Cigar Industry Receives Bitcoin Boost

It seems Hong Kong's goo-filled ASIC mining facilities and jazz-playing cigar bars have at least one thing in common: bitcoin.

Australia's largest premium cigar retailer, Brisbane-based Fine Cigars Australia began accepting the currency after receiving several email requests from customers.

The company's general manager, Matthew Mroczek, said he and the company were already comfortable with bitcoin by that stage. Fine Cigars Australia accepts bitcoin directly into a personal wallet without using any payment processor, and even uses bitcoin at stages further up the supply chain.

"We have been using it for several months now to pay some of our suppliers in places like Mexico and Nicaragua because it is simply a far more efficient method of payment," he said.

"To go through normal banking channels it would take two days for them to get the money, which delayed the delivery to our customers. Not to mention the problem with currency movements over such a time period."

"The alternative to that was costing us about 5-6% through Visa or Paypal. However with bitcoin it only takes an hour and the cost is usually only 1% of the transaction."

Fine Cigars sells over 200 different brands of cigar, mainly sourced from Nicaragua, Honduras and the Dominican Republic. According to its website, the business was started in 2009 by "a group of Australian connoisseurs, exasperated at the availability, dismal quality and limited selection of cigars in Australia".

Mroczek said he was able to pay suppliers directly in bitcoin thanks to a deal "with a couple of people that I have a long history with".

Cigars for bitcoin

Another large international online cigar purveyor, Puro Express, also accepts bitcoin and even offers a 10% discount to customers who pay using the currency. The company also sells cigars for bitcoins through Red Solis and CigarExport.com.

Puro Express has offices in Switzerland, Spain, Hong Kong and Las Palmas, and ships mostly from Geneva. Open since 1997, it specializes in Cuban cigars and cigar culture accessories, with guides and even an iPhone app to aid selection.

Vicky, a spokesperson for the company, said Puro Express received its first bitcoin payment in March last year and sales in bitcoin are increasing every month. Like Fine Cigars Australia, Puro Express doesn't bother with a payment processor.

"We do not use a payment processor we keep our bitcoins. Our pricing is updated according to the exchange rate against the USD, at minimum hourly. If it's particulary volatile, I run a routine that updates the exchange rate more often," she said.

The company does not, however, pay its own suppliers in bitcoin just yet. But its international customers also run up against barriers when dealing with banks.

"It is great to see bitcoin on the increase, it's so much easier for international tranasactions," Vicky continued.

"We're seeing a huge increase in the number of customers who have to phone their bank to have international charges authorized before a charge will go through on their card. Bitcoin is so much easier."

Among Puro Express' accessories are humidors of various sizes, cutters and lighters (but disappointingly no smoking jackets). Butane is usually the fuel of choice for lighting cigars or, if you're inclined, $100 bills.

But if you'd rather put those Benjamins to better use acquiring more bitcoin, this online store offers more affordable and appropriate fiat lighter options.

Cigar image via Shutterstock