Those looking to spend hard-earned virtual cash on a new transmission for their car now have a place to go in Westchester County: Straub Auto Repairs in Hastings-on-Hudson.
The repair shop recently made the jump to accepting bitcoin, a digital currency created in 2009, as a form of payment. It is the first Westchester auto shop to do so, according to CoinMap, an interactive online map of brick-and-mortar stores that take bitcoins.
Harry Straub, who since 1991 has owned the shop his father started in 1965, said two factors made accepting bitcoins attractive to him: It gives him access to a new revenue stream – people with bitcoins who need car repairs – and the service fees on bitcoin transactions are miniscule compared to credit card fees.
“I started reading that a couple of bigger chain stores and whatnot have taken on bitcoin,” he said. “So once I started figuring out more about it, I figured it doesn’t hurt to be a little ahead of the curve. … It can only bring you business; it’s not going to scare anybody away.”
The Wall Street Journal recently reported that satellite-TV provider Dish Network Corp. will accept the currency, adding to a list that includes online retailer Overstock.com, the Sacramento Kings of the National Basketball Association and Virgin Galactic, the space flight arm of Richard Branson’s Virgin Group Ltd.
But Straub may not have taken notice of such news reports without the steady prodding of his 23-year-old son Thomas.
“He has to deal with me speaking about it all the time,” Thomas Straub said. “So he knows more than most people do, and I just nagged him until he was willing to try it.”
Thomas Straub has taken on bitcoin “mining” to supplement his father’s financial assistance while he attends St. John’s University School of Law in Queens.
Bitcoin is a decentralized currency, which means there is no bank to keep track of money that is spent. Instead, a public ledger is kept – with security measures in place so no personal information is compromised – by computers participating in the bitcoin network. Mining is the heavy lifting done by these machines as they work through the computational problems involved in keeping all of the computers in the network up to date with every bitcoin transaction that occurs. As a reward for solving the problems, miners receive bitcoins, which can be converted to dollars via online exchanges.
“So I just leave those two little (mining) devices on my desktop,” Thomas Straub said. “They’re probably about the size of a business card Rolodex. … I figured how to get them running, plugged them into my Mac laptop and I let them run. And they make me, I want to say it’s around 20 bucks every two or three days.”
Thomas Straub doesn’t advise maintaining a significant balance of bitcoins due to the currency’s volatility. Its value has surged and dropped dramatically in response to major coverage by mainstream media. For businesses, though, volatility risk can be eliminated with software that can instantly convert bitcoins to dollars at the time of transaction.
“You don’t want to give somebody $500 worth of service and then they pay $500 at that minute and then a minute later, it’s $10,” Thomas Straub said.
He gave his dad a tablet and set up a free account with Coinbase, an online wallet for bitcoin users. When a customer wants to pay for repair work in bitcoins, a Straub Auto Repairs employee enters the total cost into an app on the tablet. The app then generates a QR code with a virtual address to which the bitcoins will be sent. The customer scans the code and confirms the transaction with his or her smartphone. The amount charged is instantly converted into dollars and posted to Straub’s Coinbase account, then deposited to the company’s checking account once a day.
“So without the risk of losing money, there’s no real downside to doing it,” Thomas Straub said. “It’s not going to cost you anything to get set up; it’s not a real big deal. Anybody that has a computer, tablet, smartphone, anything can get set up in five minutes or so.”
Straub Auto gets more of the money from bitcoin purchases than if the customer were to use a credit card. While credit card companies charge up to about 4 percent to process a transaction, Coinbase waives all fees until a merchant hits $1 million. The company then charges 1 percent to convert bitcoins to dollars. Keeping the bitcoins without converting is free.
Harry Straub said that besides the savings on added fees, what attracted him to bitcoin was access to a unique market: tech-savvy spenders from New York City.
Bitcoin-accepting businesses are sparse in the city’s suburbs on CoinMap, with Straub Auto joined in Westchester by License 2 Grill restaurant in Thornwood, and Luca’s Pizzeria, Stamford Salads and Old Greenwich’s Forefront Law Group in neighboring Fairfield County, Conn. Locations that accept bitcoin are more dense in and near Manhattan. Few tristate area auto shops accept the currency, so Harry Straub said he thinks he can pull some customers to Hastings-on-Hudson.
“Even if it was one car a week in the beginning, you get one car and the guy pays in bitcoins, it’s not a big percentage of what you’re doing but it’s one car you wouldn’t have gotten otherwise, so that’s not horrible,” he said.
The auto shop owner said he thinks use of the currency can catch on with other small businesses in Westchester through word of mouth at training seminars and industry meetings.
“Everyone’s always interested in getting more business. Most guys are open to ideas of how they can generate more revenue,” he said. “The more people that are accepting it, the more accepted it will become.”