- It was very difficult to make typical daily transactions necessary to survive using only bitcoin in New York City for a week.
- Not many retailers and restaurants accept bitcoin directly still.
- If they do, additional fees make it more expensive than using dollars.
With all the hysteria around surging to records and possibly being the currency of the future, CNBC decided to put it to the test. Can one person live off of bitcoin for a week?
New York City may have thousands of restaurants and bars, but only a handful accept bitcoin. We made a lot of calls and reached out to several vendors to see if they accept the digital currency. We also leveraged "bitcoin maps" online which were not entirely accurate.
However, we did find a few eateries in the city who accept the currency directly - two of which are French restaurants in lower Manhattan – Le Village and La Serine.
And if you're craving an ice cream sandwich then you're in luck. Melt in the Lower East Side also accepts bitcoin. Melt also has a stand on the Highline, but when we visited them they didn't have the bitcoin app running.
Another option was using Gyft.com, a site which allows you to purchase gift cards to Whole Foods, Starbucks, CVS, etc with bitcoin. This ended up being tremendously helpful, but also highlighted the reliance one must have on third parties to get by just on bitcoin.
Another big takeaway? Using bitcoin can be costly. Checking out at vendors that accept bitcoin is relatively easy, but I ended up spending on average 40 percent more versus paying with dollars or credit card because of unfavorable conversion rates and additional transaction fees. For example, my ice cream sandwich at Melt sold for $5, but with bitcoin I ended up spending the equivalent of more than $9. The gift cards also come with additional fees.
At one point during the week I ran out of bitcoin so I had to purchase more using my virtual wallet on Coinbase. Fortunately, they make it very easy to buy and sell bitcoin and another digital currency, ether, as well.
Transportation is also a challenge. As a reporter, I am constantly on the go, traveling around the city to meet sources, attend conferences and coming on air from different studios. The subway is typically how I get around town. Unfortunately subways do not accept bitcoin. Same story for yellow taxis.
The third option (besides walking) was ride-sharing apps. I was able to buy an Uber gift card via Gyft.com. I ended up spending more time and money taking this roundabout way, but at least I could travel from downtown to the upper west side without walking.
After a couple days, I started reaching out to folks in the NYC bitcoin community. I found a bitcoin investor online who was wiling to sell me a subway card in exchange for bitcoin. I met him at Penn Station the following day and he gladly helped me out. This interaction proved to me that the bitcoin network is very supportive of one another.
Clearly, living on bitcoin is challenging. But many experts say that the true value of bitcoin is not in making transactions, but in its underlying technology.
One of the most well respected bitcoin investors, Mike Schwartz, Managing Director at BCG Digital Partners and Founder of DVolution, told CNBC that blockchain technology, the backbone that records bitcoin transactions, will change the medical and security industries. Schwartz also says that blockchain will change future elections by improving the accuracy and efficiency.
"So when was the last time anybody could tell you that they were confident that a voting system was completely secure, completely fair? The votes were irrefutable. The records were immutable. All of this is possible in a Blockchain world," said Schwartz.
Schwartz also said protecting your personal identity will become possible with the use of this new technology.
It may take time for blockchain technology to reach its potential and be applied to real life scenarios. In the meantime, Silicon Valley experts like Shaherose Charania, strategist at 23 Design, says this cutting edge technology is getting the respect of heavyweights in the technology space.
"There are a lot of believers in blockchain and the decentralized world. The power the banks have could be taken away from them and that's mind blowing," said Charania.
—By CNBC's Seema Mody. Follow her on Twitter: @SeemaCnbc