Eight years ago, a programmer bought two pizzas with bitcoin. Annually celebrated on Bitcoin Pizza Day, the purchase is recognized throughout the cryptospace as the first time anybody used a cryptocurrency to pay for goods. Since that fateful May day in 2010, blockchain technology has evolved considerably, and more vendors are acknowledging the digital assets as legitimate means of payment. In ETHNews' series Block & Mortar Adoption, we follow local businesses that accept cryptocurrencies in exchange for goods and services.
Straddling the border of San Francisco's Dogpatch and Mission Bay neighborhoods is The Boba Shop, a small teahouse serving your quintessential assortment of bubble tea, from taro and matcha to lychee and kiwi. Located across the street from the massive University of California, San Francisco Medical Center, the shop attracts casual visitors and hospital staff alike.
Patrons can shell out the standard $4.75 for their one-topping tea drinks, but there is another, more interesting payment method: cryptocurrency. Although various retailers have started to allow crypto payments, especially through their web stores, most brick-and-mortar locations have yet to pick up the trend. The Boba Shop, on the other hand, has taken the crypto plunge.
This quaint tea shop accepts not only the biggies – Ether and Litecoin, for example – but also over 30 other coins and tokens, such as EOS, Golem, and 0x. The icing on the cake (or tapioca in the tea): Customers receive a $1.50 discount for every item they purchase with cryptocurrency, which is an almost 32 percent reduction in price.
However, The Boba Shop co-founder William Cho sees the discount as more than just a business opportunity or a way to earn some extra money. His store ultimately decided to accept crypto payments to "help with adoption and exposure" of the technology.
"People are always asking, 'I know bitcoin, but what are all these other coins?'" Cho told ETHNews. "I'm more than glad to explain [these coins] to any customer."
Of course, he noted the high costs of certain third-party merchant service providers such as Square. To Cho, crypto payments are one way to circumvent these fees. For example, Square has "around three percent fees per transaction, whereas with cryptocurrencies, [The Boba Shop] can actually get these down [significantly]."
As for the customers, Cho believes they appreciate the discount. He said that people were skeptical at first – they thought it was all talk – but customers realized they could save cash on their tea purchases. "I started seeing people like hospital workers pulling out their mobile phones and asking, 'Hey, what do I need to do to save myself some money every time I come?'" he elaborated. He added that his customers hope to see more businesses accept crypto payments in the future.
The shop's promotion has been well received since it started in December 2017, but Cho admits that less than one percent of customers pay with cryptocurrencies. Of that one percent, most of the payments are in Ether, bitcoin cash, and Litecoin.
Despite the low turnout, he said the shop would accept crypto "as long as it's still alive." According to Cho, only if the market were "completely dead" would there be "no point in accepting cryptocurrencies anymore."
Notably, one of the teahouse's customers is Dogecoin creator Jackson Palmer, who recently tweeted about his cryptocurrency payment experience at the shop and how "convenient" it was:
Although many stores and restaurants choose to forego cryptocurrency transactions, examples like The Boba Shop demonstrate the technology's potential in the retail space. To Cho, the move toward crypto makes sense. "Why not?" he said.