Before the State: Texas's Grassroots Bitcoin Economy, 2013–2015

Where did Bitcoin first get spent in Texas?

At a bookstore, for ideological reasons, twice. When KUT went looking in June 2013 for anywhere in Austin that took Bitcoin, it found exactly one: Brave New Books, the libertarian bookshop at 1904 Guadalupe across from the UT campus, where owner Harlan Dietrich saw a decentralized currency as a fit for the store's politics and two customers had so far agreed. “People are really holding onto their coins here,” Dietrich said. “That's going to be how Bitcoin lives or dies.”^[1] The consultant who set it up was a UT student named Michael Goldstein, for whom the bookstore was his only client; five months later he would co-found the Satoshi Nakamoto Institute out of the same campus circle, and the other consultant KUT quoted, Pierre Rochard, would co-found it with him.^[1] Silicon Hills, that December, called his firm Bitstein Consulting.^[2] The merchant layer and the intellectual layer of Austin Bitcoin began in the same room, and the room was small. By December, when Silicon Hills News counted the Austin Bitcoin and Cryptocurrency Meetup at 189 members with about forty in the back room of Scholz Garten, Brave New Books was still the anchor merchant.^[2]

What could you buy with Bitcoin in Austin in 2014?

Tacos, donuts, a haircut, a pizza, groceries, a firearm, and a dental cleaning – and someone checked. On February 11, 2014, Techzette's Savanna Rose walked the city's Bitcoin economy and published it: seven storefronts visited – Central Texas Gun Works, Little Lucy's Mini Donuts and Art of Tacos on Rainey Street, Havi Hair on Anderson Lane, Brave New Books, The Unconventional Oven pizza truck on Lakeshore, and La Canasta Market in Leander – with eleven pins on the accompanying map, the extras being a coin and bullion dealer, an office-furniture store, a peace studio, and a dentist.^[3] Six days later Community Impact filled in the suburbs: Vista Ridge Family Dentistry in Cedar Park, La Canasta Meat Market and Hill Country Home Improvements in Leander, all onboarded to BitPay by Steven Wilkinson of the Austin Bitcoin group. The dentist, Dr. Max Kerr, made the merchant's case in one sentence – “It's the freest form of currency” – and the arithmetic underneath it was BitPay's 1% against roughly 2.5% for cards. Hill Country's owner had bought beer at La Canasta with Bitcoin in January. Bitcoin was around $800.^[4][20]

The volumes are the honest part. In July 2014 Techzette's Kaoru Fujita tried to live on Bitcoin in Austin for five days and recorded the one transaction that went smoothly: five tacos, drinks and a 15% tip at Art of Tacos for 0.0485 BTC at $618.55, confirmed in about thirty seconds through a Coinbase wallet. The owner, Les, had taken Bitcoin since early 2014 and liked it. He saw about one Bitcoin sale a week – and more than half of all his Bitcoin sales had come during SXSW.^[9] That is the shape of the whole era: a real, working, tiny market that spiked when the festival brought the wallets to town.

Why did Austin have both of America's Bitcoin ATMs?

Because the scene had organized before the machines arrived. On February 20, 2014, Robocoin switched on the first Bitcoin ATM in the United States at HandleBar, a bar on East 5th Street, with TechCrunch and KUT present.^[5][6] Ten days later Central Texas Gun Works unveiled a second Robocoin unit on Ben White Boulevard at a Texas Independence Day fundraiser, and for a stretch of March both of the country's Bitcoin ATMs sat inside Austin city limits.^[7] Three days after that, the first Texas Bitcoin Conference opened at Circuit of the Americas – three tracks, an exhibit hall, and a hackathon with Ethereum, Mastercoin and Monetas among the prize sponsors.^[8] Six weeks later, Greg Abbott's gubernatorial campaign began taking Bitcoin donations, a story told on Greg Abbott and Bitcoin.The Department of Banking's Supervisory Memorandum 1037, the state's first formal word on Bitcoin, landed on April 3, 2014 – after the merchants, the machines, the conference, and the candidate. The sequence matters: the history of Bitcoin in Texas usually begins with the memo, and the memo was catching up.

Did the grassroots reach Houston and Dallas?

Slowly. Free Press Houston, surveying its own city in 2014, found 15 to 17 merchants taking Bitcoin and quoted local evangelist Kevin Moore without softening it: “Houston's dragging way behind compared to Austin, Dallas.” The Texas Alcoholic Beverage Commission's Carolyn Beck confirmed for the record that a bar accepting Bitcoin was “the establishment's choice.”^[10] The response was a room: the Houston Bitcoin Embassy, opened March 29, 2015 at 6907 Almeda Road as a coworking space and home to the Texas Coinitiative nonprofit, founded – Bitcoin Magazine noted – in part because so few Houston merchants accepted the coin.^[11] Dallas is the gap in the record: contemporaries placed it ahead of Houston, but no named Dallas merchant from 2013–2015 has surfaced; Fort Worth's contribution was Coinsource, the ATM operator founded there in 2015. North of Dallas, in Muenster, a UNT alumni note records Dave Reiter's Crossroads Express Stop as the first convenience store of its type in Texas to take Bitcoin. It is a single source, and this page holds it as one.^[12]

What about the Bitcoin pedicab at SXSW 2015?

It happened, and almost nothing else about it can be established. During SXSW Interactive in March 2015 – the festival's first year with an official day of Bitcoin programming, on March 16 at the Hilton Downtown, with Barry Silbert, Jeremy Allaire and the Wall Street Journal's Paul Vigna on the bill and BitPay, ChangeTip and Gyft as sponsors – a pedicab driver named Carrie took Bitcoin for rides downtown.^[15][16] We know because Scott Rose filmed her. Rose was not a bystander: an Austin-based former Apple presenter turned Bitcoin speaker, a CoinDesk op-ed contributor in March 2014, and the man behind Austin Nerd Night's “Bitcoin 101,” he posted the clip on March 14, 2015 under an advocate's headline: “Meet Carrie, The World's First Bitcoin Pedicab Driver.”^[13][14] It reached the bitcointalk forum that night and drew a second thread the next morning.^[17][18]

That is the entire record. Her surname and her pedicab company are unrecorded. No Austin, Texas or crypto-trade outlet covered her. “World's first” is the video's title, not a finding; by 2015, with the city already running Bitcoin through taco trucks and gun stores, an earlier undocumented pedicab ride is close to certain, and “first documented” is the defensible phrase. The one checkable claim – a forum commenter's “over a bitcoin in tips so far” – fails its check, though not in the way you'd expect. The only Bitcoin address in the threads turns out to belong to the poster, not the driver: it received 0.01 BTC in April 2013 and sent it on March 8, 2014 to the relief fund for Dorian Nakamoto, the man Newsweek had just misidentified as Bitcoin's creator. It has never received a satoshi since.^[19] Whatever address Carrie displayed on her pedicab is not in the written record, so the tip figure – about $270 at the time – cannot be verified, and this page does not repeat it as fact.^[20] What remains is still worth keeping: a dated video, by an identifiable Austin Bitcoiner, of the street-level tail of a sequence that began at a bookstore two years earlier. Lore, labeled as lore.

The honest counterweight: the volumes were tiny

Every number on this page is small. Two customers at the bookstore. Eleven pins on the map. One sale a week at the friendliest taco truck in town. Fifteen to seventeen merchants in the fourth-largest city in America. One video for the era's most-repeated story. The grassroots era was real, but it was never an economy in the sense the mines or the reserve would become – it was a few hundred people who had decided the thing mattered, and a few dozen merchants willing to humor them at 1%. Most of it left no record at all; the merchants named here are the ones a reporter happened to visit. A page that claimed more would be doing what the pedicab video did: putting an advocate's headline on a modest fact.

Why does the grassroots era matter to the record?

Because the sequence runs the opposite way from the way the story is usually told. The Department of Banking's memo, the mining migration, Senate Bill 21 and the state's first Bitcoin purchase are institutions responding to something that already existed. What existed was this: a bookstore, a meetup, a map, two machines, a conference, and a pedicab – built by people with no authority and small balances, in the eleven months before the state said a word. The man who set up the bookstore went on to run the institution that keeps Bitcoin's founding texts. The gun store's owner went on to the Supreme Court. The state that ruled in April 2014 that Bitcoin was not money now holds it in the Strategic Bitcoin Reserve. The grassroots era is where all of that was first paid for, one taco at a time.