Dublin sold its first pint of Guinness in exchange for bitcoins, the peer-to-peer digital currency, last night.

Staff at The Baggot Inn on Dublin's Baggot Street have been looking at introducing the invisible currency for the past month or two, and last night, they sold a pint without cash or credit.

[comment]Pic: The Baggot Inn[/comment]

The famous digital currency is a form of open-source software, held securely in encrypted digital "wallets" without any physical representation like coins or notes - they're simply encrypted digital items.

So, how can we use them to buy beer, then?

Chris Healy, Marketing and Events manager at The Baggot Inn, explained the straightforward system they're using.

Behind the bar, the staff have a handful of tablets. They input the value of your purchase into an app, which then checks the conversion rate against several Bitcoin exchanges - places where you can change your bitcoins for cash - to figure out how much you owe in the digital currency.

Then, you use your own smartphone to generate a key or QR code for the right amount, and transfer it to the bar.

The company is also getting behind the Bitcoin community in Dublin, with a bitcoin ATM due to arrive on March 10. Unlike regular ATMs, this won't dispense anything material apart from a slip of paper with a QR code on it – a code representing your cash. Another ATM is due to be installed in Hippety’s Café in Temple Bar.

Still, the question remains: why?

"We had a customer who asked us about it back in January," Healy said. After looking into it and attending a few local meetups of bitcoin enthusiasts, he thought: "let's go for this. There's a passionate community involved in it."

Even better, the bar's owner, Eddie Fitzgerald, was enthusiastic and involved right from the start, giving Healy "free reign" to get going.

Bitcoins have been in the news for both good and ill - recently, a number of the currency exchanges have been hacked and had Bitcoins stolen - but the currency has gained significant traction.

The curency is currently fluctuating between €400-€500.

If you're wondering how you can get some free beer, you might want to look into mining bitcoins - earning them for free by using your computer's processing power to authorize transactions.

The Baggot Inn on Facebook, with a hat-tip to Publin.ie.