Bitcoin Forum

I thought of this a couple days ago. I saw the news that now you can spend Bitcoin at various big retail stores using the Spedn app, which I guess basically just uses a conversion service to let you use Bitcoin and exchange it for dollars and sends the dollars to the retailer. I started thinking that this is likely the standard model that will be followed at most retailers to spend Bitcoin.

Very few retailers can be expected to directly take Bitcoin, because it is volatile and they want exactly the amount of money they charge. They're not in the investment business, they're in the retail business, so when they sell something they don't want the amount of money the receive to go up and down. So given that, any time someone spends bitcoin that goes through such a conversion service, that means it is being sold for fiat (or probably eventually a state issued fiat stable cryptocurrency) on an exchange somewhere. If it becomes normal to spend bitcoin wouldn't that create huge downward pressure on the price?

Could the dream of using bitcoin to pay for things around the world actually be, paradoxically, detrimental to its price, and therefore bad for its adoption?

This makes me think that maybe store of value will be the major use case of bitcoin, rather than both store of value and means of payment. What do you think? Is the scenario I describe where spending makes bitcoin's price go down wrong in some way?

Well maybe is complicated to accept it when price goes down, and spending it maybe not affect the price when buy something with but when the shops sell it for money then there can be a drop, but if we will have a higher price i think it can be adopted and accepted because maybe then the price will not have so much fluctuation. And if shops sell it people can buy it again and use again.

If you have a lot of merchants wanting to convert their bitcoins into fiat all at the same time, that, my friend, is what would cause the price to crash. But in a society and economy where bitcoin is basically accepted on par with fiat currencies as is, then we might be talking of something good in here and not something that could be detrimental for the price. Right now the main focus of people as to why they are buying bitcoins is because they wanted profit and earn more than what they initially bought for. When this focus is shifted towards just using bitcoin as is with the rest of the world, I don't think price would matter by then. Perhaps in time the whole world would accept bitcoin on par with fiat and never would the need for conversion be present again.

In the shorter term, consumer usage probably equates to coins being dumped on the market. I think this is an inevitable stage in consumer/merchant adoption. We can't expect merchants to start holding such a volatile asset yet. Their vendors and supply lines are all paid in fiat money. They're not trying to speculate on currency appreciation.

So this is a middle ground that offers merchants better features (cheaper processing, no chargebacks?) until BTC gains more acceptance as a means for settlement. Bitpay has indicated a massive increased in B2B payments and I think over time that will continue.

Eventually I think these middlemen will be cut out, but it can't be expected to happen overnight.

I remember a Bitpay employee saying every single satoshi they were receiving at one point was going straight into the wallets of OTC buyers. Where else will you find a constant and steady supply with a very willing seller? There aren't many other places.

Well, the adoption of Bitcoin is not necessary to be accepted by all of the industry. The point is, for the bitcoin to be accepted by the general of the industries. But, I don't really see a vision where people will use bitcoin as their daily asset. Why? It is really hard to depend on a volatile thing. Due to my experiences, I believe that consistency is always a must to survive. In transactions, it would really give us a lot of hassle if bitcoin is the only option we have for our daily transactions. What I visualize is that people will be open for the option of having cryptocurrency. But fiat must always be there

That's a good point. I guess the fact that Gemini is engaged in such a big retail rollout says they're pretty confident about OTC market demand. I take that as a pretty bullish sign about the state of the market.

It will not crash the market. You are thinking that the flow of bitcoin will be all in one way - selling. But in order to continuously use the app, the user have to replenish his account with bitcoins. This will create a cycle and a demand. Users will either buy bitcoin from exchanges or work to earn bitcoin. Then they will spend by buying from merchants through the app. Both creates flow of bitcoin in the users side and will push the price up. While on the apps side, the bitcoin will remain in spedn's wallet and will add to bitcoins under hodl.This lessens the supply available in the market, pushing the price further up.

Of course this is only possible if the app can provide a better, faster and secure service than using fiat. Or If the app can provide incentives to users so they will choose to use crypto.

We are all spenders here but we also hold a little portion of the total supply.

I don't see anything wrong with spending as the purpose of bitcoin is to become a payment system or an internet money, which suppose to be spent.
The most important that should not be lost is the demand, I mean a continues demand, and then the price will just move up and have a stable movement.

Those dumpers of big amount are those that would affect the price in a bad way, not only because they move the market, but because they might cause panic which is a major problem in the crypto space ever since.

Is there no obstacle when bitcoin can be used for direct transactions, because I see there are still many countries that are not financially ready for the implementation. indeed with this, of course there will be convenience and prices can not go down and rise but according to that time, different if we first change into fiat. maybe a dream for this matter still needs more time.

Valid point but you should need to understand some of the points. I will try to make it simple so you can understand it easily.
Until the global adoption of bitcoin, spending will be bad because even the retailers who are accepting bitcoins will cash out as there is no other option they have. However, if the bitcoin is fully adopted around the world then spending bitcoin will be beneficial because retailers and shops will use bitcoin as payment not only to cash out for fiat.

Theoretically the mass adoption will create less volatility, because it will balance the supply and demand, but decentralised currency wont be as stable as fiat, but it still can be used as a payment especially when the payment is converted directly to fiat, the store owner won't loss anything due to the fluctuations

I think it is not because the more people will use Bitcoin for their actual spending is the more the people will keep Bitcoin for their future spending. The owners of the sold commodities will replace their stocks using Bitcoin too so it will be a never ending economic cycles therefore it is ok to use our Bitcoin in spending.

With different types of people's points of views, using bitcoin with your merchants only gives ideas to others how this payment currency works, it will adds interest and possible to bring more people to actually using this system, the only thing that will affect the price is when every holders from the business sectors who will cash it out altogether after seeing good value amount.

The real essence is to be useful and being adopted, the volume will define the actual value after.

It depends of the current price and the quantity of people that are spending bitcoin.
It also depends for what you they actually spending bitcoin-for fiat money,for altcoins/tokens or for goods and services?
If many people start selling btc for USD at a very low price,off course it will affect the global bitcoin price.

If we see it from other side, when people like to use it they will need bitcoin to purchase it. So it meand demands will come. Actually anything in this world will have pros and cons. So it is not always be bad thing.

If people continue to spend bitcoin then demand will also continue to go up and this will also help in rising the price. But if someone or a whale, sold a big amount of bitcoin, this will surely affect the price of bitcoin. Spending bitcoin to buy some producfs will not affect its price because spending will cause a demand for more bitcoins which can also boost the price up eventually.

Not if the volumes are high enough. The amount counts, when it becomes to big to fast it will crash.

Its the user who makes the price therefor it would go up since supply is scares.

Why would it be bad for the price? You are spending your Bitcoin, you are not selling it. So it won't directly affect the price of the bitcoin. Spending it is like moving your coins from one hand to another. You are not selling it for cheaper or for more. You are spending it for the exact price it is.
In fact, spending bitcoin like you would spend a fiat currency might actually bring some good to the market.

This question is really old but still valid to ask I guess, Bitcoin has to be used spent and circulated to really be of worth.   I think this is known as monetary velocity and it helps to create value.   The very origins of Bitcoin were a token which until exchanged for a pizza had no idea of worth exactly only potential in that secure transaction.

We've come a long way and the price rose alot but I still go back to the usage, if people didnt spend and agree to an exchange and price then its not accumulating into this little eco system we have.  Nothing wrong with spending, buy on the lows as well and its all good.    I hold a little bit of worth in many asset types and I dont see using any of them to fund a bill as bad really

Well the inevitable things happen and we can not stop someone from spending their own money, but I think a little chip of fraction may not cause the price to go down but if whales would gather and spend or exchange their Cryptocurrency or Bitcoin to fiat then there might be a sudden change with the price of bitcoin but that is not spending but converting Bitcoin or other cryptocurrencies to fiat money, So if a number of people would spend their hold coins maybe something like that could happen, But as I said we can not control any of it. And maybe a cycle of spending and saving can occur so it will produce a cycle of continues profit, I can not say about if it might happen but I guess it will surely depend on a given occasion.

1. The volume has to be sufficient enough for this effect to change the price - I doubt that many people will be using those apps, at least at the start, so we wouldn't notice it.

2. The fact that big names have adopted Bitcoin can alone boost the price, so it may cancel some portion of the negative price effect.

3. I don't think that whomever handles those coins will be mindlessly dumping them, they'll probably sell some and trade with some. T

I have been asking myself this same question: Is spending bitcoin helping it or is holding it making it grow? We have to remember that bitcoin is both a currency and a store of value...and both must be promoted and utilized leading to the dreamed massive adoption by the people. The problem is that because many are thinking that bitcoin will be moving in value they choose to hold rather than spend. Unlike the fiat money which is not very volatile there is no incentive to hold more than what you need...the same thing is quite opposite with bitcoin. So what we should achieve is finding the middle ground. We should be encouraging people to use some of their bitcoin and then use some to hold though admittedly as shown in the market today this can be difficult to achieve.

It's neutral when you buy stuff with bitcoin if you already own bitcoin but can affect the market if the store/owner sells it. If you have to buy it first then it will have no effect since you are first pumping the price and then dumping it. The volume however is so low that it will have no effect either way

If people are able to spend bitcoins for buying products then this is a great step towards mass adoption.
Personally, I don't find a good idea to spend my bitcoins for purchasing stuff. I keep hodling them and wait for a bigger adoption to come in the next years. Not to mention that I consider it as a way to store value.

If you just spend a little then it won't affect the price that much unless if you are part of the whales who will be spending thousands to millions of coins then that would really change the price. It is normal to spend since you are just doing like trading you sold your coins.

The vast majority of merchants accept BTC through Bitpay or other payment processors in exchange for fiat. Those BTC are generally being dumped on the market.....perhaps OTC rather than spot, but no matter what, this is selling that is absorbing market demand.

Spending would be classified into 2 different things which you do directly spend out your coins into merchants purchasing goods and services

and spending where you do basically making buy and sell or simply trading.It isn't really that bad and come to think that only big holders of btc
would be the only one would mainly affect the entire market.

if the payment system is as you explained, using a third party, then the third party exchanges it directly to fiat. this is tantamount to selling bitcoin to buy things right? if the user of that payment system (third party) is large it will certainly affect the market? I can't determine this is good or bad for the price, because of course there are positive and negative influences. I think it would be much better if we spend bitcoin directly to the merchant without a third party, it would be good for the price

Yes, such a method of payment for goods and services would in many respects solve various problems related to cryptocurrency. This is especially true for sellers who find it very difficult to keep records in cryptocurrency and then report to the tax authorities. That is, for sellers of goods and services, these would actually be settlements in ordinary currency, and for buyers, it is important that purchases are made at the rate of crypto-currency at the time of the transaction. Here both sides retain their interests.

I think it depends on where you spend, the important thing for bitcoin is adoption and increasing the hype for it so spending does actually make a lot of sense. However if you spend it on somewhere that will sell it right away then it doesn't really make any sense. For example steam had bitcoin purchase for a while and that was amazing, I don't know what they did with it but if they kept a bit of it then they are bitcoin rich right now for sure, that type of spending is alright.

However, if you want to spend it buying coffee that doesn't really make that much change, its just a cup of coffee here and there and it would literally make no change at all. That is why where you spend your bitcoin changes the bad or good, there is really very little "bad" place to spend unless they literally cash out right away but there is levels of good on spending.

  Absolutely, spending bitcoin can't affect the outgrow of its price, maybe it is about the market high volatilization which can fluctuate the possible price of bitcoin. I spend my bitcoin which gives huge  assurances on giving massive profits in return and always keep determined for every possible conclusion.

This is just one more reason I don't really share sentiments with the so-called permabulls and ultra hodlers or whatever they call themselves. Sure, I hold as much as I can but I'm not hesitant to spend my btc. I earn almost everything in coin.

I personally don't know how it works but logic says it is only with regular spending and use that Bitcoin continues to have its appeal as currency and its value as such grows.

Pizza day coming up too. Isn't that self explanatory?

I believe it's not bad for bitcoin in any ways. You are circulating bitcoins in the market, using it as currency, what is one of the biggest criticizes to the virtual currency. So it's less one argument for bitcoin haters, what makes the market more optimistic, consequently there will be more demand for btc.
And once you buy your food, products with btc, the third party service might sell the bitcoins ahead (dumping the currency), but you, as customer will need more bitcoins later to buy more stuff, then you will buy it (increasing demand, pumping the currency).

It depends on what kind of bitcoin user you are . if your a whale that has a tons of bitcoins and you want to spend it a half or a whole of it then it does have a major impact on the market or the whole market of cryptos rather not just on the bitcoins value alone but if your only a small time hodler or an average joe that has a small amount of bitcoins its obvious that you wont make any changes as soon as you sell your coins  . i assume that your not a whale so go ahead spend all you want , sky is your limit  . just dont regret and cry if you see that bitcoins price is skyrocketing 

I don't think that spending Bitcoin has some substantial influence on price. Besides to my opinion Bitcoin should not only sit idle and serve no concrete purpose. Sooner or later majority of users will either spend Bitcoin or koncert it into fiat and there isn't and also there shouldn't be some mechanism to prevent that.

Spending wisely cannot take down bitcoin price, and what's bad for bitcoin was the bad news circulating around. Every negative thoughts could trigger panic, that's why we're able to notice price declination. Normal spenders just use bitcoin according to it's purpose, like trading and buying coins at trading sites.

when you spend your cash like USD and buy stuff like McDonald's is that bad for USD? so why should it be bad for bitcoin to spend it!!!

as a matter of fact spending bitcoin can only be good for bitcoin as it is increasing the circulation, increases the adoption and helps the bitcoin economy grow. one of the main reasons why many merchants are still reluctant to adopt bitcoin is because people are reluctant to spend their bitcoin. if they do, then these merchants will adopt bitcoin and then more people will adopt bitcoin and the circle continues and all of that helps bitcoin grow more and more.

Well said, and we also need to note the best part in it keep on increasing the market circulation through realtime utilizing which gives more importance similar to fiat and this won't make a big change in the price unless there is massive usage from the common people same as that of the adoption happening from a country or acceptance from a chain of businesses under a single authority.

I think that taking the role of bitcoin solely as a means of saving capital is not entirely true. First of all, because people now actively working with LN. When this work is completed, we can very easily pay all of our purchases directly using Bitcoin. And it will happen in seconds.

No, basically when a bitcoin is spent or exchanged for money FIAT is because another person or another operator is changing it, that application may have an Exchange or maybe it comes to a Wallet whose owner is an investor or the person who wants to buy , for example: In the platform of Localbitcoins.com, bitcoins are bought and sold for FIAT money, this means that the bitcoin passes from one client to another, and is exchanged for money, the application may have that way of operating, although It would be good to know how is the mechanism that they choose to make the Exchanges.

Logically the constant movement of all bitcoins spending on goods and services will cause the economy of Bitcoin is dynamite and produce a great development, this ensures that the general economy of bitcoin and the market increases because people start to see the bitcoin of another way and start looking for it much more, that is if the demand increases the price of bitcoin starts to rise, which would bring as a direct consequence is that the bitcoin increases in price rapidly increasing way.

For Bitcoin to survive it needs to be spent. Even if that spent bitcoin eventually gets converted into fiat by the store where the transaction took place.

This is why the guy who spent 10,000 BTC for 2 Pizza's was an important event. Sure it was a bad investment in hindsight but it was one of the transactions that made it possible to actually see bitcoin being used as a currency.

Some people don't realise that if you keep your bitcoins forever and never actually spend them, then its not good for the crypto ecosystem. You need to spend them so stores can make a profit, so exchanges can make money in fees and so miners can make money in fees also.

Well, I believe you're mixing 2 things here:

Spending is, and will remain limited and is actually needed because without it, none would sell and if nobody sells, how will people who are willing to buy it, would actually be able to purchase it at their purchase price?

Ah yeah, things you're mixing here are trading for money and trading for Bitcoins.

How?

Trading for money has many different phases, where few of them are mentioned below:

- One is the phase where the app you described helps people to trade their Bitcoins to pay to merchants and merchants receive fiat (or a state issued centralized cryptocurrency). Another one is when you pay Bitcoins which they display based on market price (fluctuating values in BTC) and they receive the coins only instead of fiat, but it's still trading considering that you're getting back the good/s and/or service/s against your payment.


Whilst trading for Bitcoin is something different:

- When you buy/sell BTC online and pay/get fiat, it is a bit different if compared to trading for money.

- It is a considerable fact that you get to see a lot of fluctuations in the price and that's because trading for money (as mentioned in type 1) is lesser if compared in numbers against trading for Bitcoins because people love to make more Bitcoins through trading over exchanges (be it for altcoins or through fiat) and another type is margin (leveraged) trading. Trust me, price of Bitcoins is being set by those big traders who are setting the trends and its adoption will also bring some greed in people to hodl their BTC and earn more fiat while its value grows.

Spending and buying is good for the economy. If you buy something and you pay BTC, it wouldn't do anything to the price since the price is only dictated by the market which is why it doesn't matter if you cash out to your fiat as its not where they market price will be base on. fact is that BTC is being cashout everyday by thousands of us.

That's very true. If everyone hoards BTC and nobody spends it, there will be zero transaction liquidity on the network. The network would be useless. Fees wouldn't support mining security anymore. BTC would be worthless in that case.

People converting BTC to fiat (by spending or selling) is much better than a reality where nobody spends at all. I believe this phase where Flexa and others are converting BTC to fiat for merchants is just a middle stage prior to mainstream and merchant B2B adoption. Eventually, less and less BTC will be converted this way and the middlemen will start being cut out.

I don’t really think spending bitcoin will totally crash the price of bitcoin based on your explanation, because if you look at the principle guiding or affecting the value of bitcoin which is basically law of demand and supply, it is when demand becomes high and supply becomes limited that bitcoin value becomes very expensive.

So if all retail stores all accept bitcoin, it means they will force their users to buy bitcoin which will create enough demand, and the more people demand bitcoin, even if those retailers are changing what they receive to dollar, the lesser we will have supply, and since bitcoin supply has a limit, bitcoin will gradually gain its value even when they convert it to fiat.

Spending it to a merchant is basically trading your crypto into Fiat so it would affect the price but the crypto market is huge so a single transaction would see an effect on it.
Even in a trading site we could see that there are plenty of traders doing it daily but it still continues to grow because of the demand is huge.
So even if we use it to pay in a merchant the price could still hold it unless we are also experiencing a market crash.
And even if Bitcoin gets accepted by merchants only a small percent of crypto user would pay with it since they would rather hold it to gain profit since most of us see's it as an investment not as a payment option.

Bitcoin the value of USD is at a set price. It fluctuates with other national currencies but not within the US itself. It is only changes based on the amount of USD issued by the Fed. USD doesn't have a market that affects its value within the country. And it doesn't get sold for something else when you buy something. It isn't even close to the same thing.

I already explained my reasoning behind why it could be bad for price. Did you read my initial post? Or did you only read the thread title?

I think some people don't understand what I said in my initial post.

I'm not saying a single transaction of buying something will affect the price. I'm not saying spending bitcoin is a bad thing to do. I'm not saying bitcoin circulating through spending is bad, or the various other things that people brought up.

I'm saying once you can easily spend bitcoin, people will start spending it, instead of just holding it, because they can finally use it easily in real life. And spending bitcoin won't just be moving bitcoin to another person no bitcoin is sold. Merchants won't accept bitcoin directly for the most part, I think that reality is becoming clear. Which means every time you spend your bitcoin it is getting immediately sold on exchanges, and the resulting fiat is sent to the merchant you spent the bitcoin at. The effect is that every time you spend bitcoin what you are really doing is selling bitcoin for fiat. If spending becomes regular this provides a huge selling pressure in the markets, meaning price goes down. Market downward pressure would no longer be just from people taking profits from trading, but add in every single time bitcoin is used to purchase something, that gets added to the selling. Now of course if the ability to readily spend bitcoin causes bitcoin to be adopted by way more people, it will even out or something. But, if market dynamics continue as normal - people buying bitcoin when the price goes up - and people don't just start buying bitcoin because they can spend it (ya know since they can already spend money now, you don't need bitcoin to buy stuff) then spending it will just mean that people who already have bitcoin can now use it, which means they will be regularly selling it, rather than holding it as a store of value. This is downward selling pressure on the market.

So I think a very real possibility is that spending causes more downward pressure on the bitcoin price, without an equal amount of additional adoption being caused by being able to spend bitcoin, because the major reason for converting fiat into bitcoin in the first place will likely remain the same, because the price will go up in the long term. But the downward pressure of selling could slow that adoption by, well, obviously causing the price to drop due to the pressure.

Just a possible outcome. It could very well be that once widespread merchant adoption hits all the people who think bitcoin is a scam will realize its real and will start buying it due to it being possible to spend, which would certainly offset the existing bitcoin holders suddenly starting to spend (sell) their bitcoin on a regular basis.

No coins are being sold on exchanges. Payment processors like Bitpay sell everything OTC. I think maybe you're not accounting for the huge demand that exists to purchase these coins.


Spending always represents selling pressure because it means spenders want to liquidate coins. So to an extent, you are right. Spenders are keeping the OTC market from completely drying up in supply, which prevents some excess demand from entering exchanges.

I don't think this is a big deal though. Fewer and fewer people are going to want to spend their BTC as time goes on and the price keeps rising. A lot of these coins being spent today are being scooped up by long term investors.

I think some years from now, merchants won't be converting all the coins they receive to fiat either.

Spending your bitcoin will only generate liquidity since more bitcoin will be available to be bought and sold, however you are only looking at the supply side of the equation and while it is true that if people begin to spend their bitcoin there will be more bitcoin in the market the scenario you bring will also have a larger demand, so I still think this will make the price of bitcoin to skyrocket since most whales will never do something like that and when you take into account the lost coins as well then to me it seems the demand will outgrow the supply and that always means higher prices.

Widely used means more demand, so the price can easily go up when the supply is limited but the price will still depend on the trend. Bitcoin should be used for transactions online, that’s alright and it can’t affect much the price. Yes, if we can easily use bitcoin for payment and more online store accept bitcoin then more users will use their bitcoin, its more faster and convenient way of shopping.

Obviously, Your thoughts are right at the same time peoples are weighting for Bitcoin legal in China and India. Because 220 million peoples are live in these two countries so once accepted automatically it will going to moon. Online shopping and stores are impossible to gain expecting hype. I think as soon as possible Bitcoin will occupy entire world but it takes some time. So current investment is good for future days 

I think merchants will convert some of the amounts of the coins into fiat because if fiat is still available as the payment method, they need to get the money for their profit and save the rest of coin as their investment. I think people will do the same as with bitcoin, they can make money, and at the same time, they can have a new investment so they will save more and more bitcoin for the future.

Spending bitcoin is not advisable for this time of the cycle. If you have more money to spend, use your cash to buy some some BTC. The price is noticeably going upward and its not smart if you wouldnt take the opportunity and spend yout remaining bitcoin for a non necessity things exchanging your future millions.

There's people who don't have the time to wait indefinitely for the price to go up and spending their Bitcoin could save them some time or effort now that exchanges and other services are accepting Bitcoin. They could profit during this time but we shouldn't stop them from spending Bitcoin if they really want to since that's the main purpose of it.

Also as more and more stores accept Bitcoin, I (and many others) will increase the amount of Bitcoin I buy every week, I would like to get to the point where 50% of my paycheck goes into Bitcoin, but in order for that to happen, I must be able to pay my bills and purchases with Bitcon.

But as more people put more of their income into Bitcoin, it will increase the price.

We should be thankful that there is an increase of Bitcoin users than of decreasing. The moment that there is a huge market adoption, the more market prices moves is that we've actually looking for (price fluctuations).
If we could compared what will happen when everyone keep on holding versus everyone will spending, the market demand will chance its course. We could see more favorable market flows when everyone will keep on spending. 

Spending bitcoin is actually not bad for the price. The more bitcoin is used as a currency, more its demand will increase. More People will use it and since its supply is limited, the price will grow automatically.

Consider no one spending bitcoins and miners waiting for the transactions forever, no trading etc will means no use case for bitcoin and it value will be decreased to zero.

People should look into something like this. And a lot of people here i see really support bitcoin and give positive thing that come if bitcoin spent on something. I think if bitcoin can be spent to buy something, it will adopted in a lot of country and demand will increased.