Has Bitcoin Failed as Money?

[Silberman]

While bitcoin will grow in value relatively quickly, there is no point in using it as a means of payment. Why buy goods or services for bitcoin, if its holder knows that after a while its price will rise and he will be able to buy even more goods for the same amount in bitcoins?
Therefore, the initial plans of Satoshi Nakamoto to use bitcoin mainly as an alternative means of payment can be considered to have successfully failed.

It is too soon to make that conclusion, if bitcoin really becomes as valuable as we think then bitcoin is not going to be used for your everyday transactions but for really big ones, I know this is not what most people want but that could be the path that bitcoin could take, what we need to figure out is which coin will be the one that will be used for our everyday transactions, litecoin does not seem like a good option and ethereum has the same problem of bitcoin with the fees, so the door is still open for a coin to take that spot in the case bitcoin is unable to fulfil that role.

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I don't fully understand how Bitcoin can replace FIAT as payment due to the volatility.

What if Bitcoin shot up in price the second you paid for something? It would either put you off doing it again, or simply make you feel that it's a game of roulette.

The only way I imagine it happening is if there is a way of hedging against the volatility for both the trader and the customer using some sort of short term option or something to cover it.

[Wexnident]

Bitcoin isn't really suited for small payments due to how high fees can be, especially if you're not really paying attention to the network. It's also been one of the issues that Bitcoin has faced when being used as a mode of payment though the community has been trying to fix it, especially with the recent development of the lightning network. Though give it more time, we've been only here for a decade, and I'd think that it's only starting to spread on how it's used for transactions, and not immediately for adoption. It's like letting people see a trailer, only for the exact game to be released 2-3 years later kind of thing.

[pooya87]

This topic is essentially another "scaling bitcoin" topic and I have to say I don't consider bitcoin a failure as money yet. We've just fallen behind from scaling bitcoin.
Keep in mind scaling is not something we do once and get it over with. It has to be improved again and again to keep up with the demand and the hardware improvement. We already implemented a solution 4 years ago but I feel like the scaling debate was forgotten by many and now we are behind.

Not just in development but also in adoption. For example we still see people and businesses who refuse to use SegWit because of some FUD they heard years ago and believed it. The result is that we see blocks that are 1.1MB to 1.5MB instead of being 2.5MB to 3MB.

Same with LN. Why hasn't more major exchanges adopted LN? (I only know Bitfinex that has done it!). Keep in mind that one of the main reasons we keep seeing these fee spikes is the price rise and "traders" making a lot of on chain transactions to and from exchanges.

[Rruchi man]

From the onset, i don't think  the primary aim behind btc was to completely eliminate fiat, its entire idea due to innovative thinking is to create an alternative digital currency accepted globally. Fiat and cryptocurrencies can exist hand in hand and an individual can decide to make payment for any commodity with the appropriate currency (btc or fiat) as he sees fit. Because money is anything that can be accepted for transactions, and Tesla accepts btc for transactions, it is obvious thay btc is money. So btc is actually winning as money (soon we will have widespread acceptance).

[Nunoluck]

Although all of that is true but I think it's still okay. Maybe most of us are considering bitcoin as investment but there are some people who use bitcoin as money to purchase something. I buy bitcoin and other cryptocurrencies for investment because I know that there are a lot of advantage of becoming early adopters but sometimes I also use some of my cryptocurrency to purchase something online. It's not often but atleast I used it as medium of payment. I am sure when bitcoin get mass adoption then more percentage of bitcoin users will use it as money.

[Poker Player]

Due to the scarcity of Bitcoin, it can never be used as money or currency. Whoever has even small portion of it, prefer to hold it till it's value appreciate to a level where he has made huge profit.
Bitcoin is seen by many as store of value. New adopters are buying it because they know it's price will shoot up and they find it as good investment.

I think this is the key factor here.

Also, I mostly agree with Murad Mahmudov's Lindy Effect chart:

https://twitter.com/MustStopMurad/status/1022169639386836992

^take note that this was posted in 2018, so the "We are here" part might be outdated.

I am not so sure about that. No matter how big the market cap is, or how low the fees are with LN developments, I think if Bitcoin is perceived as more valuable than other currencies (fiat and shitcoins) people will tend to store it instead of keeping it. That's what Gresham's law states. But it doesn't matter what Gresham said or not. Just think about it: if I can use fiat currencies that constantly lose value of Bitcoin that it's the best at keeping it, which one am I going to use?

[mk4]

Just think about it: if I can use fiat currencies that constantly lose value of Bitcoin that it's the best at keeping it, which one am I going to use?

Assuming the day comes sometime in the future that people worldwide can and have chosen be paid with bitcoin for their wages/sales— would you prefer selling the bitcoin for fiat then spend it? Or just straight off spend the bitcoin instead?

[Poker Player]

Just think about it: if I can use fiat currencies that constantly lose value of Bitcoin that it's the best at keeping it, which one am I going to use?

Assuming the day comes sometime in the future that people worldwide can and have chosen be paid with bitcoin for their wages/sales— would you prefer selling the bitcoin for fiat then spend it? Or just straight off spend the bitcoin instead?

Well, I think if market cap increases, Bitcoin becomes a unit of account and people worldwide can be paid with it, there won't be that option. Fiat will have disappeared by then, or it won't be long.

As long as there is coexistence of a crappy currency and one that is worth a lot, people will spend the crappy currency. And if there comes a time when the shitty currencies lose so much value that they collapse, the only option will be to spend Bitcoin.

Although this is very hypothetical about the future and we don't know if by then a decent cryptocurrency may have appeared and/or taken an important role in our economy. One that is not as good as a store of value as bitcoin and is better for everyday payments.

[Pmalek]

While bitcoin will grow in value relatively quickly, there is no point in using it as a means of payment. Why buy goods or services for bitcoin, if its holder knows that after a while its price will rise and he will be able to buy even more goods for the same amount in bitcoins?

Most merchants convert the coins they receive to fiat right away so they don't have any concerns about the direction the value will go to. They don't store bitcoins and other cryptocurrencies because they need fiat to pay their workers, bills, taxes... Your concern is only valid from the point of view of the payer or the buyer who might be speculating how the price will move after he sends his transaction.

Maybe bitcoin was never meant to be used for micropayments or as an everyday currency. Even in the old days, it wasn't considered suitable. Take a look at what satoshi said on that subject back in 2010:

Bitcoin isn't currently practical for very small micropayments.  Not for things like pay per search or per page view without an aggregating mechanism, not things needing to pay less than 0.01.  The dust spam limit is a first try at intentionally trying to prevent overly small micropayments like that.

Bitcoin is practical for smaller transactions than are practical with existing payment methods.  Small enough to include what you might call the top of the micropayment range.  But it doesn't claim to be practical for arbitrarily small micropayments.

What was true in 2010 is true even today. It's even more less suitable for micropayments considering the fees right now. We can only hope that LN catches on.

[Altcoinsintel]

The fees may be acceptable for buying a Tesla for $ 40-50k, but certainly not for daily payments.

The way I see it, soon Bitcoin fees won't be acceptable even for buying a Tesla. It could be thousands of dollars in fees, since Bitcoin will be used for ways to secure wealth of nations and not just individuals. Fees is the way for Bitcoin to scale and miners select only the highest fees. In a scenario where international trade is settled in Bitcoin, it will mean at least a thousand dollar fees for each transaction.

[AniviaBtc]

It is now striving to become a money for many transactions but unfortunately there are still businesses or company which are against it .

Bitcoin succeed as an asset because there are a lot of investors who invested on it and believed on its existence in the market.

But I hope that bitcoin should become more into a mainstream and become utilized as a payment method in many transactions especially even in a small transactions.

[In the silence]

From the onset, i don't think  the primary aim behind btc was to completely eliminate fiat, its entire idea due to innovative thinking is to create an alternative digital currency accepted globally. Fiat and cryptocurrencies can exist hand in hand and an individual can decide to make payment for any commodity with the appropriate currency (btc or fiat) as he sees fit. Because money is anything that can be accepted for transactions, and Tesla accepts btc for transactions, it is obvious thay btc is money. So btc is actually winning as money (soon we will have widespread acceptance).

I also agree with this. Bitcoin won't replace fiat but it would be world's digital cryptocurrency which we can use for online transactions just like how we pay things online today. Bitcoin should be accepted as a helping hand and not a threat for any fiat currency just because it is a digital "currency".

[ivankoh]

Bitcoin will never fail below money / fiat levels.  That is not exactly what bitcoin is aiming for.  Bitcoin will go hand in hand and interspersed with utility options intended to be used for free - an absolutely free financial space that Money / fiat, by all means, is not a rival to bitcoin.  
Right now, you can see how bitcoin is different from the standpoint of a core asset, what it means, and how important it is to reach $ 57k.
Bitcoin has always won over fiat, but it's not a successor and a replacement for fiat.

[pankowri]

Success or failure depends on observation of a long period. It can't be said to see a slight only. In my opinion, BTC never failed yet because it survives a long period and reaches the position that's it deserves. Indeed, it's never stable but once was a time when people were afraid of using BTC but now time it's a favorable time who are connected with BTC.

[mekie]

Personally and only my opinion, I think so. It has now become a trading commodity, but unlike Gold it has no intrinsic value, therefore while there will always be some transactions able to be done with Bitcoin it will become more confined to high value items and less relevant for general everyday use.

I don't really have any suggestions how it could be more acceptable as a money alternative as the price per coin is so high. Perhaps if something along the likes of a rights issue for company shares, where 1 bitcoin was replaced by say 100 New Bitcoin. this would do two things: firstly reduce the unit value to about $58 at todays price this makes it more affordable to the mainstream and secondly it still limits the total available coins.

I have no idea as to the practicality of this, but I would imagine as Bitcoin is "Decentralised" it would be very difficult.

Perhaps other posters could give me their thoughts?       

[FlightyPouch]

Well, we can't do a lot of things with bitcoin if we will be considering the fees especially if we will be talking about payment methods. There are a lot of exchanges that offer free transaction fees but I don't think all of us would be so happy to transact their bitcoin into exchanges. Right now, it is more of an investment asset rather than money.

Maybe we could work something out in the future. A future where we usually use bitcoin without having a problem with it.

[ukw]

In my opinion, Bitcoin is not intended to be used as a currency from the very beginning. Even its limited number of coins is indicative of this. Rather, Bitcoin is an asset that bases its value on interest in it. And it is the basis of the crypto market.

[Maslate]

In my opinion, Bitcoin is not intended to be used as a currency from the very beginning. Even its limited number of coins is indicative of this. Rather, Bitcoin is an asset that bases its value on interest in it. And it is the basis of the crypto market.

You've got be wrong man. Satoshi created Bitcoin with the intent to use it as digital currency, an alternative way of sending and spending money but it was not is a good start, most people consider this as an investment up to now.

I can't say it was the failure of Bitcoin because we don't consider it as money and only a few establishments are accepting this. It can't be an instant adoption and people don't make use of it if they don't about it. Well, of course, it takes time to finally reach the stage where Bitcoin is fully adopted and that can acceptable globally. Let us see how it changes 10 years from now, I think it was long enough to expect huge adoption.

[coolcoinz]

One of the problems of Bitcoin if we can call it that is that there's not enough of it for the whole planet. It's inevitable that Bitcoin is going to become the rare and safe money that people will use to store value and perform the most important and biggest transactions. Company takeovers, project funding, real estate purchases, overseas transfers... this is where Bitcoin is going to excel. Many people have a wrong understanding of money. They think Bitcoin is not money because you can't buy coffee or a burger, but money is not only groceries. When you think that people are buying planes, factories, whole islands, you'll see that Bitcoin is money, just not the one you'd use every day.