The idea of an unregulated, completely virtual currency took some time to work its way into public consciousness.
And now, it’s in the Waterloo Region.
Capacity Waterloo Region, a local not-for-profit organization, has begun accepting Bitcoins for donations. It is one of the first non-profits in the country to do so.
“For us, it fits in perfectly because we want to teach organizations to become more entrepreneurial, so finding new ways to find resources would fit exactly and we would encourage others to do the same,” said Andrew Wilding, director of operations.
Capacity Waterloo Region helps local charities that work on social change issues to incorporate innovation and entrepreneurship. Wilding says that Bitcoins will provide more options for how donors can give to the organization, something that will also be useful for the organizations they work with.
The idea was proposed to Wilding by a Laurier student who also works at Capacity Waterloo Region.
“I figured it’d be a cool way of, hey, if we lead this and it goes fairly simply, perhaps we could start helping other people get set up with it,” said Shubhagata Sengupta, who is a third-year communications student.
Sengupta was inspired by a friend who helped implement Bitcoins at a national non-profit, Pathways to Education Canada.
Bitcoins, he says, make it easier for people to give anonymous donations.
It also avoids complications with exchange rates for people who want to donate internationally and also has lower fees for the organization receiving the donation, compared to, for example, credit cards.
So far, Capacity Waterloo Region has received just over one Bitcoin — or about $1,000 — in donations from VirtEx, the organization that hosts its merchant account.
The only other known business using Bitcoin in Waterloo Region is Death Valley’s Little Brother, an espresso and whisky bar in Uptown Waterloo.
Local interest in Bitcoins has also popped up in the way of Bitcoin KW, a group founded this January that organizes meet-ups and online discussions for its membership, which is currently listed at 44 people.
The online, international currency has gradually begun to take hold in cities across Canada.
Bitcoiniacs, a Canadian bitcoin broker, set up Canada’s first Bitcoin ATM in Vancouver and is opening stores across the country – including in Toronto and Calgary – where people can physically exchange Bitcoins.
“We knew just from selling peer-to-peer there was a demand for it and as soon as we opened up the doors, we were overwhelmed by the response,” said Bitcoiniacs co-founder Mitchell Demeter.
Bitcoin brokers like Bitcoiniacs allow people to buy and sell bitcoins from a more reliable source.
Non-profits can sign up for profiles that allow them to issue tax receipts.
All people or businesses that use Bitcoins have to have a wallet that you can sign up for online or through a broker. You can have a desktop, mobile or web wallet that holds your virtual currency. Bitcoins can then be exchanged for other currencies based on the current exchange rate.
Like a stock, the value of a Bitcoin fluctuates based on speculation, buying and selling. Driven completely by the market, the currency is still fairly volatile. Currently, one Bitcoin is worth over $900 Canadian.
“It’s a democratic process, it’s left to the market to determine the prices,” said Demeter. “It’s volatile because the market has to determine what the price of it should be.”
According to Demeter, Bitcoin is meant to mimic the release of gold, rather than paper currency.
Bitcoins are released into the system according to a pre-set schedule. Currently, there are about 12 million Bitcoins in existence.
Demeter expects to see regulation of the currency come into play as countries explore it further and track its patterns more closely.
Wilding added, “Governments have tried to regulate the Internet but it’s been very difficult and users do not want that to happen. I think it’s the same for Bitcoins.”
As a charity, Capacity Waterloo Region will convert any Bitcoin donations immediately to minimize the risks of working with an unregulated currency.
While it’s hard to say what kind of impact Bitcoins will have on the non-profit’s donations, Sengupta thinks it’s “only a matter of time” before the currency really takes off.
“It’s becoming more mainstream and it’s becoming easier to get Bitcoin yourself.”
“People still see some risks in the actual holding of a wallet,” he added. “I think once the initial fears about security are out of the way, then it’s a lot easier to implement.”