When I asked him why does he looks ashamed telling me this he answered me: Well, I saw that my local coffee place started accepting Bitcoin and was offering a 10% discount or any client that used Bitcoin to purchase coffee or other goods. I spend them all on coffee until November. I never knew how big it could get, for me it was only coffee money.

Starbucks stores have around 500 clients per day in all of their 27,000+ locations worldwide. That comes to a 13.5 million customers per day and with an average coffee price of $5 – $68 million in sales daily. Total per year? $25 billion in revenue, or more. Not everyone would use Bitcoin – as some people find it still hard to purchase a cryptocurrency or store it safely. But let’s say that 1% of their clients would use Bitcoin and exchange it for USD to buy a coffee. This will lead to a $250 million increase in market cap per year and also a stability for the market.

If Starbucks would decide to offer an incentive if people would exchange Bitcoin trough them and purchase coffee – let’s say a 5-10% – the number could grew a lot more. If 20% of the clients would use it, that would be an increase of $5 billion in market cap per year. And this would grow year by year by word of mouth.

What Starbucks should do so they could benefit from Bitcoin as a way of payment

  Make sure the exchange rates are acceptable. A 1% difference would be ok. A 2.5% or more would lead to people using other means of exchanging BTC to USD.

  Offer an incentive for people to exchange the Bitcoin at Starbucks – such as a voucher for a free coffee for exchanging higher amounts or certain percentages discounts at Starbucks goods.

  Negotiate a good fee with Bakkt – If Bakkt will exchange the Bitcoin for USD, its important not to have a high fee. The worst thing that could happen is a price lowered with 5%, paying the Bitcoin transaction fees and also a fee for converting those for USD.

  Make sure there aren’t any tax related issues to convert Bitcoin to USD in USA – If so, those would probably be solved if instead they would offer gift cards.This would probably lead to a lower volume of transactions, but it would be safer.

  Test the Lighting Network – Even though right now they would convert the Bitcoin to FIAT, they should also accept Lighting Network in a couple of stores across the country. The results could be amazing here and soon the biggest coffee chain in the world would see the benefits. Low fees, instant confirmation and probably hundreds of millions of dollars saved in fees. But it’s a long way until there, as Lighting Network isn’t live yet and it doesn’t have a way to exchange the funds directly to FIAT – as much as we know.

Increasing The Adoption

This would be a small step for Starbucks, but a huge one for Bitcoin. Not only it will increase the public interest for it, but it will also offer it more value. A currency’s value is given also by the places where you can spend it. By allowing their users to exchange their BTC to U.S. Dollars – Starbucks could pave the way for the worldwide adoption.

If an example would be set, more businesses would follow. Those won’t probably be as big as Starbucks and would work on the same principle as they plan to – but Bitcoin being accepted in all the major business as a way of payment could lead to a substantial increase in value and market cap. And in time, it would be as Milton Friedman predicted in 1999:

“The internet is going to be one of the major forces for reducing the role of government. The one thing that is missing is a reliable e-cash, a method by which on the internet you can transfer funds from A to B anonymously.”

He spoke here about a general internet currency. A currency that can be used in any country. If you’re an American and you want to visit Europe, you need to swap your USD to Euro. If Bitcoin would be accepted in all the large corporations and retailers – it would be way much easier to travel, pay for goods, send money internationally and many other things.

An increase in adoption would also result in a stability in price. If Bitcoin would reach to an almost equal supply and demand – the volatility would be reduced and we’d probably see daily 0.x changes in percentages. This could be done with major businesses accepting Bitcoin payments – and even with the small local ones, where crypto enthusiasts already started doing this.

Conclusion

Starbucks ‘accepting’ Bitcoin could lead to a new wave of adoption. A new wave that will increase cryptocurrency users as well as businesses accepting Bitcoin as a way of payment. But all of this relies on Bakkt creating a great system to exchange crypto to fiat in a matter of seconds, at a good rate with decent fees. If the fees would be as high as an Bitcoin ATM one – there would probably be no difference

Until Bakkt finish its product and we can see how safe & reliable it is, Starbucks as a way to exchange crypto to fiat is still a possibility, nothing guaranteed.


Source:  ZEROCRYPTED