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The Utility Value of Bitcoin

The Utility of bitcoin

I speak to many business owners about how bitcoin could be useful in their businesses. A common response is ‘but, what’s the utility value of bitcoin? What makes it valuable? I can’t see it or touch it.’

I enjoy this question because it means the person asking is trying to think of bitcoin as money, which is exactly what it is. But because the money everyone is used to working with has a physical aspect in the cash of cash, paper notes or coins, or gold & silver which has commercial applications too, this can make it hard to apply the same thinking to bitcoin.

The answer to the question about utility value to is understand what bitcoin does:

Bitcoin is a protocol that has a higher network uptime than any financial institution, bank, reverse bank, trading desk, etc.

Bitcoin is issued every 10 minutes together with the new block of transactions added to the blockchain.
Transaction blocks (the blockchain) cannot be altered.

The full issuance schedule of bitcoin is already known from now until the last bitcoin is issued in over 100 years from now.

Bitcoin is open source, and can be verified by anyone.

Bitcoin can also be used by anyone, anywhere in the world, and at any time of the day.

So, what am I saying here? Bitcoin is certainty. And who values certainty? Well, EVERBODY.


The international businesses want to know they can invest in a foreign country at a large scale without having laws change, policy changes, wars, regime changes, etc that could affect their investments.

Financial sectors want stability. They want to know that no sudden changes to laws and regulations can be expected.


Countries want to know that their trading partners can be relied upon to honour trade agreements.


Local businesses want to know that the tax laws and labour laws won’t change overnight, and that the price they paid for materials last month is the same price they can expect to pay this month.

Citizens want to know the price of fuel won’t double overnight, or the price of food. Or that their savings and investments won’t be nationalised.

Financial markets price in certainty. See how quickly stock exchange indexes adjust to even a rumour or hint of uncertainty – think tariffs for a recent example.

So that is the utility value of bitcoin. Absolute certainty, all the time.


It’s like building your house on the proverbial rock, as opposed to building on the shifting sands.
Name one other thing that we depend upon to make our living and raise our families that that can give you that level of certainty.


In a world that we know is changing, and more rapidly all the time, for the first time in human history we have certainty.


Absolute certainty, forever.

Bitcoin’s Retail Revolution in South Africa: How Ekasi, Witsand, and Beyond Are Reshaping Commerce

The South African retail sector has a small but tenacious newcomer to the world of payment solution options. Amidst economic instability, currency devaluation, and a growing unbanked population, Bitcoin is emerging as a lifeline for businesses and communities. From grassroots initiatives like Bitcoin Ekasi to national chains like Pick ‘n Pay embracing bitcoin, the nation is witnessing a retail revolution.

The Rise of Bitcoin Circular Economies
South Africa’s townships and rural areas have long battled financial exclusion. Enter Bitcoin Ekasi—a movement translating “street” or “community” into a digital-age economic model. Located in Mosselbay, local traders, spaza shops, and freelancers now transact in bitcoin. These micro-economies thrive on Bitcoin’s borderless, permissionless nature, allowing value to circulate without reliance on banks or fiat currency.

Similarly, Bitcoin Witsand, a coastal town in the Western Cape, has more than half the local businesses accepting bitcoin payments.

In Plettenberg Bay, Bitcoin Plett has turned the coastal town into a haven for remote workers and tourists paying in BTC for accommodations and surf lessons. These models prove Bitcoin isn’t just a speculative asset—it’s a tool for economic sovereignty.

Retail Giants Join the Movement
While grassroots efforts drive adoption, national and international retailers are legitimizing Bitcoin as a mainstream payment method.

Pick ’n Pay, a South African retail titan with 2,300 stores, began testing Bitcoin payments in 2022, and now have enabled this at all their stores. Customers scan a QR code at checkout to pay for groceries using the Lightning Network—a scalable Bitcoin layer enabling instant, low-cost transactions. The move aligns with Pick ’n Pay’s commitment to financial inclusion, targeting the millions of South Africans without access to traditional banking.

Spar, a local retailer very familiar to South Africans, is testing bitcoin payments in Switzerland.
Across the Atlantic, the U.S.’s Steak ’n Shake—a retro fast-food chain—has embraced Bitcoin at 500+ outlets. Allowing customers pay for double cheeseburgers in BTC, with the confidence of rolling this out to all stores at once. While not South African, its success offers a blueprint for local eateries.

Why Retailers Are Betting on Bitcoin

  1. Lower Transaction Costs:
    • Credit card fees erode profit margins, especially for small businesses. Bitcoin, particularly via Lightning Network, slashes these costs to fractions of a percent.
  2. Financial Inclusion:
    • Many South African have no access to traditional banking benefits like credit cards. Bitcoin wallets—accessible via any smartphone—open doors for unbanked consumers to participate in the formal economy.
  3. Hedging Against Inflation:
    • With the rand depreciating 50% against the dollar since 2015, holding Bitcoin protects merchants from currency debasement.
  4. Marketing Edge:
    • Accepting Bitcoin attracts media attention and early adopters. Websites, Maps sites and search engines promoting businesses that accept bitcoin often allow you to list your business and support crosslinks to your website, which helps with search engine rankings.
  5. Global Reach:
    • Bitcoin turns local businesses into global players. A Durban surfboard shaper selling to Australians via Bitcoin bypasses SWIFT delays and exchange controls.

Challenges and the Road Ahead


Adoption isn’t without hurdles. Price volatility, regulatory ambiguity, and consumer education remain barriers. Yet, solutions like BTCPay Server and Lightning Network powered wallets like Blink, Aqua and Phoenix are smoothing the user experience. The technological development is happening so quickly that it’s almost hard to keep up with the innovations. For example, payments received can be automatically split at predetermined percentages, and sent to different people – think restaurant tips. Any tip can be split immediately to all staff at different rates depending on position, experience, etc.

    Conclusion
    From the townships of Ekasi to the beaches of Plett, Bitcoin is rewriting South Africa’s retail narrative. Merchants embracing this shift aren’t just adopting a payment method—they’re joining a movement reclaiming economic agency. As Pick ’n Pay and Steak ’n Shake prove, the future of commerce is decentralized, inclusive, and unapologetically borderless. The question isn’t whether retailers should accept Bitcoin—it’s whether they can afford not to.

    Why Bitcoin Outshines All Cryptocurrencies: Price as the Ultimate Indicator of Value

    As business owners we understand that selling price can be determined in one of two ways. The first method is calculating input costs plus required markup. This is the most basic method. The second, and preferred method, of calculating selling price is to charge as much as you can get away with. This links directly to the theory of subjective value.

    Subjective value is the perceived value of an object or service in the mind of the individual, which can change based on context and personal preferences. In other words, we all have different needs for different things at any one time, and based on that, the price we are prepared to pay for something will change with time. How much would you pay for a bottle of water in the desert vs when you are drowning in an ocean?

    Our customers understand selling price can be expressed as, ‘’what does it do for me and how badly to I want it’’? This value, too, is subjective. For example, if we look at two different types of cars; a Toyota and a Ferrari, it's quite clear that they both serve the same purpose as a mode of transport and yet they serve quite a different purpose as a status symbol or objet de désir. In fact one would argue that Toyota does a better job as a mode of transport but yet it does not carry the same price tag as the Ferrari. This leads us straight back to the theory of subjective value.


    In another example; two seemingly similar items at different price points will immediately make us ask why is the one more expensive than the other. The salesperson selling the expensive item will go into a long list of all the reasons why the expensive item is the premium or better option.


    Pricing is determined by a combination of the real cost of production (If the most we can charge for the product is below the cost of production, we go out of business). It could be argued that the entire company and all of it divisions (Operations, Marketing, HR, Production, Procurement, Branding, etc) and a whole suite of executives, divisional heads, mid-tier management, lower management, employees, etc sole purpose is figuring out the selling price for that product or service.


    So, let's come back to the idea of price as an indicator of value and how this applies to Bitcoin.

    Bitcoin has no head office, no executives, CEO, chairman, or board, no operations department, no marketing department, no middle management, lower management, or employees.
    Bitcoin is also seemingly similar to the all the other crypto coins out there.
    And yet Bitcoins price dwarfs that of it’s nearest rival. At the time of writing Bitcoin’s market cap is 64% of the entire cryptocurrency market.
    Bitcoin, on its own without any formal company support structure or marketing team, in a free market economy, has risen to the top of the pile, by far.
    Ironically all the other cryptocurrencies do indeed have a head office, a suite of executives, a technical team, a marketing team, sales team, social media and advertising. All of these things to derive a price and a sales team to find a market for this product, and yet none of these cryptocurrencies even come close to the Bitcoin price.


    Why is it that Bitcoin carries such a premium?
    Because it’s the individual actions of millions of people around the world determining value in their own subjective framework. The purest free market there is.


    You may not understand the technicalities of Bitcoin and what makes it work. None of that is important if you just look at the price. The price will tell you everything that you need to know. Take all the cryptocurrencies and line them up in a row and the price of each one will tell you where the value is to be found. It is as simple as that.

    Now it’s time to think about how this could mean for your business.

    Securing Tomorrow Today: Why Bitcoin Is the Ultimate Store of Value for Businesses

    While there is a lot of information circulating on how businesses can add bitcoin to their corporate treasury, or to integrate Bitcoin payments into their business operations, it’s worth having a conversation on WHY this is even a good idea in the first place.


    So, what is the why?


    Bitcoin is money. In fact, Bitcoin is the best money we have discovered. This, then raises the question ‘’what's wrong with the current money’’? If it ain't broke, why fix it? Right?

    Let’s look at how money works in the business process.


    As a business owner, you know that you first have to have a product or service, that somebody else feels will add value to them, before they take out their money and pay you for it.


    This is otherwise known as selling.


    Once you have been paid, you in return pay off your own production costs and your own living costs and whatever is left is your retained earnings. Retained earnings can be either reinvested or saved.
    Savings is what you put away as a safety net against unforeseen problems in the future or new opportunities that may arise, and you need money ready in both scenarios.

    Money is not the end goal itself.

    It is stored time & energy to be used at some point in the future for something that you need.
    To put this process in the simplest possible terms; Build + Sell = Money

    In the current world of highly financialized services this unfortunately is not how money works.
    When you go to the bank to lend money for a new project the bank is not lending out depositor’s savings that they are holding. They used to do it this way when banks were required to have full reserve banking. Full reserve banking meant that for every R100 a bank lent out they had to first have R100 of a depositor’s money. A one-to-one loan. Over the years this has changed to fractional reserve, and in some cases even zero reserve banking. This means the bank does not actually have the money before the loan is granted, it is created when the loan is issued.
    You take this money, you invest it, you create value, and you sell that value for money. One of the production expenses you pay back is the loan. When the loan is paid off that debt is cancelled and the money ceases to exist. Deleted.
    Back to simple possible terms; Money + Build = Sell

    Contrasting these two processes brings us to the crux of the matter.
    In the first process, the work has to be done first (excuse the pun) and money is the result of the value created when the sale takes place and they buyer choses to part with his own savings in return for that value.
    In the second process the money is created BEFORE there is value added. Now you have some products to sell, and sell them you better. The perverse outcome of this system is twofold;

    1. You have made products that you may not have a market for, because you got the money first.
      This is why stupid things get made and we are bombarded by an ever increasing amount of advertising and selling techniques to buy stuff we don’t need or want.
    2. Money has now entered the market before any value has been created.
      This is otherwise known as inflation.

    Of the two, Inflation is the real killer.

    When banks (both retail banks and central banks) create money through loans which is injected into the economy, but no value has yet been added, the money in the system the money no longer represents the value in the system through the amount of goods and services produced. The extra money in the system chasing the same number of goods and services over time starts to drive those prices up.
    This is the fundamental problem with the money printer when people can access money before they add value, they start to make strange investments decisions.

    Zombie companies that would otherwise fail are propped up on cheap loans. Dumb investments are made because money can be obtained at unrealistically low interest rates (low risk on money created at the click of the ‘’loan approved’’ button) and something must be done with it. This money has not been earned through real production.


    Bitcoin is money that cannot be created from nothing. It is expensive to produce through its mining process. There are energy costs, site location costs, staffing costs, and other real-world inputs that go into Bitcoin mining, which ties Bitcoin into real world physics.


    The Bitcoin fundamentals of scarcity, verifiable, secure, transparent and censorship resistant have not changed since inception, and offers certainty in an ever-uncertain world.
    Compare this to the money sitting in your bank account. These are not even the same thing and for them both to be called money is laughable.


    The only ways to get bitcoin is to mine it, buy it or get paid in it.
    Buying bitcoin is to buy some at the current market price. This price is set by thousands of participants in free market dynamics all over the world. It is true price discovery. This makes Bitcoin as different as could possibly be to the current money system.


    The best way to get bitcoin is to get your customers to pay you in bitcoin for your goods and services. Setting this up is as simple as downloading an app on your phone and can easily be expanded into existing Point of Sale systems in more complex configurations.


    In closing, think about the money you use for daily transactional purposes, and separate that from the money you use for long term savings to secure your future. Saving in money that inflates away is like holding a melting ice cube in your hand.


    Choose where to store your savings, its your future.

    From Novelties to Game-Changers: The Surprising Impact of New Tech on Commerce

    As a business owner, how often do you think about technology that was supposed to be the next big thing but failed? Most of us may reminisce over this while having a beer afterhours but I’m sure its not keeping any of you awake at night.

    What about the new and emerging technologies that are still fledgelings, and only really spoken about in small circles of enthusiasts? Unless you are one of those enthusiasts yourself, you probably don’t have the time to spend researching every new thing to see how it could help you.

    The stages of technology adoption are a useful model, developed by sociologist Everett Rogers, to help us understand how adoption happens, and includes five distinct stages: innovators, early adopters, early majority, late majority, and laggards.

    Businesses that tend to live in the laggard stage are not going to be a threat to any of us.

    So that pretty much leaves us with the early adopters and the majority. Technically curious individuals will tend towards the early adopters while most business owners probably fall into the majority.

    While I do regard myself at technically curious, I am amazed at how many times I have looked at something for what it is, and not what it could become. One example that I can think of is when the first cameras were added to mobile phones. When I first read a magazine article that cameras on mobile phones were the greatest threat to the photography industry I nearly laughed. This was in the early 2000’s. At that time, I had a Sony Ericsson phone with a small camera on the back and it took positively awful photos. As a result, I never used it as a camera, and I never took it seriously. It seems that didn't age so well.

    The advent of new technologies has consistently transformed the business landscape, often in unforeseen ways. As cameras on cell phones seemed like a novelty at first, but ultimately disrupted the entire photography industry, they went on to create entirely new worlds filled with social media influencers earning millions of dollars.

    And in the early days of the internet, many were sceptical about its potential impact on business. The early dot.com era was marked by hyped up and failed ventures, but it also laid the foundation for the e-commerce giants of today. Similarly, the early adoption of the internet was slow, with many questioning its relevance to everyday life. However, as the technology improved and more people gained access, the internet became an indispensable tool for businesses and individuals alike.

    The same pattern is emerging with bitcoin payments.

    Initially, many saw bitcoin as a speculative asset or a store of value, but its potential as a medium of exchange was overlooked. However, with the development of the Lightning Network, bitcoin payments have become faster, cheaper, and more scalable. This has enabled businesses to accept bitcoin payments, reducing transaction costs and increasing financial efficiency.

    The impact of bitcoin payments on business is multifaceted. For instance, companies like Mercari, a Japanese e-commerce platform, have seen significant growth in bitcoin payments, with over 100,000 transactions in the first month of launch. Similarly, Pick n Pay, a South African retailer, has reduced transaction costs by accepting bitcoin payments, which also allows customers that don’t have traditional bank accounts to buy from them, making them more competitive in the market.

    The rise of bitcoin payments also has broader implications for the economy. It enables cross-border transactions without the need for intermediaries, reducing costs and increasing speed. This has the potential to disrupt traditional payment systems, such as credit card networks and banks, and create new opportunities for businesses and individuals.

    Moreover, the development of bitcoin payments is not an isolated phenomenon. It is part of a larger trend towards decentralized and digital technologies that are transforming existing models.

    NOSTR (stands for Notes and Other Stuff Transmitted via Relay) is a communication network protocol that allows for decentralised communication, like X or BlueSky but now enables sending bitcoin payments to people. Not only can you send a bitcoin payment, but the receiver does not even need to create an invoice. You just sent the payment to them. This has pushed the “value for value” meme on NOSTR where you send a micro payment, almost like a tip, to someone that creates content that you like.

    In conclusion, the impact of new technologies on business is often unpredictable and far-reaching. The rise of bitcoin payments is a prime example of how a seemingly niche technology can revolutionize an industry. As businesses and individuals continue to adopt and innovate with bitcoin payments, we can expect to see significant changes in the way we transact and do business. Just as cameras on cell phones and the early internet seemed like novelties at first, but ultimately transformed their respective industries, bitcoin payments are poised to have a profound impact on the future of commerce.

    Continue to be curious – we live in incredible times.

    Loyalty Reward Programs – How Bitcoin Fixes This

    One of the best loyalty reward programs I ever used was Discovery Vitality’s program - the one where you got a free cappuccino each week. There have been so many loyalty reward programs by different companies over the years, but Discovery’s was the best.

    What made it the best? It was simple.

    You didn't have to do anything except reach your fitness goal for the week and you'd qualify for a free coffee. This was made even better by the fact that many of the gyms you would go to for your fitness rewards, had a coffee shop inside the gym from which you could get that free coffee. So, this meant you didn't have to go out of your way, and you got something free.  That was enjoyable.

    As with all good things, it came to an end as soon as Discovery decided to get clever. It wasn't just the coffee you could get, it was now a snack and a hot drink or a cold drink. Not only was it from the coffee shop but there were three or four other vendors added. After adding so many different vendors and options they then started changing the app functionality making it harder to access those vouchers. It wasn't anything serious it was just an extra click or an extra swap to get to navigate but after a few iterations it was almost impossible to find out where to go to claim your voucher quickly. At that point I stopped bothering.

    Other rewards programs I’ve been part of have been dismal. They offer you something that is hard to claim, that is trying to figure out how to cash in the rewards. And frankly it took you years of rewards points to get anything worthwhile. Furthermore, those rewards would often expire if not used. The kicker is that every rewards program is unique, and these rewards are locked into that company's program. I could not take rewards points earned from Pick ‘n Pay and go and spend it at Woolworths, likewise I could not take a Kauai voucher and go and use it at Pick ‘n Pay.

    Because of this I have lost track of the rewards programs and points I have built up over the years. From major institutions like banks and insurance companies to retailers and restaurants; my wallet used to be stuffed with cash and credit cards, and now it's stuffed with loyalty rewards cards. Actually, one of my banks lets me cash in my rewards for money – but that money will just inflate away in time.

    In a nutshell they were difficult to use, expire, and restricted in where they can be used.

    Doesn’t sound very rewarding, does it?

    Now let's contrast this with businesses that offer you Bitcoin rewards.

    Firstly, these businesses generally accept payment in Bitcoin, which is the fastest final settlement payment network and with near zero fees. That’s a business win right there.

    Secondly, these businesses let you earn rewards in Bitcoin for when buying their products and services. Now you might ask what's the difference between this and any other reward program?

    The difference is HUGE.

    Bitcoin is money, and money that does not inflate away. In fact, it appreciates significantly. The lowest increase in value over any 4-year period is 23% year on year.

    Bitcoin can be spent like money. It can be used to buy any product or service at many vendors, the largest of which is Pick ‘n Pay stores where you can pay for any purchase using bitcoin. So you collect all the bitcoin rewards from these programs and they can be used anywhere else.

    Bitcoin does not expire. The rewards just keep on building up over time.

    The Bitcoin payments ecosystem has exploded over recent years. Look at the recent report from Breez for a quick overview on how many companies offer solutions to handle Bitcoin payments for your business. If you want to attract clients to your business with a royalty rewards program, the best one, by far, is a Bitcoin rewards program.

    Some examples of how it can be implemented are; Fold, The Bitcoin Company, Satsback, Bitrefill.

    This simple loyalty rewards program is how they were supposed to be. Rewarding.

    The Paradox of Money

    A paradox is a statement that is self-contradictory or logically untenable, though based on a valid deduction from acceptable premises.

    The world of money can be confusing, and two recent discussions got me thinking about how little people understand how money works.

    But before that, let’s warm up with a mental exercise: You know Zeno's Dichotomy Paradox? In the fifth century B.C.E., Zeno offered arguments that led to conclusions contradicting what we all know from our physical experience. The Dichotomy Paradox is the one where a person can never actually reach their destination because they must cover half the distance, and then half of that distance, and so on ad infinitum. In other words, they never actually arrive at their destination although they are always getting closer. Now while you can follow this logic and it makes sense, at the same time you know that if you wanted to cross from one side of the street to another, you simply walk across and you have no trouble with half distance’s ad infinitum. And this is the paradox.

    Similarly, when it comes to understanding money, our initial assumptions can often be misleading.

    Now, back to the two discussions. Firstly, the Trump coin frenzy.

    This coin was launched the day before the inauguration of President Trump. The coin's value skyrocketed overnight, only to crash down 40%. A friend asked this question: where does the money come from to pay out people who sell the coin at a higher price? For example, if someone buys the coin for $1000 and sells it for $10,000, where does the extra $9000 come from? This question seems reasonable at first glance, but it reveals a fundamental misunderstanding of how markets work.

    The answer lies in understanding how open & free market dynamics work. When more people are buying than selling, the price goes up. When more people are selling than buying the price goes down. For you to buy the coin, you're buying it from someone who's looking to sell it to you at that price. If the price is not agreeable to both of you the sale does not take place.

    This is the ‘value for value’ exchange that takes place during every transaction. Neither party is forced to trade with the other. And neither will any trade take place if one party does not value what they receive in the trade. For the trade to succeed both parties need to feel they will be better off after the trade than before the trade. If you later sell it for a higher price, you're finding a buyer who's willing to pay that price. If the price starts to go down, then more people are selling and flooding the market with the coin. If the coins are not selling, then the price will continue to drop until a buyer is found. If no buyer is found at any price then you are stuck with the coin.

    So back to the Trump coin and the mystery of the extra $9000 - there's no central pot of money or vault; it's just an open marketplace of buyers and sellers trading with each other.

    The second discussion was about interest payments on loans in world with fixed money supply. The question was: In a world with a fixed money supply (unlike what we have at the moment – but that’s for another day), where would the money come from to pay the interest on loans? The assumption here is that you borrow $500,000 to buy a home, and over a period of time you pay back $600,000. Now $100,000 has been created and where does that money come from?

    Let’s answer this question by another example.

    You go to buy a new car and the car you want is priced at $50,000. This price is made up of the all the costs taken to get the car into your hands, such as raw materials, manufacturing costs, labour costs, transportation costs, branding and marketing costs, rent, and the profit the dealership wants to make on the sale. Now if you don’t think the car is worth $50,000 you will choose a cheaper car at a price you are happy with, but the dealership still makes a profit on the sale of the cheaper car.

    In the case of the interest paid on a loan, the interest is the PROFIT the lender makes on the loan. In fact if you look at the breakdown of the $500,000 loan you will see that admin fees, management fees and interest listed to make up the final real price of $600,000.

    Just like the profit the car dealership makes on the sale of the car. This profit is what the lender feels is a good reflection of the risk undertaken in providing the loan. Therefore interest, like profit, does not create money out of thin air. It is a real cost that is part of the final sale price paid by the buyer.

    While this is not a strictly business article it does involve money, and money is half of every transaction, and business is about successful transactions.

    Zeno’s Paradoxes

    Bitcoin and the Tariff Wars

    The New Testament Bible talks about building your house on a foundation of rock and warns of the dangers of building your house on the sand which is a poor foundation.

    Your home is the place where you have chosen to stake your claim in this life. It's the place where you are going to build a place of safety and raise a family. It's the place you come home to at the end of a busy day to rest, and it's the place where you and your spouse talk about your dreams for the future and make your plans.

    Similarly, a business needs solid foundation, but this stability is not created about the physical location you choose to operate your business from. It is the political, social, and economic environments you choose to place your business. Some regions are better than others, and some countries are better than others.

    However, it does not matter how great things are right now, circumstances can change quite quickly. The recent global shutdown caused by COVID are still fresh in everyone's mind. Political changes, through elections or revolution, are famous for making sweeping changes to the laws and regulations of the previous regime. Right now, the phrase “tariff war” is on everybody's minds. Stock markets have reacted strongly to the Trump proposed tariff and countries are responding with tariffs of their own. Nothing rattles international global trade quite like a tariff war, or at least threats of one. All of this creates uncertainty.

    Uncertainty makes planning extremely difficult. But businesses need to plan. They need to figure out supply chains, distribution channels, new product lines, branding and marketing to introduce these new product lines, and of course the regulatory environment into which these products fit.

    Even with stable political conditions, legislation can change. Suddenly with the swift stroke of a pen, your bestselling product could be in trouble.

    We haven't even added currency fluctuations into this discussion. Sometimes it's a country on the other side of the world that has a problem which reverberates all the way through to affect your business.

    One common thread about uncertainty is that is generally completely outside of your control.

    So where does Bitcoin fit into this? Bitcoin’s is a simple idea perfectly executed and runs entirely unsupervised and uncorrupted since its inception in 2009. Bitcoin has a simple supply issue schedule of a new block every ten minutes and this supply halves every four years. That’s it. And it has done this without interruption since 2009. It is so predictable the reliable that it is often described by the phrase “tik tok, next block”.

    I think it is worth emphasizing the fact that this is Bitcoin just following its code; no more, no less.

    It is not affected by a politician calling for a tariff war.

    It is not affected by the sudden devaluation of a currency or the hyperinflation of said currency.

    It is not affected by COVID lockdowns.

    It is not affected by a supply chain shock anywhere in the world.

    In fact, there is nothing that can be done to shut Bitcoin down or to alter it in any way without expending such significant resources as to make that likelihood nigh impossible. Even people heavily involved in the Bitcoin community that have, in the past, called for changes to the Bitcoin protocol, insisting that there is a dire emergency or cataclysmic event about to happen that required an urgent change, and have not succeeded. Bitcoin continues uninterrupted, unconcerned, and unchanged.

    This is the rock foundation for your business that is called bitcoin.

    If your business accepts Bitcoin for payments of goods and services, you have started building your solid foundation. This foundation will get stronger, and as your business accumulates more and more Bitcoin, you know that you are accumulating an asset that is not swayed by public opinion, political bias, newfangled fashionable ideas, currency debasement or the need humans have to change everything constantly, all the time to try and make it better.

    It is for this very reason that bitcoin exists.

    Tik tok, next block.

    What is a Bitcoin Strategic Reserve?

    What is a Bitcoin Strategic Reserve? I'm so glad you asked. This is just a fancy way of saying you have some savings in Bitcoin. In the case of an individual person this would be the same as a savings account, except in bitcoin. In the case of a company this sort of savings would be called a treasury. Company treasuries don't come up in conversation too often simply because most companies can’t leave cash just lying around in case of an emergency. Inflation eats away dormant cash like a melting ice cube. Reference previous article for more details. The profit predicament.

    As more and more businesses start to look at a Bitcoin Strategic Reserve (BSR) it’s worth discussing some ideas around this. There are a few ways for this to be done:

    Firstly, the SBR is a reserve. It’s not working capital, and it’s not short term investing. It’s capital that can be stored for at least 5 years without disrupting company liquidity.

    Now how do you actually go about creating one? Let’s look at two options.

    1. Buy Bitcoin with retained earnings and store it, or

    2. Get paid in Bitcoin and store that as your strategic reserve.

    Option One:

    This option involves the company opening an account with a registered Bitcoin exchange. Be prepared for some serious admin jumping through all the KYC hoops – exchanges are financial service providers after all. Deposits funds to the exchange account, and then buy Bitcoin. The exchange typically charges between 1% and 2% per transaction, but make sure to check the ‘fees’ page on your chosen exchange. Fees are different for each type of transaction. An eft payment from your company bank account to your exchange account is the cheapest but you do have to wait the usual 2-3 days for the fund to clear. You can use quicker payment options but fees tend to be higher for the convenience.

    Option Two:

    A much more interesting option is getting your clients to pay you in bitcoin. This way you can get bitcoin without having to open an exchange account and go through the troublesome KYC process with multiple verifications and emails forwards and backwards. You also avoid the exchange transaction fees but, more importantly, you also avoid the merchant fees for credit card transactions.

    Merchant accounts for businesses charge between 2.2% and 3.5% per transaction this means for every R100 your client pays by credit card you pay R2.20 – R3.50 to the bank for the favour. Of course, there is also an initiation fee the bank charges for the hardware and setting this up and there can be a monthly admin fee that you are required to pay to continue the service. There is an increasing number of third-party companies providing the similar solutions but the fees are pretty much similar to traditional banks.

    https://www.news24.com/news24/bi-archive/card-online-payments-south-africa-2021-6

    Something else to think about with credit card payments is that you don't actually receive the money immediately. Yes, the transaction shows as approved when the credit card is swiped and your customer takes his product or service, but the funds only arrive in your account days later. This means that not only do you pay a transaction fee but you're also going to spend up to a week waiting for your money.

    For the sake of simple math let's use 5% as the cost of taking money you have earned from your business to purchase Bitcoin (3% merchant fees and 2% exchange fees). Now imagine if your client paid you in Bitcoin. This means you now get the Bitcoin at a 5% discount and the Bitcoin is stored directly to your account.

    Business owners sometimes say that they cannot afford to lose out on rands and that they need every penny to meet their expenses. The reality is you are not going to be converting all your sales from rands to bitcoin overnight. You will only have a very low percentage of people using Bitcoin to buy your products and services, at least for the moment. Pick ‘n Pay stores have been early bitcoin payment adopters and even with their national footprint of groceries (cheap daily necessities) they only received 0.34% of their annual turnover in bitcoin.

    https://www.itweb.co.za/article/pick-n-pay-sees-uptick-in-bitcoin-payments-in-stores/DZQ58vV8kL1MzXy2

    https://www.picknpayinvestor.co.za/pdf/investor-centre/results-and-presentations/2024/interim-results-2024/pnp-h1-fy25-interim-results-booklet-singles.pdf

    The fees that you are paying on credit card transactions are going to amount to far more than what you would miss by being paid in bitcoin with a near zero transaction fee. This is also a convenient savings tool as the bitcoin that comes in gets stored and left there. It's a small percentage you probably won't even really notice it and yet it's just going to add up week by week, month by month until you have a really significant portion. Think of this as a forced savings account.

    You can even afford to incentivise clients to pay in bitcoin by offering a discount.

    Another benefit is that by offering or by accepting bitcoin payments can sell to customers outside of South Africa, that would normally have difficulties sending you cross border payments via traditional means.

    Speak to us for more information.

    An introduction to Bitcoin Strategic Reserves for Companies

    As we embark on a new year in 2025, it is worth taking a moment to reflect on a development in 2024.

    Corporations, both public and private, have been acquiring bitcoin since 2018. Interestingly, it was the public companies that initially led the charge (over 3400 public companies vs 12 private companies by the end of the year). This trend is surprising especially considering the timing. Remember back in 2018 Bitcoin was a far more speculative and less understood technology. There was no ETF’s, no SEC ruling on Bitcoin as a commodity, FASB laws had not changed, it was a much wilder and uncertain environment in the Bitcoin space. Public companies are often owned by a diverse group of stakeholders, including venture capitalists, other companies, stockholders, and pension funds which tends to result in a more conservative approach to strategy and risk appetite. So, one would have expected private companies to be more adventurous and willing to take risks due to their simpler ownership structure and nimbler decision making.

    Feb 2021 had a huge explosion of private companies holding Bitcoin. The number went from 12 to more than 25,000 overnight. While public companies nearly doubled in number over the month of February. This coincides with the early 2021 bull run in the Bitcoin price when it went from $10,000 in Oct 2020 to $61,000 in April 2021.

    However, in late 2022, there was a sudden and significant increase in the number of private companies reporting bitcoin ownership. This surge was so substantial that it exceeded the number of public companies holding bitcoin up until that point, almost overnight. The number of private companies went from 25,000 to 367,000 in a two day period. What is interesting about the Bitcoin price at that time was that this was almost the very lowest point in the Bitcoin bear market priced. I have no idea what caused this overnight explosion, but I do suspect it has something to do with reporting or regulatory requirements. It seems unlikely that about 340,000 companies decided to purchase Bitcoin on exactly the same day.

    In mid-July 2024 to early August 2024, the number of private companies holding bitcoin dropped by approximately 100,000. At that time the Bitcoin price was trading sideways in the $60,000 range. Following this brief period of decline, both public and private companies experienced slow but steady growth until November 2024 when the bitcoin price broke out of the $60k range for good and went on to hit a new all-time high of $106,000. From then on, both types of companies began to increase their bitcoin holdings rapidly and in tandem with each other, with public companies more than doubling over the next two months.

    To summarise we have the following:

    The trend is clearly up, on both fronts. Price be damned. And with 2025 being the year it is expected that nation states will announce their own Bitcoin Strategic Reserves, this may well accelerate.

    It would be a crying shame if nation states, just like public companies have out run their privately owned compatriots, end up being nimbler and leaving the private sector in their dust.

    Corporate Bitcoin Holdings Surge 587% Since 2020

    https://experts.bitwiseinvestments.com/cio-memos/companies-buying-bitcoin-an-overlooked-megatrend

    https://bitcointreasuries.net