By NICK CHOWDREY of Crunch Accounting - www.crunch.co.uk

Imagine a local economy where money can travel instantly between customers, vendors and

suppliers, with no transaction fees, at the touch of a button.

To many small businesses in Brighton, it may feel like we’re years away from achieving this - however, all the required technology is actually available today.

Bitcoin is a digital currency that’s rocked the world of tech finance in the last 18 months. Worth

just £7.50 at the start of 2013, its price peaked in November at £750 a coin, making a 1,000% increase in value in just 11 months.

Although today the price has normalised around the £350 mark, many financial experts believe

the technology is here to stay. The Winklevoss twins, who co-invented Facebook with Mark

Zuckerberg, have even suggested that the value could climb as high as £40,000 (~£23,000).

Multi-millionaire, Harvard-educated business tycoons aside, what does bitcoin mean for normal people and businesses in Brighton?

A recent study by Barclaycard revealed that small businesses could be losing as much as £7.5 billion a year due to only accepting cash. This amounts to an average loss of £10,884 in revenue per business, per year.

Payments by debit or credit card have been available for a long time - so why aren’t more small businesses offering this option to customers? Darren Kis, who accepts Bitcoin as payment at his Brighton-based design and distribution company, SWAT Marketing, said: “Using bitcoin reduces bank and credit card fees, because transaction are virtually free.

"Ultimately, it could really help small businesses with their cash flow, as payments are instantand it reduces banking costs.”

For Darren, whose business is all online, accepting bitcoin has also helped him expand his client base. He added: “Bitcoin can also help small businesses do worldwide trade at no extra cost. The main reason I accept bitcoin is because it’s easier and cheaper for my overseas clients to pay me.”

Bitcoin is free to use because the network that runs it is maintained by volunteers. Individuals known as ‘miners’, they contribute computer power to check transactions and make new coins.

In return, they stand a chance of being rewarded with new bitcoins.

Another benefit is that paying in bitcoin is also almost instant, because the checking process

is done automatically. This has led some to call it “virtual cash”. Could bitcoin, then, be the solution for all those small businesses that can’t afford to offer card payments?

Business owners are understandably put off bitcoin by the huge fluctuations in price - firms that run on a small profit need their capital to keep its value so they can pay the bills. The main

problem, however, is that many people don’t know what bitcoin is, nor do they understand how to use it and buy it.

One group has appeared in Brighton this year that want to change this. Graham Lally, computer programmer and founder of Bitcoin Brighton, is trying to spread awareness about how bitcoin could benefit businesses in Brighton.

The group was involved earlier this year in getting the Blind Tiger Club to accept bitcoin payments. The club continued to provide this service until it was forced to close down in May due to a noise abatement order.

Graham thinks that adoption of bitcoin is happening in Brighton, but slowly.

He said: “I'd probably expect to see bitcoin being used by more "fringe" organisations first - there are so many volunteer-based digital and arts projects which spring up in Brighton, and I can see them taking bitcoin as donations first.

“Maybe that will get bitcoin into the local area and kick off more local use.”

The group have monthly meetings to discuss the future of bitcoin in Brighton and plan to start

hosting bitcoin seminars. They are also considering whether to install a bitcoin ATM in the city.

A more radical alternative to adopting bitcoin itself would be for Brighton to have its very own cryptocurrency. Lewes already employs its own currency - the Lewes Pound. Lewes residents

say that money spent locally circulates within the town’s economy, encouraging demand forlocal goods and services.

Regional digital currencies already exist too. Auroracoin has been introduced in Iceland to combat the huge inflation of the Icelandic Krona. Because digital currencies are not controlled

by central banks, the money supply can be increased at a steady rate that does not devalue the currency.

Whether or not a scheme like this could work in Brighton is something yet to be explored.

However, with its thriving local economy and ever-growing tech industry, it certainly seems like

an excellent candidate.

Interested in bitcoin? Visit www.bitcoinbrighton.com to find out more or follow

@bitcoinBrighton on Twitter.

Nick Chowdrey is a freelance and staff writer who specialises in business and technology.

He is currently Technical Writer at Hove-based online accounting firm, Crunch. Follow Nick on Twitter @nickchef88