Art collectors in Lawrence looking for an original painting by a local artist might be able to find one at the Lawrence Percolator for around $250. Or, in lieu of cash, they might pick it up for roughly one-quarter to one-third of a Bitcoin, depending on the day.
The Lawrence Percolator announced this week that it is now accepting transactions in Bitcoin, making it possibly the first local merchant in Lawrence to accept the internet-based digital currency that is now starting to make its way into the mainstream online retail industry.
"Once you learn the system it's much easier to make transactions in Bitcoin than in cash or credit card," said Walt Ohnesorge-Fick, a volunteer member of the Percolator's board of directors.
The Percolator, 913 Rhode Island St., is a nonprofit gallery that describes itself as being "dedicated to community involvement and area artists."
Bitcoin was launched in 2009 as an alternative currency used mainly for internet transactions, but its precise origins remain something of a mystery. Since then its value has risen sharply, from about $30 per Bitcoin around this time last year, to a recent high of just over $1,000 per Bitcoin.
"I learned about the coin in 2009 during my grad program at San Francisco Art Institute," Ohnesorge-Fick said, "and had I bought into it then, I would have been able to retire today."
But financial experts caution people against speculating in Bitcoin value as a strategy for getting rich quickly because its exchange rate can fluctuate wildly, even over the course of a single day.
The website bitcoinmarkets.com, for example, quoted an exchange price of $799.99 Monday afternoon, down sharply from the previous 24-hour average of $989.03.
Although Bitcoin is commonly referred to as a kind of currency, Kansas University law professor Rick Levy said it really isn't. And that, he said, explains why it's legal to use and is not considered a form of counterfeiting.
Article I of the U.S. Constitution gives Congress the power to coin money. But Levy said Bitcoin is not "legal tender" and nobody has a legal obligation to accept it. Its value, therefore, is determined by whatever people are willing to accept in exchange for it.
"Historically, there have been other forms of made-up currency," Levy said. "For example, companies would pay their workers in 'scrip' that was used in the company store, and the military did something similar in other countries during times of war."
Ohnesorge-Fick said the gallery hasn't yet completed any transactions in Bitcoin, although he said he has made several purchases himself using the alternative currency. He said artists who sell their work through the Lawrence Percolator can decide for themselves whether to accept payment in Bitcoin or U.S. dollars.