Does a Bitcoin City Work?
Yes. It does and I’ll tell you why.
First, let me explain my personal circumstances.
I know that spending bitcoin is frowned upon in certain circles.
Yet, This article about a recent visit to Bitcoin city, Arnhem. And how spending bitcoin is good for your soul and your marriage.
Over the last 12 months it’s been obvious to me that we are in the “then they fight you stage” and I’d been wondering how someone can leverage their bitcoin gains in a way that is simple, private and keep the wife happy.
With capital gains tax threshold at a measly £6k, the kyc on ramps being choked. Who knows other what draconian measures the “authorities” will bring in to fight bitcoiners with.
Am I Shorting Bitcoin though?
I had a couple of personal reasons to visit bitcoin city. Firstly, I was overdue treating my long suffering bitcoin wife a romantic city break.
Secondly, proof of sanity. In six years my wife says she has never seen or benefitted from my voracious stacking appetite. (She has, she just hasn’t seen it.)
I’ve been stacking sats for years and it’s provided me the insurance to confidently grow my business and give me financial insulation to follow my passion.
I admit, Every time we go away. Its through gritted teeth. I don’t want to short bitcoin for a holiday.
“How can I short bitcoin for my families temporary happiness.”
Holidays are high time preference. Yet as any based Ken knows. Sometimes you have to let your Barbie win.
I was overjoyed when my wife told me she had some unused Avios (air miles) about to expire. So, we can fly somewhere for almost nothing.
I suddenly warmed to the idea of a short city break.
Why Holland?
I’d recently announced I was making an appearance at a bitcoin meetup for my day job.
I’d been invited to do a pop up salon to cut hair at the bitcoin adventure weekend in Avon Valley. (Full report about that experience to come.)
And in my twitter feed, a reply from Bert de Groot. “Come to our festival in Pentecost (Holland) next year.” Intrigued, I responded.
Holland. Hell, yeah. I tell the wife let’s go to Amsterdam. I tweeted back to Bert and he shared with me to visit the original bitcoin city in Arnhem.
Essex to Holland
We set off on our BA flight from London City Airport on the 45 minute flight to Schiphol across the English channel. Took a train and arrived in Arnhem within 100 minutes.
Now, Holland is not really known for its tropical climate. But a little cloud and rain doesn’t put off a couple of weather hardened Brits. Especially, when there is a promise of shopping and fine wine to be experienced.
Armed with BTCMAP.org we dragged our cases straight through the middle of Willemsplein. To scout out the BTC locations we would be visiting.
Arnhem is a compact Amsterdam minus the canals. Which makes it a perfect destination for bitcoiners to visit. Every BTC vendor is within a square mile of the centre.
Our first choice bitcoin hotel was inconveniently closed for annual vacation. Hotel Modez (my second choice) at the time of writing did not accept bitcoin. They did before and once I’d finished with them maybe they will again?
Before I left blighty, I’d joined the Bitcoin Arnhem telegram group. And reached out to see if any oranjecoiners were available to meet up to give me the low down.
Unfortunately, their high level opsec meant they were all mysteriously unavailable.
In unfamiliar territory with rain overhead and a hungry wife, we made a bee line for literally the first restaurant we found that was open. (Wednesday’s in Holland seem to have half day closing schedule)
JANS in Arnhem ticked all my wife’s boxes fine wine, quality menu but none of mine (bitcoin not accepted)
Checking the menu to compare the prices of steak and beer. My low time preference heart skipped a beat. Bitcoin wasn’t going to help me out here.
I made an offer the wife couldn’t refuse. I would only pay if the place accepts bitcoin. Determined to prove to her that bitcoin is real and not a figment of my enthusiastic imagination.
Using BTC map we made a list of restaurant reservations for that evening and I made sure they accepted bitcoin before I committed to anything.
Italian Restaurant Zavfino 22 Zwanenstraat, Arnhem was the first on the list. Based in a cute idyllic part of Arnhem, I asked the waiter. “Do you accept bitcoin” he had to check. I said to him “we aren’t making a reservation unless you do.” He came back and he said they would. All good.
Paying with bitcoin
Two steaks and four red wines later out came the bill. 100 euros including the tip. I eagerly jumped up to organise the bill.
At the counter they had a monitor with a web browser. One tap onto the website and the bitkassa.nl interface appeared. They typed in the amount and immediately a pop up QR appeared. I opened my Muun wallet zapped the QR and a confirmation bar appeared and counted down the confirmation. The bill was paid in a couple of seconds.
Technically, this was an onchain bitcoin transaction. Bitcoin Arnhem was established in 2014 before lightning was conceived. The clever chaps at Bitkassa created their own exchange for merchants to accept bitcoin and hodl it or exchange for Euros. Patrick told me that at it’s height 120 merchants used this Bitkassa service.
Unfortunately, since lockdown it seems Arnhem is down to half of that number. (For reasons that i’ll touch on later)
Bitcoin City promotes “A peer 2 peer electronic cash system.”
The local exchange called Bitkassa. Created an implementation of bitcoin in the exact way it was imagined by Satoshi in the white paper. “A peer 2 peer electronic cash system.”
At the end of day one, well oiled and satiated. My bitcoin itch was well and truly scratched.
The next day we entered the town centre and shopped at multiple bitcoin accepting merchants and multiple ones that didn’t. Note that every little fashion boutique my wife entered did not accept it. This was a relief for me as this trip could have got very expensive indeed.
Breakfast at cafe Meijers, snacks at spar and coffee at brew2cup. Smoked meat and gifts to take home from the Woarst Deli.
Each time using bitcoin. Each time flawlessly..The user experience was smooth and quick. It just worked.
Spend Sats and Replace.
If you’re reading this and you think I have broken the first rule of bitcoin by spending bitcoin and not dirty fiat. You’re wrong. Clearly, you need to Hodl your bitcoin for a few years before you can take advantage of your increased purchasing power.
In a FIAT system of ever-expanding regulatory capture by the legacy financial system. You have to figure out how a way you can leverage your bitcoin gains in real life.
Granted, If you’ve been in bitcoin a while, you’ve made some gains. And this is exactly the reason why spend and replace is important.
Personally, I don’t want a bitcoin pizza moment. Yet I do want to take advantage of my increased purchasing power.
Paying with bitcoin in this context highlighted to my wife, bitcoins ultimate STORE of VALUE proposition. Like the merchants that still accept bitcoin in Arnhem. She is hyper aware that goods priced in fiat get more expensive year on year.
Provided I can replace this bitcoin with FIAT as soon as i can mean I will never have the Bitcoin Pizza regret. She now knows she will get a nice holiday every three years or so out of me.
FIAT is designed to go to zero measured in bitcoin. As Henry Ford said in the early 20th century.
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
Henry Ford
Spending my oldest bitcoin means that the goods I purchased were bought with a giant discount. That steak and wine at Zavfino came to 99 euros in today’s fiat money. (280k sats) But spending my old sats means really I’ve paid around 10-20 euros
in total I spent about (800k) sats in Arnhem and over the next few weeks I spent £180 in dirty FIAT to get them back.
In a nutshell.
A Bitcoin city works. Merchants in Arnhem have a unique selling point. Like canals & cannabis is to Amsterdam. Shopping with Bitcoin is to Arnhem.
The one annoyance I have is why doesn’t anybody know about it. Every bitcoiner can tell you about Bukkele in El Salvador. Yet no-one I’ve talked to knows about Arnhem?
What Patrick and the team have created in Arnhem with the network and the exchange Bitkassa to help onboard merchants is remarkable. An inspiration for any orange coiner in every country.
The first one through the wall gets bloody.
Then they fight you.
Earlier i said the amount of merchants accepting bitcoin has halfed since lockdown. I was disappointed on checkout that my hotel said they no longer accepted bitcoin.
According to Koen in the Arnhem Telegram group – “they quit at the moment that BitKassa could no longer convert BTC to EUR (because of regulations).”
Gnoek said “The same with the venue directy next to Modez (Caspar), after the corona years the owner really needed the money and wasn’t willing to take any bitcoin volatilty risk, At the height we had like 120 merchants, now only about half of them. Currently, I’m not really pushing for more as we first need to have more users who are using bitcoin.”
Otto added “There was a new law that required a license, BitKassa didn’t apply for the license because it was too expensive. The service BitKassa provided to merchants was basically free, so there was no real revenue to pay the ridiculous fees for the license.”
Ridiculous regulations
The powers that be brought in a law to delay the adoption of bitcoin in Arnhem.
The law required Bitkassa.nl to purchase a licence in order for them to exchange bitcoin for euros. The price of this licence was approximately twenty five thousands euros but the cost of compliance to set up with the Dutch Central Bank (DNB) was estimated to be “several million euros”
Patrick added “the total costs is multiple times those amounts as you would also have to hire a compliance officer to setup all the AML/KYC procedures. Not forgetting the fact that DNB overreached their regulatory mandate and dutch bitcoin companies had to take DNB to court. Which increases the costs even more.”
This sinister piece of legislation has been specifically designed to delay and prevent merchants from adopting Bitcoin. The official line from the bureaucrats is that they are protecting their people. We know how this orwellian double speak works. “They’re protecting themselves” definitely not protecting the merchants or the local bitcoiners.
This adminstrative tactic by the state has worked in delaying the adoption of bitcoin for normies. But considering it has pushed all of the merchants that still accept bitcoin to HODL it. Have they inadvertently just increased the scarcity of bitcoin by taking liquid coins off of the market?
Other merchants intimidated by the volatility of the bitcoin exchange rate stopped accepting bitcoin. They have ceded a competitive edge they would have over local rivals. This decision to stop accepting bitcoin could damage the long term future liquidity of their business and deny them the opportunity to welcome bitcoiners like me from all over the globe.
Their are still over 60 merchants accepting Bitcoin and they are all keeping the bitcoin they receive. I spoke to the guy that runs one of the stores i visited and he told me.
“I simply mark the bitcoin payment as a cash payment” and top the till up later out of my own pocket. He said this as he reached for his muun wallet.
Patrick added “The good thing however is that more merchants are keeping the bitcoin they receive (now 100% vs 25% back then)
Which can only be a good thing. Hodling is a fundamental use case The HODL wave grows and grows as more people discover it’s ultimate Value Prop. The optics of Bitcoin “Number Go Up” measured in FIAT will moon forever!
Conclusion
What I have learned is that we need to be rewarded every few years for our low time preference. If we do not have a private off ramp to take advantage of our frugal nature, then we will be mentally exposed to the harsh bear winters that bitcoin goes through.
Retail therapy is a good way to keep motivated, enthusiastic and positive about this chosen path.
If you want this to be about mental health, sanity and stability. It can be. Because celebrating your wins to help keep your pecker up is what life is all about. Know what I mean!
Author @btcessex
Want to read more?
Checkout this article from Patrick from Bitcoin Arnhem about “Why spending Bitcoin is a good idea!”
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