As the digital currency bitcoin continues to draw attention for its fluctuating values, some Frederick County businesses are starting to accept it as payments.

Dave Schmidt, operations manager of the heating and air conditioning business Frederick Air, said his shop now accepts the digital currency as a way to reduce costs for customers.

If he doesn’t have to pay the financing fees associated with processing credit card payments, which he said costs about 3 percent per bill, he can pass those savings along to customers, Schmidt said.

Frederick Air also began accepting PayPal and Apple Pay last year.

Bitcoin is a digital cryptocurrency that uses encryption technology to shield the identities of buyers and sellers. But the encrypted identities of the users are maintained on a public ledger to record and verify transactions.

While most customers won’t use cryptocurrency such as bitcoin, Schmidt wanted to have it available as an option for those who do.

Since its first appearance in January 2009, bitcoin has mostly been seen as a high-tech curiosity used by a small group of people, according to the Congressional Research Service in a 2015 report.

During 2014, the value of its daily transaction volume around the world fluctuated between $40 million and $60 million, which reflected between 50,000 and 90,000 transactions per day, according to CRS.

Meanwhile, the credit card company Visa said its total dollar volume was $6.9 trillion, with an average of about 24 million transactions per day.

Bitcoin offers a mix of benefits and problems in expanding its reach to other users.

“Bitcoin offers users the advantage of lower transaction costs, increased privacy, and long-term protection of loss of purchasing power from inflation,” according to CRS. “However, it also has a number of disadvantages that could hinder wider use. These include sizable volatility of the price of Bitcoins, uncertain security from theft and fraud, and a long-term deflationary bias that encourages the hoarding of Bitcoins.”

Bitcoin can be obtained — once a user downloads the software — by either exchanging currency such as dollars or euros, in exchange for goods or services, or by “mining” them by using their computer’s processing power to verify the validity of other users’ transactions.

The currency has attracted speculators who buy them up, some of whom have owned their bitcoin for years through numerous fluctuations in value.

But unlike those speculators, Schmidt said Frederick Air immediately converts any bitcoin it receives into cash.

“Someone will buy those bitcoins for real dollars,” he said.

In December, departing Federal Reserve Chairwoman Janet Yellen said in a news conference that she believes that bitcoin plays such a small role in the country’s financial system that it doesn’t present a significant threat to that system.

“Often, risks threatening financial stability arise when there’s exposure of the banking system to fluctuating asset valuations, and I really don’t see any significant exposure of our core financial institutions to threats from Bitcoin if its value were to fluctuate,” Yellen said, according to a transcript of her statement. “I don’t see a threat to our core financial institutions, so undoubtedly, there are individuals who could lose a lot of money if Bitcoin were to fall in price, but I really don’t see that as creating a full-blown financial stability risk.”

But Randal Quarles, Fed vice chairman for supervision, told a group in November that he believes that bitcoin and other cryptocurrencies could pose a threat if they become more widely used.

“While these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide-scale usage,” Quarles said. “Risk management can act as a mitigant, but if the central asset in a payment system cannot be predictably redeemed for the U.S. dollar at a stable exchange rate in times of adversity, the resulting price risk and potential liquidity and credit risk pose a large challenge for the system.”

But Lewis Hotchkiss, the owner of VRocks Vape Shop in Frederick, said younger customers are increasingly interested in using the currency.

He gets two to three customers a week looking to use cryptocurrency, including bitcoin.

Hotchkiss said he bought his first bitcoin in 2013 or 2014, and he’s been waiting patiently for it to really take off.

Like Schmidt, he sees it as another option that customers can use if they want to.

As a business owner, Hotchkiss likes it because it means he doesn’t have to have cash sitting around, and he can make fewer trips to the bank.

He expects that in the next two or three years, 90 percent of online transactions will come from cryptocurrency.

“I think it’s going to become a big part of our economy,” Hotchkiss said.

Follow Ryan Marshall on Twitter: @RMarshallFNP.

Ryan Marshall is the transportation and growth and development reporter for the News-Post. He can be reached at

(14) comments

Latest Bitcoin News

Cryptographic currency is a digital, virtual, decentralized currency generated by cryptographic applications. According to the Merriam Webster dictionary, it is “computer coded and decoded information.” Cryptography is the basis for making debit cards, computer banking, and e-commerce systems possible.


Since I started using furcoins(.)com for my bitcoins exchange (buy or sell), their service is better, faster, more convenient with lesser rates. These guys are great.


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Bitvavo is a provider of digital currency based in the Netherlands (Amsterdam), which has grown considerably since October 2017. The company aims to make digital currency accessible to everyone, with the slogan: "digital currency for everyone". You can buy and sell Bitcoin and other digital currencies. This is easily done via iDeal or bank transfer. All prices are based on the current rates of the digital currencies.


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Bit coins are for money laundering to prohibit traces of where value originates. As long as they can get a country's currency, it will exist. Not good for the honest!


Not good for the honest, you say? What is your view of Christ Coin, a cryptocurrency that encourages Jesusy behavior?

"Christ Coin is the first pre-mined Christian-based Cryptocurrency. It is used to financially reward people who read the Bible, post/view content and interact with the community on the Life Change Platform. The rewards may then be used to supplement personal income, invested for potential future gains, tithed to churches, or used to support global missions and humanitarian efforts."


It’s a very sketchy practice. Getting around the system in place is for the criminal element, Christian or not. My ex put all of our money into bitcoin to hide it during our divorce leaving me with very little. This ‘Christian’ used bitcoin as I suspected many other criminals do.


You can use what you want, Gladys, give me the good old fashioned greenback


Everyone can use what he or she wants, Dick. That's hardly the issue. Do you think the folks behind Christ Coin are dishonest?


In the past currencies were based on the nation that backed them. And the nations were very careful to monitor them and how they were produced. I am no expert on Bitcoins or any digital currency. But I do know that any computer generated product can be copied by another computer that is powerful enough. And networks of tiny processors can mimic the work of a "super computer" given the right instructions. I would never buy a Bitcoin, unless it was a collectable. Someone may copy all they want.


Wow, you clearly have no idea what you are talking about. I know crypto-currency is confusing, but do some research before you post.


OK. Correct me.
I do need to learn more about it.


One desirable trait of a currency is that it be a reliable store of value. Bitcoin fails that test (see the enormous fluctuation in value over the course of just a few hours). At the moment, it seems to be more of a vehicle for speculation than a currency. As such, it should be compared to other speculative vehicles rather than to other currencies.

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