Why Cryptocurrencies Might be the Future of Payment in the Restaurant Industry

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Technologies in blockchain and cryptocurrency are still in their infancy, but bullish entrepreneurs and business owners in the restaurant industry already see tremendous potential.

“Right now, blockchain is what the internet was in 1983,” says Kelsey Cole, co-founder of the Canadian start-up Adbank. Bitcoin, the most widely known cryptocurrency — whose creators invented blockchain technology — turned 10 years old on Halloween of last year and though most Canadians (64 per cent according to a 2017 report by the Bank of Canada) have heard of Bitcoin, only 2.9 per cent own any of it and a vanishing minority of them treat it as currency rather than as an investment.

Yet the possibilities for the technology are interesting. Blockchain refers to a virtual ledger, one that tracks and verifies transactions by verifying the other transactions that occurred previously in the “chain.” As Cole explains, “the technology could theoretically be used to track anything from an employee clocking in and out, to the different transactions that bring a head of lettuce from the farm to the restaurant refrigerator.”

This is valuable for a few reasons. For one, it’s “secure by design.” Once blocks are added to the chain, they can’t be altered and can’t be added without knowledge of the previous blocks in the chain. All blockchains work in slightly different ways (and thousands of them exist) but with Bitcoin’s blockchain, this verification process is known as mining and as the chain grows longer, it becomes more secure.

The other advantage is that the chain, regardless of size or complexity, becomes virtually transparent. This is especially useful when it comes to tracking supply chains. Walmart recently entered into a partnership with IBM to do just that with its supply of all leafy greens in order to be able to pinpoint foodborne illness. The software company has launched similar partnerships with other giants such as Nestlé, Dole and Kroger.

As with most innovations, bigger businesses will be better positioned to take advantage of these technologies at first, but eventually, Cole says it could become a software-as-a-service, where third-parties provide the equipment and information infrastructure. In other words, it won’t be all that different than the way Interac and credit machines work now.

But others are betting there’s sufficient interest now to launch the technology. Kibo, a sushi-restaurant chain with 11 locations in the Greater Toronto Area, recently entered a partnership with T.OS, a company whose blockchain and cryptocurrency was designed specifically for real-time transactions, such as those that would occur in restaurants (the creators say it’s also much less prone to the kind of volatility that’s caused some of the massive swings in value for Bitcoin in recent years). While not yet operating on the same scale as more popular cryptocurrencies, T.OS appears to be the only one targeting the foodservice industry and, according to Kibo founder and CEO, Bo Seo, they have already seen some uptake in countries such as South Korea and Japan. This is Kibo’s first foray into the North-American market.

Kibo is already offering $5 discounts to generate interest and people will be able to pay for meals using the currency in its restaurants in the coming months. And though there may not be very many customers who are able to pay with the currency at the outset, Seo says he’s excited to be getting in front of what he feels will be a huge change in the market.

“In the future, this will be a part of payment,” he says, “everybody wins.”

Written by Tristan Bronca

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