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bitcoin

Sarah McCabe and Natasha Doff – 02 January 2014

WHAT do Offaly B&B The Ring, Dublin phone shop GSM Mobile and Wexford CCTV company Visiconnect have in commonn?

They are all on a growing list of Irish businesses who will accept virtual currency Bitcoin from customers instead of euro.

From Berlin record store Long Player to the Flower Lab, a florist in Santa Monica, California, more and more retailers are accepting Bitcoin as consumers increasingly buy into the currency, pushing up its value.

There are about 12.2million Bitcoins in circulation, bought and sold online and not controlled by any government or central bank. The cryptocurrency emerged in 2008, founded by an unknown programmer. As of Tuesday, one Bitcoin fetched about $757 (€550).

While online payments for everything from university tuition fees to gummy bears aren't unusual, over-the-counter transactions are just beginning to become popular.

Now the virtual currency can buy olive oil in Spain or vodka shots in Moscow as consumers seek ways to spend the digital money. In the past month, the number of businesses on CoinMap, a website showing physical companies and vendors accepting Bitcoin, has tripled to more than 2,100.

The Bitcoin Association of Ireland, which was set up in 2013 to promote awareness of the currency and the companies who accept it as a form of payment, currently lists nine businesses where Irish consumers can spend their Bitcoin. These include an electronic cigarette supplier and bedding company as well as the previously mentioned B&B, phone shop and CCTV centre.

While the non-profit organisation has no official regulatory role, it offers help and advice to Irish businesses interested in accepting Bitcoin and encourages the use of consumer-friendly codes of practice. In the UK, there are about 160 physical retailers who accept Bitcoins. Late last month, Reaney's Burger Bear became London's first street food vendor to accept the virtual currency. Within three weeks about 50 customers had used the facility, paying him by making a transfer with their smartphones.

RETAILERS

"I wasn't expecting all the fuss when I said I would accept Bitcoins, but a lot of people have jumped on it," Reaney said.

But government restrictions prevent UK retailers from adopting Bitcoins on a larger scale, according to Chris Skinner, director of the Financial Services Club and head of Balatro, a research firm in London. "Banks are running scared of money-laundering regulations and Bitcoin is primarily associated in the government's mind with avoidance of tax and potentially fuelling and funding terrorism and drug running," said Mr Skinner.