Bit on the side: The UK e-tailers embracing Bitcoin
Following Dell's decision to accept Bitcoin, CRN talks to the UK electronics retailers also using the crypto-currency to boost sales
Bitcoin is beginning to become a force in the channel, with at least four UK electronic retailers now accepting it, one of which says the crypto-currency is now responsible for up to a tenth of its sales.
Scan, Overclockers, CeX and Aria Technologies are all accepting Bitcoin for payments.
Aria Taheri, chief executive of Aria, a Manchester-based electronics retailer, decided to start selling tools to mine Bitcoin, such as graphics cards and frames dedicated to build Bitcoin rigs, in January.
According to Taheri (pictured, with a mining rig), Aria's sales doubled in February, reaching a record monthly high, following its decision to begin selling Bitcoin manufacturing tools.
Aria also started accepting Bitcoin as payment for its products in February and has recorded its highest Bitcoin transaction of £700. The crypto-currency is now responsible for five to 10 per cent of its sales.
"There is a niche segment of customers who use it for their payments so we attracted a demographic of customers we had never tapped into before," Taheri said.
Bitcoin uses a stream of code instead of notes and coins to represent monetary value, and can be created via "mining" – using large computers to undertake difficult mathematical transactions – or buying them online via Bitcoin exchanges.
Mark Purdy, marketing manager at Overclockers, said Bitcoin was another source of revenue and realised if they didn't have the payment method, they would not be able to make the extra revenue.
"At the time, quite a few people had Bitcoins to spend and a couple of our rivals were tinkering with Bitcoin so we didn't want to miss out," he said.
But it is not just small retailers who are beginning to adopt the virtual currency.
In August, Dell's chief executive, Michael Dell, tweeted to announce a $50,000 (£30,150) server deal transaction using Bitcoin.
Paul Walsh, chief information officer at Dell Commerce Services, said in a statement: "We're pleased by the initial response to our current Bitcoin pilot on Dell.com for consumer and small business shoppers in the US."
Bitcoin in recent months has seen its price fluctuate dramatically, as the value of one Bitcoin hit $1,000 in November 2013 before dropping to $470 per unit. And not everyone in the channel is convinced of its merits, with only six per cent of respondents in CRN' s latest poll accepting Bitcoin or saying they plan to.
Leander Bindewald, researcher and project manager in complementary currencies at the New Economics Foundation, said: "Instability is written into the code because it doesn't have a government or structure written into it."
But there are clear advantages to using the virtual currency, as it eliminates transit and transaction fees, and allows companies to reach new demographics of customers who don't want to make transactions via traditional banking means.
Stay tuned for the next issue of CRN which will feature an in-depth feature on Bitcoin in the channel.