Cryptocurrency

by David Klemt David Klemt No Comments

Here Come the NFT Restaurants…

Here Come the NFT Restaurants…

by David Klemt

Blue and white NFT concept

It was inevitable, really, that after seeing cryptocurrency nightclubs we’d eventually see non-fungible-token-focused venues.

Not too long, in fact, a crypto nightclub set up shot in an ultra-lounge inside a Las Vegas casino. Members had access to a VIP section inside the venue provided they had minimum amounts of certain coins.

Bottles were popped, Instagram models made appearances, and the crypto contingent were given the VIP treatment.

Other such venues are in operation. However, the “new thing” leveraging the proliferation of the blockchain is the NFT restaurant.

Interestingly, two such restaurants are set to open in the US in two major markets. One is New York City, the other Los Angeles.

What’s an NFT?

Okay, bear with me here. I’m not an NFT expert, nor do I own an NFT. So, I’ll do my best to make this as simple as possible.

First off, the acronym NFT stands for “non-fungible token.”

Second, an NFT is a digital asset—quite often artwork—bought and sold online. Quite commonly, these assets are purchased with cryptocurrency. In fact, many sellers won’t accept any other form of payment for an NFT.

Their ownership is recorded, just like cryptocurrency, on the blockchain. It’s important to know that the purchase of an NFT doesn’t necessarily come with licensing rights, but that’s another issue entirely. So, yes, there are people who “own” an NFT but don’t actually own the rights to do much with it.

For now, what’s important to know is that NFTs are exclusive, unique digital assets. Oh, and the market (industry?), as of 2021, was worth a reported $41 billion. Not entirely surprising when one considers that a single NFT once sold for almost $92 million.

What’s an NFT Restaurant?

It is, perhaps, more accurate to refer to these hospitality venues as NFT clubs. Yes, there’s a restaurant component, but the main draw is a membership.

In New York City, for one example, the NFT is the membership. The planned venue is Flyfish Club by VCR Group, and it’s billed as “the world’s first member’s only private dining club.”

What does a Flyfish NFT membership get you? Well, the space isn’t open yet. However, the following benefits are expected:

  • Unlimited access to a 10,000-square-foot dining room.
  • Exclusive culinary, social, and cultural experiences.
  • An “iconic, New York City location” for the dining room, cocktail lounge, omakase room, and outdoor area.

It’s rumored that—dependent on crypto exchange rates, of course—the Flyfish membership will cost around $13,000.

On the other side of the country is another NFT membership. This concept comes from SHŌ Group and is slated to debut in 2023 on top of the Salesforce Transit Center.

Unfortunately, there isn’t any pricing information available (publicly) just yet for SHŌ Club. However, three tiers of membership have been revealed:

  • Earth: The lowest tier.
  • Water: The “core” membership.
  • Fire: Offers “ownership-like benefits.”

Per SHŌ, these memberships are not only verifiable via the blockchain, members will be able to sell or transfer their ownership of a membership.

If you’re curious about costs and a full breakdown of SHŌ Club benefits, you can sign up for notifications here.

Niche Concepts

Honestly, what else can we categorize these venues as besides “niche”? While both venues’ operations would likely be familiar to any hospitality professional, the NFT element certainly designates them as highly specialized.

Now, that’s not necessarily a bad thing. “Niche” isn’t inherently negative. In fact, identifying and servicing an underserved niche can be incredibly lucrative for any entrepreneur.

Indeed, the locations of Flyfish and SHŌ Club are telling. NYC is often labeled the finance capital of the world. And, of course, San Francisco is home to Silicon Valley, the tech capital of the world.

Obviously, many who work in finance and tech live in NYC and San Francisco. So, it makes sense that they’d be interested in these memberships and, as importantly, can afford them.

Clearly, VCR and SHŌ are targeting a group with a shared niche interest, and they’re doing so with upscale venues and experiences. Should these concepts come to life and their experiences live up to member expectations, they’ll have hit a homerun.

As an operator, you may not be interested in targeting the cryptocurrency or NFT crowd. However, the ubiquity of subscriptions in our lives may motivate you to consider a membership program.

If so, remember to offer value, avoid alienating non-members, and offer benefits authentic to the business.

Image: Riki32 from Pixabay

by David Klemt David Klemt No Comments

Let’s Talk About Bitcoin

Let’s Talk About Bitcoin

by David Klemt

A Bitcoin on top of a $100 bill

Bitcoin and cryptocurrency in general are no strangers to media attention, but it seems like the coverage is increasing.

Of course, it helps when people who are excellent at garnering attention talk about it. Consider the explosion in news stories and online conversations about cryptocurrencies when Elon Musk tweeted about Dogecoin.

Then there’s the mystery factor. Many people don’t understand Bitcoin, Ethereum or other forms of cryptocurrency. The word itself—”crypto”—lends to the enigmatic air of this form of currency.

As a business owner, you should at least have a cursory understanding of cryptocurrency. After all, some people may try to pay you with it and you should at least consider meeting these guests where they are.

Before we proceed: I’m not a cryptocurrency or financial expert. I’m sharing information I’ve come across in my research over the years. Don’t make any financial or business decisions solely based upon what you read here—learn more for yourself and consult with experts before making investment decisions.

Crypto is Relevant to Our Industry

I’ve written about cryptocurrency—Bitcoin in particular—in the past. In one article, I wrote about a “nightclub” within a nightclub in Las Vegas devoted to cryptocurrency.

The club, MORE, had its own “coin” (MORE Coin), accepted other cryptocurrencies, and tailored its experience to crypto fanatics. It has become more of a members’ club, offering access to and preferential treatment at an array of venues, along with other perks. The club’s coin is purchased via Bittrex, a popular exchange platform

There are also hotels in Las Vegas (and other cities, of course) that accept cryptocurrencies like Bitcoin for rooms. Bitcoin ATMs scattered throughout Vegas allow people to access their wallets and convert crypto to cash.

Paying with crypto may become more commonplace than we think, sooner than we think.

Crypto Basics

Let’s address the term “cryptocurrency.” In this case, “crypto” is a reference to the encryption technology that protects a cryptocurrency network.

Bitcoin and other digital tokens, such as Ethereum and Dogecoin, are decentralized currencies. That is, there’s no main server, no government, no bank that controls or owns the network.

A digital token is incredibly difficult—if not impossible—to counterfeit or “double-spend.” This is due to sophisticated encryption technology and the blockchain.

The blockchain is a peer-to-peer distributed ledger technology that makes it incredibly difficult (again, if not impossible) to take over a crypto network. Every transaction is public knowledge; open to inspection; duplicated and distributed throughout an entire network; and  unalterable.

It’s that last point that made Bitcoin viable. Unlike attempts in the past to create digital currencies, the blockchain makes crypto trustworthy in that someone can’t just make up a new currency, wait for people to buy in, and then take it all for themselves.

Bitcoin has become synonymous with cryptocurrency. It’s the first viable digital token as we know it, the most popular, and at the moment, the most valuable.

Interestingly, it’s widely accepted that Ethereum is the second-most popular digital token but the most-utilized blockchain.

Finally, Bitcoin is finite. There are exactly 21 million Bitcoins—that’s it. Once they’re all mined, no more will be made.

Beyond the Basics

Fewer than 2.4 million Bitcoins remain to be mined. Currently, one Bitcoin is worth about $58,000.

A person uses a digital “wallet” to send and receive Bitcoin. Some people store their unique wallet on their computer; a separate and dedicated hard drive; a thumb drive; or a “cold” wallet, a device that’s not connected to the Internet to protect it from hackers.

If a person loses their wallet or password, they lose their Bitcoin(s).  There’s no way yet to know how many of the 21 million Bitcoins have been lost.

Bitcoin is a software system. Therefore, it can be copied. That’s the reason crypto beyond Bitcoin—such as the aforementioned Ethereum and Elon Musk-promoted Dogecoin—exists.

One of the biggest questions people have about bitcoin is, “Is this a scam?” Search online and you’ll get a mix of results.

There are high-profile people like Jack Dorsey and Elon Musk who are apparently heavily invested in crypto. There are critics calling the whole thing a scam and fraud. Then there are some former critics, like Jordan “The Wolf of Wall Street” Belfort, who were highly critical and suspicious of crypto but have changed their tunes.

Support from hotels, restaurant chains, financial institutions and other legitimate businesses seems to answer the scam question. However, operators must proceed with caution, as they would for any change in their business or investment.

Accepting Bitcoin Payments

Businesses that decide to accept Bitcoin and/or other digital tokens will need a POS app or platform to do so.

Starbucks is reportedly using Bakkt to accept Bitcoin.

Other options include BitPay Checkout, Bitcoin Cash Register, Anypay, and Paytomat.

Some solutions create a QR code the guest scans with their phone to complete a transaction. Others convert digital tokens to cash to accept payment.

It’s important to note that the IRS treats cryptos differently than US dollars. Before choosing to accept cryptocurrencies as payment, consult with your tax professional and accountant to ensure you don’t run afoul of any laws.

Canadian operators should note that while crypto is legal in the country. However, only the Canadian considered official legal tender in Canada. Again, this is why it’s so important to consult relevant experts before proceeding with crypto in your business.

Disclaimer

The information provided in this post does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Neither the author nor KRG Hospitality recommend that any cryptocurrency should be bought, sold, or held by you. Conduct your own due diligence and consult your financial advisor before making any investment decisions.

Image: Bermix Studio on Unsplash 

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