Bitcoin and Cash-only Businesses
10 Feb 2015I came across this pretty interesting documentary on the cannabis industry from thy New York Times. I have thought about this problem before as a huge opportunity for bitcoin. Businesses like these can’t get access to the banking system, even though they are legitimate businesses. Thus, they are forced to deal in, and pay to secure, large quantities of cash. The video even mentions that particular business paying over $400,000 in cash to the Federal Government in taxes!
Think of how much they must pay for security, storage, and security for their storage because of all the cash they are forced to deal with. This seems like a huge opportunity for cryptocurrencies like bitcoin. Bitcoin can be secured virtually for free (or with a $119 trezor), and has no transport costs. A business could even do business without keeping any private keys on premises, which means even on a break in, they lose no money. The iPad/Tablet accepting payments would only need the hierarchical deterministic (HD) public key to be able to generate new addresses, but would not be able to spend from them. The HD private key could be kept on a trezor, or on paper, off premises in a secure location.The costs for securing cash are probably high enough that these businesses could offer significant discounts to users willing to pay in bitcoin. Thus, users would have an incentive to find ways to get bitcoin and a motivation to spend them.This seems like one of the many opportunities that bitcoin creates.