The Beer Industry Prepares for the Crypto BroVinePair
“In a few years, or maybe just a few months, people are going to read this story and laugh at us.”
So says Joshua Stylman, the co-founder and CEO of Threes Brewing, based out of the Gowanus neighborhood of Brooklyn, with additional locations in Greenpoint, Brooklyn, and the town of Huntington on Long Island. I’d reached out to him after a matter-of-fact tweet on Feb. 18 in which the brewery noted it was now accepting cryptocurrency. I’ve known Stylman for awhile, and he has a sly sense of humor, so a part of me wondered if this was all just a gag in keeping with these strange times. He insisted it wasn’t.
“I fancy myself an Andy Kaufman type,” he jokes, referring to the comedic prankster of the 1970s. “But this is not a troll. We now accept crypto.”
In fact, Stylman, COO Jared Cohen, and the entire Threes Brewing team are extremely bullish about digital currency. The pandemic forced them, like many others, to make changes to their business and they’ve been aggressive in pivoting (what’s that Sun Tzu quote about appearing strong when you are actually weak?).
They had completely overhauled their website just a few days into the pandemic and were almost immediately able to start delivering their beer direct to consumers. When online customers started demanding they accept PayPal, Stylman figured, why not cryptocurrency as well, an integration that took less than 10 minutes to set up via the Shopify app they use.
“Learning about a new ecosystem is exciting to us,” says Stylman. The Threes website now uses Coinbase. Incidentally, the San Francisco-based crypto exchange is about to go public in a few months and is expected to have a valuation over $100 billion, something Stylman believes will finally open people’s eyes.
“Digital money is here, it’s happening, and it’s certainly the future” he says. “What’s that expression that things happen gradually then suddenly? I personally think cryptocurrency is as big of a deal as the mobile phone or internet before it.”
The 0.000396946667 Bitcoin 4-Pack
As, admittedly, a crypto neophyte, it seemed insane to me that someone might use Bitcoin, say, to buy a 4-pack of beer. That could mean paying $16 for a 4-pack last March had actually cost them like $150 today. Indeed, even Stylman doesn’t think people will really use Bitcoin for beer purchases, it’s just too volatile.
“I personally don’t believe it’s going to be a currency,” he says. “It’s going to be a stored value like gold. You don’t go to your bodega and pay for beer with blocks of gold.”
In that regard, Threes currently accepts five other cryptocurrencies, including Ethereum and Litecoin as well as two stable coins, USD Coin and Dai, which are pegged to the U.S. dollar. Having said that, Threes is fine if you want to use 0.000396946667 of a Bitcoin (which was the rate when I was buying some beer in late February) to buy a 4-pack of Lifeworld, their new Czech pilsner. The Shopify app allows you to immediately convert crypto back to cash, but Threes plans to keep all crypto payments as crypto.
In fact, Threes is betting so hard on cryptocurrency that they’ve moved 10 percent of their treasury into it — Something Stylman proudly notes they did a few weeks before Elon Musk similarly moved a portion of Tesla’s cash into Bitcoin. Stylman sees it as a prudent hedge against expected inflation post-pandemic, though he recognizes its value could also drop to zero at a moment’s notice.
“Please write that I am by no means qualified to pontificate on the future of currency,” he tells me, though he’s being a bit humble, as he does have a lengthy background in tech and angel investing previous to starting Threes, as does Cohen. “Like every other schmo, though, I have opinions.”
Philadelphia Brewing was the first American brewery to accept Bitcoin, which it did starting in early 2013. Iron Triangle Brewery, which opened in downtown Los Angeles in 2016, accepted numerous different cryptocurrencies (including the jokey Dogecoin) on special days, which it immediately converted to Bitcoin. (By 2019 it had closed, with the owners claiming their “capital would be better invested in their other businesses.”)
Most notable is BrewDog, whose brewpub location at Canary Wharf in London accepted Bitcoin the day it opened in 2018. By the next year, it was offering shares in the brewery via most cryptocurrencies, along with their standard bluster of supposed “punk” self-promotion.
“At BrewDog we have worked our entire lives to challenge perceptions and be bold and uncompromising; the developers and miners of cryptocurrency are exactly the same,” claimed a company press release. “Adopting alternative payment options for craft beer is a natural fit.”
Breweries like BrewDog may have initially accepted crypto as a way to get easy press, but that doesn’t mean it doesn’t make a lot of sense. Craft brewing has always been a damn-the-man industry, and accepting crypto jibes with that ethos.
There’s even a cryptocurrency called Beer Money, intentionally designed as a means of payment within the brewing industry, and a German-based one, Beercoin, which can only be produced by drinking beer and scanning QR codes on the underside of the bottle cap.
“The beer market is a billion-dollar industry which has not seen many innovations in recent years and is currently decreasing in volume in many parts of the world,” claims Beercoin founder and CEO Tobias Meyer. “Our goal is quite straightforward: We want to create the beer-based cryptocurrency.”
Neither Beer Money nor Beercoin have gained much of a foothold over the few years they’ve existed — or much value; Beercoin currently sits at $0.0110 a coin — and they don’t appear on Coinbase at the moment. The more you start diving into craft beer and crypto, the more it can start to seem like satire. As in the case of Down Stream, a collaborative brewing project in Ireland that claims it is the “world’s first blockchain beer,” referring to the public transaction ledger used for Bitcoin, or the two beer bars in Manhattan that were recently offered for sale in Bitcoin.
“I mean, stuff like this is a little gimmicky,” says Stylman. “But maybe our thing is, too!”
Indeed, most craft breweries I spot-checked laughed when I asked them if they were accepting crypto, but by the end of our conversation, had seriously begun considering flipping the switch on the technology. Both Shopify and Square are already set up to easily accept crypto, and Jack Dorsey, Square’s CEO, is a huge proponent of it, having set up his own crypto team to support development. Stylman thinks you’ll see breweries adopt crypto payments as quickly as we’ve seen everyone add a Square-loaded iPad on a swivel stand to their bar top.
“Looking at our cash register over the six years since we’ve opened, almost no one uses cash anymore” says Stylman.
He tells me that, leading up to the pandemic, 80 percent of tabs at Threes were being paid via credit card. He notes a key benefit of switching to crypto is eliminating credit card fees, which unfortunately get baked into the pricing whether customers realize it or not. And that’s how you end up with $20, er, 0.000396946667 BTC 4-packs.
The Blockchain Beer Release
But what I really wanted to know in writing this story was: What are the crypto bros drinking?
“I mentioned to our director of marketing, ‘You might want to put this on social media,’” says Stylman, recalling the day he opened up digital currency payments. “There are some crypto bros that are going to be really happy with us.”
I’d hit up Stylman just five days into his experiment and he’d only had two purchases via crypto by that point (I would end up making the third). Based on the stereotyping of crypto enthusiasts, though, who love off-beat diets such as intermittent fasting or keto, or exclusive meat-eating carnivory, maybe they don’t even drink calorie-laden craft beer.
A lot of other questions are likewise still TBD and even Threes is feeling it out as they go along.
For instance, when their bars open again and people come in for a pint, how will they pay with crypto?
They’ll scan a QR code to pay with their Coinbase wallet.
Could they offer a gratuity with crypto?
“Our employees do pooled tips,” says Stylman. “So it would be a little weird, and they would need a crypto account.”
Likewise, crypto is meant to protect the anonymity of the individual but, in buying 21+ beverages, the individual inherently has to prove who they are.
“Technically, we’re a weird example since we check IDs,” says Stylman, “We can’t be like a health clinic where it’s important that they maintain privacy.”
Even if Stylman doesn’t know how a lot of these things will eventually work, he is certain that crypto will play a huge part in his brewery’s future. He believes we’re still in “internet 1995” when it comes to crypto and its potential.
Taking it to the extremes, Threes has even been discussing the idea of releasing non-fungible tokens, or NFTs, a hard-to-fathom concept that has been blowing up in the geekiest of tech circles lately. NFTs use the same blockchain technology as cryptocurrency, allowing fans to buy one-of-a-kind digital collectibles — the most famous at the moment being the basketball highlights sold via NBA Top Shot and Beeple’s $69 million work of art, with Nike currently developing CryptoKicks digital shoes that seem destined to take off among sneakerheads.
In that regard, if you think that recent 200-bottle release of pastry stout or the $90 members-only 6-pack was hard to score, maybe the future of crypto and craft beer will be a sui generis Threes IPA you can’t even drink.
“We’ve been kicking it around,” says Stylman. “Would collectors be interested in buying little NFT beer cards for each of our styles? I don’t know. It’s admittedly weird.”