Will People Really Buy a Movie Ticket With Cryptocurrency?

Highlights

• In August, AMC had said it would start accepting Bitcoin and Ethereum – the first and second largest cryptocurrencies by market cap – as well as altcoins - Litecoin and Bitcoin Cash - for movie tickets purchased online
• How many people will pay for goods and services with crypto when normal currency still remains an option?
• Given’s crypto’s notorious volatility, why would anyone want to hold their savings in Bitcoin when it could potentially lose half it’s value in the space of a few hours? 

Crypto adoption has been a popular theme in the digital currency space and has seen increasing encroachment on behalf of the crypto space into mainstream finance and culture.

The last manifestation of this is the decision by popular movie theatre chain, AMC, to start accepting digital currency for movie tickets.

Will People Really Buy a Movie Ticket With Cryptocurrency?

The extent to just how penetrative this is, considering the decline in movie theatre business due to Covid-enforced lockdowns, is debatable. Regardless, it demonstrates another example of how cryptocurrency is encroaching ever so gradually – albeit with resistance - from the fringes of society to the mainstream.

The Move From AMC

In August, AMC had said it would start accepting Bitcoin and Ethereum – the first and second largest cryptocurrencies by market cap – as well as altcoins -  Litecoin and Bitcoin Cash - for movie tickets purchased online.

The decision was announced by AMC CEO, Adam Aron via Twitter, where he said the company would begin accepting the digital currencies in late 2021.

Why Does This Matter?

The way this move affects AMC will be interesting given the fledging movie theatre industry, which has undoubtedly been crushed by worldwide lockdowns, but in truth the cinema going experience has been under siege for a number of year’s now due to the rise of streaming platforms like Netflix, Prime and Hulu (amongst others) combined with the fact that the changing infrastructure of Hollywood has created a movie going culture where studios bank on big budget franchises, particularly comic book movies to reign in an audience. Simply put, the movie going experience avails itself to big budget productions that the studios rely on to keep their business from going under.

But that’s beside the point. While it’s a positive for the crypto space the idea that a person can pay for a service, like a movie ticket, the question arises: How many people will pay for goods and services with crypto when normal currency still remains an option?

The Disadvantages of Paying in Crypto

The original purpose of Bitcoin, which came about in 2009, was to pay for online services without using a means of payment that could be traced back to the consumer. In other words, the appeal was anonymity. This is the reason for so long that Bitcoin’s reputation was as a means for some to purchase illicit goods and services off the internet without fear of having their privacy compromised.

Indeed, one of the primary uses of Bitcoin in the early days was to purchase items off the dark web. Most notably, one popular site, Bitcoin holders exchanged their digital currency for was on a site called Silk Road – a site where one could purchase an array of sketchy goods and services from illegal drugs to automatic weapons. The site has since been taken down by the FBI and the owner of the site is currently serving a life sentence.

But when it comes to legitimate businesses, like movie theatres, the glaring problem that will pose reluctance on behalf of the consumer is the volatility of Bitcoin as well as the wider crypto market.

Image source © Skypixel | Megapixl.com

In crypto’s short history, the market has experienced unexpected plummets that arrive with all the subtlety of a flash flood.

Given that characteristic, why would anyone want to hold their savings in Bitcoin when it could potentially lose half it’s value in the space of a few hours?

Keeping with the context of a movie theatre, that means a person could buy a ticket to a film and by the time the movie finishes, the price of Bitcoin could drop, meaning the fifteen dollars they paid for a ticket three hours ago would be potentially worth four times the value based on the new decreased price of Bitcoin.

And while it’s true, it could work the other way and the price of Bitcoin could increase dramatically in a short space of time, it would mean the business would then be considerably out of pocket.

Either way, the volatility of cryptocurrency does not make for viable commercial transaction.

What is clear, however, is the crypto revolution is happening and crypto is vying desperately for legitimacy. While the adoption of crypto by major companies garners legitimacy for the likes of Bitcoin on the surface, there’s a long way to go until people will realistically pay to see the next Marvel movie using Bitcoin.