The paradox of Bitcoin adoption

[hatshepsut93]

Merchants don't adopt Bitcoin because their clients don't use it. Clients don't adopt it because merchants don't support it, and people want to have a payment method that can be used anywhere they go. How can this vicious circle be broken? Who will make the first move?

And by adopt I mean adopt for payments, not hodl it as an investment.

[titular]

I think you could posit that the circle is already being broken. Merchants all over are slowly starting to accept bitcoin payments. Just like consumers around the world are slowly starting to hold bitcoin. I think that it is just a matter of time (maybe a long time) until we see it being used for everyday purchases en masse.

I think the bigger concern is how regulatory bodies will enforce using their CBDC rather than allowing the public to choose what currency they purchase goods/services with.

[maju69]

This is only an alternative to financial screening and to make dollar farms grow, the real adoption of money is not expected to be like this. It's like what's happening now is just doing a lot of rounds from Dollar to Bitcoin then back to Dollar. Makes it seem as if the adoption is done but in fact it is not. The value-keeping system was taken for granted and turned back into splattered banknotes that added to the insane inflation value. Where is Bitcoin adoption really going?

[Ararbermas]

Merchants don't adopt Bitcoin because their clients don't use it. Clients don't adopt it because merchants don't support it, and people want to have a payment method that can be used anywhere they go. How can this vicious circle be broken? Who will make the first move?

And by adopt I mean adopt for payments, not hodl it as an investment.

i think it depends on how they will introduce their new payment method wherien in order to convince clients or whatever it's to use the same or let say to adopt what's the most useful and easiest ways when it comes paying bills and etc . Because if you don't know how to advertise it of course no one will gonna believe it or use it.. Infact the advantage of crypto is one of the key why the adoption is increasing.. So it's up you how to prove it.

[DaveF]

I posted something about this a while ago. It's getting better, and with places like bitrefill other gift card providers & all the exchanges offering credit cards it will get better still. Just slowly.
Big merchants can get reports about where their gift cards are purchased. So as they see more and more coming from places like bitrefill they might take a look and go hmmmm this could work. With PayPal now slowly letting merchants accept BTC / crypto how long till some do it on their own.

Credit cards are a bit different, the merchants might not know but the credit card processors know who controls the cards. How long till they go out and see that the BitPay / Coinbase / etc cards are being used more and decide to process crypto on their own offering it to more merchnats.

It's just inertia. It takes time to get it moving.

-Dave

[BlackHatCoiner]

The answer to this paradox lies on this sentence:

And by adopt I mean adopt for payments, not hodl it as an investment.

The reason this paradox exists is because bitcoin is seen more as a long-term investment rather than a currency. It favors you to keep it instead of spending it and that's true as for speculators as for its deflationary nature.

Only if you put the advantages of it above this fact, you'll use it as a currency. So, in order to break this paradox, the people have to respect privacy, sovereignty and censorship resistance more than their capital appreciation. Tough thing to do.

[Fortify]

Merchants don't adopt Bitcoin because their clients don't use it. Clients don't adopt it because merchants don't support it, and people want to have a payment method that can be used anywhere they go. How can this vicious circle be broken? Who will make the first move?

And by adopt I mean adopt for payments, not hodl it as an investment.

That's not really the paradox behind Bitcoin and doesn't get to the root cause of the problem. The real paradox is - as Bitcoin is adopted by more people, the transaction fees goes up and the network takes longer to process the increased levels of transactions while also burning a lot more electricity than comparative payment networks. If Bitcoin was much cheaper and as instantaneous as existing card networks, this wouldn't even be a discussion - people would have naturally moved over and Merchant adoption would be much more widespread, however the claimed benefits are simply not there. I find that Bitcoin is very good for one thing - moving reasonably large amounts across borders, it simply is not fit in the current form to handle the degree of small scale transactions that take place each day.

[alpamar99]

Of course, I think this goes back to government regulations where the company and the client are located.
when you want to decide on this, there must be clarity first about regulations in one area because if a company in one area decides to adopt payments via bitcoin but at the same time the government still has not made bitcoin an alternative payment it will be difficult and will not run smoothly .
but it would be a different story if there was clarity in regulation, for example, now el savador is so friendly about bitcoin and this is one of the advantages of the company being there by adding the option of paying via bitcoin without worrying about regulation

[famososMuertos]

The reality is that you put merchants on one side and the other you put consumers, but the matter here is that two people do not agree in the easiest way that exists, trust, in fact the virtual yellow line with The one who started all this.

That is the matter, regardless of whether it is a merchant or that represents when you make a payment to another person, the incorporation of third parties, whether with a simple contract, SCROW, APP or even the improvements that are being made to improve.

In person you can give money to another without problem or you can send to another person on the other side of the world and this can wait 7 days and step pay more $ 40 for this and it is even possible that a percentage stays to receive the money into account destination , and works.

But all this is eliminated with Bitcoin and there are still doubts about its efficiency.
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OP:...?

Trust and Trust:
In updates that are made to the network, if you do not convince you at least you should start accepting any.

The use of associated third-party projects that deserve it. That exist.

If your client is your neighbor accepts a P2P transaction from time to time, with an amount where the risk is not much.

[hatshepsut93]

I posted something about this a while ago. It's getting better, and with places like bitrefill other gift card providers & all the exchanges offering credit cards it will get better still. Just slowly.
Big merchants can get reports about where their gift cards are purchased. So as they see more and more coming from places like bitrefill they might take a look and go hmmmm this could work. With PayPal now slowly letting merchants accept BTC / crypto how long till some do it on their own.

Can we really call it Bitcoin adoption when Bitcoin just gets incorporated into the Visa/Mastercard/PayPal systems and real coins are rarely moved on blockchain? I was thinking more about directly sending and accepting Bitcoin without any intermediaries, because that was the point from the beginning.

The answer to this paradox lies on this sentence:
The reason this paradox exists is because bitcoin is seen more as a long-term investment rather than a currency. It favors you to keep it instead of spending it and that's true as for speculators as for its deflationary nature.

Only if you put the advantages of it above this fact, you'll use it as a currency. So, in order to break this paradox, the people have to respect privacy, sovereignty and censorship resistance more than their capital appreciation. Tough thing to do.

There's a ton of other reasons why people are not using Bitcoin as a currency, but here I want to specifically discuss the problem between merchants and their customers that neither makes a first move in adoption.

[Slow death]

a person buys bitcoin worth $1000 and years later that person sees that his bitcoin has given him 10X profit, if someone tells that person to take $1000 in bitcoin and make purchases that person will not accept, he will prefer to take fiat and buy what he needs in the real world because it will be more advantageous. in the same way that the merchant who accepts to be paid by bitcoin later will be limited where he will spend those bitcoins, this is a cycle that even though it is being slowly broken will take many years to take effect

[deadmousehat]

because Bitcoin has great potential in the long term. Bitcoin is more profitable as an investment asset not as a payment and also not all countries legalize bitcoin as a means of payment. As the popularity of bitcoin increases, the more people who own bitcoins in a region, the more merchants start accepting bitcoins as payment in that region.

[yazher]

First move is on the mainstream media when they announced the sudden spike of the price which will make the merchants all around the curious about it because most of them are money thinkers where they will eager to research about the things that will give them fast profit than when they start to implement it on their stores, then the next thing will be the consumers who will gonna get their own crypto wallet to join the trend. That's just how easy it is.

[cabron]

The adoption is not massive unlike what is going on in El Salvador where even a local store is accepting BTC. The people there trusted BTC because the government also is trusting it than our governments. And right now most of us are likely to just hold BTC because of the profit we can get when the price goes up.

Not all merchants as well are well informed about BTC, they may have heard of it but just ignore it since they are not seeing its potential. A local store probably has to start adopting and that other merchants nearby will also see how it works.

[franky1]

Merchants don't adopt Bitcoin because their clients don't use it. Clients don't adopt it because merchants don't support it, and people want to have a payment method that can be used anywhere they go. How can this vicious circle be broken? Who will make the first move?

And by adopt I mean adopt for payments, not hodl it as an investment.

back in 2012-2015 was the best era where merchants were adopting it, and customers were using it.
but then the era of expensive transactions and network expansion avoidance occured.

arguments that bitcoin needs to run on windows 98 based specs and people should not be buying daily stuff like coffee and weekly wages of third world countries changed bitcoins ethos from 'banks for the unbanked' to payment rail for the elite

bitcoin is not seen as digital cash payment system, but now as national reserves payment system

[Darker45]

There are a host of factors involved. And Bitoin's overall price movement, which is the primary reason why Bitcoin is now being treated more as an investment rather than a currency, has a very significant role. Not to mention it's volatility, course, which will certainly affect the operations of the business.

Other than that, it would be very interesting and ideal to approach this dilemma without going outside the Bitcoin story. Unfortunately, it might not be possible at all. Having said this, we cannot avoid but bring up the issue of our current financial and economic milieu. I imagine the kinds of trouble I would be facing if I open a business, which issues government-issued receipts and legally complies with everything, which accepts Bitcoin. The tax bureau, business bureau, licensing department, down to the local village office might be confused and dumbfounded when you indicate that your business will be accepting this thing called Bitcoin. Unless, of course, if you simply use Bitcoin as representative of fiat, which is not really the kind of adoption you meant here.

In the end, I guess the cycle will probably be broken by Bitcoin education. Once Bitcoin awareness becomes widespread enough and authorities begin to acknowledge it as an alternate currency, the commercial use of Bitcoin as Bitcoin itself and not just a form of payment which will reflect in fiat terms in the books will probably start.

[tranthidung]

The bullish case for Bitcoin, in which Vijay mentioned about Lindy effect. It's important for anything to survive in our society. After more than 1 decade, Bitcoin nowadays is stronger in the past about its survival ability.

Merchants, clients, customers and Bitcoin enthusiasts are all interact with each other in a bitcoin ecosystem. Over time, we will see more implementation of Bitcoin payment gates from merchants, each halving will bring more people to Bitcoin ecosystem, and so on. Together, we will have a bigger ecosystem and adoption will certainly increase.

Personally I have no worry about it.

[The Cryptovator]

How many years it has been Bitcoin become much popular? I think it's not above 5 years. So do you believe it's easy to break the traditional ecosystem when Bitcoin isn't accepted by global authorities? Due to legalization even merchants who want to accept Bitcoin, failed to do it. Due to legalization as a Bitcoin user, I can't use Bitcoin in merchants. There is a strong centralized traditional payment system, they won't accept Bitcoin anyway. So they are always working against Bitcoin. Although there are many barriers still Bitcoin accepted by many merchants. And day by day more merchants will start accepting. There are so many things related to when merchants accept Bitcoin as a payment gateway, they can't do anything just they want.

[DapanasFruit]

As for my humble opinion, the biggest obstacle for Bitcoin becoming a really utilized form of money is the fact that people are HODLING into the Bitcoin they got all because they are expecting that any day from now the value can rise and they gonna be regretting why they were tempted to use their Bitcoin to buy a shoe online or to have a drink of a cup of coffee with a shop that accepts Bitcoin.

So how would you convince people not to continue speculating? I think that is an impossible mission because we all have the sense of greed written in our DNA and no wants to experience FOMO. The best solution is to pay people Bitcoin as their salary and this can be started easily with freelance work sites- sadly attempts to do so failed in the past and I don't know why. Another strategy is for merchants to offer attractive discounts with their merchandise if buyers will choose to pay by Bitcoin. I am expecting some good level of success with the coming Bitcoin City in El Salvador where we can clearly see how an economy can be run solely on Bitcoin though in a minuscule experiment.

[pooya87]

Clients don't adopt it because merchants don't support it

There is nothing stopping them from sending a request to that merchant asking them to accept bitcoin. For example about 5 years ago people bombarded Valve with requests to accept bitcoin payment and they did it when they saw the demand.

As for your paradox, I used to see it that way too but no more. I believe it is a natural process that will happen slowly. When there is demand both sides will adopt bitcoin.
But the real issue is the price. When we see price keeps going up month after month or year after year, we end up with people who have bought bitcoin as an "investment" not as a currency so they are not willing to spend it in first place so there isn't really that much "demand" for merchants to accept it. Although I should add that even with this situation we are getting adoption in both camps: investors and spenders.