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Author Topic: Why Is Getting Bitcoin "Accepted" As A Form Of Payment So Important???  (Read 5562 times)
db
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March 13, 2011, 05:30:58 PM
 #21

Horse breeders did not work on fractions of a percent.

And...

This isn't the 1800s.

So? Their margins don't matter if their costs are orders of magnitude higher and their services unreliable.
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gigabytecoin
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March 13, 2011, 09:49:52 PM
 #22


Most everybody's gold is held in a vault. You rarely get to touch it. But you don't have to. You know you can't take a bar and go buy a car. But you don't care.

I expect if I walked into a car dealership able to pay for a car in gold they would gladly accept it if it meant a sale.

Try it. Unless it's obviously 10x the car's value or something... they'll tell you to take it to a bank first.

Even if it was 10x the car's value. How would a car dealership know it was real 24k gold?

If it was recognized gold bullion coins and I walked in there and had a plausible reason for why I wanted to do the transaction that way, why should they say no and lose a sale?  They would do a thousand jumping jacks on the showroom floor upon request, or bring in a masseuse to rub you down while you signed the papers, if you seriously convinced them that's what it took for you to buy the car from them, as silly as it sounds.

How would the car dealership know it was 24K gold?  How do they know that when they hand me the keys for a test drive, I'm not going to just drive off and never return?  I'm sure they'd make sure they had some sort of recourse before accepting such a deal (after rolling their eyes etc.)

You're talking about minted gold coins there. Not gold bullion. Yes, a minted gold coin is legal tender. But that is not what I was referring to. I meant gold in terms of bullion/bars/what most of it is held in.
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March 13, 2011, 09:51:34 PM
 #23

Why try to change bitcoin from what it already is? A store of value.

Personally, I'm not looking for a store of value.  I want a low-cost, non-reversible, resilient means of Internet payment.  Bitcoin does that better than gold or silver, so that's why I work towards its success.

I want all of this as well. I'm just saying I think it would be easier to tackle a simpler problem first (getting investment in this great idea) and more beneficial to all of our overall goals.

I guess this is one of those "what came first" conundrums... there are solid arguments for both sides.
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March 13, 2011, 09:52:54 PM
 #24

Why try to change bitcoin from what it already is? A store of value.

Personally, I'm not looking for a store of value.  I want a low-cost, non-reversible, resilient means of Internet payment.  Bitcoin does that better than gold or silver, so that's why I work towards its success.

Indeed.  Currencies, in general, make for poor forms of savings.  That's not why they exist.  Bitcoin exists as an Internet cash equivalent, and if performs that function very well.  If you are looking for a store of value, there are much better choices.

Gold is not currency. Not typically at least. I'm talking about gold bullion. What most gold investors purchase and deal in. Nobody is seriously investing billions of dollars buying $500 gold coins...
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March 13, 2011, 09:56:06 PM
 #25

Before something can be a store of value, it needs to have value. Gold gained this initially through being wanted for use in jewelry. The only way bitcoin can gain value, is by proving its worth as a useful (or even best) means of electronic payment.
This is a good point. Can bitcoin be a reliable store of value (as it currently is) without being supported by its use as a highly convenient electronic payment method? Can something be established solely as a store of value? Where does the value come from? I'm guessing it being a highly convenient store of value... But I can't wrap my head around it to be convinced that it can be enough...


What do billionaires pay bankers in Switzerland million dollar fees for? To store value for them, secretly.

So yes, simply being a safe way to store a value seems to be enough to sustain bitcoin alone.

And I'm not saying we should totally forget getting bitcoin accepted as a form of payment... but it will be much much easier a task once bitcoins are worth $10 to $100 each.
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March 16, 2011, 11:59:08 PM
 #26

Before something can be a store of value, it needs to have value. Gold gained this initially through being wanted for use in jewelry. The only way bitcoin can gain value, is by proving its worth as a useful (or even best) means of electronic payment.
This is a good point. Can bitcoin be a reliable store of value (as it currently is) without being supported by its use as a highly convenient electronic payment method? Can something be established solely as a store of value? Where does the value come from? I'm guessing it being a highly convenient store of value... But I can't wrap my head around it to be convinced that it can be enough...


The answer to this actually answers the OP question of why it's important that Bitcoin gains prevalence as an accepted method of payment.

What gives currency value is the existence and high-availability (currency liquidity) of transaction counterparties -- that somebody always wants to be at the other end of your transactions. The second you can't find a buyer for your Bitcoins or a seller that will let you buy into the Bitcoin system, Bitcoin no longer has value. After all, the value of a Bitcoin (like the USD->BTC conversion rate) is a direct measure of how many people want Bitcoin.

Until there's a commercial market for Bitcoins, all Bitcoin counterparties are fellow speculators and investors and the Bitcoin exchange is fueled by fickle things like novelty rather than reliable things like food and the human desire to buy things that we don't really need. The intrinsic value of a currency isn't its ductility or conductivity (i.e. gold) -- they are flatly irrelevant --, but actually the reliability and ease of finding a counterparty to your transaction. A commercial market is what entrenches the transactional reliability of a currency. It creates cycles of exchange and networks of trade that entrench and distribute the investment of the currency across a lot of people, which increases the chance that there's always someone out there that wants to trade with you.
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March 17, 2011, 04:52:57 AM
 #27

Why try to change bitcoin from what it already is? A store of value.

Personally, I'm not looking for a store of value.  I want a low-cost, non-reversible, resilient means of Internet payment.  Bitcoin does that better than gold or silver, so that's why I work towards its success.

Indeed.  Currencies, in general, make for poor forms of savings.  That's not why they exist.  Bitcoin exists as an Internet cash equivalent, and if performs that function very well.  If you are looking for a store of value, there are much better choices.

Gold is not currency. Not typically at least. I'm talking about gold bullion. What most gold investors purchase and deal in. Nobody is seriously investing billions of dollars buying $500 gold coins...

Who are you talking to?  It looks like you are trying to respond to me, but I didn't even address gold as a currency.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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March 17, 2011, 04:57:32 AM
 #28

Yes, a minted gold coin is legal tender.

Not by any definition of that term that I have ever heard.  Even an American gold Eagle isn't legal tender because of the gold content of the coin, but because of the face value stamped into the side of it.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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March 17, 2011, 08:58:43 AM
 #29

I think it would be a much easier and saner a goal to achieve first (making bitcoin an accepted store of value), before we strain the community too much in trying to tackle an incredibly competitive payments market. I mean... those companies work on margins of fractions of a percent. They have ties with big banks and government, most of whom most likely won't want to deal with us - at first at least.

The fact that companies such as Paypal work on such tiny margins and still need to charge 2-3% transaction fees suggests that the whole industry suffers from systemic inefficiencies, and that a shake up is long overdue.

Bitcoin doesn't have the costs that those companies have, so it can always out-compete them in terms of transaction fees.  No bonuses, no middle management, no legal departments, no call centers, no red tape, no marketing costs, no office buildings, no dispute resolution, no chargeback, no cost from chasing fraudsters.

Sure, Bitcoin suffers from scamming too but these costs are carried by the scammed individuals, not collectively by all users as with Paypal and credit cards.  Bitcoin users rely on a reputation system and  take personal responsibility for how much risk they are prepared to take.   That also removes the moral hazard and reduces system-wide fraud losses.  Bitcoin users can also optionally use escrow, but again then they have to pay for the incurred costs individually.

 

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Besides, we need people to have money invested in bitcoin in order to spend it first, right?!

The bulk of Bitcoin purchases hass been from investors so far.

GPG ID: FA868D77   bitcoin-otc:forever-d
gigabytecoin
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March 17, 2011, 11:08:32 AM
 #30

Yes, a minted gold coin is legal tender.

Not by any definition of that term that I have ever heard.  Even an American gold Eagle isn't legal tender because of the gold content of the coin, but because of the face value stamped into the side of it.

Boy we're getting technical here!

Yes, that is what I meant. I live in Canada. In Canada, our mint sells "$100", "$200", "$500" gold coins... etc... they are 24k gold. They are worth a shit load more than $500 each. And they are legal tender. Meaning you can spend them anywhere - because technically they are worth $500 at a bank - (ie. for a car, which was my original argument) but you would be a fool to do so. They're generally collectors items.

Sorry I didn't explain myself better the first time around my southern friend!
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March 17, 2011, 08:55:27 PM
 #31

Before something can be a store of value, it needs to have value. Gold gained this initially through being wanted for use in jewelry. The only way bitcoin can gain value, is by proving its worth as a useful (or even best) means of electronic payment.

Gold was valuable as jewelry only because it was rare...if gold was scattered all over our yards like dirt, we'd have given it no more thought than that which we give mud when we wipe it off our shoes.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
Dobry Den
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March 17, 2011, 09:04:28 PM
 #32

Yes, a minted gold coin is legal tender.

Not by any definition of that term that I have ever heard.  Even an American gold Eagle isn't legal tender because of the gold content of the coin, but because of the face value stamped into the side of it.

Boy we're getting technical here!

Yes, that is what I meant. I live in Canada. In Canada, our mint sells "$100", "$200", "$500" gold coins... etc... they are 24k gold. They are worth a shit load more than $500 each. And they are legal tender. Meaning you can spend them anywhere - because technically they are worth $500 at a bank - (ie. for a car, which was my original argument) but you would be a fool to do so. They're generally collectors items.

Sorry I didn't explain myself better the first time around my southern friend!

Haha, yeah. That's like spending old American coins (like war dimes) that were made with silver. You can still slot them into vending machines, even. But you're slotting away something worth far more than 10 cents.

It's more accurate to say that government-mandated coins are legal tender, and some of them happen to be made with precious metal!
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