Everyone has heard of bitcoins, but there are still few who understand the concept. The technology block chain and the cryptocurrencies they are an innovative space in the financial industry; Nevertheless, its complexity makes it difficult to use among entrepreneurs. This article is intended to serve as basic guide to know the concepts and exemplify how they are being used in the hospitality sector.
- 1.- Blockchain or blockchain technology
- 2.- What is bitcoins and how cryptocurrencies work
- 3.- Smart contracts and tokenization
- 4.- Pay with cryptocurrencies in restaurants
- 5.- Original uses of blockchain technology in restaurants
- 6.- Training and advice on cryptocurrencies for restaurants
1.- Blockchain technology or block chain
To understand what a bitcoin, the first step is to become familiar with blockchain technology. This is a cryptographic technique that link different data sets using secure codes and timestamps. Each of these sets is called a block. Related blocks reference each other preventing anyone from altering the chain; Or what is the same, the information transmitted.
Although simple in general terms, the technology block chain makes use of state-of-the-art mathematics and novel computing solutions. The advantages that this system provides compared to other data communication methods are unbreakable security, democratization of protocols and decentralization of audits (check).
2.- What is bitcoins and how do cryptocurrencies work??
Employing the ability to transport data from the block chain, a logical step was to save information about financial transactions in the blocks. Based on this concept, bitcoin in 2008, the first cryptocurrency.
Bitcoin it is a digital asset that can function as a store of value and fiat money. In the first case, the existence of a limited reserve makes it a non-inflationary asset, ideal for preserving investors' wealth. Its function as a currency also brings advantages, this digital service is more like cash: person-to-person transactions, Privacy, as well as the practical absence of commissions and latency justify this comparison.
Bitcoin is just one of the many cryptocurrencies in the cryptocurrency market. BTC thus joins Ethereum (ETH), Litecoin (LTC), Tether (USDT) O Currency (XRM). This is a limited list, some cryptocurrency brokers collect more than a thousand and the total estimates are close to the 5000.
Each of these cryptocurrencies has different properties that makes them more or less interesting depending on the circumstances. For example: Currency (XRM) it is impossible to trace so it is used to make private purchases on the network, Tron (TRX) allows international transfers of any amount without commissions, Nano (NANO) allows you to execute confirmed transfers in 0.14 seconds, y Euro Tether (EURT) is a stabilizing cryptocurrency pegged to the euro used to hedge against volatility.
Each cryptocurrency has its niche.
3.- Smart contracts and tokenization
Another application of the technology block chain is the possibility of creating contracts that automatically verify if the clauses of the same have been fulfilled. They are logic programs of the type «if A, then B ». Ethereum, besides being a cryptocurrency, allows you to create this kind of contracts.
Tokenization is nothing more than participation in one of these contracts. The level of abstraction of these tools can mislead newcomers, let's look at an enlightening example:
A restaurant establishes an affiliate program through which diners can recommend the place to friends and family and, if they make a drink, get a bonus in the rewards program of the app brand mobile. The conditions for the award of the reward would be the smart contract, while the reward itself would be the token the plug.
What is revolutionary about the system is that he token becomes fiat money. The owners of the token they can trade it and exchange it for other cryptocurrencies and even legal tender. Some users will want to accumulate as many tokens to redeem them in the app mobile, while others may prefer to have cash to use wherever they want. Thus a open market. If the interest aroused by the token it is very high, the exchange price is liable to skyrocket.
A special kind of token, currently booming, are the NFT o tokens non-expendable. Is about tokens unique used to safeguard exclusive rights to works of art, although they are also applicable to real estate ownership and other tasks.
4.- Pay with cryptocurrencies in restaurants:
4.1- Cryptocurrencies as a payment method in Spanish restaurants
Avoiding the costs of payment processors by cutting the middleman is one of the great promises of cryptocurrencies. further, the high possibility that the asset will revalue encourages hoteliers to adopt this means of payment.
And Ibiza, the restaurant Inside has been the island's pioneer when it comes to accepting various cryptocurrencies (bitcoin, ethereum, ripple, 0x y stellar). According to those responsible, Miguel Sancho, Andrés García-Prado and David de las Heras have done it to help their non-European clients, who no longer need to purchase the local currency; adapt to a future cashless society, where cryptocurrencies are leading the charge; and increase the security and speed of transactions while fighting fraud and abusive commissions.
There are still few clients who pay with cryptocurrencies, they comment from the Bitcoin Rock Café by Gustavo del Río, David Varo and Antonio Vázquez, which opened its doors in August 2020 in Vigo. The olive restaurant, inaugurated during the brief respite that the pandemic gave last summer, resists thanks to the typical Galician products and the informative presentations on cryptoactives that they celebrate on Wednesdays in their meeting room. More and more curious people come to this thematic venue decorated with screens that broadcast the financial evolution of assets in real time. Some even use the cryptocurrency teller installed in the establishment or they pay directly to the digital wallet of the restaurant in some of the 1500 cryptocurrencies accepted there.
4.2.- Cryptocurrencies as a payment method in organized catering
The relationship between cryptocurrencies and the hospitality sector goes back a long way. One of the first purchases documented with bitcoins was made by Laszlo Hanyecz in 2010. He made it in exchange for two large pizzas from Papa John’s Pizza. What was then a milestone, a commercial transaction worth € 35 carried out entirely in bitcoin, today is a meme: the 10.000 BTC that were used as payment would be worth 300 million euros in today's market. Such is the repercussion of this event that the 22 May is celebrated on Pizza Day bitcoin.
Slow adoption has been greatly energized in the latest bull market. However, this is still estimated around 0.9%. Now, many organized catering chains are probing the world of cryptocurrencies, encouraged by the hopeful news from Elon Musk, Cathie Woods and even those responsible for Visa.
McDonald’s Y Starbucks have been part of the pilot test of the commonly called electronic yuan (a Chinese CBDC). In Latin America, McDonald’s has also accepted bitcoins through third party services: Dingo in Venezuela and Bitrefill In colombia.
Dingo has also helped Pizza Hut Y, under the Venezuelan hyperinflationary situation, Burger King has come to accept BTC directly. In Canada KFC accepted cryptocurrency temporarily, Subway does the same in selected venues, since April 2021 you can pay with BTC at Starbucks using the app Baked, and Chipotle recently designed a promotional campaign in which they accepted bitcoins.
These contacts at the local level are the germ of the global expansion that we will see, probably, in the next cryptocurrency cycle. However, there are already large companies with a much more aggressive strategic line. Three examples:
- The British-Dutch company Takeway.com established in 2017 a cooperation with the payment processor BitPay. Takeaway recently acquired the French subsidiary of Just Eat, dominating the mobility market in Central Europe as Just Eat Takeaway.com N.V. In this way accept BTC in 15 000 establishments restoration of the region when processing reservations and orders for delivery.
- The Landry hotel group will offer payments via cryptocurrencies in more than 600 restaurants they control, including the brasserie Morton’s Steak House, and the seafood restaurants Bubba Gump Shirmp Co Y Joe Crab Shack.
- Muscle Maker Inc. will do the same with the brands it manages: Burger Bar, Superfit Foods, Maker Grill Y Healthy Joe’s. According to Michael Roper, CEO of the company, "To accept bitcoin it's a logical change for companies that want to stay relevant. The millennials they want healthy food, and giving them the option to pay with cryptocurrencies makes it easier for them to eat healthily ».
4.3.- Cryptocurrencies as a payment method in small restaurants
Muscle Maker brands are not the only ones that have wanted to orient their business towards younger consumers.
Atila Ajdinovski is the owner of the Monica’s Restaurant from New York (OF. UU.). The reason you accept bitcoins in your local it is because in this way attracts a younger clientele, wealthy and knowledgeable about new technologies. This provides the local with long-term recurring business., better profit margins and a higher table turnover rate than your local competitors.
The cost of payment processors' commissions is another reason for restaurants to accept various cryptocurrencies. We already know the case of the Rota Ibicenco, but with the abusive commissions of Hong Kong (up to five euros per transaction), the case of Okra Hong Kong by Max Levy is more blatant. This Japanese fusion food restaurant has started accepting BTC, ETH, XRP, BinanceCoin (BNB) y Binance USD (BUSD). Levy hopes that the 25% of customers use cryptocurrencies in their payments, which would translate into a saving about 5000 monthly euros.
Back in new york, the family pizzeria Helen’s Pizza offers exclusive discounts to those who pay with criptodivisas. Nicholas Kalcanides, the representative of the new generation who will take the reins of the business, proposed to channel part of the savings in commissions in the form of a discount for the client. The play is working like a charm for them.
The synergies that can foreseeably arise from cooperation between hoteliers and technology developers block chain it is such that some brokers (called exchanges in this ecosystem) they have been involved with interesting bets.
It is the case exchange Korean Bithumb, who has launched a self-order kiosk for retail businesses with support for cryptocurrencies. The Touch B kiosk range is specially designed for catering SMEs, where panels are very successful. In these ways, cafes and bars can pounce on the self-ordering technology so beloved in South Korea., while reducing costs, improve the efficiency of your operations and increase your business volume.
5.- Original uses of technology block chain in the restaurants
Earlier 2021 Patrick Hughes decided to sell his restaurants Scruffy Duffy’s Y Hellcat Annie’s located in the Hell’s Kitchen neighborhood, in manhattan (NY, OF. UU.). His offer captured the attention of the media as the asking price was 25 BTC u 800 ETH, about 1.5 millions of dollars. The interest aroused was of great help to him to revalue the restaurants in that last stretch of their useful life.
The meeting between the technology block chain and property management doesn't end here for the innkeepers. The tokens non-expendable or NFT open the possibility to diversify the products offered for the business, at the same time that the brand image of the company is reinforced in the face of younger consumers.
The confinements of 2021 they have resurfaced hobbies like collecting. Pokémon cards, sneakers and retro video games have seen all-time highs in recent months. One of the niches where the bidding has been stratospheric is the old McDonald’s Happy Meal toys.. Teddies TY’s Teenie Beanie Boos that accompanied the children's menu in the 2000 are now sold to 450 $.
The interest in collectibles has arrived, relentlessly, to the virtual field. Here NFTs certify original digital art in a medium with problems due to excess reproducibility. A) Yes, for the first time purely virtual art has reached millionaire amounts: Everydays: the First 5000 Days de Mike Beeple Winkelmann was auctioned for 69.3 million dollars at Christie's.
The turmoil caused by NFTs has not gone unnoticed by restaurants.
The French branch of McDonald’s announced through its Instagram account the launch of two NFT videos in which a Big Mac and McNuggest were represented with 8-bit aesthetics. Two days later two other works were unveiled under the hashtag #McDoNFT. These NFTs were offered as a reward to two contests held throughout the month. They were granted through OpenSea, a platform specialized in purchasing, sale, auction and exchange of tokens non-expendable.
Taco Bell, on the occasion of the return of its mythical potatoes to the menu, released five works inspired by the brand. For each of the designs of NFTacoBells five certified copies were made available. Pizza Hut Canada also published an NFT collection linked to the promotion $10 Favourites. Was minted 1 Byte Favourites and represented pizza slices with different toppings in digital format.
In any case, NFTs have not been relegated to large restoration operations.
The very young chef Logan Guleff, with only 18 years, knew how to see the potential of NFTs to offer unique experiences. With his ingenuity, he managed to sell a virtual dinner set in the sitcoms of the 80. It had the portal Rarible to close the transaction.
Meanwhile, Rare Pizza put in value the culture of the internet to offer digital art created based on the contributions of 300 pizza artists from around the world. Under the name NFToppings sold unique slices of virtual pizza on π Day (with both mathematical and gastronomic connotations) and pizza day bitcoin. Once again, Opensea and Rarible were the portals chosen for the distribution of the tokens.
Finally, Cordia Corp.. has verified the value of this asset at The Blind Pig restaurant in Las Vegas (Nevada, OF. THE), owned by Peter Klamka, CEO of Cordia. Now Klamka wants to combine NFTs with celebrity-associated ghost kitchens, another dynamic trend in the sector. The first project where the NFTs will have relevance will be in the restaurant Tasty by Carmen Electra in Los Angeles. The actress who played Lani McKenzie in The Baywatch will be the protagonist of virtual collectibles in the form of stickers, videos and pictorial art.
Klamka is positive about receiving these tokens: "I think NFTs are great for building buzz and attracting a young audience", which, according to the employer, is among the 14 and the 25 years. If this project is successful, from June they hope to also launch the rapper and actor's Feast Busta Rhymes, he Yummy by former golf player Holly Sonders and a project still fledgling with actress Denise Richards. In Cordia they continue to negotiate with American athletes and stars to launch these ghost kitchens with lines merchandising NFT associated.
6.- Training and advice on cryptocurrencies for restaurants and hospitality businesses
According to Marco Iansiti and Karim R. Lakhani, Professors of Business Administration and Management at Harvard Business School (Massachusetts, OF. UU.), accept payments in bitcoin is a reduced risk to a company's business strategy as the infrastructure and the cryptocurrency market are already well established.
If you have a restaurant and want to start charging in cryptocurrencies, it is convenient that when you go to renew your point of sale terminal, payment processor or integrated application ask the provider if they can be accepted bitcoins (or other cryptocurrencies) through the system. At best this will be a possibility, and at worst they will know how to direct you towards an extension with which you can achieve it.
parallel, if you feel comfortable with technology, can register your own wallet or digital wallet and start receiving P2P payments completely without intermediaries.
Regardless of whether you are prepared to use cryptocurrencies in your hospitality business or not, it is vital to be properly trained and advised on this ever-changing and constantly innovating world.
At the Diego Coquillat School we teach the Online Restaurants Course 4.0 whose objective is to know and identify the latest technological trends that change the way of working, both people and companies and the new paradigms that provoke changes in business models and in the evolution of restaurants; one of the main, the blockchain and cryptocurrencies.
Yes, besides you need personalized advice on the impact that cirptocurrencies have in the restaurant industry or want to implement this technology in your business, be sure to review the different online advisory and consulting services offered at Diego Coquillat Consulting.