Cash, credit or... cryptocurrency? North Jersey restaurant now accepts bitcoin, litecoin

Show Caption Hide Caption How the brilliance of blockchain overshadows Bitcoin Warren Buffett called Bitcoin “rat poison,” but the technology behind it is something everyone can agree on. Here are other life-changing uses you didn’t know about.

Monica’s Restaurant now accepts a new method of payment for its signature Italian dishes that include mozzarella fritta, calamari and stuffed mushrooms — cryptocurrency.

It doesn't jangle in your pocket, it's not in your checkbook and can't be swiped on a credit card reader. Cryptocurrency is virtual.

The Pompton Lakes restaurant on Lakeside Avenue recently joined a small number of eateries that accept decentralized virtual currency, or cryptocurrency, in the form of bitcoin and its clone currency litecoin.

Apart from a personal interest in cryptocurrency, owner Atila Ajdinovski said he hopes to lure new and younger customers to the Italian restaurant through the alternate payment systems.

"Right now, we have an older clientele," Ajdinovski said. "Hopefully, it brings in the younger crowd."

Is cryptocurrency the future?

Jon Moore of Nationwide Merchant Solutions, a payment processing company based in New Milford, said Monica's is now among 20 New Jersey businesses he has helped to embrace cryptocurrency.

Many deal in online sales, where the security, speed and ability to track bitcoin and litecoin limit the risk of disputed transactions while reducing fees and accelerating payments, he said.

"Credit cards are based on the honor system," Moore said. "When you're dealing with people across the world you don't know, honor systems don't work. We're seeing it already not work with all the fraud in the payment system."

Local: Two very different NJ teachers with help from 'brutally honest' students pen SAT prep book

History: History of boxer great Joe Louis in Pompton Lakes

Food/Dining: North Jersey's best restaurant bars

Today, shoppers can buy a wide range of retail goods with bitcoin. Online takers include Newegg for electronics, Overstock.com for home goods, Expedia for travel and Tesla for cars. There are also walk-in shops such as Jeffersons Apparel & Accessories in Bergenfield and local service providers such as Boiling Point Mechanical in Wanaque.

A sit-down restaurant, however, is different, Moore said. The high-volume, fast-paced and in-person business provides an everyday application for people to become accustomed to what is likely the future of payment, he said.

Monica’s Restaurant in Pompton Lakes, NJ now Accepting Bitcoin/Litecoin for Payment. #LTCEastcostteam is having dinner there this Friday. Of course we will #PayWithLitecoin!! More videos this weekend showing live LTC Payments!! #Litecoin #IgnitetheFireLTC pic.twitter.com/WD9H3LodlI — Jon Moore (@jonnylitecoin) October 16, 2018

"It's an exciting place to have it," Moore said. "Most places aren't as visible to the public."

Moore said he is hoping to personally help 50 to 60 New Jersey retailers start using cryptocurrency within the next six months. Among the next in line are Sendai Sushi in Emerson and Giovanni's Deli in Secaucus, he said.

Mining computer power

Bitcoin and litecoin are not commodities or stocks, rather virtual currencies that can be procured by providing users with goods and services or "mined" with computer power.

As a virtual currency, transactions are secured and processed with the help of the internet. Instead of being done in a centralized location such as a bank, the transactions are documented everywhere on the internet.

"It's more secure than any network out there," Moore said.

Internet users that provide the massive computing power now needed to process bitcoin transactions are called miners. Miners are compensated with newly-created bitcoins, which are becoming more difficult and consequently costly to mine.

"[The mining of] it uses as much electricity as the country of Argentina," Moore said.

Historically, those with the money and hardware to mine are rewarded. The currency's value has stayed at roughly 2.5 times its mining cost.

Litecoin is similar to bitcoin, though its uses a less complex cryptographic algorithm, Moore said. Due to its low transaction fees, Litecoin is a better payment system, he said. However, the currency itself does not hold its value as well as bitcoin, he added.

How to use cryptocurrency

Though easier to implement for online sales, Moore said cryptocurrency transactions at Monica's remains simpler for the business and its diners than paying with cash or credit card.

The Italian restaurant has a QR code, which is a pixel-matrix barcodes seen on almost every item sold today, inside its receipt holders. By scanning the code, users are able to transfer money from their virtual wallets to Monica's.

The process allows the restaurant to almost instantly know how much a patron paid and tipped, making some potential disputes moot, Moore said. There is no waiting for change or to sign a receipt. There is also less worry, Ajdinovski said.

Records of the transaction are permanently stored on the internet, but account information is not shared.

"When they have your credit card, they have the expiration date. They have all the codes," Ajdinovski said. "They can turn around and rob your credit card without you knowing."

Setting up a virtual wallet is also relatively simple, Moore said.

Smartphone apps such as Litecoin Foundation's LoafWallet create an encrypted virtual wallet to hold the currency. Losing the phone does not necessarily mean the money is gone, however. A series of words unique to each user, which Moore recommended writing down and keeping in a safe, can be used to find that virtual wallet.

A fluctuating market

Among the first and only eateries to start accepting bitcoin was Helen's Pizza in Jersey City. The restaurant had its initial transaction with bitcoin in 2014, said Nicholas Kalcanides, whose family has owned Helen’s Pizza since 1968.

Kalcanides said bitcoin use started slowly, about one transaction a month. The transactions became more regular as the value of bitcoin rose and hit $400 around January 2016.

The story continues below the video.

Bitcoin prices are back up After a brutal start to the year for cryptocurrency investors, Bitcoin bounced back big time in April. Is it here to stay?

Since the currency broke the $1,000 threshold in January 2017, he said there have been no users beyond the three or four regulars who recently starting using it again as the value has been on the decline.

“Once it shot up a lot, we didn’t get any transactions,” he said. “The only thing recently is we’ve had a few customers start using it again in the last couple weeks.”

The restaurant offers a 10 percent discount for users of cryptocurrency, due to the relatively low transaction fees of 10 to 20 cents for bitcoin and about 2 cents for litecoin - compared to 2 to 3 percent for credit cars. The pizzeria began accepting litecoin about three months ago. It had yet to register a litecoin transaction through mid-October, Kalcanides said.

Virtual money's value

Litecoin was created in 2011, a year after the first purchase was made using bitcoin. The user bought two pizzas with 10,000 bitcoins. Now (Oct. 19), that translates to $64.4 million.

The New Jersey Division of Taxation requires taxpayers to determine the fair market value of the cryptocurrency in dollars at the time of receipt for tax purposes. Kalcanides said the accounting process does not change much at Helen’s Pizza, except for one fact. The business has held on to every fraction of a bitcoin it ever exchanged for a slice.

“It’s OK because they store their value and the value has gone up. So, we’re happy about it,” he said. “We did pretty well.”

They hit roughly $20,000 per unit in late 2017. It is now valued at more than $6,400. Still, bitcoin that bought a slice a few years ago could buy whole pies today.

Ajdinovski of Monica's said he is not sure what he will do with the virtual currency. He is considering holding it, but said he still "has to pay bills." Many retailers are opting for immediate conversion into dollars, due to the perception of a volatile market, Moore said.

Where to buy bitcoin

Though pricey, fractions of Bitcoin can be bought on internet exchanges or with $20-dollar bills at special ATMs. Royal Fried Chicken in Elizabeth has one, as does the T-Bowl Smoke Shop in Wayne.

Rocky Gandhi of George's Market on Hamburg Turnpike in Pompton Lakes, put a Bitcoin ATM in his corner deli in April.

The story continues below the tweet.

Every two weeks, the deli sees about 15 to 20 users deposit cash in the machine and uploading bitcoin onto their smartphones, Gandhi said.

Whether or not the Bitcoin ATM will stay for the long term is still undetermined. As it stands, Gandhi said he receives a flat fee from the ATM owner.

“Let’s see what my commission goes up to,” he said. “I have to see if it’s worth it for me to have it or not.”