MOST stories about bitcoin, a digital currency loved and loathed in equal measure, focus on the future potential of the technology, rather than its present-day usefulness. This story is no different. Earlier this month, UATP, a payment network for airlines, announced it was teaming up with Bitnet, a bitcoin processing platform, to offer 260 of the world’s largest carriers the option of accepting the currency for flight bookings. UATP merchants provide 95% of global airline capacity, counting among their ranks mainstream brands such as British Airways, Lufthansa, Delta Air Lines and Southwest Airlines. The company also works with 130,000 travel agencies, plus big rail operators such as Amtrak. None of these partners, it must be stressed, has said it will add a ‘Pay With Bitcoin’ button to its website. But the potential to do so is now there. And that is more than enough to get the bitcoin faithful excited by the development. For those who still scratch their head at the mention of bitcoin, a quick introduction should suffice. Traditional payment systems—credit cards, bank transfers, PayPal and so forth—work well enough, but can be costly, slow and vulnerable to fraud. Geeks have long dreamed of a digital currency that exists solely in the form of computer code, which can be pinged over the internet without the need for an intermediary. Six years ago, bitcoin made this dream a reality. The payment system uses mind-boggling cryptography and secret codes to keep transactions secure. (There is a more detailed explanation of how it works here. Our recent article on the industry of bitcoin mining also comes highly recommended.) America’s Department of Justice has said digital currencies are capable of providing “legitimate financial services”. Ben Bernanke, the former chairman of the Federal Reserve, believes bitcoin “may hold long-term promise” as a “faster, more secure and more efficient payment system”. That, in theory at least, should be music to the ears of the airline industry.

Any cost-conscious company would welcome lower transaction fees, but airlines have a particularly strong incentive for scraping away expense. Even in relatively good years, the industry gets by on average global profit margins of one or two per cent. The nature of international travel also means that foreign currency transactions are commonplace. A single, cross-border payment tool would make life simpler for both airlines and passengers. In regions such as Africa, where not everyone has a bank account, mobile-phone-based payment systems are already the preferred way of buying flights. Bitcoin would simply be an upgrade to the status quo. And travellers need not worry about the price volatility that has burnt speculators in the digital currency. E-commerce platforms such as Bitnet can convert bitcoins to hard currencies near-instantaneously. As far as airlines are concerned, therefore, bitcoin has appeal as a cheap, reliable and secure medium of exchange, not a store of value. It is an attraction that glimmers as much in the skies as it does on the ground, potentially liberating cabin crew from the burden of in-flight sales with multiple currencies.

Buying an on-board coffee without fumbling around for change certainly appeals to this author. So does paying a few quid less for a flight thanks to a canny booking platform that cuts out the middleman. Even so, it is not worth getting excited until some big airlines commit to the concept. The world already has one small carrier, Latvia’s Air Baltic, that accepts bitcoin. UATP says “a few” of its larger airline partners are interested in doing the same, though none has gone public. When one does, there will be an army of bitcoin devotees vowing to patronise the new channel. Whether or not the rest of us do the same will depend on how the broader bitcoin story unfolds.