It's been almost two years since a group of businesses in a Cleveland suburb started accepting digital currency bitcoin as a form of payment. The response at first was huge. Visitors from around the world stopped at what became known as "Bitcoin Boulevard." But now, the bitcoin hype has subsided.
Along a lane of small retail stores, restaurants and bars, nine independent Cleveland Heights businesses banded together to form Bitcoin Boulevard in May 2014. But today, two of those businesses have closed, one is not actively accepting bitcoin, and a wine shop ceased most of its bitcoin transactions after the Ohio Division of Liquor Control banned alcohol purchases with the digital currency.
Mitchell's Fine Chocolates is one of the original nine businesses. Owner Bill Mitchell says he started seeing a drop in bitcoin payment when its value dwindled at the beginning of 2015.
"Since the latter part of the winter of this year going through the end of October, it's been deader than a doornail," said Mitchell.
Mitchell isn't the only one seeing a drop in bitcoin business. Shawn Paul Salon says it has only had six bitcoin transactions in the past 18 months. That's a lot less exciting than everyone had hoped.
Mitchell remembered a few international visitors soon after the project's launch. "I had a Korean television crew in here when the big splash occurred last spring, with an interpreter and the whole thing," said Mitchell.
Bitcoin Boulevard was included in a documentary on bitcoin from the Korean Broadcasting Company.
Within two months of Bitcoin Boulevard's debut in May 2014, the currency was valued at more than $650. Now, it's dropped to far less. The problem, according to Case Western Reserve University banking Professor William Mahnic, is bitcoin's instability. "My bitcoin is worth X at 9 o'clock and its worth X minus one or X plus one at 9:01," said Mahnic. "How do you get over that? The money in your wallet, your credit card, is stable."
Mahnic said bitcoin is appealing because it charges no transaction fees to merchants. Some credit cards have transaction fees between 2 percent and 4 percent. With bitcoin, transaction fees are decided by the merchant and the customer. Sometimes they decide to complete the transaction without a fee.
It works like this: business owners have a website through bitcoin processing program BitPay, which rings up the merchandise in U.S. dollars. Customers pre-load bitcoin onto their smartphones, in a digital wallet. They scan a QR code, which sends the bitcoin from the smartphone to whatever device the merchant is using — a computer, tablet, or smartphone. The price is converted live from U.S. dollar to bitcoin.
Rebecca Groynom is a Cleveland Heights native who shops at Bitcoin Boulevard's Revive, a fair trade boutique. She uses bitcoin because it's independent of credit card fees. "All of my money was going directly to the business owner, therefore going directly to my local economy and benefiting my community," said Groynom.
Groynom hasn't used Bitcoin since 2014 due to the price drop, but plans to save her stash until the price rises. Even at a lower price, bitcoin still has its supporters among business owners and customers.
Emily Sattin is the manager of Revive. She says bitcoin usage brought welcome attention to the city. "We had a great response," said Sattin. "A lot of questions too, which was great to open dialogue and learn a little more about what this digital currency is."
Organizers of Bitcoin Boulevard say the next step is to work with state legislators to modify Ohio liquor laws so bitcoin can be used to purchase alcohol.
Elizabeth Miller is a reporter/producer for WCPN in Cleveland, Oh.
