Four years ago, I attempted to live off bitcoin for a week and failed. It was too hard to find businesses that would accept it as a form of payment.
Bitcoin was trading in the $2,500 range at the time in 2017. Later that year, it soared to a then-record high of nearly $20,000. In 2018, it lost 80% of its value.
With bitcoin soaring 2,220% since the days of $2,500 per coin — most recently surpassing $58,000 — I decided to put it to the test, again.
But before I embarked on my new adventure, I looked back at the things I was able to pay for in bitcoin in 2017, and how much that amount of bitcoin would be worth at last month’s record prices.
Back then, I found a bitcoin holder on a chat room who agreed to meet me at Penn Station and sell me a New York City MetroCard in exchange for bitcoin. I ended up paying him $20 worth of bitcoin. If I had held on to that $20 in bitcoin, it would have been worth $464 now.
That $10 salad I paid for in bitcoin at a French restaurant on the Lower East Side four years ago, would now be worth about $232.
The ice cream sandwich from Melt? It cost me $6.50 of bitcoin in 2017. That amount of bitcoin would be worth around $150 at February’s peak.
But that was then, and this is now.
I cut my recent experiment down to only a couple days because of the health risks during Covid, the city’s virus restrictions and the closure of a number of restaurants due to the pandemic.
In 2017, I found it difficult to buy coffee directly using bitcoin. In 2021, it’s possible thanks to Bakkt Cash, a digital currency platform that Starbucks is testing out via a limited program.
That’s probably one of the biggest changes from four years ago, a growing number of third-party apps that make it easier to spend your bitcoin. Instead of putting a credit card into the apps, you opt to pay with bitcoin. Generally, the apps show you prices in dollars and draw on your bitcoin as the payment source.
However, Flexa told CNBC a majority of the transactions on its platform, more than 60%, are for coffee, tea and other quick-service items. It charges no user fees.
Similar to four years ago, there are workarounds including gift cards that bitcoin holders can buy using their bitcoin. However, these sites typically have transaction fees that vary depending on a number of factors. Currently on bitinfocharts.com, the average transaction fee is $15. Two weeks ago, it was around $30.
Costly transaction fees are one of the many reasons bitcoin holders told CNBC they don’t view it as true currency. Based on a Chainalysis report, only 8% of bitcoin transactions in the U.S. were for merchant services last year.
Using a popular service, I was able to buy…