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Bitcoin, the digital currency that’s arguably one of the greatest social technical innovations since the internet is not without its detractors. Whenever there’s substantial coverage in the press, people are quick to dismiss it as a fad or a scam, likely both. It challenges people’s philosophical understanding of money, and understanding of cryptography and software.

Despite its introduction since 2009, it’s still primarily an asset in which value derives mostly from speculation. Its use as a system for true remittance, though gaining traction, is still far from common usage by the common folks.

From a positive perspective, this indicates that bitcoin and the underlying blockchain’s applications for social systems is still in its infancy and has a lot of potential. At worst, bitcoin is merely a bubble that’s destined to pop, and will be relegated to a footnote and precursor to something bigger and better.

Last week, a friend brought up the idea of starting a T-Shirt online store as a business experiment. I decided to join in, and started my own shop named Traction Shirts. The process was surprisingly a fun and creative one – playing with the designs and thinking of something novel was satisfying. Setting up the store through Shopify was bulletproof easy.

The process was similar to starting a WordPress blog on a custom domain, like on Bluehost, but easier. You go in, pick a theme – many are free, and even those are beautiful – then setup your products and you’re ready to open up shop.

I ended up with two shirts to start.

What I was probably most excited about was testing out the alternative payment options available to Shopify, in particular, the bitcoin integration. To date, I’ve only seen a handful of shops that I’ve stumbled upon in the wild taking bitcoin without seeking it out.

The first thing you have to do is go to the Payments portion of the site. To get there, you press the Settings link from the dashboard.

Then, press the Payments option.

In this screen, you’ll see the following payment options that a customer can use to buy your items:

Shopify Payments (Stripe, essentially) to process credit cards

Paypal

Alternative Payments (this is where the bitcoin payment options are)

I chose Coinbase because 1) I already have a wallet with them, 2) they’re a Y-Combinator company, 3) and they had investments from some big players such as the New York Stock Exchange among others. I also personally think positively of Brian Armstrong and Fred Ehrsam, co-founders of the company. In dealing with the press and pontificating bitcoin without turning people off, they’ve done a very good job. As a test, see if you can name any other CEOs of a bitcoin company aside from Mark Karpeles. I digress.

What you need from Coinbase is an account, then 1) an API key, and 2) the secret key, which you’ll have to paste into the following fields in Shopify:

You’ll need a merchant profile, which you’ll have to fill out, to get the proper API key and secret token. This took a bit of fishing for me to find. From the directions provided by Shopify, you should see this the below button on the left side of the tool bar in your Coinbase dashboard/home.

I couldn’t find it and ended up at this page. Then, when I pressed the link noted there, https://www.coinbase.com/merchant_profiles, my merchant profile appeared. Once that’s done, and once you’ve filled out the merchant profile detailing a bit about your store, you can gather the API Key and Token by first pressing the Setting link from the top right.

Then click on API Access and + New API Key button on the right as depicted below.

Just a warning, API Keys are really keys. By making a new key, you’re essentially making another way to access your account. Be careful who and which other applications you gives these to, and ensure that only the proper accounts are selected for access. A modal will pop up where you’ll configure your new keys.

Note that I’ve only given access to my “Merchant” wallet, and allowed for merchant permissions. Just to note, as of today, Shopify is still relying on API v.1. It’s still working, and I’m getting my bitcoin payments processed. Initially, I tried API v.2, but had failures from the shopping cart.

After you’ve selected the permissions and generated the keys, enable it on Coinbase and input the values back on Shopify. Once you’re done, you’re set to start taking payment in bitcoin as part of the payment process.

The first thing I did was run through the process myself by buying my own shirt. When I got to the first checkout page, I was a bit confused.

You’ll note prominently on the top left that there’s a “Check Out with PayPal” button. Woah. Then I realized that this is merely a “Customer Information” part of the checkout process. Unfortunately, I think that button brings a good amount of people down that path, and they’ll never see the regular credit card and bitcoin payment options. I’ve since found out that you can deactivate this option.

After completing the shipping fields and selecting a shipping method, you’ll find the true payment page with the option to pay with bitcoin. Awesome! A QR code is generated for the customer to pay with, or if they’re already logged into Coinbase, a window with a payment button will appear. After making the payment, the bitcoin was in my Coinbase account within seconds.

Final Thoughts

When I first heard about this option for integration, I assumed that it was as easy as making a flip of a switch, then entering the bitcoin wallet address where you’d like to receive payment — a single field. But as illustrated above, the setup was a two part process between two platforms. And because context switching and somewhat unfamiliarity of the sites, at least in the advanced options, the UX/UI of the site became a slight challenge in finding what I needed to set up the API Keys. In all, it may have taken me 20 minutes to get through it. This included reading the documentation to ensure that I wasn’t giving the master key to the temple, and also attempting and not succeeding with API v.2 first through Shopify.

The Con: It wasn’t as easy as setting up a skeleton shop on Shopify

The integration isn’t so seamless as setting up ACH, i.e., checking account and routing number. Because it involves syncing up the two platforms, I can see how it’s seemingly onerous if the user didn’t have a Coinbase account to start. In short, I wouldn’t trust someone else to do this portion on my behalf because of a few security risks. Though it’s possible to mitigate additional exposure by ensuring you have 2-factor authorization set up on Coinbase along with notifications. As a recommendation, if any of your personal accounts for anything offer 2-factor, please enable it. It’s just a good security practice.

Volatility, or rather the perception of it. This is a number one cited reason for retailers not taking the currency, though that’s easily solved by cashing out immediately.

The Pros

Instant payment processing. Shopify payments batches balances weekly, then go through ACH, which takes about 3 days. In total, seeing your first proceeds may take up to 10 days. With bitcoin and Coinbase, you can in theory off your coins on the streets for cash within minutes (I’m not giving any legal advice, but you’ll likely be technically liable for additional taxes here), or, you can also go through ACH immediately and save yourself a week.

No charge/clawbacks. Because the bitcoin network is “merely” a decentralized and immutable public ledger of what accounts own what, the only way funds can return is if the recipient sends funds back to the sender. Though if you’re aiming for a good customer experience, you’ll offer to do a bitcoin to bitcoin refund for up to a time period should the customer decide to do a return.

The experience is by far better than any in person bitcoin transaction I’ve done in brick and mortar stores or eateries. These transactions are typically not quick, and messy. I once sold bitcoin to a young gentleman on Wall Street at the Bitcoin Center in New York, though I’d be lying if I wasn’t a little nervous to trade bitcoin for straight cash. In this case, you have to deal with phones, apps, syncing, and sufficient confirmation.

The fees are better than traditional credit card processing companies. Shopify Payments, which uses Stripe has the fee schedule as listed below. Coinbase on the other hand allows the first $1,000,000 in bitcoin transactions free, and 1% to exchange back to fiat for ACH. The difference is nominal for most people including me because of low volume, but bigger retailers can save a lot of money if they went with Coinbase, and immediately cash out.

If you currently run a Shopify store, and are interested in taking bitcoin, I strongly recommend you give it a shot with my instructions. You should also reference the official documentation here. If you need to sign up for Coinbase, you can earn $10 in bitcoin after you purchase $100 worth of bitcoin by using this Coinbase referral link.

And if you’d like to take a dip into entrepreneurship, starting a Shopify store couldn’t be easier! It’s fun, and your creative side will thank you.



