Bitcoin Forum

The general consensus says that the more places that start accepting Bitcoin the more valuable Bitcoin will become, but if we take a look at the recent news from Overstock - all the sales they make in BTC will be converted straight away to fiat - there is going to be a need for a general rise in the use of Bitcoin to support this.

Of course, if more people start using Bitcoin then this could potentially be sustained but if this is not the case the retailers will just be dumping BTC on the market.

What Overstock should be doing is using the BTC to pay for their costs - not possible at the moment - paying salaries to those that want a portion, if not all of their pay cheque in BTC. This would be a better way to sustain and stabilise Bitcoin.

No, because low margin retailers will truly realize how screwed they were getting by credit card companies. They will flock to adopt BTC payment.

And for every 1 person buying some BTC and spending a small % of it online at Overstock.com, thereby getting the wheels rolling on our new digital economy, there are 10 who just buy and hold, mine and hold, one guy lost his wallet, another forgot her password, another gambled it away on dice and poker... etc etc

Cliff notes: in terms of active, ready-to-spend BTC, there arent as many people or as much BTC as you would think.

I like the idea of paying employees with it, even if its only a small %. That could be huge. Im definitely shopping at Overstock.com in 2014  ;D

Yeah that's a good point as long as the transition is gradual then things should be OK. Great that we're finally getting the ball rolling!

This only matters if you are using bitcoin as an investment to make profits. Which currently ALOT of bitcoin owners are doing.

If you want to use bitcoin as a currency then it really doesn't matter if it's $1 or $1million dollars for a single bitcoin.

I don't see how more retailers accepting Bitcoin could cause the price to drop at all. The BTC won't be dumped on the market, they will just be funneled back into it.

Overstock have stated that as soon as they make a sale and are paid in BTC they will convert it straight to fiat. Now if this a gradual process that will be fine but imagine if for example:

1000 shoppers spend 0.25BTC in 1 day - 250BTC in total

Overstock will then covert this BTC to fiat instantly, I was merely meaning that as Overstock (and other retailers following this practice) try to sell this much BTC in one day, everyday, there will need to be increased demand for BTC to sustain the prices.

Retailers choosing to adopt BTC should NOT be converting it instantly to fiat - in my opinion.

But the money is just passing through Overstocks then back out the other side. Obviously some business will keep hold of Bitcoin maybe with the intention of an investment, but other big business will need the money liquidating and free-flowing.

This is a legit concern for price stability. Overstock or other major companies could drive the price down by increasing selling pressure at a time when their aren't any more buyers. Even the threat of this will drive prices down as traders front-run the market. It'll stabilize eventually, but there will be some growing pains.

If a lot of retailers adopt bitcoin then I believe bitcoin value will stabilize.
Consumers will start relating to BTC as in 0.0001 BTC will be normal for a bread and 1 BTC will be normal for buying a small car ... etc.

So adoption is good if you want BTC as a currency but it might stop BTC going TO DA MOON!! as a HODL product due to the stabilization.

But then again if more people use BTC then BTC must be spread thin as in everyone wants a piece of the pie. The pie cannot grow thus the pieces will become smaller.

Somewhere there will be an equilibrium..... :)

Oh come on guys.. If I buy something with btc I will instantly replenish my bitcoins by buying more BTC with fiat. Major retailers accepting BTC will make more people buy bitcoin, which buffers the need of the retailers to go fiat once in a while.

It's worth noting that while BitPay (and similar) may near-immediately credit and be able to pay out fiat, it doesn't necessarily mean they immediately dumped the BTC. They're pretty much all run and funded by mega-bulls. I doubt the effect is as simple as it appears.

The more places that start accepting Bitcoin, means the more volume in Bitcoin trades that there will be.

This factor in isolation, can only mean one thing, so obvious I am not even going to say it.

You realize the 1000 shoppers will first have to buy the 250BTC in order to spend them...
It's a closed loop. Say I buy a bitcoin, immediately spend it on Overstock, and then Overstock immediately sells it for fiat. The market price will not change at all - only the exchange volume will go up. This will decrease volatility, as well as convince more people that bitcoin is a real transactional currency.

This can only be a good thing for the ecosystem. Of course, I agree it would be even better if they kept the bitcoins and used them to pay salaries and suppliers, but that will take a while.

Why the hell would someone buy bitcoins to buy goods the same day. That would be really stupid.
Either you bought coins and speculate on a price increase and spend them in the future or you mined the coins.

This could really drive the price down. Thats good, because we need to find the "true" value of bitcoin with high transactions in real life. It could be worth 1$ or 100000$, we will see.

If you don't trust the banks, you are full bitcoin -> no need to buy some
If you are in fiat -> why would you buy bitcoins to buy goods, which can be purchased with your fiat

Well if you're treating bitcoin only as a speculative commodity and not as a currency, then yes, you are absolutely right.
I certainly hope most people in the bitcoin ecosystem disagree with you.

For now we are in a phase where more and more merchants accept bitcoin. At this stage most of them convert it straight back to fiat.
So at this stage it is important that we instantly replenish the BTC we spend with these shops.
At this stage it is about pushing for bitcoin acceptance.
Once we have reached a critical mass, merchants can start offering bitcoins to their suppliers and staff.
At some point suppliers can offer to pay for raw material in bitcoins.
The bitcoin cycle would be complete.

One big barrier to businesses accepting bitcoin is the fear of being cut off from the banking system.
Well, from the banks' point of view, the more BTC business customers they sever ties with, the more worried they get. One day there will be no business customers left to cut.