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August 05, 2014, 09:31:34 PM |
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I helped kickstart the initial launch of the Bitcoin Fair in NYC and I would like to give an analysis of my findings regarding adoption in a physical marketplace.
As it stands right now Bitcoin is still quite new in the minds of the general public as most people don't take it seriously or still have a negative conitation about it from media headlines. It's obvious that it will take some time before the general public comes on board and get used to using cryptocurrency like how it took some time for credit cards. It's just that we don't have a marketing department like Visa.
The kickoff day for the Bitcoin Fair was a great success as much of the community came out to help support vendors that accepted btc.
First things first is that we have to understand that this fair has over 80+ rotating vendors each week that are not tech savvy at all as they are your general small business owner concentrating on their business and less worrying about crypto. 90% of the vendors take cash only and there's a reason for that as there are no fees and it just makes it easier without uncle sam taking a chunk from a tiny mom and pop stand.
The Vendor Problem:
Out of the 80+ vendors, only 20-30 or so signed up for accepting Bitcoin, the rest didn't bother nor cared for it. Reason why these 20-30 accepted btc was due to the fact they had a relationship with the fair owner advocating it. And for the potential publicity it could bring them. These people are still not our tech savvy business owners, but they are esstential to increasing adoption as they provide products/services that we seldom find in the BTC arena mainly food / artisanal products.
Now the question to the problem is, how do we increase vendor adoption?
** Envy **
From what I noticed so far is that any vendor that took BTC received more than normal sales during the Bitcoin Fair day as BTC users came out to help support those vendors. Any vendor that did not accept BTC technically lost a sale as most of the users I interviewed would approach a vendor to ask if they took BTC and if they didn't they would just walk away to their neighbor that did. This was an interesting effect as this happened enough times, the vendors noticed they were losing sales to their competition. From there I noticed that vendors that completely ignored it initially, ended up asking more info about Bitcoin and took it a bit more seriously eventually signing up for bitpay.
** Education **
Another major hurdle I noticed after vendors chose to accept BTC, was understanding how to use it. QR scanning to pay for something is quite foreign to most people. I had to educate a majority of these new vendors from the ground up without going much into the technical details. But once these vendors get the concept, they were pretty much sold on it. This required a face to face interation with them as they will 'always' have questions. Asking vendors to 'read' or 'watch' a video isn't really going to fly when educating newcomers.
** Support **
Currently Bitpay has a booth every Sunday at the fair now to help support vendors that run into problems with the platform. This is necessary as I noticed quite a few times a transaction would get stuck or someone sent an amount less than what was required due to the .0001 btc fee deducted from the users wallet. Now this just completely frustrates vendors as they end up wondering if they received the money or not. Sure they can look at the blockchain confirmations, but good luck on explaining that to non-technical folks on the spot. This is why its ncessary to have a 'support booth' at these types of events. If this happens enough times to a vendor, they will eventually drop the platform completely. Another idea is to get processors to negate these small amounts when they occur, with a threshold of course.
** Experimental **
Initially I came up with the idea of a vendor + user rebate system for the fair. Any vendor that received X amount of BTC for that day would get an addtional 5-10% extra BTC. And any user that spent BTC that day at a 'verified' vendor's address would also get a 5-10% rebate. This is only possible with crypto since we can see transactions on the blockchain, as doing it any other way wouldn't be easy. We weren't able to excute this approach as we had an extremely small budget to work with. So hopefully anyone that holds another similar event would try this approach if they have the funding for it. It definitely would increase adotoption, imo.
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Currently the Bitcoin Fair is still running every Sunday until October and I can see bitcoin accepting vendors dwindling if we don't keep the momentum going. The fair owner is willing to waive initial booth fees for Bitcoin companies or cryptocoin communities that would like to have a booth at the fair. This is to draw more community members out and to introduce newcomers to the space. So if anyone is interested in getting a free booth or want to throw a meetup at a booth, PM me.
A big thanks to Hester Street Fair / xCubicle / Bitpay / Bitcoin Center / APIcoin / yBitcoin in making this possible. This data and experience was definitely useful for launching another future event.
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