Grilled cheese meets Bitcoin: Why this food truck is embracing digital currency

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The Cheese Wizards food truck hops around Seattle serving up grilled cheese sandwiches and tomato soup. They also are now accepting Bitcoin as a payment option.

You may have noticed a yellow truck parked around Seattle recently, handing out tasty grilled cheese sandwiches and warm tomato soup.

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Brothers Bo and Tom Saxbe are the men behind the “wizard-themed fantasy cheese palace on wheels.” Photo courtesy of Cheese Wizards.

Barely on the streets for one year, Cheese Wizards is already garnering five-star reviews on Yelp and having lots of fun in the process. Bo and Tom Saxbe are the brothers behind the “wizard-themed fantasy cheese palace on wheels,” which has geek written all over it with oblique references to George R. R. Martin and Harry Potter.

But here’s the real geek factor: As of last week, the food truck is accepting payment with Bitcoin, the decentralized digital currency.

“We host a lot of smart, tech-savvy people in Seattle, and a lot of the brilliant minds in Seattle share some of our interests: wizards, fantasy, gaming, good cheesy sandwiches, and cutting edge cryptocurrency,” Tom Saxbe tells GeekWire.

“Cheese-hungry nerds,” as he describes them, have responded well when given the option to pay for their meal with something other than cash or credit. The food truck already accepts Square and LevelUp.

Bitcoin is a bit different, though, because it is not tied to a credit card or banking institution. The currency is gaining popularity and making mainstream news headlines lately in light of the FBI shutting down Silk Road. Despite the controversy, some investors believe there’s huge potential in Bitcoin-related ventures.

The Saxbe brothers decided to use the emerging currency after one of their regulars started talking about his own Bitcoin holdings.

“Anytime someone walks up to our business and is excited about the process of paying us is a win (they are already excited for their delicious and melty sandwich, of course),” Tom Saxbe says via email. “For us, a paper dollar is just as abstract an idea as a line of code. Both mean the same thing in the end: profit.”

cheesewizardsSo far, the brothers are big fans of Bitcoin. They like the low transaction rates, ease of use and efficiency. Being able to convert Bitcoins into U.S. currency immediately or keep them as an investment is also a positive.

Here’s how Cheese Wizards use Bitcoin: Customers order their meal and say they want to pay in Bitcoin. The food truck, which uses Bitpay for a merchant interface, can use an app on its iPad or open browser window that creates a QR code specific to its Bitpay account.

That code has the amount of Bitcoin/USD the food truck is accepting in exchange for food. Then, after scanning the QR code with their smartphone, customers approve the transaction using whatever Bitcoin “wallet” they have.

Though it’s easy and efficient, one potential downside of accepting Bitcoin is the ongoing fluctuations in the currency. Just after the Silk Road closure, the currency’s value dropped from $140 to as low as $110, for example.

When accepting a payment, Cheese Wizards has the option to receive the money in Bitcoin and place it into a holding account with BitPay, or have BitPay transfer the USD amount into the food truck’s bank account. With that option, Cheese Wizards is protected from any changes in Bitcoin value.

“In the USD transfer scenario, we are essentially selling a sandwich for Bitcoin, then instantly selling the Bitcoin to Bitpay for its current USD market value,” Tom Saxbe explains. “When this approach is taken, the merchant is completely insulated from fluctuations in the Bitcoin market, and is paying way less than a traditional credit card for the exchange.”

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Photo courtesy of Cheese WIzards.

Bo and Tom Saxbe don’t see too much risk in trying out Bitcoin. For now, they aren’t expecting it to be a large percentage of sales and any proceeds they keep as actual Bitcoins can be considered an investment. The brothers are tracking any increase in Bitcoin value over time so they can tax accordingly when and if they sell the digital currency. 

Still, Tom Saxbe knows there is a chance Bitcoin can be misused just like any object or idea with inherent value, especially because it has no physical embodiment and is untraceable.

“As a business that sells delicious cheesy food, we have little need (for) the anonymous and disembodied nature that makes Bitcoin attractive to unsavory characters, but we do see there are some scary possibilities for ne’er-do-wells to abuse Bitcoin,” he says. “Narcotics trading on sites like Silk Road are the obvious options.”

But over time, the brothers believe that there will be fewer transactions involving traditional cash.

OLYMPUS DIGITAL CAMERASo far, Cheese Wizards has only processed two Bitcoin transactions after making it an option to pay last week. Part of that is because the currency is still novel, but is also due to Bitcoin users keeping their digital coins as an investment, hoping that the value will go up.

“They are hoarding their Bitcoins,” Tom Saxbe says. “That may be a small barrier to more sales, but it isn’t too surprising with the investment value side of the cryptocurrency.”

Regardless, the brothers are happy that customers are excited to try out a new payment approach. As a food truck, Cheese Wizards is in a unique spot. As a startup in its own right, the chances to be creative and innovative are plentiful.

“Being an early adopter of a ‘real product’ exchanged for Bitcoins is an another opportunity for us to be exciting and different,” Tom Saxbe says. “Food trucks are a little more free to try new things out, whether culinary or monetary. We can promise not to charge 10,000 Bitcoins for a couple of pizzas, too.”

But the future of Bitcoin remains up in the air. There’s no question that some people love the freedom and openness of the digital option, but it’s unclear how or if government institutions will try to regulate the system.

“I like the potential for a worldwide currency that is free from big brother, and think that the benefits Bitcoin offers outweigh the negatives,” Tom Saxbe says. “Hopefully the Cheese Wizards can be a part of that evolution in Seattle, one delicious grilled sandwich at a time.”

Cheese Wizards can be found on various days in neighborhoods including Ballard, the University District and Lower Queen Anne in Seattle, and Factoria on the Eastside.

  • Joe McGrath

    Good editorial on bitcoin here. Intriguing for sure. http://www.cringely.com/2013/09/30/doubts-bitcoin/

  • http://georgedonnelly.com/ George Donnelly

    I was rooting for you guys until you said that narcotics trading is scary. Some people think eating grains is scary. But you trade in it. Others think eating milk products is scary. But you trade in it. Still others think burning fossil fuels is scary. But you do it. Why the hate for Silk Road? It’s just another business where consenting adults buy and sell. Disappointing.

    • Joseph

      Some of what was being bought in sold was murder-for-hire and child porn. The Bitcoin community as a whole is better for it’s seizure, and good riddance. Amoral markets lead to coercion and human rights abuses.

      • http://georgedonnelly.com/ George Donnelly

        I don’t think you have your facts quite right.

        - Ulbricht is accused of soliciting a murder-for-hire or two. I have seen no evidence that the Silk Road permitted people to buy and sell such services openly. What’s more, these are unproven accusations at this time.

        - The Silk Road did not permit the sale of child porn according to this article (see below) and, in fact, I can find zero evidence to back up your claim.

        http://www.ecommercetimes.com/story/79112.html

        How do you know what is best for “The Bitcoin community as a whole?” That’s a laughable thing to say. No one can know that. If anything, it grew our community and enabled more trade than would have otherwise happened. That’s good.

        Markets are only as moral as their participants and codes of morality are not absolute things. The existence of the Silk Road led to more trade and less aggression as people were able to meet their needs with less risk of being victims of violence, either by red market drug dealers or government agents.

        I’m no fan of child porn, murder-for-hire or most mind-altering substances, but I am even less of a fan of coercive government.

        • Joseph

          I stand corrected on this. I was mistaking the availability of these services through Tor in general to being specifically found on Silk Road (which having never used either, I am relying on articles to fill in the pieces). Sorry for the misleading post.

          Still, I have a hard time believing that taking away the canard of “Used to buy drugs online!” isn’t a good thing for Bitcoin now that it has grown a bit and is finally receiving global attention.

          • http://georgedonnelly.com/ George Donnelly

            Bitcoin is still used to purchase controlled substances. It’s just not being done through the Silk Road anymore.

            USD are also used to purchase controlled substances, in much greater quantities and denominations than bitcoin.

            I don’t care what the opponents of bitcoin say about it. You could eliminate all sales of controlled substances and they would find something else to complain about, because they’re not upset about that.

            They’re upset about the fundamental leveling power of bitcoin. It represents a threat to their illegitimate power. What people spend it on is a sideshow.

    • Joseph

      Some of what was being bought in sold was murder-for-hire and child porn. The Bitcoin community as a whole is better for it’s seizure, and good riddance. Amoral markets lead to coercion and human rights abuses.