CNN – Right now, Bitcoin is a hard sell for people who are accustomed to old-fashioned cash or credit. The stateless, digital currency can’t shake off the image that it’s unstable, unproven and largely still an experiment. Recent news doesn’t help.
Last week, Russia’s top prosecutor declared that Bitcoin and all anonymous payment systems are illegal. One of the largest Bitcoin exchanges in the world, Mt.Gox, prevented investors from pulling out their bitcoins, citing a technical glitch. Apple yanked the last remaining Bitcoin digital wallet from its app store. And earlier, a Bitcoin exchange CEO was arrested for money laundering. The price of bitcoins has since tumbled from above $900 to $618 as of Monday. That massive drop makes it a dangerous investment and difficult to use as a currency.
Zach Harvey, an entrepreneur in New Hampshire who developed a Bitcoin ATM, describes the wild price fluctuations as growing pains.
“The currency is far from being stable, and it probably won’t be for a while,” said Harvey, CEO of Lamassu.
But that makes bitcoins maddening both for consumers and the businesses that accept them. The constantly changing value is what drives Ryan Hurley’s law firm in Scottsdale, Ariz., to cash them out every day in U.S. dollars. And it’s why Sapan Shah, a Subway sandwich owner in Allentown, Penn., needs to do some extra math before he pays his suppliers in cash.
Josh Arias, a barber in Reno, Nev., started accepting bitcoins as payment from clients in September. He was forced to ask customers to email him payments after Apple (AAPL, Fortune 500) turned its back on Blockchain, a key Bitcoin transaction app. Arias said he worries that slowing down the payments process will deter new customers from trying it out.
