Bitcoin Forum

Everyone have been looking for big retail companies to come on board, with digital currency.

Thing is, the Bitcoin community is not supporting this.

It was reported that on the 9th January 2014, when Overstock became the first major retailer in the world to start accepting Bitcoin, they made sales worth US$126,000 in Bitcoin.

As of 13 March 2014, Overstock Bitcoin income had shrunk to under 1% of their normal daily cash intake.

Source "http://en.wikipedia.org/wiki/Overstock.com"

My question is this. Why not support these ground breaking companies?, to proof to the rest of the retailers, that bitcoin has huge potential income.

Or are we hoarding coins for potential investment returns? 

It's because of the bear market. Wealth effect at a higher btc/usd price will spur more retail sales in BTC. What is the difference between saving and hoarding?

Most people buying would've been long term holders of bitcoin. I guess most of them bought what they needed. There's no incentive for someone who doesn't already own some to go out and buy BTC just to pay that way.

It's also a classic case of deflation in action. People are waiting for a rise to spend more.

If and when they open up international sales they'll get another big boost.

I'm not a huge holder in bitcoin.  I've been buying a bit each paycheck for about 6 months so I'm up to 7 now.  I have made a few purchases from Overstock myself and I must admit I've stopped purchasing things there because of the price drops.

Even when I did purchase things from Overstock I always repurchased the same amount of bitcoin.  I think I've stopped temporarily because instead of buying those items on Overstock I've told my wife to not shop there for now because I use that money to purchase more bitcoin at these sale prices rather than acquiring more goods.

Once the price hits the 700-800 or more range, then I'll be in a more holding pattern and I'll feel more comfortable just making purchases in bitcoin and replacing what I use.

People are hording bitcoin and using it mainly as a speculation instrument.

I buy from Amazon.  Gyft cards save 3% with bitcoin.

I believe most people would rather hold onto their bitcoins and just purchase goods with cash simply due to the fact that the bitcoin value can skyrocket at any time and that $1,000 tv you just purchased for 2 BTC would be $2,000 worth of BTC or more in a short period of time. Cash doesn't fluctuate in value like bitcoin does.

I think it all revolves around the current Bitcoin price. If bitcoin price was still $1000+ people would be more inclined to purchase stuff knowing that they don't have to get rid of as many coins. But with the recent decline in bitcoin price, people are waiting for the supra-1000 dollar/coin again before they continue to spend.

Sales were inflated when they first started accepting BTC as many BTC holders likely bought on overstock simply because they were accepting BTC, not because they needed what they were buying. Sales were also inflated because some people also likely bought with BTC on overstock because it was "the new thing" and wanted to test using BTC.

IMO the sales level on overstock are at a more normalized level and will rise and fall with depending on how much BTC is utilized by the general population.

The novelty wore off. Their sales will climb with price. The coming hyperinflation with the USD will also push bit coin spending. This is just the beginning.

I still use them, but I did spend more at first because there were some things I had been waiting to buy with bitcoin.

http://nakamotoinstitute.org/mempool/im-hoarding-bitcoins-and-no-you-cant-have-any/

Interesting.... people hoard the BTC but know that if people start spending the value will actually increase... catch 22

That is the reason why an highly unstable inflationary currency will be a gimmick and have little practical value as an currency. The majority use it for gambling, not for practical purposes, that an currency should be used.
The currency unit price should be unattractive as an investment. The support services that revolve around the currenc,y should be the only things that are attractive for investments. It messes up the stability if the unit price itself is an lucrative investment oportunity. And no point in telling that growth will bring stability. Growth will only attract new players with deeper pockets and better knowledge to manipulate the markets.

Patrick M. Byrne, the CEO of Overstock has never said that the Bitcoin-based sales has declined in the site.

According to him, thus is what happened.

1. On the first day, a record-breaking $126,000 worth of merchandise was sold for Bitcoin.
2. It gradually declined to about $4,000-5,000 per day after a month.
3. By mid-April, there was an upswing, and the sales increased to $8,000-10,000 per day, where they are staying right now.

So the Bitcoin sales in Overstock are gradually climbing upwards, not the opposite.

what will you do, if you have about 1000 BTC, (but not too much fiat )?    I have.

- the price is too low now, so i use fiat only
- if the price is 900-1000 again (near ATH), i will sell 10%  or/and buy goods/holidays/etc. in BTC
- if the price is 2000-2500, i will sell 10%   or/and buy goods/holidays/etc. in BTC
- if the price is 5000-6000, i will sell 10%  or/and buy goods/holidays/etc. in BTC
....
- if the price is  $100000, i will sell 10%  or/and buy goods/holidays/etc. in BTC
.....

so i always will have millions (above 2000USD/BTC) in BTC and millions in fiat or in goods

i think not i am the one who will follow the same strategy ,  holding, holding and then always selling 10% or X% BTC/buying with BTC  

Yes it's hard to spend bitcoins and then maybe knowing in a few years you payed like way to much because bitcoin has risen in price so much.
Just like the 10k bitcoin for pizza, I dont want to spend to much on something.
A few days I bought a 20 dollar steam card with bitcoins, and I couldnt help but think maybe in a few years this 20$ of bitcoins is worth 200 or 2000.
So I think people will wait for bitcoin to be really accepted as a payment where it has shown us his true value.
So we can easily spend or bitcoins without thinking the price can still rise alot.

correct.

and also: bitcoin is tiny, lets be realistic. a company which accepts BTC should also give a little discount.

Is the transaction fee lower on higher using bitcoin?

Well this is not helping the currency.

If everyone just hoard Bitcoins, hoping the price for Bitcoin will rise, less retailers will enter the market for Bitcoins.

Supply and demand principle is actually distorted.

So when the BTC price reach $1000 everyone will flush Bitcoins from their paper wallets and that will push, the price down again.  ???

People hoarding bitcoins will drive the price up. Bitcoin is not value, it's a store of value. You have to produce something of value to hold that value. The whole idea of inflationary currencies driving value is idiotic. Inflationary currencies drive debt. Deflationary currencies drive savings. Debt creates bubbles, savings create stable markets. People are not going to stop wanting things just because bitcoin is going to become more valuable in time.

It is simple, basic, austrian economy.
People have schedules of wants and needs.
Food, housing, clothings, saving, more other stuff, other savings, more stuff, savings.
When the price decline, we have people savings because they prioritize saving over "other stuff".
When they have enough saving, they start buying some more.

I just discovered this service purse.io (http://purse.io) allowing to spend bitcoin over Amazon.
One person with bitcoin want something from Amazon, someone with a credit card want some bitcoin.
The guy with the credit card pay for the goods and the service transfer the bitcoins when the goods are received.

Just another service allowing to buy bitcoin and buying from Amazon.

It would be a big mistake to take something as a store of value, that's value is almost purely built on speculation.
Don't ever go long-term on goods that's deficit is artificially created and therefor extremely fragile and unstable.

It's funny how the "bitcoin freedom fighters" are against banks earning with interest, but they see it as totally ok, if you earn with deflation. The bitcoin community has the biggest amount of hypocrites that I have ever seen.

When companies first accept bitcoin, it will trigger a temporarily bitcoin rally, where many bitcoin enthusiasts buy something just for the sake of buying, even if they don't really need or want anything.

Later on, the sales stop a little, because out of all the people in the world not even close to 1% of the people owns bitcoin. So it would be unreasonable to expect more than 1% of the sales to come from bitcoin. It would be much more reasonable to expect 0.05% for now or so.

You should not accept bitcoin and expect 10% increase in sales volume right away. You should accept bitcoin because you believe in the added value of the payment system itself, and possibly in a couple of years your company sales revenue could increase by meaningful amounts.

Until then i'd advice companies to just hoard their bitcoins, since bitcoins will only make up a small amount of their total sales they could most likely easily survive without having to sell the bitcoins. And they would be worth much more in the future.

You realize Overstock announced that it would accept Bitcoin months in advance right?

For months, people were waiting for that first day to make their purchase whether they needed the item or not - just to show support. They're excited. The Bitcoin numbers for Overstock aren't as big on a daily basis now but they are constant. Kinda reminds me of how a movie always has a big first weekend then steadily declining numbers until it is released on DVD and Cable for residual moneys.


They should receive another boost when O.co begins accepting BTC internationally. (They only take payments via the US-based Coinbase at the moment)

Of course there was an explosion and then things calmed down, novelty doesn't last forever.
Still, I think even around 1% is a huge amount, comparing the ratio of non-bitcoin/bitcoin buyers.

Bitcoin won't shine as a currency until the algorithm taps out the last coin, the market corrects for this, and then stabilizes (way up).

Until then, it's a commodity...and very exotic investment vehicle.

I don't think at all that it will take so much time. Specially because coins will be produced increasingly slower.

(In fact, I have the felling that if bitcoin doesn't reach at least a partial importance as a currency in five years, I doubt it ever will.)

Bitcoin will not ever succeed because it is used solely as a currency. How many people do you see using (for example) gold to buy groceries, gas, or other goods?  I've never seen anyone pay gold to get their car fixed, house built, or a service performed.  Don't be fooled - Bitcoin at the moment is seen by your average consumer as nothing more than an exotic investment vehicle.  Once it taps out, and the value stabilizes way up..then we may will see the currency application side start shining.  Unfortunately, that won't be for another 20 years or so.

However, the silver lining in all of this is that Bitcoin will succeed even in the short run (and so much more in the long run) because of the underlying blockchain technology and its middle-man-busting applications in the associated market sectors it is capable of disrupting/revolutionizing.  Important people in high places are seeing the writing on the wall even now.  

All in all, it's a win-win to be involved in Bitcoin.

Don't you think it's possible that bitcoin becomes something between fiat and gold? Because fiat isn't useful as a store of value because it's value depends on third-party decisions. And gold isn't useful as a currency because it is unpractical. Maybe bitcoin has the necessary characteristics to become both.

I am not entirely sure that this type of vehicle would even work in the mode as a "daily driver" currency due to the populance's fears over price instability.  The mere fact that the Fiat / bitcoin ratio could change may be enough to scare away mass market adoption as a daily-use currency.  In my mind, bitcoins' price history has already (unfortunately) sealed its fate as a currency.  

That being said and regarding what you described, bitcoins as the ultimate exotic commodity/investment vehicle all wrapped into one?  ;D

This. This is the real, sensible answer.

Add to the fact that the coins are typicially just immediately dumped, and it's a no-brainer.

It would be awesome if it becomes an all-in-one kind of thing :D
Actually, just a few centuries ago you had gold and silver coins, which had value on their own. Guess they could be considered a mixed  hybrid too :)
(Without the exotic part ;D )

Just buy your bitcoins with that cash, then buy your goods on wherever.

Price stability will bring more spending. Right now everyone is holding their breath for the big run up and feel like whatever they spend will be worth more if they hold. 

Thanks for clarifying that point I was starting to get curious as well
That said I think the market is growing and the daily transaction volume as well, that said it will still take some time for the sales to increase significantly but raking in 10,000 dollars a day is not bad. But its more like 20-30 K Bryant so was wondering where your newer numbers came from

According to Overstock.com CEO Patrick Byrne, Bitcoin has settled in the “$20k to $30k” range, and is “gradually increasing from there.”

The article said it is growing though
http://techcrunch.com/2014/03/12/overstocks-bitcoin-purchases-account-for-less-than-1-of-revenue-but-its-growing/

Afaik the sales are even rising. The first week showed a massive amount of extra sales but after the inital storm cooled down, the sales are now rising again.

Just not enough new consumer adoption in the last few months
The slowing of new adoption needs to be reversed and accelerated
Merchant acceptance just one part of the whole picture

Part of the reason bitcoins started a bit stronger on overstock imo is when they started they had amd graphics cards and the scrypt mining was red hot prices was very high roi was fast.

So people seen it as a win win support overstock.com for taking bitcoins And get a hold of graphics cards psu and other equipment to build up new mining rigs

Steve

No, right now bitcoin inflation is relatively high, only half of what it was initially. This is because bitcoin is still in the early stages, and bitcoins are still generated at a rapid pace to keep bitcoin cheap to the general public who is interested in bitcoin.

Next halving the inflation will be much lower already and I'd say by 2020 it would be 'late adopters' stage. As the rate of new bitcoins would than be pretty slow and with that few new coins coming on the market, people who have never bought bitcoin before would struggle to buy even a fraction of a bitcoin because the price would be astronomical by then.

We don't need to wait for 100 years for bitcoin to become valuable. As the amount of new bitcoins reduces gradually. And the demand increase exponentially. At least until we hit an acceptance of around 35% of world population (assuming we will eventually end up with a 95% market penetration)

Usually companies are going to see a surge in bitcoin sales when they start to offer it as a payment option. In order for that number to keep growing bitcoin is going to have to be adopted as an alternative payment system by more and more average people who would otherwise use PayPal or their credit cards to purchase things online.

Maybe bitcoin is growing in that regard but the price isn't a great indicator of consumer adoption. I would like to see some good evidence showing that more and more people are starting to choose bitcoin over other alternative payment systems. I guess keeping an eye on bitpay is one good way to watch that.

I mentioned Apple's new app rules regarding bitcoin to a friend... his reply was "Didn't [bitcoin] go bankrupt?"

We need good news to get bitcoin freshly back in front of their eyes. When we cross back over gold parity/ATH... we're going to be in for a ride.

I assume there was a big bounce of people excited to spend Bitcoins at overstock.  Then the novelty wore off and people would rather use cash.  Or maybe people are just saving their BTC and don't want to spend as price goes up.

That makes sense as volume would likely be more consistent when the price is trading sideways
Less so when the Bitcoin price is moving in an upward trend.
That said in general if the volume is increasing that is a good sign people are aware and still using it.

http://www.coinometrics.com/bitcoin/btix

if you go to bottom of page you can see the historical graph of bitcoin volume transactions in $.  It bubbled and declining