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A Weekend in Bitcoin City: Arnhem, the Netherlands

Is it possible to live for 48 hours on nothing but Bitcoin?
January 26, 2015

Propped up next to me on the red sofa in my room at the boutique Hotel Modez in Arnhem, the Netherlands, my iPad has its screen on the Bitcoin exchange ­, and the value of the crypto­currency is dropping, moment by moment. At breakfast one bitcoin had been worth over $400, but the value has been sinking for the past 30 minutes and has now hit $383. I know I’m blowing it.

When the price of a bitcoin tumbles by another $10, I am unwilling to risk any further losses. My stomach sinking, I head to reception to pay my bill. My exchange rate later turns out to have been near the day’s low, and I feel like a sucker.

For the vast majority of Bitcoin holders—and the billions of people who have never even heard of the digital currency— such fluctuations may not seem like a big problem. But for me, sitting in the Hotel Modez, it was very real: I’d committed to paying for a room, priced in euros, with Bitcoin. As I waited, and the exchange worked against me, my bill had grown increasingly expensive.

Such is the state of affairs in the volatile world of cryptocurrencies—where regulation is a distant concept and large market swings are commonplace. Because it’s hard to trace, Bitcoin has become common currency for criminals, but the list of legitimate companies accepting it as payment—or planning to—is growing to include the retailers Overstock and Newegg and the mainstream travel site Expedia, among others. Homes have been purchased with Bitcoin, which leans heavily on cryptography and a public ledger system called the blockchain. So has a hoped-for trip to space.

A rising number of people report or anticipate transacting in Bitcoin, and advocates see great potential in the currency for lowering the transaction cost of payments while increasing their security. But for Bitcoin to survive as a functional currency, it has to be widely accepted and useful in the way cash and credit cards are today. Retailers will need a reason to accept it—because of the lower costs, perhaps—and consumers will have to be convinced it’s no more of a hassle than paying by conventional means. Can Bitcoin pass that test?

To find out, I had come to Arnhem, a place with one of the highest concentration of merchants accepting Bitcoin anywhere in the world. My experiment: Could a journalist plan a weekend escape paid for entirely with Bitcoin? Further, could he not only survive but perhaps even enjoy himself?

Bitcoin has become common currency for criminals, but the list of legitimate companies accepting it for payment is growing.

Arnhem’s friendliness to Bitcoin has much to do with Patrick van der ­Meijde, a 36-year-old resident of this city of 150,000 located on the Rhine. Van der Meijde heard about Bitcoin a few years ago. Finding the concept intellectually interesting, and figuring that the traditional banking system could use competition, he decided to buy some. As his cache grew, he realized it wasn’t so useful if he couldn’t use it to buy things. So, with two partners, he set up a payment system local vendors could run—on their phones or any other connected device, like a laptop or tablet—allowing the owners to accept Bitcoin but be paid in euros. Van der Meijde has now convinced 45 businesses to accept Bitcoin, including a hotel and a major franchise grocery store.

Step one: Buying the plane ticket
Though I was familiar with Bitcoin, its genesis, its technical underpinnings, and its controversies, I didn’t actually own any of the money. So eight days before I set out for Arnhem, I opened an account with a Boston-based startup called Circle that would let me buy bitcoins with a credit card.

Next, I logged onto, one of a few companies that will let you book flights using Bitcoin, and bought a ticket flying KLM to Amsterdam from Munich. At the payment page I chose the option to display a Bitcoin address—a 25-to-34-character string of letters and numbers—to which I could send my payment. I then logged into Circle again to buy enough bitcoins to cover the ticket, but the transaction was immediately denied. After a call to my bank to explain that the charge indeed was not fraudulent, I tried again. This time I bought $450 worth of bitcoins, safely within Circle’s $500-per-week credit card limit. The transaction went through instantly.

Proud of being a part of the future, I went to Circle’s payments page, entered the Bitcoin address from CheapAir, and keyed in the $450 listed as the cost of my ticket. Almost instantly CheapAir’s website updated—to tell me I’d sent the wrong amount. What?

Was this a scam? I had taken screenshots at a few phases of paying, so I did a quick post-mortem and realized I’d made a beginner’s mistake: CheapAir’s price was listed in dollars with the equivalent in Bitcoin, so I’d also entered my payment via Circle in dollars. It felt like the intuitive thing to do—but it was wrong. Whether because of the volatility of Bitcoin or the fact that there are multiple exchanges to price it and they rarely match up, the payment I had sent was roughly $1.60 short.

I started making calls. Charlie at Circle, stumped, suggested a do-over. Gemma at CheapAir was sure we could resolve the problem but insisted, “Only our CEO has access to the Bitcoin stuff.”

She told me to wait for CEO Jeff Klee to get in for the day—and he’d take care of it for me.

About an hour later, I received an e-mail confirmation for my flight. “Do I owe you five bucks or something?” I asked Gemma when I called her back. “Don’t worry about it,” she said. “It was easier to just issue the ticket.”

Using Bitcoin for everyday purchases was proving more difficult than paying with a credit card.

Step two: Bitshock
A part of me expected Arnhem, about an hour from Amsterdam by train, to feel like a high-tech hub. But instead it resembled any typical European city. It had a few churches, a central pedestrian area filled with shops, and a handful of antique Dutch windmills. After checking into Hotel Modez, where the bubbly owner said I would be the first customer to pay in Bitcoin (something I’d hear a few times over the weekend; at the CycleNation bike shop a bemused employee took a photo of me at the register and posted it to Twitter), I met up with van der Meijde at a bar named Stout to chat over a beer.

“With Bitcoin?” said the gray-haired bartender when it came time to pay. He knew van der Meijde’s face, as did others in town: he is variously referred to as “this guy who is really into Bitcoin” or, more simply, “that Bitcoin guy.”

At Hotel Modez I was the first customer to pay in Bitcoin. At the CycleNation bike shop a bemused employee took a photo of me at the register and posted it to Twitter.

Payment itself was seamless: the bartender pulled up a QR code on his phone, van der Meijde scanned it using a Bitcoin wallet app called Mycelium on his phone, and the payment registered instantly. Later we repeated the process as I transferred Bitcoin directly to van der Meijde to cover my drinks.

A befuddled kid at the bar, of around university age, wanted to know what we were doing. “You mean I can buy drinks with this?” the kid asked. “Yes, of course,” said van der Meijde. Ever the evangelist, he helped the kid download a Bitcoin wallet—and then transferred five euros’ worth of bitcoins to him. The kid’s friend watched all this with a stunned look on his face. “Does Café ’T Huys take this?” the kid asked. When van der ­Meijde told him that the bar did, the kid bolted for the door with his phone, now a few millibits richer, clutched in his hand.

Step three: Full Dutch crypto (mostly)
Over the next two days, guided by a map hosted on van der Meijde’s website, I did indeed spend nothing but Bitcoin—with fewer mishaps than early users of Apple Pay were reporting in the press at about the same time. At dinner I ate a massive pile of ribs and learned that tips in Bitcoin are handled much like tips using a credit card, with waiters paid out from the register. Another day, at a restaurant called Mo Lón, I ordered a heaping pulled-pork sandwich and scanned a QR code that the owner, a Bitcoin enthusiast, loaded on a large LCD TV on the wall. At Mimint, a natural-foods bodega, I bought chocolate and toothpaste.

In only a few places did I encounter obstacles. At a souvenir shop I had to wait a few minutes for the owner to arrive, since he was the only one who knew how to accept Bitcoin. And at another shop I had some momentary Wi-Fi problems. I was turned away only once, at a small restaurant where the young woman working that day hadn’t heard of Bitcoin. The cook, who was sitting at a table waiting for customers, said, “I’ve heard of Bitcoin, but I don’t think we take it. Maybe the previous owners did?” (They were both surprised when I showed them the Bitcoin sticker affixed next to ones from MasterCard and Visa on the restaurant’s window.)

One night, at van der Meijde’s suggestion, I stopped by unannounced at a Web startup and co-working space called Four Digits, where once a week around a dozen tech-minded folks in Arnhem get together informally to eat, drink, and geek out. A few of the people there were equal parts skeptical and excited by the idea of cryptocurrencies. Two of them discussed theoretical—but exceedingly unlikely—exploits that would let them rip off the point-of-sale application van der Meijde had helped design. The Indian delivery order they were eating had been paid for with Bitcoin, and as they split the bill, some were paying the purchaser back in Bitcoin, too.

“How much did dinner cost?” I asked.

“About half a bitcoin,” someone said.

Step four: Ex post crypto
Though I mostly enjoyed the weekend, the getaway to Arnhem at times felt like a chore. I’d had to skip some cultural sites recommended by a friend from Amsterdam. The Hoge Veluwe National Park and its museum with works by van Gogh, Rodin, and Dubuffet don’t accept Bitcoin, sadly.

Having exhausted most of the possible Bitcoin-ready diversions in town, I spent the last few hours of my visit, on a rainy Sunday, walking along the waterfront and through a park. I pined for a museum, or a bowling alley, or a film in a warm theater. Spending bitcoins had been easy, and ultimately—despite the snafu paying for the hotel—not that expensive. But the options had run out quickly.

And there was one exceedingly important thing I could not do: get out of town. The only way to travel between Arnhem and the airport using Bitcoin was to rent a car or hire a taxi—a multi-hundred-euro expense. By contrast, the train ticket to the same place, which was not payable by Bitcoin, cost only 17.10 euros. Even the very staunchest Bitcoin enthusiast would be unlikely to pay that kind of premium.

Knowing this, I had come to town with 18 euros in my pocket. I felt like I was betraying something or someone—perhaps Bitcoin’s mysterious inventor, Satoshi Nakamoto—as I inserted coin after real-euro coin in the yellow ticket machine of the government-owned Dutch Railways. When the railroad accepts Bitcoin, I thought, we’ll know that cryptocurrencies have truly arrived.

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