The future of student drinking? Jason Benjamin

It’s a rainy Monday night in Cambridge, and three soaking wet techies and I are making history. Cambridge is the only town in the world to contain more than one pub which accepts the digital currency Bitcoin. Both The Haymakers and The Devonshire Arms are owned by the same computer scientist, who started accepting the currency in his establishments earlier this year.

Formally the preserve of a few technocrats, who could earn Bitcoins by cracking mathematical puzzles using their computers, Bitcoin is starting to capture the imagination of the general public. How long before hordes of students are exchanging bitcoins for Jagerbombs in freshers’ week?

The clientele of The Haymakers on Chesterton High Street, our first stop for the evening, is a little more subdued, comprising mostly middle-aged men in suits, their iPad screens glinting as they check the latest tech news. Michael Brooks, a programmer and medical doctor, who graduated from Cambridge to found his own tech startup, PatientSource Ltd, explains our project to Nick the barman. Nick doesn’t look impressed.

Luckily, group morale is high. My brothers in Bitcoin have kindly cycled to the pub in the pouring rain to explain to me the ins and outs of a currency which, they claim, is a phenomenon the like of which the economic world has never seen. They will also foot the bill. Everyone who holds the currency has a Bitcoin wallet, which is essentially a computer file where your virtual money is stored. Filling up your wallet isn’t easy. Since Bitcoin has no central authority – no official currency exchange – I would have to sell my pounds on the open Bitcoin market. This process can take days. And I just couldn’t wait that long for a pint.

We order our pints. Mike’s business partner Phil Ashworth is the owner of their joint Bitcoin wallet. We are also joined by Josh Treon, a compsci from Trinity. Phil takes a picture of the QR code we are given on a receipt. This allows him to send money from his Bitcoin wallet to the pub.

“Do you like this way of paying, or is it a pain?” I ask Nick’s fellow barman, who sports a humorous computer-themed T-shirt and a pony tail.

“It means I don’t have to touch people,” he shrugs.

In order for Bitcoin to become mainstream pub crawl fare, more people are going to have to understand what it actually is. Unfortunately it turns out that the more pints you drink, the harder comprehension becomes. Mike explains to me that Bitcoin began in 2009, as a currency that wasn’t regulated by central banks, or backed by a government. Any computer around the world could ‘mine’ bitcoins by cracking mathematical puzzles. But as a currency it had no worth. There was no way of converting people’s bitcoins into currencies, or real life usage, that people understood.

This was where Silk Road came in. Although it was shut down in October, this website on the hidden internet needed a way for people to buy their cocaine and hitmen without being traced. Being totally anonymous, Bitcoin was perfect. Around the same time the first Bitcoin exchanges were established, which allowed traders to convert their currency into dollars. Now, Bitcoin had real value.

Bitcoin managed to survive the abolishment of the Silk Road, and can now be used to buy locally brewed ale. According to Nick the barman, a fair amount of customers pay in Bitcoin, but it’s still a novelty. Bitcoin’s rocky road to the mainstream has made it more than a little volatile. Mike has warned me that the price we pay for the pint will vary 30 per cent depending on when we go in the day.

Bitcoin’s infamous volatility is potentially why the hordes of students have not yet materialised. “You want to know that what you can buy today is going to be the same price tomorrow or a week down the line,” says Josh.

Phil shows me why this is the case: Our pints cost £7.80 in sterling. We paid 0.0159 bitcoins. The pub’s computer system takes an average twice a day of the current price of bitcoins, which is different on different exchanges. But Phil shows me the price on the largest Bitcoin exchange. The price of a bitcoin had swung 10 per cent in one day.

“So depending on when I bought the bitcoin that could have cost me £9, it could have cost me £6, it just depends on when you buy them,” explains Phil. “Since I bought bitcoins in September, that purchase has probably cost me £5/6 because the price has gone up over that period of time. But if I bought them this morning it probably would have cost me £9/10.”

“There’s some fascinating maths behind it. Do you want to know more about the algorithms?” Mike asks. I nod enthusiastically, taking a sip from my pint and spilling most of it down my front. He looks at me: “Maybe we’ll leave the maths for now.”

One thing becomes clear: Bitcoin is not for the likes of me. And it’s not for many other people either. The benefit that comes from it is trading, rather than practical use. Aficionados tend to buy their bitcoins and then hold out until their value increases. This is the first time Phil and Mike have ever used their wallet for anything other than trading.

As we trek to pub number two, which is a wet and cold cycle ride down a lonely ring road, it seems like the Bitcoin pub crawl might not catch on as quickly as I thought.