Five years ago, not many people knew much about cryptocurrencies or blockchain. Now, millions of people, businesses, and institutions around the globe invest in crypto, believing in its future. For them, crypto is a long-term investment.
During an exclusive interview with DailyCoin, Rogier Eijkelhof, the co-founder of Arnhem the Bitcoin City, said that cryptocurrency is not to be preserved; it should be regarded as money for everyday use.
Founders of Arnhem Bitcoincity are crypto enthusiasts that inspired hundreds of businesses and local people to start using Bitcoin in their daily lives. Bitcoin popularity was steadily growing in Arnhem from 2017 until 2020 when a regulation from the Dutch central bank came into force. To make Bitcoin thrive, Bitcoincity’s co-founder encourages people to use cryptocurrency for their daily purchases whenever possible.
Arnhem Bitcoincity is located in the Netherlands and has been known as the world’s most Bitcoin-friendly city. It was founded in 2014 by four crypto enthusiasts Patrick van der Meijde, Annet de Boer, Rogier Eijkelhof, and Otto de Voogd. Since then, many business owners in Arnhem were inspired to start accepting payments in Bitcoin, and the city came closer to being less dependent on banks.
Convincing Customers to Start Using Bitcoin
Eijkelhof’s interest in Bitcoin started to grow in 2012 when he read the revolutionary Satoshi white paper. In 2012 it was still impossible to buy anything with crypto, and that’s how the four friends thought it would be nice to make a change and start paying with Bitcoin — even if it was just for small things like coffee or beer.
“I’m very enthusiastic about Bitcoin, now even more than back in 2012. As I was learning about crypto, I also found out more about the financial system, and once I realized how messed up it is, I thought we need an alternative and cryptocurrency could provide it.” The initiative began with 15 small businesses accepting Bitcoin payments in May 2014. The first few were the most difficult to convince, Eijkelhof explains:
“At first we just approached business owners, however, some of them were associating bitcoin with crime and drug dealing. We explained that crypto is a new, free payment method, where you can use it to pay for regular things. You’re not locked into any kind of contract, the system is free to use, there is nothing to lose. People were very positive when they found out how simple it works and they got their money immediately, so there were no disadvantages in accepting bitcoin at all. We said we would bring the business new customers with monthly bitcoin meetups, which happen in a different new venue (bar, coffee shop, restaurant) every month. As bitcoin was receiving more attention, it got easier to get more merchants aboard.” Convincing a regular customer to install a Bitcoin wallet, where they have to secure the keys and often check about the currency exchange, was difficult. That’s how BitKassa was born — an easy-to-use, free payment processor for Bitcoins, that made it simple to accept payments and then get them transferred to bank accounts in euros.
“Of course we encourage people to keep their bitcoins instead of exchanging them for euros. In the end, a closed bitcoin economy is the best thing there is. But the reality for most business owners is that they have to pay all their expenses still in euros, so we did the conversion for them,” Eijkelhof says.
Everything was great in Arnhem up until legislation by the Dutch national bank in May 2020. Since then, whenever a company is converting crypto into fiat on behalf of third parties, it has to procure a license from the Dutch national bank. This involves huge costs as well as different legal measures.
The peak for the number of businesses and transactions processed with bitcoin was reached in late 2019: 145 businesses in Arnhem alone, plus online shops and services around Europe that made the total of 500-600 merchants.
Unfortunately, due to the new legislation, most of the businesses refused to accept bitcoin transactions. Currently, there are around 40 businesses in Arnhem, who are still accepting and keeping bitcoin payments.
Arnhem Bitcoincity was never a commercial venue, and the project was born because of the creators’ passion for crypto, they never made money from convincing others to use bitcoin.
Also, the four friends are against the regulation due to ideological reasons. Rogier explained:
“I think bitcoin exists to get rid of the third party and authorities. Now, in order to pay with bitcoin, we had to comply with this huge regulation.”
Ultimate Goal to Buy Groceries with Bitcoin
The ultimate goal (before the 2020 legislation) was to be able to do all financial transacting in Bitcoin — to live in Arnhem on Bitcoin alone. Before the legislation, it was possible; supermarkets, bakeries, coffee shops, restaurants, pubs, clothing stores, dentists, hairdressers, flower shops, car businesses, gas stations accepted Bitcoin. Now there are two supermarkets, a hairdresser, a flower shop, quite a few restaurants, cafes, bars, and lunchrooms, so you can still do a lot with Bitcoin, but not as much as in 2019.
The importance of Bitcoin is that it takes away the power and dependency from the big institutions, authorities, central banks, and brings the power and autonomy back into the pockets of the people.
“I’m now in charge of my own money, nobody can freeze, censor or block it, and that’s an incredible feature of technology. Many aren’t fully aware of this significant aspect of crypto, but with the ongoing trouble of euros and dollars, more people will start realizing the benefits. I see huge risks in the euro system, the inflation is already higher than people anticipated, and those who save euros will soon realize that their purchasing power is diminishing.
Even though they think their money in the bank account is safe, the value, in fact, isn’t. The actual purchasing power is going down. The more this will trigger people, the more they will accept alternatives like Bitcoin that are a great solution to protect themselves from the unlimited money printing that is done by the central banks,” Eijkelhof clarifies.
How to Help the Crypto Economy Thrive
The co-founder of Arnhem Bitcoincity said that it’s difficult to convince Bitcoin enthusiasts to actually use crypto and pay with it because the mindset of most Bitcoiners is “I’m not going to spend Bitcoin, I will hold it because it will value even more later on.” Eijkelhof believes it’s more productive to spend crypto, instead of just holding it for years:
“I think if everyone is holding their Bitcoins, then Bitcoin isn’t going anywhere. For cryptocurrency to make sense, you have to use it and bring it into practice. I spend euros on Bitcoins and then later I spend Bitcoins in the shops. Most of the time it gives me more groceries or whatever I’m buying than if I was holding on to euros and spending them. So I always save money by spending Bitcoins instead of euros.” The role of Bitcoin is ultimately up to the user, however, still the reality for many people is that Bitcoin is seen as a tool to procure more fiat money. The real purpose of Bitcoin is not to get more euros or dollars — it’s to escape from fiat.
Eijkelhof suggests that instead of buying groceries with cash, you should buy them with Bitcoin and when you get home, buy more Bitcoin with this cash you didn’t spend in the supermarket. It’s as simple as it sounds and helps the Bitcoin economy prosper.
“When people ask, what is your exit plan, when are you going to sell the Bitcoins? I always say: No, you’ve got it all backward, Bitcoin is my exit plan, I’ll sell all my euros and Bitcoin is the end game. I want to help people understand that Bitcoin is not just a hype that will blow over. I think that holding euros is a bad strategy because of the inflation and the currency’s value is going down. So you’re better off moving into Bitcoin now than waiting and holding the fiat currency.” There are many more cities considered crypto-friendly. Most of them are still based in Europe and the US but the list also includes Melbourne, which adapted cryptocurrencies relatively early.
On The Flipside
- Even though more people are aware of cryptocurrency, its purpose, and its use, the number of people using crypto for daily payments is still relatively low.
- Crypto is here to stay, especially since big institutions are also showing strong interest in it; the hope is that cryptocurrency becomes more accessible in the mindset of people.
Why You Should Care?
Influencing local businesses to accept crypto as payment is a step further towards a society less dependent on banks and authorities. Cryptocurrency is as valuable as currency, not only as an investment. Using crypto for buying products or services will help its value grow.