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SALT LAKE CITY — Bitcoin is a form of internet currency. But how do consumers get it and spend it? It's something few people understand.
The Pie Hole in downtown Salt Lake City is no ordinary pizza parlor for two reasons: The owner has a secret recipe, and it is the only pizza parlor that takes bitcoin.
Owner Geo Engberson wants to start a trend of every person and every business accepting bitcoin to buy and sell everything.
"It's just a new currency," he said. "It's a new means of exchanging something that you've done for something I've done." Customers can pay for the pizza in cash or with a credit card because both they and the business have faith that those are valuable forms of currency. To buy with bitcoin, customers need it on their computer or cellphone, and it needs to have value.
Utah bitCoin community organizer Alan Walker explained how to install an app called Blockchain, one of a number of programs that deal with bitcoin transactions. Next, the consumer must get bitcoin value in their cell phone or virtual wallet.
Value can be given to the bitcoin by asking a bank to convert dollars to bitcoin, in the same way foreign currency is bought.
KSL purchased some bitcoin from a bank and from Walker, using U.S. currency. The bitcoin was transferred from their computers to KSL's, or from their virtual wallets to KSL's, using a procedure which is a lot like sending an email. In the end, KSL had about $30 worth of bitcoin.
Back at the Pie Hole, using the Blockchain app, KSL took a picture of the barcode unique to the Pie Hole. The U.S. currency cash price of the pizza was $16, but one bitcoin today fluctuates around $800.
KSL put in .02 bitcoin, or about $16, hit "return" and "send payment." Just like that, the bitcoin flew out of one cellphone and into Engberson's. He then can change his bitcoin with other consumers or businesses which take it, or convert it back into U.S. dollars.
Engberson agreed, it's all about faith.
"Oh, absolutely. Same thing with the U.S. dollar. It's kind of based on faith," he said.
Related:
Bitcoin growing in popularity among Utah businesses
The digital currency Bitcoin is growing in popularity across the globe. A single bitcoin is currently valued at over $800."I think that demonstrates the faith. That just worked. You just bought a pizza, a sausage pepperoni mushroom pizza, with bitcoin. It works," he added.
KSL delivered the pizza to Walker.
"Bitcoin is given value by the people that use bitcoin," he said. "Fundamentally, currency is what we all agree upon to have value."
Bitcoin is not the only virtual currency on the internet — there are more than 60 similar currencies. Bitcoin is the most talked about because it was the first, created during the financial crisis of 2008 as a way of controlling currency.
Those who want to try using bitcoin should think of it like purchasing and using any foreign currency. They will need to find someone who will agree to use it and consequently give it value, just like U.S. currency.
