Bolt Action:
TrackingPoint AR-15
"Buying a firearm is necessarily a complex process, but TrackingPoint wants to offer its customers some additional flexibility with how they can pay for the company's product. The Austin-based gunmaker makes those Linux-powered smart rifles that can hit targets at 1000 yards, and as of this morning, you can pay for those rifles with Bitcoin in addition to dollars.
"If you look at the way our purchasing system works, you have to apply to purchase," TrackingPoint VP Oren Schauble told Ars. "And we had a lot of applicants ask 'Hey, are you guys accepting any cryptocurrencies?' It's something a lot of guys who fit our demographic are interested in and have been investing in." The company investigated ways to begin accepting Bitcoin, "and it was significantly less complicated than we anticipated, so we set it up."
A lot of the process' complexity is eliminated by TrackingPoint's decision not to directly accept bitcoins, but rather to partner with payment processor CoinVoice that will actually perform the transactions with customers. TrackingPoint's initial plan for Bitcoin pricing is to look at the BTC/USD exchange rate at the beginning of each day and set the Bitcoin price of TrackingPoint's weapons based on the day's exchange rate. Having the price be a moving number keeps the value of the product consistent regardless of the currency used.
However, fluctuations in the Bitcoin exchange rate could make some buyers very lucky and others very unlucky. Ars asked Schauble if the company was going to have a "price guarantee" or something similar to potentially compensate customers who buy at a non-advantageous time. "We're going to develop as we go for the first couple of days, but I think it's safe to say that we'll establish something like that as we learn the timings with our vendor, who is actually doing the transactions for us," he said.
One thing that TrackingPoint won't have to worry about is the IRS' recent guidance on Bitcoin's taxability. Regardless of whether or not Bitcoin is a property or a currency, those are issues for CoinVoice, TrackingPoint's payment processor. From TrackingPoint's perspective, they're simply taking in revenue.
A more relevant question is whether the decentralized, semi-anonymous nature of cryptocurrencies can be used to sidestep some or all firearm purchasing restrictions. "When a customer goes to pick up their firearm from their FFL," explained Schauble, referring to the federally licensed firearm dealer through whom a customer would have to receive TrackingPoint's products, "they have to go through a background check anyway, so how they pay is irrelevant. They'll still go through the check."
How many bitcoins does a TrackingPoint precision guided firearm cost? Based on the day's rates, Schauble said that one of the company's new AR-15-based PGFs would cost "around 17 bitcoins." The rifles range in cost from about $9,000 for the AR-15 at the low end up to the long-range XS1 at about $22,000.
TrackingPoint isn't a high-volume manufacturer, and the PGF purchasing process is mostly a "white glove" type of workflow. Customers work with TrackingPoint salespeople to pick what they need. Because of this, the company can integrate Bitcoin into its payment processing workflow without it being too disruptive. Ars asked Schauble how many rifles they expected to sell, and Schauble expects they'll start small: "I'm anticipating a handful of transactions to start and us being able to refine the system as we go."
My $.02.
