Bitcoin tipping in the food service industry: experiment in progress

[Peter R]

Purpose: to promote bitcoin within the community, and to quantify its adoption rate by bartenders, servers, and food delivery persons when presented with paper wallets unlocking approximately $20 of value.  

Apparatus: Bitaddress.org will be employed to generate a series of bitcoin paper wallets.  Each wallet will be loaded with approximately $20 of value, and the backside of each will be marked with additional information to help guide the recipient to make sense of what they just received.  It will also be clearly noted that funds not swept after 10 days will be revoked.  A photograph of each paper wallet will be retained to facilitate recovery of unclaimed bitcoins.      

Methods: Paper wallets will be given out to participants (e.g., bartenders, servers and food delivery persons) whenever I tip them.   All participants in this experiment will be appropriately tipped in dollars for services rendered in addition to receiving a bitcoin paper wallet.   The bitcoin address of each paper wallet tipped will be posted to this forum thread along with the date and location where given.  The blockchain will be periodically inspected for movement of funds, and those not claimed after 10 days will be revoked.  Upon enrolling a sufficient number of participants in the study, and allowing the final 10-day period to elapse, the adoption rates will be summarized.  

Results (experiment is in progress):

DATE_GIVEN	|   BITCOIN_ADDRESS	|   AMOUNT	|   VENUE(1)	|   TIPPED_TO	|   GENDER	|   REDEEMED
03-Jan-2014	|   1847EXesCGn9k7fcR9tBnYFfKSR8ssLCcY	|   0.025 BTC	|   Chambar	|   Server	|   M	|   NO
09-Jan-2014	|   1GvTgseFT7kvgyMvFTyYoZAwkJoz9VMkcq	|   0.025 BTC	|   Old Town Cafe (2)	|   Server	|   F	|   NO
10-Jan-2014	|   1PwiGiSuFRabWXLUwBYaeQtmugjaLhNRHS	|   0.025 BTC	|   Cactus Club Cafe	|   Server	|   F	|   NO
11-Jan-2014	|   1L22MWVzmGEf36SHLPnZjZ6C1wZxVMzFaW	|   0.025 BTC	|   IHOP	|   Server	|   F	|   NO
11-Jan-2014	|   1Mn2PSAMP4aDrKSsSLkECAHTCSjW1Nzy2B	|   0.025 BTC	|   Cellar Jazz Club	|   Server	|   F	|   NO
26-Jan-2014	|   1Bkh1bScfbhFkgmwqzgCXbWJs76yRH3oLr	|   0.025 BTC	|   Vij's	|   Server	|   M	|   ?

(1) All venues within Greater Vancouver unless specified
(2) Bellingham, WA


Figure 1: Example paper wallet




A review of prior work in this field suggests the possibility of encountering animosity should the experiment be carried out with a potentially flawed methodology:  http://www.reddit.com/r/Bitcoin/comments/1qs62r/i_just_got_banned_from_my_favorite_restaurant_for/

[EndTheFed321]

sounds good let us know how it goes.

[mindfulmojo]

All participants in this experiment will be appropriately tipped in dollars for services rendered in addition to receiving a bitcoin paper wallet.  

As long as you do this it will be more than fine.... I'm a long time waiter. We would freaking love it... It would be a bonus. For those that don't know, 15% to 20% of the bill is considered acceptable for good service. This is because we don't make a living wage in the US. Usually far less than minimum wage.

[Andaloons]

I'm another long time server/bartender.  I think this is a good idea.  Restaurant industry people like cash and anonymity.  Also, the industry is a VERY large sub-culture and word would spread pretty far.

[lnternet]

You should attach a leaflet with information / links to resources to increase the chance of adoption.

Also make sure you explain what you are handing out at the time of handing it out. Without trying to insult anyone, many waiters and pizza deliverers are not tech-savvy or spend-an-hour-to-find-out-about-something type people, they are likely to see it as advertisement and trash it, or to just put it on their stack of other papers and forget about it.

[Lethn]

With internet on this one, I believe somebody already tried it and they managed to piss off a couple of the staff there by trying to give them Bitcoins, just be sure to have some dollars on hand if your experiment fails

[mindfulmojo]

Did you read the OP?

All participants in this experiment will be appropriately tipped in dollars for services rendered in addition to receiving a bitcoin paper wallet.

[Lethn]

Oops, sorry, it was in italic as well, I'm having my coffee now so I noticed it >_<

[mindfulmojo]

It's all good... I know you were looking out for the waitstaff which I definitely appreciate...

[justusranvier]

Back in December 2012 I ate at a restaurant and asked the server if I could give him his tip in bitcoin. He had an Android phone and had no problem installing the Blockchain.info wallet. At the time the exchange rate was right around $10 so I gave him 1 bitcoin even.

Fast forward about 6 months and I happened to be there again and he remembered me as the guy who had given him a "$200 tip". Exchange rate at the time was ~$120, but he didn't mind that it had gone down slightly after having gone up so high.

Last time I talked to him he said he planned on holding it for a while longer.

[zeetubes]

I've done this a few times now with bartender/waiters and I've never met anyone yet who wasn't fascinated. But I only do it if they have an android phone. I get them to download a copy of mycelium and then I transfer to their wallet. If the bar is quiet then both customers and staff alike gather round to watch and ask questions etc. I also make sure I explain all of the usual caveats. Just do it!!

[Peter R]

Thanks everyone for their feedback on this experiment.  The consensus was that this is a worthwhile experiment and that it is ethical provided that the participants are properly tipped in dollars in addition to receiving a bitcoin paper wallet.  As stated in the "Methods" section, this was always the plan. 

I printed out my first set of paper wallets, loaded each with 0.025 BTC, and tipped the first one at Chambar in Vancouver yesterday evening (https://blockchain.info/address/1847EXesCGn9k7fcR9tBnYFfKSR8ssLCcY).  I have updated the OP to reflect our first data point; it's been 20 hours and the funds haven't yet moved.

I am quite eager to see the statistics on the percentage of these wallets redeemed within the 10 day window.  My hunch is less than 10%, but we'll have to wait to find out for sure....

[Peter R]

I've handed out two additional bitcoin 0.025 BTC paper-wallet tips (refer to the original post for details).  One to a server at the Old Town Cafe in Bellingham, WA (https://blockchain.info/address/1GvTgseFT7kvgyMvFTyYoZAwkJoz9VMkcq) and the other to a server from Cactus Club in Greater Vancouver (https://blockchain.info/address/1PwiGiSuFRabWXLUwBYaeQtmugjaLhNRHS).

The first paper wallet tip was given out on January 3.  There are two days left until I sweep these funds back to an address under my sole control. 

I printed out another set of 3 wallets (loaded again with 25mBTC) and hope to hand out 2 of them this weekend.  I wonder how many of these paper wallets will get used....

[lnternet]

Awesome to see you go ahead with this.

You can pay less fees on your tx btw, a fifth of that is enough, assuming you don't do this intentionally.

[Carlton Banks]

Back in December 2012 I ate at a restaurant and asked the server if I could give him his tip in bitcoin. He had an Android phone and had no problem installing the Blockchain.info wallet. At the time the exchange rate was right around $10 so I gave him 1 bitcoin even.

Fast forward about 6 months and I happened to be there again and he remembered me as the guy who had given him a "$200 tip". Exchange rate at the time was ~$120, but he didn't mind that it had gone down slightly after having gone up so high.

Last time I talked to him he said he planned on holding it for a while longer.

I printed out another set of 3 wallets (loaded again with 25mBTC) and hope to hand out 2 of them this weekend.  I wonder how many of these paper wallets will get used....

Using a redeeming period is an interesting way to do it, you'll get people with kind of the opposite story to justusranvier ("had 0.025 BTC back in 2014, and I didn't take it before the guy took it back! That's $200 now!"). That kind of emotionally charged story will spread the general sense of "get on board, train's leaving with or without you".

[kjlimo]

I have people leave them in geocaches.

Another thought is just offer the choice: want $5 or $20 bitcoin?

[Frost000]

I'd love to keep track of these results as well. I'm not quite ready to tip in BTC just yet (don't have enough to throw it around), but I'd love to do this one day. I'll definitely try to talk up BTC next time I deal with a waitress/bartender/etc.

[Kungfucheez]

Thanks everyone for their feedback on this experiment.  The consensus was that this is a worthwhile experiment and that it is ethical provided that the participants are properly tipped in dollars in addition to receiving a bitcoin paper wallet.  As stated in the "Methods" section, this was always the plan.  

I printed out my first set of paper wallets, loaded each with 0.025 BTC, and tipped the first one at Chambar in Vancouver yesterday evening (https://blockchain.info/address/1847EXesCGn9k7fcR9tBnYFfKSR8ssLCcY).  I have updated the OP to reflect our first data point; it's been 20 hours and the funds haven't yet moved.

I am quite eager to see the statistics on the percentage of these wallets redeemed within the 10 day window.  My hunch is less than 10%, but we'll have to wait to find out for sure....

Good on you then, I am willing to support you so long as you give the server the option or both as you stated. Please don't try and force a server to accept btc if they want to  

Curious to see what happens with this as well, keep us informed

[testerx]

Just looking at the paper wallets I would assume 90%+ of people would be too confused to bother trying to figure it out for $20.  I know if I handed this to my mom or dad they'd have no idea what to do, and if I gave it to my girlfriend she wouldn't bother to figure it out either. 

[Peter R]

I handed out two more 25mBTC tips this weekend: the first at an IHOP (https://blockchain.info/address/1L22MWVzmGEf36SHLPnZjZ6C1wZxVMzFaW) and the second at a jazz club in Vancouver (https://blockchain.info/address/1Mn2PSAMP4aDrKSsSLkECAHTCSjW1Nzy2B) (see OP for more details).  

Thanks everyone for your additional thoughtful comments.  I’ll address a few below:

You should attach a leaflet with information / links to resources to increase the chance of adoption.

Just looking at the paper wallets I would assume 90%+ of people would be too confused to bother trying to figure it out for $20.  I know if I handed this to my mom or dad they'd have no idea what to do, and if I gave it to my girlfriend she wouldn't bother to figure it out either.  

I don’t think we necessarily want to maximize the rate at which people sweep these funds.  Of course I could make each paper tip $100 and help everyone download the Blockchain.info app to their phone, and then sweep these funds to a private address for them.  If I hired a handsome guy to push for this with a charming smile, then I’m sure we’d have close to a 100% sweep rate.   But I think making it “too easy” or offering “personalized help” would be counter-productive to this experiment because:
     (1) the funds allocated for this experiment would be drained much quicker, so less paper wallets would be given out in total,
     (2) the “adoption rate” I calculate would be biased based on how much the server likes me (it would lose its meaning),
     (3) like Carlton Banks mentioned in regards to not claiming the funds within 10 days, this "emotionally charged story will spread the general sense of 'get on board, train's leaving with or without you.'"  

Instead of pushing bitcoin on the participants, I want to be very neutral and simply place these paper tips along with the cash tip on the table as I leave.  If the server uses it, then maybe we’ve created a new bitcoin adopter.  If the server doesn’t use it, then I get the funds back to give to someone else and perhaps we still triggered a conversation about bitcoin.  Win-win I think.  Also, by being neutral like this, the results of this experiment over time will also be meaningful.  If I can continue this experiment into this summer, it will be very interesting if we can measure a statistically-significant change in the adoption rate over time.  

That being said, I may be willing to modify the note that I wrote on the backside of each wallet (refer to the figure in the OP).  I debated about adding details like "download a Blockchain.info wallet app for your smart phone," "spend your coins at Gyft," or "gamble your funds away at just-dice.com" but I decided to simply leave a single link to bitcoin.org.  This may or may not have been the best decision.  

You can pay less fees on your tx btw, a fifth of that is enough, assuming you don't do this intentionally.

I used my Blockchain.info app on my iPhone and there’s no way to control the fees (unlike the blockchain.info web-wallet).  Unfortunately, due to Apple’s restrictive bitcoin policies, Piuk does not want to update the app to make this much needed improvement, as he is worried about it getting pulled from the App Store upon a re-review.