PetaPixel

Should Photographers Accept Bitcoin as Payment?

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Enthusiasts of bitcoin, the electronic cryptocurrency, have more ways than ever to spend their digital cash. But should professional photographers try to take advantage of the growing popularity of bitcoin and similar systems by accepting it as payment for their work?

A few photographers say so, but first, what is bitcoin and how does it work?

Wired offered a pretty easy-to-understand explanation in November. Bitcoin is both a digital currency and a system of payment, like a combination of the dollar and PayPal. There are other cryptocurrencies that operate on similar principles, like litecoin and dogecoin, but bitcoin was the first, and is now the most widespread.

It maintains value thanks to a network of bitcoin miners around the world. Each of these miners downloads software that dedicates a portion of their computer’s processing power to maintaining a widely-distributed ledger of all accounts and transactions. These miners are given small amounts of bitcoin for their efforts, which then can be spent on services or simply sold to interested buyers.

Or, to put it simpler: it’s an all-digital alternative to dollars, euros, or pesos that can be easily converted into real cash.

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Today, there are more than $1.5 billion dollars worth of bitcoin in circulation worldwide, and about 60,000 bitcoin transactions happening every day. Bitcoin is accepted by some online retailers, including Overstock.com, and a growing number of small businesses. There’s even a bitcoin ATM at a coffee shop in Vancouver, British Columbia, and another at a gun store in Austin, Texas.

A few photographers, too, are testing out the waters to see if bitcoin works for their businesses. One is Hayden Dawkins, a professional portrait photographer from Northern California who began accepting bitcoin early this February. When we spoke, he hadn’t yet taken any payments in bitcoin, but he hoped that offering a 30% discount to clients willing to pay in bitcoin would attract more interest.

Even without any bitcoin-paying customers, Hayden has benefited from his decision to accept it. In particular, he’s appreciated extra interest from the bitcoin community and the press. Not only are his services now listed on websites like Spendbitcoins.com that catalog bitcoin-accepting businesses, but he’s also received some attention in the blogosphere.

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But a big part of the equation, for Hayden, is his interest in the technology industry and the unique experience of working in a digital currency. When we spoke, Sean suggested that more tech-savvy photographers might particularly enjoy that experience.

“There’s some photographers who like to just go out and take pictures, and then there are others who get really into the gear, who know the ins and outs of their sensors and own a bunch of gizmos for their camera,” he told me. “Those are the one’s who are going to love bitcoin the most.”

Other photographers have been working in bitcoin for longer than Hayden. McLellan Style, the Nashville portraiture and wedding photography studio operated by husband and wife team Mel and Sean McLellan, is one of them. I spoke with Sean about his decision to start accepting bitcoin payments and he pointed to a number key benefits to his business since he started last year. For one thing, he explained, “it’s been a cool way to connect with people who are interested in cutting-edge technology.” That’s important to the McLellans because, according to Sean, the best way to “get comfortable images with our couples is getting along with them and having a good connection.”

A few clients have already paid for portrait sessions with McLellan Style using bitcoin, but Mel and Sean have also benefited from the press attention described by Hayden. They were featured, for example, in a story in their local newspaper, The Tennessean.

All that said, there’s a reason bitcoin-accepting photographers are still relatively few and far between. As a monetary system, it’s still in its infancy, and most consumers likely haven’t heard of it… much less used it. As a result, it’s not only difficult to find people willing to pay in bitcoin, but also difficult to spend bitcoin because so few large vendors take it.

Bitcoin also takes flack for its volatility. Because of the small market, relatively small events can profoundly impact its value. As such, the graph for bitcoin value over the past two years shows some pretty wild movements, although the general trend has been upward.

Here’s a graph of the US Dollar value of a bitcoin over time

Hayden and Sean admitted that there are downsides to bitcoin. Hayden readily acknowledged that businesses shouldn’t be relying entirely on bitcoin for their revenue stream. “It’s become large enough that it can take some large hits and not fail,” he explained. “It’s pretty stable for the time being, but I don’t plan on it being my entire revenue. I plan on accepting it as a way of helping people out.”

Sean echoed that sentiment. “I wouldn’t be blindly stupid about it and convert 100% of everything to bitcoin,” he said. “I love that idea but I do definitely recognize that it would not be the smartest thing to do at this time.” But he also pointed out that there’s a lot of ways around bitcoin’s volatility. For example, systems like Coinbase, an online wallet for storing and withdrawing bitcoin, allow users of bitcoin to instantaneously convert their bitcoin into cash, minimizing the risk of swings in value. Sean further pointed out that, with a Coinbase Merchant Account, businesses can avoid paying fees for their first million dollars worth of conversions.

Accepting bitcoin isn’t going to be the right answer for all professional photographers, but for those keen on keeping up with the latest tech trends, it might be a way to spice up your business. It’s novel enough that the photographers who do announce their support for bitcoin still turn heads their way, and the cost of implementing a bitcoin system into you workflow seems to be relatively low. As long as expectations are kept in check, bitcoin can make an exciting addition to, not replacement for, your existing payment system.

As Sean put it, “It completely eliminates the risk of charge back, the fees are lower than a credit card, and your fees can be as low as zero. With all those things available, there really isn’t any risk to not try it as a tool for accepting payments for your business.”

If you’re intrigued and want to give it a shot, check out this explanation of how to get started.


Image Credits: Bitcoin Litecoin Keychains, Bitcoin Magazine, 1930s Paparazzi and Bitcoin Chart


 
  • Broseph of Arimathea

    What does 6% of the entire currency base ‘disappearing’ and being covered up have to do with whether people should use it?

    Uh.

  • Guest

    .

  • http://twitter.com/kenny Kenneth Younger III

    ONCE AGAIN, the article states (and recommends!) that you use Coinbase, which instantly converts bitcoins you receive as payment into dollars (if you want it to).

    There is *no* exchange rate risk for the photographer accepting bitcoin.

  • http://twitter.com/kenny Kenneth Younger III

    *sigh*

    This is changing more and more every day. People said the same thing about selling products on the Internet at one point, too.

  • http://twitter.com/kenny Kenneth Younger III

    No, they suggested a secure way to accept bitcoin without any exchange rate risk. If you think Coinbase is a disreputable company for any reason, please (please) provide proof.

  • http://www.sin3rgy-creative.com/ David Liang

    I don’t believe I am. Kenneth’s point is based on an assumption about crime that’s not a true comparison. To his point about bitcoin’s ledger system being more traceable is a fair one, only at this point. Cyber crime is committed by intelligent, highly motivated and often well funded parties. Should bitcoin become another universally accepted and widely used currency, it’s reasonable to assume more than a few methods to exploit bitcoin currency will be found. So the fact that it’s safe today, I would argue is only because once again, it is not widely used and thus offer little incentive for exploitation.

  • Jesse

    Nick, it is indeed a highly volatile currency, what with it being such a young currency, and it absolutely is a risky investment this early on. However, with the likes of Bitpay, merchants can accept bitcoin and choose to immediately and automatically convert payments into dollars (thereby circumventing any risks associated with price volatility). This is a nice solution for merchants opening up to potential clients wanting to pay in bitcoin (whatever their reason may be), win win for both sides.

  • Jesse

    Failure? How do you conclude that bitcoin has so far failed?

  • Gary K

    Bitcoin eliminates credit card fees (2% to 3% or more) and doesn’t allow chargebacks. Instant conversion to US dollars eliminates speculative price risk. It’s rational to accept Bitcoins.

  • Halfrack

    Try again, my point was not specific to your virtual currency bank of choice, but it seems like you’re trolling the entire thread.

    Take payment how ever you choose, but anyone taking a currency they don’t fully understand is at your own risk. Personally, I’d rather take Euro’s, English Pounds, Canadian Dollars, or even Mexican Pesos.

  • OtterMatt

    No way would I accept Bitcoins. The price is too volatile. I’d either be accepting potentially wildly different amounts of money for the same services, or I’d have to do calculations to keep up, which would just be more work.

    If it’s so easy for merchants to convert to fiat currency, then it’s just as easy for the consumer to do so. Go change it out for dollars, and THEN we’ll talk.

  • http://twitter.com/kenny Kenneth Younger III

    I am not trolling the thread. Please explain which of my posts are “trolling”. I’ve only stated verifiable facts, and been reasonably courteous in my responses to others.

    You suggested they take down the article! Talk about questionably trolling…

    When I first started commenting on this thread, there were zero positive comments about accepting bitcoin as payment. While I’m quite familiar with the PetaPixel group think pile-on in the comments, I’m not going to sit around and watch people spread FUD.

    Finally, you are more than welcome to state your opinion that you’d rather take foreign currencies. I have no problem with that, and you’re probably right: there is less relative risk in storing foreign currencies in a bank than holding bitcoin. The article wasn’t advocating storing bitcoins at all, though.

  • http://twitter.com/jonathan360 Jonathan360

    “flimsy internet code” like the internet protocol or email protocol? everything being said here is the same thing people said in the 90′s about the internet.

  • http://twitter.com/jonathan360 Jonathan360

    How are there any concerns to a photographer accepting Bitcoin if it is immediately converted to fiat? Photographer saves in transaction fees, opens customer base internationally, opens customer base to a tech savvy demographic, and reduces charge backs.

  • pvbella

    Mt. Gox claim they were hacked. They disappeared for over two weeks then all of a sudden they filed a BK, claiming they were hacked. The Mt. Gox story stinks to high heaven.

  • Mario Liedtke

    Isn’t that a very strange and unfortunatly point of time for this discussion as Mt.Gox, the leading Bitcoin Trader, went down and maybe huge amounts of Bitcoins and Dollars are down the drain?

  • alex

    “But it has to be backed by a sane system”

    Hahaha. Your dollars are losing value each year due to inflation created by the Federal Reserve.

  • alex

    Actually, the value has recovered. It hit $700 earlier today.

    Mt.Gox is gone, and you can use safer companies like Coinbase.

  • alex

    I’m going to laugh at the naysayers in a few years when Bitcoin, or another cryptocurrency becomes a major tool, like e-mail. I hope you have this page bookmarked!

  • flickerKuu

    Ignorant comment. It’s actually fairly easy to accept alt currency and convert it to your beloved Fiat money instantly. If you spend more than half a second researching you may have known that.

  • flickerKuu

    You realize that USD is “Drug money” by your definition. You are currently using “drug money”. In fact, it’s absolutely guaranteed that microscopic amounts of cocaine are all over the bills in your wallet. Saying bitcoin or electronic currency is “drug money” is like saying the U.S. Dollar is “murder money” but yet you still use it. Sorry, try again, your argument sucks.

  • flickerKuu

    About 9 million times more currency flow through criminal enterprises with US dollars. You’re argument doesn’t hold water.

  • flickerKuu

    So sad how ignorant people are. They really need to stop listening to the media and start actually thinking for themselves.

  • flickerKuu

    Because I can use my computer to mine and get Dogecoins. Then I can pay for them with those coins and never have to convert at all. Converting currency usually involves fees. Why bother with paying someone to use my own money when I can buy directly. That’s why.

  • flickerKuu

    My risk gave me %8000 return. I’ll take a risk. Look at the chart, its volatile, but it’s always going up. Barely any risk there. Snooze you loose.

  • flickerKuu

    Yes because everything is a conspiracy and a “shill”. Crypto currency is the future, you can realize that and work to accept it, or you can hide in a hole of ignorance and get left behind. The choice is yours.

  • flickerKuu

    Who cares? Mt. Gox was one crappy exchange. Bitcoin has gone up to previous levels since in bankrupted. Why doesn’t the article mention JP Morgan scandals? There isn’t a problem with the article just because you want some stupid FUD in it.

  • flickerKuu

    To bad the price went down for about 4 hours and then came back. So much for “dramatically affected”. People who were asleep saw nothing happen. No one cares anymore about Mt. Gox, everyone is happy it’s gone. There’s plenty of exchanges without horrible managers. By your logic we shouldnt use banks or the US dollar anymore.

  • flickerKuu

    They weren’t hacked. The money was stolen internally. The transaction maleability issue isn’t considered a hack, its a code bug that could be theoretically used to steal but practical use of it is impractible and easily thwarted.

  • flickerKuu

    Pretty sure the money was embezzled. Just like what happens 100 times a day in our current financial market.

  • flickerKuu

    Nothing if they weren’t in Mt.Gox. It actually increases the worth of coins that still exist -in theory. The coins will show back up. They are still in the economy, so aside from individuals getting ripped off, the “loss” of the currency shouldn’t effect the market as a whole. because the market never lost it.

  • flickerKuu

    …Says someone clueless about it…

  • flickerKuu

    Where did you get that nonsense? Silk Road was not the “biggest user of Bitcoin” by far. Check your facts. 22 million in traffic is far from a billion. Math and stuff.

  • flickerKuu

    They suck at scamming since I’ve used them numerous times. Aren’t they based in silicon valley? Sounds totally like a scam. /facepalm

  • flickerKuu

    There aren’,t people are really stupid who say there is.

  • flickerKuu

    Sucks for you.

  • flickerKuu

    What crash? The 4 hour downturn that was obliterated by the “sale” on coins? Yeah. I slept through it.

  • flickerKuu

    Doh! There goes half the “experts” around here’s theory.

  • flickerKuu

    Pfft. I can show him how to sign up for a Fiat-> coin conversion in all of a minute. The amount of extra traffic the PR would bring him accepting coins, far outweighs the 5 minutes of investment to set up the POS system.

  • flickerKuu

    Did you say. “I won’t touch the Internet with a 10 foot pole” back in the 90′s? Because that’s what this sounds like to people who actually know what Cryptocurrency is.

  • flickerKuu

    Wow, such ignorance you speak. How do you get around life being that clueless?

  • flickerKuu

    Hey stop it now! That kind of sane talk and revolutionary aspects of the currency of the future have no place here! Comments are limited to crap fox news vomits, and not facts mister!

  • flickerKuu

    That’s what the article suggests, had you read it.

  • flickerKuu

    No, one exchange isn’t the entire industry. You are saying something akin to “JP Morgan” did something wrong, now we shouldn’t use U.S. dollars anymore.

  • Broseph of Arimathea

    Epic burn, bro. Stick to reddit with the rest of the economically illiterate acolytes where you can wrap yourself in a bubble and pretend that your insecure, easily manipulated, thinly traded deflationary pretend money is ‘a game changer’.

  • tbunreal

    Didn’t some banks just fail last year?

  • Broseph of Arimathea

    He also said no value is created while mining your internetmoneys. Which is accurate. Unlike US dollars, which are paid in return for labor and the employment of capital, thus giving them intrinsic value.

  • Broseph of Arimathea

    Eliminating credit card fees is irrelevant (and, given the spread, inaccurate), since you are comparing bitcoin to cash. Not to credit cards.

    Again, you are using the same argument as the two trolls in here – ‘you can take your bitcoins and turn them into something useful, money!’. Which makes the whole thing pointless – unless there is some huge untapped market for bitcoin photography services.

    Which there isn’t.

  • Norshan Nusi

    That’s funny I saw this a few days ago….credits to Cyanide And Happiness.

    No offense okay, this is just a joke to lighten up the situation…

  • Burnin Biomass

    Or it sounds like the people who said “I wouldn’t touch an Edsel/APS/Zune/or the XFL with a 10 foot pole”. Plenty of experts would have told them they were wrong too.