Part 2: Cryptocurrencies - From a retailers perspective

Cryptocurrency-interview-Lucas-Pulkert

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Foreward

Lucas Pulkert is the managing director of stilfaser GmbH and runs his online shop, Jungfeld.com, where he and his team sell high-quality socks in an assortment of bright colours. What makes his shop even more special is the fact that “bitcoin” is offered as an optional payment method. Here in interview, Lucas shares why this is the case and illuminates his own personal experiences working with cryptocurrencies.

 

1. Hello Lucas, you’re the mind behind the online shop Jungfeld.com. Could you please say a few words about yourself?

Sure - my brand, “von Jungfeld”, manufactures high-quality socks, stockings and boxer shorts. We set up our company in Mannheim four and a half years ago. Now we supply about 650 retail shops throughout Germany, Austria and Switzerland and use Shopware as the basis for our online store.

2. You sell socks in your shop. What's the story behind that and what makes your shop special?

Lots of people say the trend towards multi-coloured socks has been going for a whole decade, others say it's only a temporary fashion craze. The correct answer is that multi-coloured socks have been worn for the last 150 years. It's a real tradition, especially in Britain and Italy. We founded our company to place an emphasis on socks – just as suits, shirts and shoes have been emphasised for ages.

We always try to provide our customers with a connection to the brand, regardless of the point of sale. Our online shop has a clean design, which allows the products and brand to shine all the more. Thanks to various adjustments, you only need three clicks to go from the homepage straight to the PayPal express checkout. This even includes selecting the size. So usability is also important to us.

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3. We noticed that you offer bitcoin as a form of payment. Why did you decide to accept a cryptocurrency?

We are a young team and very much into technology, and we’ve been personally interested in cryptocurrencies for quite some time. What's happening at the moment is highly speculative. But we support the underlying ideology of a local currency, and it has to start somewhere to stop people from saying: "bitcoins are only used to buy arms and drugs.” Well, now you can use bitcoins to buy socks too.

4. Unlike standard means of payment, you have to keep an eye on currency fluctuations all the time, don't you? What are the technical conditions to offer this in your shop and how do you keep up with the exchange rate?

At the moment we use a plugin with a direct API to Blockchain.info. When an order is placed, the correct amount is calculated in bitcoins, based on the current rate. The customer then sees a QR code that he can scan with his wallet. The correct price is already included in the QR code. As soon as our wallet registers the incoming payment, the order is released. It's all fully automatic.

5. The price of bitcoins fluctuates daily. How do returns work in the Jungfeld shop? Does the customer get bitcoins at a recalculated rate or the amount he paid before?

Fortunately, returns don't happen very often with us, but if this does happen with a bitcoin payment, we handle it just like any other currency: the daily rate applies.

6. If a transfer has been made by bitcoin, do you recalculate payment into euros or do you leave it in the cryptocurrency? It's very possible that bitcoins could be worth twice as much in a year's time.

Since there are still a manageable number of bitcoin transactions at the moment, we leave the bitcoins in the wallet. You might say this is the company's investment branch.

7. How did bitcoin first attract your attention – did you have previous experience with cryptocurrencies?

Yes, I think that people who allow cryptocurrencies in their shops are users themselves. Here in the team, a minor crypto-fever has broken out. Obviously, it's also about getting involved in a clever ICO (Initial Coin Offering). But we are particularly enthusiastic about the ideology of cryptocurrencies and blockchain technology. Anyone who is interested will discover that a genuine step in technological evolution is taking place here. The first time I seriously got involved with bitcoins came from advise from my father, who always has a good instinct.

8. When you hear about bitcoins in the media, they’re often in a negative context involving blackmail or cybercrime. Can you do serious business with cryptocurrencies?

Definitely, you can buy socks with it. This question basically opens up a long discussion on security and freedom. Both sides can now quote arguments made by clever people. When it comes down to it, bitcoin is a fiat currency whose value is not regulated by central banks, rather locally via supply and demand. This also makes it a speculative business, but that's just how it is with supply and demand. Blockchain technology makes the third trust party (banks, for example) superfluous. The fact that the ownership of bitcoins is to a certain extent anonymous is also nothing new – after all, I don't write my passport number on every 10€ note that comes through my hands.

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9. We can imagine that your customers are very sceptical about this means of payment. What is the general acceptance like and how often do your customers use this means of payment?

The acceptance is still very low. On the one hand, bitcoins are far less widespread than it might appear. On the other hand, I believe that people who already have bitcoins consider them more of an investment rather than a means of payment. Just last week I bought a pizza from a well-known online delivery service and it worked faster than I could say for PayPal.

10. Taxation is in general a difficult subject – is it getting even more complicated with cryptocurrencies?

Yes, that's true. We had to explain that specially to our tax office. ("Bit-what?") But there's a way for everything in the end.

11. Bitcoin is only one of many cryptocurrencies. What's your view of the other payment possibilities and could it be the case that people will also soon be able to use "Ethereum" to pay in your shop?

Now there are loads of different coins and nobody knows which ones will turn out best for eCommerce transactions in the end. Ethereum would probably be the next candidate. But at the moment our main goal is to increase the acceptance of bitcoins.

12. Expert opinion is divided concerning cryptocurrencies. Some say that the exchange rate will rise dramatically, while others predict that the bubble will burst in the near future. What is your assessment?

In entrepreneurial terms, the proportion of bitcoin payments is still so small that we aren't spending any operational time worrying about how the rate will change in the future. I personally believe that we could certainly see another "crash". That would be the sixth or seventh collapse since its release, by the way. But in the long term I prefer to go with John McAfee's Twitter correspondence: "Bitcoin moves above $500,000 within three years" Re: "so 1btc = $500,000 within 3 years?" Re: "if not, I will eat my dick on national television." I see considerable specialist expertise there.

13. Jungfeld.com is one of the few online shops in Germany that offers bitcoin as a means of payment. Would you say that other shop operators should react now, and if so, why?

At this juncture, an online shop that integrates bitcoins as a means of payment is doing it out of a sense of mission, rather than out of economic interest. I'd exclude drugs and arms from this statement. We took an interest in this in a private capacity. I asked our developer one Friday afternoon if he could try to assess the cost of integration and on Saturday morning I got the news that he'd integrated it even before breakfast. But as I said, with us it's more about enjoying the whole thing.

To part 1 of this series

To the Jungfeld shop

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