The evolution of technology has had a huge impact on many parts of our lives, but arguably none more so than on our relationship with money. From the emergence of online banking services to chip-and-pin and contactless card payments, the way we manage and use our finances has changed massively in recent years and is almost in a constant state of flux.
Arguably one of the biggest stories to emerge in the financial and money world in recent times however has been the growth of an entirely new form of currency. While Bitcoin was first launched in 2009, it has only just recently reached a point where it is on the cusp of breaking into the mainstream, with its value surging to unprecedented highs in the past few months.
But just what is the currency and what does it ultimately mean for the travel industry? Here we take a look at the key basics around Bitcoin, as well as the differences it could make – and is already making – to the tourism sector.
The basics of Bitcoin
To start from the very beginning, Bitcoin was first designed and launched in 2009 by a person known as Satoshi Nakamoto. Not believed to be his or her real name, the individual (or group of individuals, according to some theories) is thought to be among the richest and most elusive people in the world.
In its most basic terms, Bitcoin can be referred to as a form of digital currency. Without getting too bogged down in technical detail, the basic premise means that users have a virtual wallet containing the currency and the power to send and receive the coins in transactions or deals with whoever they wish. The system operates on a technology known as the blockchain, which is essentially a global network of computers which jointly manage and record Bitcoin transactions. The fact that this digital ledger is operated across several sites means that records cannot be tampered with or corrupted, making it much more secure than when information is held at a single, central location.
The reason you may have seen Bitcoin in the news so often recently has been due to the record rises in its value. The currency is notoriously volatile and has many critics, but a huge number of people were left stunned when its value went through the roof at the start of December and reached record highs of $16,000. Although it then slumped for a short time, its value then increased once again to reach more than $15,000 – an incredible rise from its value of $966 at the start of the year.
While financial experts try to decide whether Bitcoin really is the next big thing or simply a flash in the pan, the cryptocurrency is making an increasing impact on the public consciousness. There have been a host of stories about how people are beginning to embrace it, with Wired reporting on how a group of developers who created a complex system for a hedge fund decided to ignore traditional money and chose to be paid in the currency instead.
Furthermore, it is becoming an accepted currency in a range of sectors. VegasCasino.io may look like a standard online casino site but when you are there you will soon notice that it offers visitors the chance to gamble Bitcoin while playing games like poker and blackjack. Other major brands which accept the currency include Microsoft, which offers the payment option on its Windows and Xbox stores, as well as online retailer Overstock.com. Some outlets of Subway in Argentina have also started accepting it for payment too.
So while its value is on the rise and the number of brands choosing to accept it is also increasing, what are the actual benefits that it offers ahead of using traditional banking and the increasingly old-school method of carrying cash? Well, the ability to transfer the currency directly to another person cuts out the need for any form of middleman. This means that Bitcoin can move quickly between users without any banks or other payment services bodies charging a fee for it to do so.
Furthermore, a report by Mastercard highlighted that more than 130 million people in Europe alone do not have access to traditional banking services in their country. Many of us take access to banks for granted, but among the reasons that people cited for not using such services was the issue of trust. With the effects of the global banking crisis still being felt several years on, the emergence of a new currency which does not need the involvement of major institutions is something that may well be attractive to a great number of people.
What does it mean for tourism?
While debate rages on about whether the currency has a future, the travel and tourism industry is actually one area which has already started to openly embrace the opportunities that Bitcoin has the potential to offer. From small businesses to major travel giants, a huge number of different companies involved in our sector are already embracing both the technology around Bitcoin and the currency itself as its prominence continues to grow across the world.
Based in Germany, the TUI Group is one of the world’s leading travel companies with an estimated 20 million customers across the globe. In a recent interview reported by Tnooz, the firm’s CEO Fritz Joussen outlined his belief that Blockchain technology would become a fundamental part of business in the next decade and also revealed that the company has launched its own project based on it. Called BedSwap, the system allows TUI to move its hotel inventory to different points of sale depending on the demand which is being seen. Joussen added that he felt that the use of Blockchain had the potential to drive huge savings across the company.
Another major name which has embraced Bitcoin and its technology is Expedia.com. The online travel giant, which generated a global revenue of more than $8 billion last year and employs more than 18,000 people, introduced the option for its users to make Bitcoin payments for hotel bookings in the middle of 2014. While the payment option has not yet been rolled out for flights and other issues, you imagine that it is only a matter of time.
Earlier this year, Japanese travel agency HIS Co Ltd also announced that it was accepting Bitcoin payments, with the transaction amount reportedly being limited to the equivalent of two million yen. Using the Bitflyer exchange, the company initially introduced the payment option at 38 of its stores in the Tokyo, although the plan is to increase the number of participating outlets further in the future. It also marked the launch by offering special bitcoin tour packages to mark its decision to embrace the cryptocurrency.
However, it is not just larger businesses which are embracing Bitcoin, with a smaller travel agency operating in Malta now exclusively accepting the currency. Called Bitcoin Adventures, Bitsonline.com reports that the Gozo-operated company was established to boost awareness of the currency in the country, with its first paying customer being a Japanese infrastructural support engineer who arranged a three-night stay through the company.
Finally, while the popular tourist hotspot of Thailand originally declared Bitcoin illegal in 2013, some businesses in the country were quick to react when the country changed its stance just a year later. Among the spots which have embraced the currency is the Pattaya Beer Garden, with its founder Peter Noid telling Bitcoin.com how they get transactions in the currency every day and that it helps to combat the issue of credit card fraud, a problem which the country has built a reputation for in recent years.
On the cusp of the mainstream
Despite the fact that Bitcoin has now existed for almost a decade, it is interesting how many people still regard it as a new phenomenon. After a relatively long journey to prominence, the currency is now well and truly on the cusp of entering the mainstream and this is likely to have a huge impact on all industries and sectors.
As the information above outlines however, the travel industry is arguably among the sectors which have been most open to embracing the concept, with a great number of businesses already being familiar with it. By taking the steps that they have, such companies are ensuring that they may well be ahead of the game – and rivals – when Bitcoin does finally become a widely recognised mainstream current that the general public regularly use.
However, the flipside to this is of course that any businesses which are yet to investigate or embrace Bitcoin face being potentially one step behind their competition. With this in mind, now is undoubtedly the time for travel companies which are yet to explore Bitcoin to take the step and ensure they are prepared for it hitting the big time. Failing to get to know the currency and all the benefits it may be able to offer could prove to have massive consequences.