BitcoinArsenal (OP)
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July 27, 2018, 01:12:06 PM |
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As global investors flock to cryptocurrency as an investment vehicle, the use of cryptocurrencies for their intended purposes has come into question. New research suggests that only one-third of transactional activity occurring on the Bitcoin network is related to the purchase of goods or services. Full article on NewsBTC
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stompix
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July 27, 2018, 02:21:39 PM |
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I stopped reading the article at this line: According to data from blockchain data provider CoinMetrics, the majority of Bitcoin’s transactional activity can be attributed to factors like mining pool distributions, spoofing, and manipulation. Today the estimated transactions are 108,108 BTC, the reward is 1800 BTC, you would have to send all those coins back and forth 6 times to reach 10%. And they call themselves "cryptoasset analysts"
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Slow death
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July 27, 2018, 08:58:57 PM |
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the use of cryptocurrencies for their intended purposes has come into question. New research suggests that only one-third of transactional activity occurring on the Bitcoin network is related to the purchase of goods or services. Why does someone waste time posting this type of article? the visa and mastercard do not like crypto for several reasons and one of those reasons is because cryptos are not regulated in many country, so if we do not have bitcoins debit cards or virtual cards that allow to make purchases using bitcoins, as it would be possible to have many transactions related to the purchase of goods or services? I think nobody should waste time posting this kind of article
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vy99
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July 27, 2018, 09:23:17 PM |
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It's an interesting point but I do think the numbers will go up. Part of the problem with Bitcoin today is too many people are holding it as opposed to spending it. Yeah it's great to hold on to an investment but in the end it's supposed to be currency and currency only works if you're spending it.
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Wild_Potato
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July 27, 2018, 09:38:33 PM |
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Is there an encouragement towards consumerism amongst bitcoin users? Like we are not using it for the correct purpose, and that we should be buying things that we don't actually need?
Bitcoin has intrinsic value in that it is a decentralized system of exchange. But it is also a store of value. It contains value in terms of (US$) that is isolated from the most violent system of manipulation: central banks. There is no central authority that can print more of it or raise interest rates because they need to "stimulate the economy". It is what it is. Pure and simple. Maybe people aren't buying and selling with it right now, but that might just be because it's a little bit slow, and not many merchants accept it.
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squatter
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July 27, 2018, 10:27:56 PM |
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As global investors flock to cryptocurrency as an investment vehicle, the use of cryptocurrencies for their intended purposes has come into question. New research suggests that only one-third of transactional activity occurring on the Bitcoin network is related to the purchase of goods or services. The "intended purpose" of Bitcoin wasn't consumer purchases. It was intended to solve the double spending problem without introducing a trusted third party. Consumer sales are just about the most boring use case for Bitcoin, and conventional payment methods are perfectly fine for most consumer applications. If anything, consumer purchases should drop as a percentage of total BTC usage over time. As BTC becomes increasingly accepted as its own asset class and a store of value unto itself, people will just hoard it more and more.
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hatshepsut93
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July 27, 2018, 10:59:45 PM |
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As global investors flock to cryptocurrency as an investment vehicle, the use of cryptocurrencies for their intended purposes has come into question. New research suggests that only one-third of transactional activity occurring on the Bitcoin network is related to the purchase of goods or services. The "intended purpose" of Bitcoin wasn't consumer purchases. It was intended to solve the double spending problem without introducing a trusted third party. Consumer sales are just about the most boring use case for Bitcoin, and conventional payment methods are perfectly fine for most consumer applications. If anything, consumer purchases should drop as a percentage of total BTC usage over time. As BTC becomes increasingly accepted as its own asset class and a store of value unto itself, people will just hoard it more and more. Satoshi wanted Bitcoin to be used for many purposes, including consumer purchases. Also, the current centralized payment systems are not perfect for consumers - they lack privacy, they require trust (banks can and do freeze accounts for whatever reasons they want), fees can get big with international transactions. Maybe it's not a problem for the majority of population, but there are definitely those who would use crypto over traditional payments for their daily purchases.
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mazdafunsun
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July 27, 2018, 11:15:33 PM |
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I do not know about the accuracy of this calculation but it is no suprise that most of transactions are not for goods as we know that the BTC acceptence by vendors is not very high at this moment.
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Rahar02
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July 28, 2018, 12:09:29 AM |
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The economic value of bitcoin is not a question, it's clear like a water, depends on our perspective even though not everyone using bitcoin as a daily means of payment due to regulation or lack of merchants accept bitcoin. This article mentioned; Although the Network Value to Transaction Ratio gives a general idea of how cryptocurrencies are being used, it doesn’t give a reliable idea of how many of the on-chain transactions have economic value. yet it says only 33%? definitely just a prophecy because it seems impossible to calculate all the transactions worldwide and declare a specific number. However, 33% is better than nothing ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif)
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squatter
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July 28, 2018, 12:20:03 AM |
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As global investors flock to cryptocurrency as an investment vehicle, the use of cryptocurrencies for their intended purposes has come into question. New research suggests that only one-third of transactional activity occurring on the Bitcoin network is related to the purchase of goods or services. The "intended purpose" of Bitcoin wasn't consumer purchases. It was intended to solve the double spending problem without introducing a trusted third party. Consumer sales are just about the most boring use case for Bitcoin, and conventional payment methods are perfectly fine for most consumer applications. If anything, consumer purchases should drop as a percentage of total BTC usage over time. As BTC becomes increasingly accepted as its own asset class and a store of value unto itself, people will just hoard it more and more. Satoshi wanted Bitcoin to be used for many purposes, including consumer purchases. Also, the current centralized payment systems are not perfect for consumers - they lack privacy, they require trust (banks can and do freeze accounts for whatever reasons they want), fees can get big with international transactions. Maybe it's not a problem for the majority of population, but there are definitely those who would use crypto over traditional payments for their daily purchases. That wasn't the point. There is a common misconception that the "intended purpose" or "point" of Bitcoin is consumer purchases -- just read the OP. Consumer purchases are just one possible application. As such, nobody should care if "only x% of transactions" are for purchasing goods and services. It's obvious that consumer spending isn't Bitcoin's most common use case, let alone its "intended purpose." What you're saying regarding privacy and trust isn't lost on me, but these considerations aren't very important for most consumer transactions (particularly from the consumer side). Most consumer spending = housing, transportation, food, insurance, healthcare, clothing. Not black market or cross-border or government-sanctioned activity, etc. that requires trustlessness or privacy. For savvy consumers, using credit cards (and reaping the rewards) and paying them off without interest makes a lot more sense than spending precious bitcoins. And if you're worried about frozen bank accounts, that's about censorship resistance broadly, which reaches far beyond just consumer spending. I'm a big believer in Bitcoin, consumers having additional options like Bitcoin is great. But consumer spending isn't what makes Bitcoin one of the most important inventions of our time. ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif)
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gentlemand
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July 28, 2018, 12:24:34 AM |
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No idea whether that figure is accurate. To me at least it seems ridiculously high. I wouldn't have expected more than 5-10% as a pure guess. Most people are parking for the long term or playing shitcoins.
Actually buying stuff looks low down the order unless you want to get rid of some free profit. And merchant options are contracting. If you take payment processors into account Coinbase have basically told merchants to sod off by making them handle their own keys and Bitpay wants to turn everyone onto shitcash.
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aso118
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July 28, 2018, 08:55:10 PM Merited by richardsNY (1) |
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As global investors flock to cryptocurrency as an investment vehicle, the use of cryptocurrencies for their intended purposes has come into question. New research suggests that only one-third of transactional activity occurring on the Bitcoin network is related to the purchase of goods or services. Full article on NewsBTCI really wouldn't be worried even if it dropped to 5%. Bitcoin may be considered a currency, but that is not its only use. Some people see as a safe haven asset, some people look at it as a lottery ticket, some people see it as the reserve currency for crypto trading. It doesn't matter - all these people have a role in making the cryptocurrency ecosystem more popular.
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richardsNY
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July 28, 2018, 09:28:40 PM |
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Some people see as a safe haven asset, some people look at it as a lottery ticket, some people see it as the reserve currency for crypto trading. It doesn't matter - all these people have a role in making the cryptocurrency ecosystem more popular.
That. I'm personally not a fan of the speculative use of Bitcoin, but it happens and it adds to Bitcoin's utility value at the end of the day. In the same way I don't like all the shitcoins cluttering this space, but noobs use them so they have a purpose and utility value, regardless of how poor that utility value is. Bitcoin's price doesn't matter as much for me as it used to matter, and where possible I try to avoid looking at the price but there is no way to get around it. News outlets have a Bitcoin ticker. Everywhere on social media you have people constantly referring to the latest price. If you browse through YouTube you are bombarded with videos related to the price. It's impossible to not see it.
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July 29, 2018, 02:49:24 AM |
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No idea whether that figure is accurate. To me at least it seems ridiculously high. I wouldn't have expected more than 5-10% as a pure guess. Most people are parking for the long term or playing shitcoins.
Actually buying stuff looks low down the order unless you want to get rid of some free profit. And merchant options are contracting. If you take payment processors into account Coinbase have basically told merchants to sod off by making them handle their own keys and Bitpay wants to turn everyone onto shitcash.
Looks unbelievable for me too. What kind of goods are they referring to? People still hate the fees that are deducted to them everytime they use bitcoin to buy or transfer their funds. Bitcoin users prefer making a transactions once every few months or a year so I'm really curious.
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Abdulkadir00004
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July 29, 2018, 06:47:05 AM |
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This value should actually be far lower because majority of individuals who get bitcoin actually do so expecting the value to appreciate as time goes. Which means they only keep money they don't have intention of using soon except as a last resort.
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buwaytress
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July 29, 2018, 08:43:58 AM |
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That's actually a lot more than I expected. Any alt in existence would KILL to have even 1% of transactional value going towards something other than speculation at trading markets or exchange of value. I know at least Ether now is supplanting wages (Bitcoin is paid as salary to quite a lot of people now but Ether is also picking up) but still not used to purchase goods.
This is good news, even if the headline seems to imply this is a low number!
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Wild_Potato
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July 29, 2018, 11:41:59 AM |
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No idea whether that figure is accurate. To me at least it seems ridiculously high. I wouldn't have expected more than 5-10% as a pure guess. Most people are parking for the long term or playing shitcoins.
Actually buying stuff looks low down the order unless you want to get rid of some free profit. And merchant options are contracting. If you take payment processors into account Coinbase have basically told merchants to sod off by making them handle their own keys and Bitpay wants to turn everyone onto shitcash.
Looks unbelievable for me too. What kind of goods are they referring to? People still hate the fees that are deducted to them everytime they use bitcoin to buy or transfer their funds. Bitcoin users prefer making a transactions once every few months or a year so I'm really curious. Yeah that's true, and I think that's why we don't see as much widespread usage of it as everyone hopes for. It's hard to transfer such small amounts on a regular basis when the fees are that high. If you compare it to other ways of buying things, like cash or card, there is no point in using bitcoin for such small purchases. Otherwise people can use it for keeping their money in one place and then just bring out spending cash every month or something. It seems a bit more reasonable that way because even if you pay fees, theoretically, you would gain more in the increase in value of the coin.
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July 29, 2018, 12:56:13 PM |
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I know at least Ether now is supplanting wages (Bitcoin is paid as salary to quite a lot of people now but Ether is also picking up) but still not used to purchase goods.
Ether is not a token people are willing to spend outside Ethereum's own ecosystem, which is why very little actual Ether->goods transaction activity is happening. Bitcoin of all coins has the least speculative use and the most actual currency use. It's nothing to be surprised about since most noobs have ditched Bitcoin because it became too expensive for them to buy into. Yes, people can buy smaller fractions, but people can't swallow paying thousands of dollars for just a chunk of a coin. They rather use that money to buy plenty of whole coin units from lower market cap coins. If BitPay didn't mess up and start charging extra fees for using Bitcoin as payment option, people would be more willing to spend their coins.
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Carlton Banks
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July 29, 2018, 03:07:32 PM |
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If BitPay didn't mess up and start charging extra fees for using Bitcoin as payment option, people would be more willing to spend their coins.
You're forgetting: Bitpay are less relevant as a result. Lots of businesses started using alternatives to bitpay when they started to add friction to BTC payments. Add to the trend; stop using bitpay, and there won't be anything much to talk about (BTCpay protocol will ultimately dominate payments market I believe, it's the apolitical code-only alternative, as it enables maximum merchant choice)
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1Referee
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July 29, 2018, 04:07:47 PM |
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Add to the trend; stop using bitpay, and there won't be anything much to talk about (BTCpay protocol will ultimately dominate payments market I believe, it's the apolitical code-only alternative, as it enables maximum merchant choice)
I definitely agree with how BTCPay is better in every way and combats gateway centralization, but there are some factors to take into consideration; # you need a server of yourself to run it or use something like azure, and it requires some level of technical understanding. # you have to store your coins yourself, and you have to convert your coins to fiat yourself as merchant, which increases the risk of losing value in the process. What incentive is there for a non crypto merchant to put time and effort in setting it up while stopping with accepting Bitcoin is an easier option? The only way I can see it become a viable option is when merchants generate a decent amount of revenue through Bitcoin and don't want to miss out on it.
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