In order to claim this prestigious title, BitPay and BitStraat have developed dedicated bitcoin payment terminals, which they are giving away free to 100 brick-and-mortar stores throughout the Dutch capital.

BitStraat, which serves as a middleman linking bitcoin-accepting merchants and payment processors such as BitPay, was founded by Amsterdam residents Max Barendregt and Kasper Keunen.

"It only makes sense to establish Amsterdam as the global bitcoin capital," Barendregt said.

"The Dutch capital has a history and a name for being technologically ambitious as well as open minded and forward thinking in general. A currency for the people free from centralised control would be a natural fit. We aim to enable visitors to our city to pay for all of their expenses in bitcoin, including their stay in a hostel, their trips to museums and their diner at local restaurants," he added.

Barendregt and Keunen pitched their ambition to the BitPay team at Bitcoin2014, the Bitcoin Foundation-organised conference held in Amsterdam last May.

Having just opened up its European headquarters in Amsterdam a month earlier, BitPay was immediately enthusiastic about the initiative, said director of European business development Moe Levin, explaining:

"Our community made us, so our philosophy will remain simple: we put our community first. That means supporting any local project that increases adoption, adds awareness, and ultimately drives bitcoin from speculation to mainstream."

The POS terminals that have been developed for Amsterdam Bitcoin City consist of a small tablet device with specific software installed. This is integrated into a custom-made stand, so it can be easily placed on any counter top.

Since the terminals, their installation and BitPay's payments plan all cost nothing, the whole package is completely free for the first 100 merchants to enroll – up to a monthly revenue of €900.

After that, merchants get the non-committal option to either pay €10 a month for the complete service, or they can purchase the terminal outright for €120.

Amsterdam Bitcoin City has so far signed up 18 vendors, although not all of them have yet had their payment terminals installed.

Among these bitcoin-accepting locations are Hofje van Wijs, a cafe set to accommodate the first Bitcoin Embassy Amsterdam later this year, and Pakhuis de Zwijger, the event-venue that hosts the city's monthly Bitcoin Wednesday meetup.

BitStraat and BitPay hope to have reached 100 participants by next spring.

In order to become the bitcoin capital of the world, Amsterdam Bitcoin City will first need to surpass another Dutch city, however.

Arnhem's Bitcoincity signed up 15 bitcoin-accepting merchants at its launch in May of this year, and has more than doubled in size to 36 participants since then.

Arnhem Bitcoincity was itself inspired by another Dutch project, the Bitcoin Boulevard in The Hague, which consists of 10 bitcoin-accepting merchants along a single canal.

Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.

Images via Shutterstock; BitStraat