In the Summer of 2011 I developed an extreme interest in technology when I was introduced to the world of collaborative consumption and decentralized economies. I heard of an exciting new concept called Bitcoin, a digital currency that was available for the taking if you had the computer power to figure out some crazy math problems (this was my dumbed-down definition of Bitcoin). I thought it was a great idea and I was excited to see where Bitcoin would go as more people learned of it.
Two years passed, I started a technology company, Tealet, and became deeply involved in the world of tea. I repeatedly joked that Tealet would one day build its entire business using Bitcoin; a complex fair value exchange system between tea growers, tea buyers, and tea lovers around the world in different economies. Last month the joke started to become a reality as Tealet began accepting Bitcoin as payment. This news has gained much interest and has made me realize the connections between Bitcoin and Tea.
Bitcoin is a decentralized, cryptocurrency that can become quite technical as you enter the world of mining and trading. There are a number of benefits that have brought together a passionate group of advocates that have made Bitcoin as successful as it is. These benefits mean less foreign exchange risk, no government control on our economy, and no dealing with private banks that charge so much to process transactions. As there are advocates there are also opponents who don’t trust the capability and stability of Bitcoin. Now is the time to become educated because Bitcoin is quickly gaining traction, becoming a bigger and bigger part of the economies of countries such as China and Russia.
I was recently lent the book The Ancient Tea Horse Road from a trusting tea friend. Author Jeff Fuchs journeyed one of the first trade routes established between China and Tibet made necessary by the tea trade. Although I had heard much about the important history of tea, there was something very powerful about this story that got me thinking about the role tea played in building international trading routes. Essentially, tea, a high-quality and scarce product, was one of the world’s first forms of currency.
Since that time, tea has gone on to start wars, shift communities completely, and become one of the most competitive businesses on the globe. It would be fitting to see the global tea industry to be one of the first to innovate through Bitcoin, or any other successful decentralized currency. Just as Tealet is using Bitcoin to cut the financial middlemen – such as Paypal and credit cards – out of consumer sales, we also look forward to seeing how Bitcoin can be used to secure even more profits for small tea growers as we help growers adopt Bitcoin in their businesses so they can reduce foreign currency exchange risk.
Tealet is not the first online tea company to accept Bitcoin; most notable are revolutionary companies like The New Mexico Tea Company and Teanobi Tea Company. These are the first; many more to follow. Tea is a product that is easily shipped around the world. It is these international transactions that benefit from Bitcoin the most. If you are interested in learning more about Bitcoin you should check out We Use Coins or start your Bitcoin wallet at a service like Coinbase, the payment processor we are using on our website. Bitcoin is not a new concept, but it definitely has much more time until it will become an integral part of our global economy.
I heard that bitcoin can be risky because sometimes it’s highly volatile. Is it true?
Yes, Bitcoin is extremely volatile. Over time this volatility will subside as there is more adoption of the currency and its value is better established. In the meantime Tealet will continue to accept Bitcoin because there is quite a large demographic that have adopted Bitcoin and there are few reputable companies that accept it. We have a few customers that have told me that they have converted all of their money to Bitcoin because their don’t trust their government’s economy. For the health and stability of our business we will not be holding Bitcoin because of the volatility, we are only accepting it and using a service that will convert it to USD at the same value of the transactions. We are charged a 0% transaction fee, which beats the heck out of Paypal and other payments services. Times are changing and efficiency is the name of the game!
What a fascinating idea. I love that it’s eliminating banks and high credit card processing fees. Is there a fee to convert Bitcoins to U.S. dollars? I look forward to seeing more vendors accepting this form of currency. My guess is that VISA/Master Card will begin to lower their fees once this hits critical mass. Thanks so much for turning us onto this concept. I’d love to hear from finance people about their perception of this currency.
Yes, I was really hoping that this article would get a conversation brewing. I believe that David from New Mexico Tea Company may have some meaningful input on this subject. I hope he joins the conversation.
Eliminating middle-men has to be good for consumers. Imagine the implications of a currency not tied to any other currency to determine its value? It is a concept that could end – or escalate – the notion of worldwide inflation.
Yes, yes, yes, you get it! It’s a far fetched goal, but I think it’s always good to put our efforts towards something progressive and meaningful. The world deserves a change if we are going to survive the dark ages we are in today!
I applaud you for working with this currency, despite its issues. This is a whole new world. You’re a pioneer.