Bitcoin Forum

Seriously.. Why does THE important thing for bitcoin seem to be how many merchants take the currency? I mean.. good luck going anywhere with a bar of gold and buying services.

It would be like: "Hi there mister accountant! how many grams of gold will it cost me to get a tax return filed today? Do you have a scale on hand?"

Almost nobody takes gold as a payment method, yet it is 1600+/oz. Why must bitcoin be any different?

because gold is meant to be stored.  that is its value, being indestructible, etc.

Bitcoin is meant to be transferred.  That is its value.  Moving instantly anywhere in the world...

Really, if credit card companies just took payments in BTC, that would fix basically everything.

Gold maintains its value simply because of tradition and convention. Gold has been around for a long time and it remains an integral part of the economy. There is still a lot of gold trading going on in the world, though much less at the consumer level. For example, the biggest ETF in the world is GLD.

Bitcoin doesn't have that status (yet) or that level of trading. If nobody takes bitcoin, then it has no value, by definition. I think that bitcoin will continue to increase in importance and it will quickly become a widespread underground currency.

The more merchants that decide to accept bitcoins, the better for the bitcoin economy.

just need to shed the bad skin away from bitcoin, (scam, hacking, etc) for it to be an accepted form of currency in real world merchants eyes.

bitcoin is like US FIAT dollars bank notes.. but painted red to show they know it came from 'POSSIBLE' criminal activity

imagine if someone offered a business $10,000... the merchant would smile.. the second you show them the red bank notes. would they still take it with the same open arms and smiley faces knowing it will show on their books as funds from possible sources with bad reputation and criminal behavior.

we need to get bitcoin green..

Agreed. I believe that will change over time and the light cast on bitcoin will be more and more positive over time.

"Green" Bitcoins would be worth much less. For now, the majority of Bitcoin's value stems from illegal and otherwise illicit transactions; they keep the value as high as it is. There is little-to-no incentive to purchase BTC right now unless you need them to purchase things that would otherwise be unobtainable with fiat currency, or if you want to make an internet purchase without leaving a paper trail. They can be used to store wealth and hide your financial assets from being taxed, at the cost of not having a bank to insure your assets and secure them as such. If merchants started paying employees in BTC it'd be mutually beneficial to the employer and the BTC market as a whole. The employer would be buying up sell orders on the exchanges, raising BTC's value, and he/she wouldn't have to pay taxes. It'd be the ultimate way to get paid "under the table".

understandable.. and thats the hopeful future result.. but to get there u need to get people to trust bitcoin... first of all getting merchants to sell LEGAL products then once your able to buy daily household necessities then wages would be worth being put in as bitcoin as u know theres a nice variety of products to buy and live on.. not just drugs, gold and novalty t-shirts.

theres no point putting ur wages in bitcoin if your landlord/ electricity company, or the local 7-11 food shops dont accept them..ull be homeless and starving. especially if it takes 3 days for a employer to wire transfer their fiat wage into ur bitcoin exchange... for you to then cash out at the exchange back into fiat to pay your bills.. there is no benefit in thinking employee wages come first.

so asking employer to do that is not feasable YET. but theres nothing stopping u spending ur wages once u received them in fiat to then spend on bitcoins right now.

but step one has to be - bitcoin trust.
step 2 merchant LEGAL product sales
step 3 increase merchant / product range
step 4 employers pay wages in bitcoin
step 5 goodbye fiat lol (yea i wish)

Converting between bitcoins and fiat incurs expenses.  If I have to cash out bitcoins to fiat, I pay a fee for that.  Or if the merchant receiving bitcoins cashes them out to fiat, then the merchant incurs the fee.  Sure, it might be less than 1% but it still is an avoidable conversion if I can pay with bitcoins and then the merchant can use the bitcoins for paying for some of its purchases.   So the more choices of places that bitcoins can be spent, the less the likelihood that the coins will need to be cashed out.

OOOHHH
Electricity company - I paid my last power bill in Bitcoins through https://www.spendbitcoins.com - when they are buying they pay 2% above gox - worked well for me  ;D

how about company registration fees? I also paid Ozcoin Pooled Mining Pty Ltd annual review fee to http://www.asic.gov.au/ with Bitcoins through SpendBitcoins and again I got a 2% bonus for trading

Looking forward to the Bitinstant credit card as most of my income is Bitcoins and most of my bills in fiat these 2 services combined should make my life heaps easier :)
So it is starting to matter less who takes BTC directly

But for a strong and expanding Bitcoin economy we need to expand the ways we can use Bitcoin as a currency.
Where I can, I buy and sell stuff in Bitcoins and encourage others to as well.

I do not believe Bitcoin will replace any fiat currency and I am not of the school that thinks if I cant buy a stick of chewing gum with BTC Bitcoin has failed
I have never walked into a store and asked to pay for a stick of gum with paypal either :)

All Things Luxury fits both step 1 and 2 Franky. We are doing our part.

Bitcoin's utility is its ability to be exchanged for real things. If there's a barrier between this (requiring a step to transfer to fiat) it is that much less valuable

Velocity.

+This

Key word, I suppose, being "have" - in other words, immediately - or at end of day, ie Bit-Pay. If you get a liquidity provider rebate by doing limit sells that exceed all bids on the orderbook and are able to withdraw via ACH for free, or advertise on LocalBitcoins, then you're not forced to pay fees.

What it comes down to is two things:

By accepting Bitcoins, will the business get more revenue.

By accepting Bitcoins, will the business get enough more revenue to cover the expense of time involved in accepting Bitcoins.

By accepting Bitcoins, will the business get enough revenue to cover any additional expenses involved in accepting Bitcoins.

By accepting Bitcoins, will the buyer paying in Bitcoins be willing to pay more money to the business in Bitcoins than previously used currency to cover any additional expenses involved in the conversion of Bitcoins to the geographically appropriate currency necessary for the business to continue to operate and conduct business.


Remember, a pre-existing business already conducts business. That may sound silly, but it's the most critical factor. There is no incentive for a business to accept Bitcoins if all four things above can't be reconciled.

Yet don't discount the residual earnings from conversion of a new customer for the business -- whereas that customer might otherwise have gone elsewhere.  And don't discount the potential for the business to lose revenue by not accepting bitcoin where the consumer prefers to use bitcoins for payment and prefers merchants who do accept bitcoin.

Look at the anonymous VPN marketplace.  Several of those vendors were not taking a leap of faith into accepting bitcoins, they were essentially forced to do so as they were losing market share to those who already do accept bitcoins.

As stated earlier, Gold is a store of value.  In times of crisis everyone takes their cash, stocks and bonds and buys gold. It is recognised as a safe investment.  BTC does not have that status and will not have for many years, if it takes off.  It needs to be recognised by everyone as somewhere to safely store your wealth.  At the moment, BTC is seen as a fringe experiment at best and a drug dealers/ money launderers tool at worse!  It will take a while to shake off that image.

Agree, BTC are more like micro-money..

If 1 billion earthlings use the 10 million BTC for micro payment... each btc would worth a lot too, like gold, but for different reason !

No, it's like this: The best thing for bitcoin is adoption.

Gold is valuable because people are convinced it's valuable.  It's also a physical object and has real uses in the economy, so it has a leg up on Bitcoin there.  In order for people to be convinced that Bitcoin is valuable, it has to be tradeable for something, and the easier it is to trade, the better.  Bitcoin has no physical presence, so its value is derived solely based on its efficiency and efficacy as a medium of exchange.

Adoption can come in many forms. vendors could decide to accept it (slowly over time). Some mega-corp (like visa, western union or some bank) decides to start using to move money internationally. It replaces paypal by becoming easier to use, more reliable and less of a headache.

Heck if all it got used for was domestic western union style transfers - we'd start seeing a massive upswing in transaction fees.

Maybe you should look up what that word actually means....

Yeah, exactly...one way or another if people see other people wanting bitcoins, they will want them too.

It's enough that it can be traded into USD or other fiat currency, people do not need another currency if the current one can satifty their daily spending needs, most of the fiat currency already do that today

When there is more than some critical mass of merchants taking bitcoin, like when they do not have to trade them back into fiat and bitcoin starts working as inter-merchant currency, not just consumer currency interesting thing happens:

Supply side of bitcoin naturally shrinks which leads (in most cases) to the rise of bitcoin price. So far so predictable and good, but than bitcoin feature kicks in and gives bitcoin a perk in natural competition among currencies: since there is limited and long-term fixed supply of bitcoins unlike fiat - the supply may only contract in long term (presuming bitcoin-goods trade volumes do not shrink). The bitcoin economy look like destined to some sort of run away effect to me. Rising in price which no bubble can fully burst or slow and measurable dying being swamped by fiat.

Block reward halving acts like sort of kicking gear-shift up to me.

Sum up on what you need:

Raw material producer accepts bitcoins to sell raw materials to distributor. AND raw material producer can operate business with bitcoin intake aka pay employees etc in bitcoin.

Distributor accepts bitcoins to sell to wholesaler.

Wholesaler accepts bitcoins to sell to retailer.

Retailer accepts bitcoins to sell to consumers.

And why mass adoption is important?

Because as with any currency that has "trust" as the main intrinsic value, the more people that trust the currency and use it, the better. Because the more people use it, the more goods are traded and then more trust it gets. It's a vicious cycle.

Gold is too heavy. Bits are so light.

Ease of use.


BTC needs transactional volume for stability. Volume needs easy use.

lol
+1