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


 
  • Stephen

    You’re engaging in a circular argument and then stopping halfway along. The reason to gain “customers” is to obtain payment, which is defined as something of value to you. If you have no way to (conveniently?) spend Bitcoin, then there is indeed a “risk doing so,” but more importantly you haven’t really gained a “customer.” You’ve gained something, maybe, but not a customer.

  • Ralph Mazio

    I’ll give you the real reason. You are brainwashed. You don’t even know how money is unfairly created to benefit the ultra rich and make the rest of us poor and you’re programmed to HATE something that would actually benefit you. You can’t explain it. All you can do is spew venom as you’re programmed to do.

  • Ralph Mazio

    Let me explain the money creation process although your mind is already firmly entrenched with this being something that is correct:

    The Fed is a group of private central banks. They essentially create money to pay for various government securities. They create this money out of thin air. Poof…here’s your money. They can also create money in other various ways by controlling the interest rates banks can borrow money at (poof…here’s your money) and the reserve to deposit ratios banks must follow (fractional reserve mojo). They are also involved in various other “quantitative easing” schemes that essentially amount to creating new money for banks including themselves. I would go further and wager that when you are the “lender of last resort” and aren’t audited, you’re likely creating money for lots of things people don’t know about and better not ask about. The rabbit hole goes much deeper when you understand the whole basis for fractional reserve banking which basically means banks only have to hold a fraction of money in “reserve” or at the actual bank based on deposits that are made. They can actually lend out more than they have when new deposits are made. Now, if you control this system or are a large bank that creates money upon new deposits, how are you going to loan that money out? I know what I’m going to do, I’m going to create policies that make it perfectly legal for me to loan large amounts of money out to friends and family. Essentially those involved in the money creation process can enrich themselves while devaluing the dollar for everyone else. Nice little scheme isn’t it? If you are a Keynesian and believe in economic stimulation and spending/borrowing your way out of recessions then that’s fine. I say we stop letting a few bankers decide who gets the new money but rather give it to all Americans equally.

  • Broseph of Arimathea

    Funnily enough, I have some nicely framed piece of paper on the wall that refute those baseless assertions, Angry Internet Guy.

    I am sorry you lost all your pretend money when Magic The Gathering Online eXchange went bankrupt. Here, let me tip you with some dogecoins/koinye/memebuxx.

  • Ralph Mazio

    I’m not angry at all. I just recognize your type. Most people are just like you. They too can’t understand why.

  • Ralph Mazio

    People don’t complain about volatility when the price is rising.

  • Jennabitcoin

    It really wasn’t. Most of us in the market knew Gox was failing and started saying so months ago. Most got out. The market is actually up significantly since Gox closed. :)

    If you’re concerned with the volatility but want a new way to accept payment and a bold trailblazer, Moolah and Coinbase let you take them and convert them to dollars. (or many other fiat currencies with Moolah.)

  • Jennabitcoin

    You can store your coins on your own computer, and if you are anywhere near tech savvy it’s easy to be hack proof.

  • Jennabitcoin

    I have actually made thousands but thanks :)

    Most Bitcoin owners don’t store them in an exchange like Mt. GOX. The ones that got hurt there were mostly day traders.

  • Mark Davidson

    OK, I will display my ignorance here.
    Why should I trust a currency that has “crypto” in its name? Why would I assume that the creators are not, in fact, criminals that are not interested in ease of use and and anonymity but rather emptying my account of whatever Bitcoin I may have accumulated? While I get the fact that all currencies are fiat currencies, Bitcoin has only the tiniest chorus of people agreeing that it is a medium exchange at all. After the Mt. Gox collapse why would I have any confidence in the “currency” at all?

  • aswed

    Except it’s optional to store your Bitcoins with a third party such as gox, just as it’s optional to put your cash in a bank or building society. You can keep your own Bitcoins without having to trust anyone, be your own bank, and spend them online with any counterparty trust – this is the whole point.

    If people want to trade on exchanges such as gox, they need to do their due diligence (gox has had warning signs for years). Eventually regulation will emerge anyway and we’ll have insured Bitcoin services that are as reliable as our current banks are.

    The key point is that use of them is *optional* this is not the case in any other online payment system.

  • darren kis

    do your own research and work it out for yourself. start with the bitcoin white paper by satoshi and then watch any vids on youtube with andreas Antonopoulos.

  • Jimmy Fartpants

    Key words: “At this point”.

    My experience with Bitcoin, and yes, I have held some is that is far to volatile to be taken seriously as a currency. Why would I would I want to be paid in something that could dramatically fluctuate in value within hours of being paid?

  • OllieOh

    Would you accept “blood diamonds” as an alternate answer?

  • OllieOh

    Oh, I’ll accept cash. I just won’t accept Bitcoin… and Discover card.

  • Jimmy Fartpants

    “It’s always going up! Barely any risk!”

    Sounds a lot like what everybody said about real-estate about 10 years ago.

  • Jimmy Fartpants

    Dude, do you even realize that you’re coming off as the exact stereotype of the prototypical annoying & condescending crusader that everybody thinks of when they hear the word Bitcoin? And right now, you’re not doing much to dispel these notions.

    There’s a good reason your movement is widely regarded as being one run by a bunch of elistist neckbeards who never leave your parents basement (or reddit).

    Instead of the douchbaggery, maybe try a different approach?

  • Jimmy Fartpants

    Do you have a source for this, because that smells like a complete bull$hit statistic.
    How many more U.S. dollars are in circulation that Bitcoin?

  • Jesse

    Kenneth wasn’t make an assumption, he was stating a fact; a
    fact FinCEN first brought before a Senate addressing this very question of
    exploitation. I find it amusing that a
    governmental agency setup to enforce laws against money laundering and the sort
    is taking a less conservative approach to Bitcoin than you are, but you are
    entitled to your opinion nonetheless and I’ll even say I understand your angle.
    However, you’re basically saying that we
    should kill innovation whenever it can be exploited. Which is in every case, including the most
    revolutionary innovations in man’s recent history . Criminals print counterfeit money, do we
    blame the printing press? Pedophiles use
    the web to distribute child pornography, should we have killed the internet? Terrorists have used airplanes as bombs, do
    we cease traveling by air? The list goes
    on. Now perhaps you may not think cryptocurrency
    to be as revolutionary as the internet, even if it is praised by great
    minds/visionaries (one that comes to mind is Andrew Andreessen, the inventor of
    the first graphical web browser), it is a heated debate after all. But the point is that you can’t demonize
    Bitcoin any more than you can cash in terms of exploitation.

  • Silk Road Warrior

    I have used Bitcoin for exactly two things:

    Silk Road & online sports betting.

    It’s very useful for a few recreational pursuits, sure, but I haven’t found any other useful applications for it.

  • Jesse

    I agree that there’s a learning curve.
    We’re in the infant stage of bitcoin’s development and I believe that
    within a short amount of time now, it will be made easier for non-tech-savy users to learn how to use it, store it in a
    safe way, etc. With most significant innovations, there are growing pains
    and it’s just a matter of time. Bitcoin seems to be
    in an accelerated growth stage now and I think that time may be shorter than
    most of us might think possible.

  • Jesse

    If you accept cash, then you can’t use the “drug money” argument with bitcoin. :)

  • http://www.flyingsuicide.net/ Oj0

    I’m not going to claim to be an expert at anything, but I have been mining, trading, and using Bitcoin and alt currencies for almost five years now. I’ve put countless hours into tweaking my config to get the highest hashrate, studying trends between alt currency exchange rates, monitoring the value against FIATs, sitting on exchanges doing dozens of transactions per day. I find it to be a lot of fun, and what do I have to show for it? All of my camera equipment, several graphics cards, a telescope and, at this very moment, the equivalent of four months’ salary sitting in various QT wallets which are both encrypted and backed up.

    Yes, I have a lot of faith in cryptocurrencies. I wish I had this kind of faith when I started, with the first major crash I witnessed I sold all of my Bitcoins which today would have made me a millionaire. I’ve since seen many crashes, but each time the value bounces back higher than before. The peak of $1200 wasn’t followed by a crash but rather a normalization. The value should never have reached $1200, and for the time was not sustainable or realistic. It dropping to under $800 shortly after was to be expected, it was certainly no reason to panic.Also keep in mind that before shooting up to $1200 it was still worth only a tiny fraction of what it is worth right now

    I hope this gives a bit of insight to all.

  • OllieOh

    I wasn’t making an argument about drug money. I was making a joke.

    But joking aside, Bitcoin has a long way to go before I trust it.

  • Jesse

    I think even bitcoin proponents appreciated the humour in this when it was first posted. Hey, we can laugh too! :)

  • Kynikos

    I only accept unicorn tears.

  • A.J.

    Mt. Gox was by far the biggest exchange in an already niche marketplace though. A better analogy is to say that this was like the entire New York Stock Exchange closing down, and walking away with all the cash invested in it.

  • Norshan Nusi

    Glad to hear that :)

  • http://www.fantim.com fantim

    That’s like asking “Should photographers accept pounds as payment?” or “Should photographers accept pesos as payment?” Money is money, if bitcoins make you uncomfortable then trade them for dollars.

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

    I’m reposting this comment now because PetaPixel has held it in moderation for days, probably because it had an all-to-relevant link! Original comment below:

    What does “position of privilege” have to do with anything? That’s no a sound basis for discouraging using bitcoin in the slightest. In fact, there are SERIOUS people looking at using bitcoin to bring banking and stable currencies to third world populations because of its incredibly low fee structure. This is just as easily done with the underbanked community in the US.

    [If you want to see the link that caused all the trouble for PetaPixel, search google for "Arianna's Bitcoin Blog - Why Bitcoin Matters for Africa"]

    And no one is arguing that this replace government issued currency. We think that eventually that will happen because people will discover the benefits of this system, but no one has called for bitcoin to replace the dollar for everyone.

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

    Did it ever enter your mind that there are those of us out there that have mined a bunch of bitcoins and might want to spend them at some point? I don’t want to convert them to dollars first, that would cost me the exchange fee.

    The WHOLE FRIGGIN point of this would be to accept another form of payment for people that want to pay this way. There is no risk involved. Why the hate?

    And I’ll ask you, what did I do that was “trolling”. I have acted civilly, pointing out incorrect statements by others, but have not done anything “trollish” by any Internet standards.

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

    Argentina also has capital employed, and the ability to tax, yet seem to have a hard time maintaining value of their currency. Huh, I wonder if there’s another component to that equation?

  • flightofbooks

    Trade them for dollars? Sure, just find me an exchange that will guarantee the security of my btc even if hackers rob them blind (over the course of two years).

  • flightofbooks

    has that white paper been updated to reflect the massive fraud perpetrated on users of mt gox resulting in the loss of millions of dollars worth of btc and quite a bit of real money besides?

  • flightofbooks

    Have you ever known petapixel to deliver timely news about anything that isn’t a press release for new camera?

  • flightofbooks

    No, but if the Fed announced tomorrow that it was insolvent because hackers had been chiseling money out of it for two years, I bet that might lead some people to say we shouldn’t use dollars any more.

  • flightofbooks

    Holding on to the bitcoins would mean assuming the rather significant risk of holding value in av volatile and largely untested instrument, an already dicey proposition made even more so by the recent bankruptcy of bitcoin’s largest exchange due to a security breach permitted by the massive incompetency of its owners. That might be fine if you’re a bitcoin miner who’s been in it from the beginning. All in the game. Asking working creative professionals who are just trying to stay in business to assume this enormous risk and not instantly cash out is completely absurd and suggests to me either you’re being disingenuous because as a major btc holder you need to get more suckers into the game, or you simply don’t understand how the financial realities of running a business differ from those of being a speculator in exotic cyber-currency.

  • flightofbooks

    But there is a transaction fee paid to coinbase, so what’s the benefit over cash or check exactly??

  • flightofbooks

    What % does bitpay take as a transaction fee?

  • flightofbooks

    Well that should certainly make the people who lost dozens and even hundreds of btc with no recourse for recompensation feel better.

  • flightofbooks

    How does a photographer save in transaction fees when converting btc to $ necessarily requires a transaction fee?

  • flightofbooks

    Maybe not the biggest but by far the most successful

  • flightofbooks

    Oh I’m sure cryptocurrency will be a major financial instrument one day. But only after a system is designed for it that isn’t an open invitation for fraud and maleficence and the destruction of wealth. Maybe bitcoin will finally grow up after mtgox. Or maybe it will go into decline and a new cryptocurrency will take its place. But for cryptocurrency to become as widely used as email it can not exist in this unregulated libertarian fantasy land that asks regular users (not speculators) to accept take on massive financial risk as a matter. The fact the btc boosters on this thread can’t seem to understand why accepting the risk of btc would be a problem for anyone just illustrates how out of touch you all are.

    cryptocurrency is here to stay, but it’s not going to be what you expect.

  • flightofbooks

    “They weren’t hacked. The money was stolen internally.”

    That’s actually much, much worse.

  • flightofbooks

    But to cash out, you’ve got to go through an exchange of some sort, right? I’m sure day traders took most of the damage, but I seem to recall reading about people who were just trying to convert some of their btc into greenbacks who ended up having their btc frozen and then wiped out. That’s the kind of thing that should make anyone thinking about taking btc as payment in lieu of convention payment on the assumption they can convert it later think twice.

  • flightofbooks

    If a client tried to pay me in btc I would get ready to sue them as a preemptive strike type of deal.

  • flightofbooks

    “inflation created by the Federal Reserve” lol way to fail economics dude.

  • flightofbooks

    apples to oranges

  • flightofbooks

    “If they are easily converted to cash, then why can’t the consumber convert them and pay that way?”
    Bingo!

  • flightofbooks

    yes, good thing there was a system set up to deal with that and protect the money people had in them. If only bitcoin had something like that before mt gox went down…