Budafoods , a certified organic farm and food supplier located in the Sunshine Coast Hinterland, Queensland, Australia, is attempting to create a closed bitcoin economy among farmers and to encourage its partners, supporting businesses and community to accept bitcoin.
Over the past few years, online payment services and platforms such as PayPal and banking systems have negatively affected businesses in the area, including Budafoods and the local businesses the farm supplies. Apart from the substantial fee for transactions and payments, PayPal and the bank transfers have been extremely inefficient, freezing funds for weeks at their will.
In search for a cheaper, yet quicker, payment method, Budafoods founder Mark Burgunder came across bitcoin, a decentralized currency which enables instantaneous and cheap transactions for merchants and small businesses.
“My main reason for attempting to get others to accept bitcoins is that I love the speed and ease of bitcoin payments and have a distrust of most central banking methods,” Burgunder told Bitcoin Magazine.
“On a deep emotional level, fractional reserve banking feels like cheating to me and has only been successful because it benefited the already rich,” he said. “Additionally through experience with credit card processing and using PayPal I have realized that not only are merchants/sellers charged a substantial fee for accepting money, but we also need permission from the banks, credit card companies and/or PayPal to accept payments.”
Unlike most companies that claim to accept bitcoin, Budafoods is not converting the bitcoin it accepts to fiat money.
“In Australia, a surplus of bitcoins wouldn’t be an issue as we currently have a great service available here called Living Room of Satoshi that allows us to make bill payments and electronic transfers to almost any bank account in Australia using bitcoins. We’ve been using this service on a number of occasions already with the largest purchases so far having been for chicken feed and for mobile electric fencing,” Burgunder told Bitcoin Magazine.
Closed Bitcoin Economy Among Farmers
As computer scientist and cryptographer Nick Szabo stated before, suppliers, businesses and customers must all accept and use bitcoin for it to be effective in an economy. Szabo calls this concept a complete closed cycle: store => supplier = workers => store.
Burgunder attempts to implement this concept into the local farm and business networks in Queensland. Currently, Budafoods is trying to convince local businesses in its community to accept and pay them in bitcoin, as it is faster and cheaper than other online payment methods available in Australia.
“We are supplying one of the local restaurants and would be more than happy to accept payment in bitcoins from this restaurant. We feel this should make it easier to allow the restaurant to accept bitcoins from tourists and, in turn, pay us for supplies with the bitcoins they’ve accepted,” said Burgunder.
The Use of Multi-Sig Wallets between a Supplier and a Business
Burgunder further explained that the use of multi-signature wallets between a supplier and a business will be far more efficient than any other payment method/systems available today.
“I’d envisage in an escrow scenario we’d pay for the purchase into a multi-sig wallet with one of the signatures being ours, with us signing a transaction to release the funds to the supplier once we’ve received the shipment,” explained Burgunder. “With the supplier also having one of the multi-sig keys it wouldn’t be possible for us to just withdraw the funds, giving the supplier certainty that the funds will not disappear on them. I feel this would help incentivize the supplier to assist in speedy and hassle-free delivery as in this scenario it would be in their interest to have the shipment arrive with us in a timely manner.”
Joseph is a web developer and designer, writer and a passionate musician who loves to travel. He has worked as a researcher for a number of venture capital firms and as a freelancer designer for resorts and corporations in Korea and the Philippines.