Decentralization Dream: Living in a City Only with Bitcoin-Friendly Stores and Merchants
Bitcoin (BTC) supporters and crypto enthusiasts have been thinking for a long period of time in a city or a world with Bitcoin working as a means of payment.
Although this is something that seems attractive for many of the crypto enthusiasts, it is far from being a reality.
Could We Live In A Bitcoin City?
According to Breaker Magazine, a group of students from Ljubljana at Stanford University gave a presentation titled: “Growing ‘Bitcoin Cities’ Across the Globe.”
In this world in which just Bitcoin is accepted, the virtual currency does not share its market with fiat currencies or credit and debit cards. This is a city just for Bitcoin. Users would be able to pay for a coffee, see a movie or just get a new haircut paying in BTC.
Although the number of ATM’s that offer Bitcoin continues to grow around the world, there are just a few “crypto only” shops around the world. In general, if merchants accept Bitcoin they also accept credit cards and fiat currencies. That means that the world seems not to be ready to start using the most popular digital asset.
Back in June 2018, a new pilot program in Ljubljana launched a “Crypto Shopping Mall.”
This place as also called Bitcoin City. This could be one of the first large-scale, functional and working Bitcoin ecosystems around the world. In this place, not only a few shops accept virtual currencies, but there is an entire network of merchants accepting digital currencies. Users can simply go with their favorite digital currencies and start purchasing goods and services.
Indeed, Miro Cerar, the Prime Minister of Slovenia, has purchased a cup of coffee using virtual currencies.
The author of the article at Breaker Magazine, Jeff Wilser, was able to see the Bitcoin city by himself and experience it when he did a trip to Ljubljana. About it, he says:
“I’m standing at the top of a skyscraper in Ljubljana, gazing at the panoramic scene below. The Alps are in the distance. Between us and the mountains are countless shops, restaurants, warehouses, office buildings, hotels, and parks. It’s more than a “shopping mall.” It’s an entire city.”
During his visit, he was able to talk with Jože Mermal, the chairman of BTC. He said that they have a lot of technical talent in Slovenia and they wanted to attract more of it. BTC City is just a way to build an entire ecosystem, creating an environment where individuals can go shopping, find something they were searching for, or even go to the theatre and pay in Bitcoin.
There are 70 bar, restaurants, a barbershop, a pharmacy and a water park, among others. There is a blockchain Think-Tank in the city, a cryptocurrency mining rig and also three Bitcoin ATMs.
Mermal explains that there are four hundred and fifty shops and more than 3,000 companies located in the city. However, if there is no culture, art, and innovation, the city has no soul. For him, blockchain technology is changing the soul of this city.
It is worth mentioning that the BTC company he runs is not the same as Bitcoin City. BTC stands for Business Trade Center and is a warehouse company founded back in 1954. The name changed over the years to “Business Transport Center,” “Business Transit Center” or even
“Blagovno Tragovinski Center.”
Thus, it seems that BTC is moving towards Bitcoin City. It is attracting 21 million visitors each year and a lot of people think that BTC makes reference to Bitcoin.
There is a downside point about this city. Using cryptocurrencies in the Bitcoin City requires users to download an application and use a specific wallet called Elipay. This will make things easier for merchants that have the same system.
The decision to use Elipay is related to the fact that the company BTC partially owns the company Eligma, the owner of Elipay. The main intention is to compete against other merchant processors such as GoCoin, Cryptopay, and Bitpay.
When Mr. Wilser tried to start using his digital assets, Eligam’s CEO, Dejan Roljic and his team, explained that he would have to answer a few questions that the lawyer would make. The lawyer had to see Wilser’s passport and meet in person with each applicant due to regulations imposed by the Slovenian law.
This is clearly something that does not seem to be related to the “frictionless” system proposed by virtual currencies and Bitcoin. Indeed, it seems like an airport security procedure. Thus, this is a clear barrier to adoption, and Roljic knows it. In the future, the intention is to make things easier by creating a skype call with the lawyer rather than making an official visit to the building.
The banking industry seems to work in an easier way, it is not necessary to talk with any lawyer in order to open a bank account or receive a credit card.
One of the things that Wilser mentions is that the company would have to flag some transactions. For example, a $10,000 transaction to purchase a TV would just receive a red flag. However, if a “writer” makes 50 transactions of 10,000 Euros in just a month, the lawyers might have to make a call and ask how the writing is going on.
Wilser wrote about this situation:
“He laughs, and we all chuckle at the absurdity of a writer having large sums of money, and I get that Eligma is simply complying with the law – they have little choice – but the setup strikes me as troubling.”
If Bitcoin wants to reach a larger number of users around the world, it will have to avoid having these kinds of problems. This regulation goes against the main proposal of virtual currencies, and the original anti-regulation ethos.
Moreover, Elipay could eventually track the assets used by individuals in this place and know that some objects purchased could have depreciated. Thus, they can create a loyalty program and integrate it with other platforms, eventually, use artificial intelligence and more.
It is very interesting to have a cryptocurrency city that allows individuals to start using Bitcoin and fight against the current banking system. But the entire process to be able to start using these virtual currencies at the BTC city is clearly not encouraging.
There are many issues that must be solved before it is possible for digital assets to expand around the world. That means that regulations will have to be more friendly for these kinds of initiatives. Some countries such as Malta or Switzerland are trying to implement flexible regulations for crypto companies and firms to be able to invest and grow in these regions.
Nonetheless, the initiative at Bitcoin City is very interesting and could be improved in the future.