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8/5/2018 Cryptocurrency and Blockchain In Coffee, Part 1: Retail - Daily Coffee News by Roast MagazineDaily Coffee News by Roast

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Cryptocurrency and Blockchain In Co ee, Part 1: Retail


Howard Bryman (https://dailycoffeenews.com/author/howardbryman/) | March 8, 2018

(https://dailyco eenews.com/wp-content/uploads/2018/03/cryptocurrency-3085139_1280.jpg)

As media coverage of the cryptocurrency craze careens across categories from tech
(https://techcrunch.com/tag/cryptocurrency/) to nance (http://fortune.com/search/?q=cryptocurrency),
business (https://www.entrepreneur.com/topic/cryptocurrency) to politics
(https://www.cnbc.com/2018/03/01/cryptocurrency-candidates-politicians-embrace-bitcoin.html), and
even occasionally crime (https:// nance.yahoo.com/news/get-ready-2018-cryptocurrency-crime-wave-2-
145635242.html), a slowly growing number of specialty co ee people are taking notice. Individual
companies are gradually beginning to accept Bitcoin and other cryptocurrencies as payment, and some
are wading more deeply into crypto’s less charted waters.

Take Pull Espresso Machines (https://www.pullespressomachines.com/), which now


accepts cryptocurrency for payments on Pull machine purchases. Pull’s owner, Todd Millar, even has a
small “rig” set up for “mining” Bitcoin and other currencies himself — more for the personal edi cation
than for the nancial reward.

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“I’m trying to understand
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a little bit more by being involved in it, by actually doing the mining part of it,”
Cryptocurrency and Blockchain In Coffee, Part 1: Retail - Daily Coffee News by Roast MagazineDaily Coffee News by Roast Magazine

Millar told Daily Co ee News, aware of the irony of embracing bleeding-edge technology to help support
a business building electronics-free manual lever espresso machines
(https://dailyco eenews.com/2016/09/07/beauty-consistency-longevity-pull-luxury-espresso-builds-100-
year-machines/) with a sort of old-world ethos.

(https://dailyco eenews.com/wp-content/uploads/2018/03/pull-espresso-cup.jpg)

Photo courtesy of Pull Espresso.

The “rig” in use for his small mining operation is a bunch of linked, high-performance computer graphics
cards dedicated solely to the task of receiving and verifying a never-ending stream of encrypted
transactions that, once sorted, are stored forever in a decentralize public ledger. In the case of Bitcoin, the
successful veri cation and entry of each transaction is also what triggers the release of new coinage into
circulation. A portion of this and of the tiny Bitcoin transaction fee is rewarded to the race-winning rig,
hence the term “mining.”

Crypto vs. Traditional Currency


Millar admits that while the cryptocurrency phenomenon is hard to grasp, it fast becomes an intellectual
rabbit hole the closer one gets to understanding it.

“I can choose to hang on to the crypto and speculate the market, or I can immediately take that exact
value and turn it in for real U.S. dollars,” said Millar. “There are lots of companies, lots of services that do it
for very small fees. For me, it’s a more secure way of doing business, especially with international
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customers. This is
8/5/2018
a global business, it’s not just the USA, not just the U.S. dollar. Using a global currency
Cryptocurrency and Blockchain In Coffee, Part 1: Retail - Daily Coffee News by Roast MagazineDaily Coffee News by Roast Magazine

like this really opens us up as a company.”

Millar does generally keep the cryptocurrency he earns as opposed to exchanging it for U.S. dollars,
though. So does Pourtables maker Libra Co ee (https://libraco ee.com/pourtables-2/), another retailer in
the specialty co ee industry with an interest in cryptocurrency (https://www.coindesk.com/libra-eyes-
institutional-investors-with-crypto-compliance-app/). Libra is primarily an online roasted co ee merchant,
o ering a subscription service and a la carte co ee products purchasable the old-fashioned way, via
credit cards.

(https://dailyco eenews.com/wp-content/uploads/2018/03/farm-2852025_1280.jpg)

Example of a cryptocurrency mining rig. Pixabay stock photo.

“Generally, credit card companies take 2-4 percent transaction fees straight o the top for just being a
middleman,” Libra founder and roaster Eric Medina told Daily Co ee News. “My thoughts are that if
Bitcoin or another cryptocurrency is mass adopted, then it will allow us to increase our pro t margin.”

Medina is an enthusiast and a believer to the extent that Libra Co ee has launched a special co ee blend
called HODL, as an appeal to crypto culture. “HODL” stands for “Hang On for Dear Life,” an expression
among crypto-fans for times when the speculative value of a currency swings wildly.

“Terms like HODL, Lambos, To the Moon, and all the other vernacular is a fun way to communicate about
the trading volatility of the crypto space, but for Bitcoin to actually replace central bank money we have to
spend it and replace it, and not day-trade it,” said Medina. “HODL co ee is a way to spend your Bitcoin,
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and if we get enough
8/5/2018
companies to do the same then you grow the Bitcoin/crypto economy.”
Cryptocurrency and Blockchain In Coffee, Part 1: Retail - Daily Coffee News by Roast MagazineDaily Coffee News by Roast Magazine

As an equipment manufacturer and seller, Millar has been burned by customers, by suppliers, by credit
card companies, and others. For purveyors like Millar and Medina, the breakneck boom-and-bust
rollercoaster of Bitcoin — or of any of the other 1,500+ currently traded cryptocurrencies
(https://coinmarketcap.com/all/views/all/) — value is neither a draw nor a deterrent. Millar points out that
risk is an inherent part of any business.

“At the end of the day, money is money, and it’s all a gamble,” said Millar. “I call it ‘going to Vegas.’ We’re
building a machine and hoping to acquire a customer, that’s going to Vegas. And just hanging on to our
U.S. dollar is going to Vegas. How is it any di erent to take a cryptocurrency? It’s really no di erent in my
mind, it’s the same ‘going to Vegas’ mentality.”

(https://dailyco eenews.com/wp-content/uploads/2018/03/bitcoin_co ee.jpg)

Bitcoin Co ee in Prague. Daily Co ee News le photo by Couple of Prague (www.coupleofprague.com)

A handful of co ee retailers throughout the world have been early adopters of this mentality when it
comes to crypto. A new cafe in Dublin, Ireland (https://www.irishtimes.com/business/retail-and-
services/lattes-and-litecoin-it-s-dublin-s-crypto-cafe-1.3389663), currently accepts the cryptocurrencies
Litecoin and Ethereum. A Prague cafe called Bitcoin Co ee, operated by a kind of collective of crypto-
anarchists under the name Paralelní Polis (https://www.paralelnipolis.cz/o-nas/en/), has been accepting
Bitcoin since as far back as 2014, creating a retail space that is inintentional disorienting
(https://www.washingtonpost.com/news/innovations/wp/2014/11/05/the-liberating-idea-behind-pragues-
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bitcoin-only-cafe/?utm_term=.11813bc239fe)
8/5/2018
to visitors accustomed to traditional cash payments. Yet
Cryptocurrency and Blockchain In Coffee, Part 1: Retail - Daily Coffee News by Roast MagazineDaily Coffee News by Roast Magazine

another new cafe in Singapore accepts various forms of cashless payments, including Bitcoin and its own
cryptocurrency, Ducatus.

“We just want to make sure people understand that cryptocurrencies are here to stay,” Ducatus CEO
Ronny Tome recently told Reuters (https://www.reuters.com/article/uk-singapore-cryptocurrency-
cafe/singapore-cryptocurrency-cafe-launches-as-regulators-sound-warnings-idUSKBN1EF10C).

While such operations currently live with the value swings associated with crypto
(https://www.npr.org/sections/thetwo-way/2018/01/18/578586738/cryptocurrency-investors-worry-wait-
after-bitcoin-price-drop), it’s the security, transparency, cost-e ciency, speed and control inherent to the
underlying platform that provides the appeal. That underlying technology is the blockchain, for which
currency exchange is only one of many possible applications.

How Blockchain Works


Blockchain is a system of recording and encrypting data in an interlocking way, while also being a system
physically comprised by a decentralized network of computers, rather than one central server. Both
factors contribute to the security and transparency it provides.

A network spread far and wide is not only less vulnerable to singular hacking attacks or outages, but also
alleviates the need to trust any one single entity or institution. Cryptocurrencies are considered to have
entered the mainstream (https://medium.com/koinex-crunch/a-brief-history-of-cryptocurrency-
889fed168555), after all, in reaction to the nancial crash of 2008, when trust in big banks and the
governments that bail them out reached a breaking point.

By circumventing these institutions, participants not only dodge the fees they charge for doing business
and the delays inherent to their systems, but also the need to have any faith in their security, their
integrity, or how responsibly (or not) they handle one’s nances.

When a user sends a transaction request into a blockchain, rather than going through a single institution
or entity, it’s broadcast throughout a decentralized network of, in most cases, thousands of individual
computers, often referred to as “nodes,” around the world, setting o a race to see which node is the rst
one to solve the virtual puzzle that generates the encryption according to a given system’s protocols.

The winner of that race is rewarded with a bit of cryptocurrency — the source of which di ers depending
on the type of cryptocurrency involved — and then the rest of nodes keep working essentially until the
majority of them have veri ed that the rst one got it right. The record is then sealed throughout the
great decentralized ledger, as it were.

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8/5/2018 Cryptocurrency and Blockchain In Coffee, Part 1: Retail - Daily Coffee News by Roast MagazineDaily Coffee News by Roast Magazine

(https://dailyco eenews.com/wp-content/uploads/2018/03/blockchain-3019121_1280.png)

Each of these records, be it a nancial transaction, a contract, or other sort of exchange, is then stacked
one on top of another in a manner not unlike virtual Lego bricks, in that the encryption of the next le
actually incorporates a number or some other data point drawn from the record before, like one Lego
nob sticking upward into the next Lego brick. A bunch of these records is eventually sealed into a “block,”
and eventually the blocks interlock as well, hence the blockchain.

These transactions are all completely visible to anyone on the internet, which gives the system its valued
transparency, even if the identities of the humans involved can be kept secret if they want. Yet it is by
virtue of the interlocking cryptography that if anyone attempted to change any part of a record after it is
sealed, it would instantly cause a disruption throughout the entire chain. There is no computer on Earth
fast or powerful enough to not only crack but also change and correct an entire blockchain all at once,
especially given that these chains are also continuously growing. It is therefore considered to be
incorruptible.

Not only does blockchain technology now provide the basis for “smart contracts,”
(https://blockgeeks.com/guides/smart-contracts/) it can also be used to record prices paid, quantities
ordered, shipping and receiving info, and other data points for a variety of industries. In the case of
specialty co ee, this includes co ee varieties, altitudes, processing methods and other origin-related
details, all in a format that can never be altered or lost once the record is sealed.
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In the next installment
8/5/2018
of our two-part series on cryptocurrency and blockchain, we’ll take a look at how
Cryptocurrency and Blockchain In Coffee, Part 1: Retail - Daily Coffee News by Roast MagazineDaily Coffee News by Roast Magazine

blockchain technology actually works when applied to specialty co ee at origin.

Howard Bryman (https://dailyco eenews.com/author/howardbryman/)


Howard Bryman is the associate editor of Daily Co ee News by Roast Magazine. He is based in Portland,
Oregon.

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