By Courtney Trenwith
Start-up in Business Bay is believed to be the first UAE retailer to accept the digital currency
The Pizza Guys is believed to have become the first UAE outlet to accept peer-to-peer payment system bitcoin.
The Business Bay shop in Dubai has carried out two transactions with the digital currency since adding it along side credit card and cash payment systems five days ago.
UAE founder of the New York pizza chain, Rami Badawi, told Arabian Business he was willing to take on the risk of the volatile bitcoin in the hope of seeing it become more widely used, which would in turn make it increasingly viable.
“Right now it’s extremely volatile so people are unwilling to adopt it but I think the more people that adopt it the more likely it will be feasible to use.
“Our approach is that right now the volumes will be at a level that we can absorb the risk ourselves.
“We don’t anticipate an overwhelming number of people paying with bitcoin but if it does get to that point – we’ve set a daily limit – we’d have to look at alternatives, maybe pricing bitcoin instead of converting from bitcoin to dirhams.”
Badawi has set a AED1000 ($272) daily limit but does not expect to reach that anytime soon.
He is hoarding the bitcoins his business receives to see where their values goes in the future.
“I do believe in bitcoin and I think when people stop and think about it, any currency these days gets its value from someone – the government - who says what it’s value is,” Badawi said.
“In [the case of bitcoin], it’s an algorithm that decides what the value is. It’s [also] self-limiting so there will only ever be 21 million bitcoins, so you’re never going to have a case where, for example, in the 2008 financial crisis part of the what led to that was a lot of money essentially being printed and available to invest in any kind of asset and that caused a bubble.
“You won’t see that if bitcoin becomes widely accepted. It’ll be much more stable.
“I do, in a philosophical level, believed in it. I think the unlimited printing of money is dangerous; this is a step towards addressing that.”
Badawi said it had been easy to add bitcoin as a method of payment, with no infrastructure or technology required other than an app on his Android mobile phone.
The digital currency, introduced in 2009, is still rare as a form of payment but is growing in acceptance among businesses because it has no transaction costs, compared to 2-3 percent for most credit cards.
It has been criticised for its ties with illicit activity and several governments have acted against it.
China has restricted the use of bitcoin in exchange for the Yuan, while the US FBI last year shutdown an online black market and seized 144,000 bitcoins worth $28.5m.
Last month, the vice chairman of the Bitcoin Foundation, a trade group promoting the adoption of the digital currency, was charged by US prosecutors with conspiring to commit money laundering by helping to funnel cash to illicit online drugs bazaar Silk Road.
Charlie Shrem, who is well known as one of the bitcoin's biggest global promoters, also was charged with operating an unlicensed money transmitting business. He was released on $1m bail.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Correct me if I'm wrong but using the numbers presented above, (144,000 bitcoins worth $28.5m), one bitcoin is worth approximately $198 and The Pizza Guys say they have already had two transactions using the virtual currency?
Each of those is one hell of a pizza order if that's the case...
In New York City, it is the taxi driver. In Dubai, it is the pizza guy. Both financial advice are similar in nature and carry the same weight; bupkis.
Jonnie, you can pay a fraction of a bitcoin.
1 bitcoin is actually close to 800$ currently....but 2 transactions mentioned does not mean 2 bitcoins spent...transaction amount could be 0.01 bitcoin....usually transactions in bitcions are mili bitcoin....
Each bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.
Bitcoin (BTC) which is a digital currency was first described in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it an anonymous, peer-to-peer, electronic payments system. Bitcoin creation and transfer is based on an open source encryption protocol and is not managed by any central authority. The creation of new bitcoins is automated and may be accomplished by servers, called bitcoin miners that run on an internet-based network and confirm bitcoin transactions by adding codes to a decentralized log, which is updated and archived periodically.
Are we seeing the New World Order round the corner.
Jonnie, You can pay in fractions of a Bitcoin. Just like 1 British Pound can be divided into 100 pennies. Similarly a Bitcoin can be divided and you can pay in 0.1, 0.01 or even 0.0000001 Bitcoins (there can be 8 decimal places, I think). All you need is a smartphone with internet access and transaction happens quickly using your pre-installed free wallet APP. There is a very minor processing fee (which is way less than credit card processing fees of 2%+).