Mumbai-based Headrush, an adventure- and extreme sports company, has become the first player in India to accept Bitcoins.
On March 2, 2014, it held a Bitcoin meet, wherein adventure junkies paid for the services via their Bitcoin mobile wallets. So how does it work? Customers are given the public key to the Headrush wallet and they can simply transfer the Bitcoin.
It is currently accepting the cryptocurreny at Headrush Urban Extreme, its adventure park in the financial capital of India, where it has activities such as Zipline, Paintball, etc. Headrush soon plans to extend services to other divisions, i.e. adventure tours, outbound programmes and adventure equipment.
Kanak Seth, Director and Co-founder, Headrush
“We have been following Bitcoin for a while now as we find the idea of a decentralised currency quite progressive,” said Kanak Seth, Director and Co-founder, Headrush, during a chat with e27.
We are all witness to the volatile nature of the cryptocurrency. So how does the company plan to factor that in? “We currently plan to hold on to Bitcoins when a customer pays, so we are exposed to some volatility risk in the short-term. But we believe that we will be able to liquidate at a good price in the future. Alternatively, one can choose to encash it on the same day, reducing any risk involved,” shared Seth.
Bitcoin is shrouded in too many complications in India. Offices of traders were raided few months ago. The monetary regulator of the country, The Reserve Bank of India (RBI) even issued an advisory to citizens to not buy cryptocurrencies. In light of this, accepting Bitcoins for services could be a move before its time.
However, Headrush is bullish on Bitcoins. It feels that the cryptocurrency is a decentralised system that is revolutionising banking.
Seth explained that it is the first time the “double spending problem” (rate of currency exchange) has been solved without the use of a centralised body.
As cryptocurrency grows in popularity, it takes away power from the banks and therefore, threatens to overthrow the current system. It’s like how postal services took a huge hit when email came in. Isn’t it obvious why the current system would oppose cryptocurrency?
“The difference between the cryprocurrency system and the current system is that the crypto method asks you to put your trust in the system (the rules of which are open to be read by anybody), while the current system asks you to put your trust in a centralised body that has autonomous control to change rules as and when it pleases, said Seth, “Another big difference is the transaction fee is minuscule compared to the current banking system. As cryptocurrency grows in popularity, it takes away power from the banks and therefore, threatens to overthrow the current system. It’s like how postal services took a huge hit when email came in. Isn’t it obvious why the current system would oppose cryptocurrency?”
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The Indian Government fears (not unreasonably) that Bitcoins will aid black money transactions across countries because of its ease of use. We are far from finding solutions and it is not very soon that we will see cryptocurrencies becoming mainstream. Seth agreed and stated that for Bitcoin to be a success it will require a support system comprising the government, private companies and ultimately, the users.
However, he countered the argument saying that fiat currencies have been around for years, and we still have such a huge black market. Apart from this, we still have issues such as counterfeiting, credit card skimming, etc. that will not take place using cryptocurrencies.
What’s happening in the region?
But, all is not hunky-dory in the Bitcoin world. If we look at the Asia Pacific region, Japan-based Mt Gox, the world’s largest Bitcoin exchange so far, collapsed on March 2, losing INR 3000 crore (approximately US$490M), — ironically the same day Headrush started its Bitcoin services in India. Indonesia has called Bitcoin “not legal”. Thailand, on the other hand, has banned the cryptocurrency.
Seth opined that Mt. Gox is one exchange that dug its own grave. “Incidences like this are inevitable in any system because you cannot predict what people will do. Will they do something smart or something stupid?”
He personally believes that cryptocurrency is a step up in the evolution of money as we know today. And that crypotocurrency will become big as it’s a much stronger, secure and transparent system. He said democracy (fairly decentralised) is to a dictatorship (extremely centralised) as Bitcoin is to the current banking system.
Well, it is not all gloomy news. Australia is making progress in usage of Bitcoins. Singapore is leading the way by getting Bitcoin ATMs. Do we see that happening in India? “I find it hard to predict, but I’m sure many more companies like ours need to open up and start accepting Bitcoin in return for goods/services before that becomes a reality,” said Seth.
So what is the vision for Headrush? “The move of accepting Bitcoin puts Headrush on the world map. Through this, we hope to see people from across the globe spending Bitcoins in a swiftly growing space i.e. adventure sports, when they make a trip to India,” concluded Seth.