"Merchant acceptance is NEGATIVE for bitcoin"

[bananas]

It seems that Peter pointed a fact that nobody noticed. But as the market is manipulated, who knows.

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[franky1]

the real secret is. when rich people find out about bitcoin, they will try any tactic they can to tempt others not to buy in.. simply so they can buy in cheaper.

[RomertL]

many merchants that starts to receive will också start to be more interested in SPENDING btc and will have more opportunities to do so. And some of the employees will probably ask for some of the salary in btc. Eventually many people will both earn AND spend most of the salary in btc and then it gets really interesting. Then we have something that resembles a currency more than a high risk investment, something that starts to seriously compete with fiat.

This will at least longterm have a stabilizing affect and drive up the price as I gets more useful and attracts booth investors and normal users.

[jbrnt]

If a popular merchant accepts bitcoin, a lot more people will buy bitcoin for purchases. The amount of bitcoins users buy will be more than the merchant will sell after the purchase, so is a positive.

[RomertL]

I'm actually a merchant about to start to accept Bitcoin, but expect most sells to continue to be in fiat even if I give like 10% off for btc purchases, but let's see. If I against all odds get lots of purchases in btc I will put more effort in trying to spend btc rather than just holding on to them like I do now. I really like the idea of being completely out of the loop, but might be some time before that's possible...

[franky1]

merchant acceptance is negative?

whoever thinks that needs to talk to overstock.com, tiger direct.com foodler.com, and the other thousands of businesses. the story appears to be a opinion of a person and not a research result from many merchant interviews. thats why i think that the person making such a remark, is some one creating FUD to get cheap coins

[jparsley]

I dont think so. Although massive sells are the main reason for the recent drop

[Mageant]

First it was Bitcoin doesn't work because people hoard it.

Now it's Bitcoin doesn't work because people *spend* it???

[teukon]

FWIW, Peter's brother and business partner, Andrew Schiff, seems a little more open to bitcoin. I spoke with him after a debate with Jeffrey Tucker a couple months back. Andrew is clearly influenced by his brother's stance, but also had some criticism of some of Peter's opinions, and was far more content to basically say "let's wait and see; maybe it'll work" than Peter is. Too bad Peter's the more public celebrity, though.

Interesting, I didn't know this.  Let's see what I can add:

Tow Woods, an anarcho-capitalist and senior fellow at the Mises Institute, regularly fills in for Peter on his show.  He's really quite interested in Bitcoin and while he reserves judgement on the technology as a whole (recognising a lack of strong historical parallels and that his own understanding is limited), he has commented on being impressed with the logic and lucidity demonstrated by various Bitcoin proponents (Erik Voorhees is his "go to guy").


I reject Peter's claim that greater merchant adoption will suppress the price.  It seems as though he's ignoring why people are holding bitcoins in the first place.  I find it almost impossible to justify the assumption that most people will want to reduce the dollar value of their bitcoin holdings as those bitcoins become more useful.

[Beliathon]

Just finished reading through this thread. This is the most important and concise post:

There are three stages:

Merchants not accepting bitcoins.
Merchants accepting bitcoins but converting them immediately to fiat.
Merchants accepting them and keeping a bitcoin holding.

This is a progression which must be undergone before Bitcoin can reach a plateau as a widespread and significant currency and payments system. It says a lot that the argument is moving from the inane Bitcoin "scam/ponzi/laugh" to Bitcoin "can't be successful as it is swapped for fiat after use". It means that the detractors are losing ground.

Very well said, thank you.

For more insight into the evolution and inevitable global adoption of cryptocurrency, I highly recommend watching Bitcoin the organism, Jeff Garzik at TEDxBinghamtonUniversity.

Also, a reading of the History of the Internet wikipedia page will prove fruitful.

Since the mid-1990s, the Internet has had a revolutionary impact on culture and commerce, including the rise of near-instant communication by electronic mail, instant messaging, voice over Internet Protocol (VoIP) telephone calls, two-way interactive video calls, and the World Wide Web with its discussion forums, blogs, social networking, and online shopping sites. The research and education community continues to develop and use advanced networks such as NSF's very high speed Backbone Network Service (vBNS), Internet2, and National LambdaRail. Increasing amounts of data are transmitted at higher and higher speeds over fiber optic networks operating at 1-Gbit/s, 10-Gbit/s, or more.

The Internet's takeover of the global communication landscape was almost instant in historical terms: it only communicated 1% of the information flowing through two-way telecommunications networks in the year 1993, already 51% by 2000, and more than 97% of the telecommunicated information by 2007.[1] Today the Internet continues to grow, driven by ever greater amounts of online information, commerce, entertainment, and social networking.

"Almost instant in historical terms" is what happens when a decentralized, democratic, organicly adaptive, mathematics-based solution comes along for a problem that was formerly, and poorly, addressed by some ancient, industrial-age centralized solution.

Now class, who can tell me what these all have in common?

• Pre-internet telecom networks
• Blockbuster video
• The Newspaper
• The record store

and the newest member of the list:

• Nation-state fiat currency

Let's put aside the problems of fiat inflation and hyper-inflation for now.  On your own time, study root causes of WWII, Weimar republic. Hint: fiat hyperinflation to pay war debt.

The point is, a vast, labyrinthe system of interconnected centralized national banks is an over-engineered solution to the problem of trust. Good engineering is not what you add, it's what you remove. The blockchain's power as a technological superforce is rooted in the brilliant simplicity of the mathematics under the hood. This is Occam's razor at work.

Very simply put, cryptocurrency is a better way of doing money. I'm sorry, boys and girls, but there will be no epic battle for the fate of money. This fight was over before it even began.
We early adopters are going to drink your fiat milkshake, and there's nothing anyone can do to stop it.
That's why a few of us with even tens of BTC in cold storage know we are already set for life.

For those of you paying attention, the answer is yes, you should probably divest from your nation's fiat into the safe haven of the crypto of your choice, ASAP.
This is going to be over very quickly. Dangerously quickly... Once we've got ~10% global adoption, shit will get serious. I'm talking permanent exponential growth, it could be all over in months or days.

Impossible to know when or how long, but it will happen sooner or later.

[The internet] only communicated 1% of the information flowing through two-way telecommunications networks in the year 1993, already 51% by 2000, and more than 97% of the telecommunicated information by 2007

1993-2007.
1% - 97%
14 years.

Four years later, BAM! Cryptocurrency is invented.

I think most of you folks are not comprehending how short a length of time four years is, when weighed against the magnitude of the innovation that is cryptocurrency.



The waves are getting shorter every generation. The beginning is near.



http://www.ctetrailblazers.org/2012/06/technology-changes-everything-computers.html

[jabo38]

http://www.ctetrailblazers.org/2012/06/technology-changes-everything-computers.html

I just read an article that said in South Korea 5g will be out by 2020.  It will be 1000 times faster than the 4g of the ipones and galaxies.  Well..... that is what they say anyway.  I am waiting to see, but if it does happen, then yes, cell phone internet speed will be comparable to that graph.  Just another part of the puzzle coming together for the digital revolution.  

http://khnews.kheraldm.com/view.php?ud=20131218000816&md=20131221004323_BH

Everyone I know says don't buy bitcoin, but I just want to get more and more into crypto.

[maurya78]

Vinny Lingham has a nice piece in Medium where he explores this angle

[Abdussamad]

So, I was wondering, could this be part of the reason why prices have consistently gone down as merchant acceptance has gone up?

Yes, that's right. Also there was a bubble.

Greater merchant acceptance just means that early adopters dust off their paper wallets and bring coins out of cold storage to spend. That increases the supply of bitcoins while demand remains constant because no one is buying bitcoins to spend when other payment methods are more convenient.

This is good for what buyers there are. These old coins are now in the hands of newer speculators/investors. The price of a bitcoin has gone down so more people can afford to put their money in.

Greater merchant adoption also means that they start mentioning bitcoin in their marketing materials so that creates awareness. That could boost prices. Will it be enough to entice consumers to use bitcoin? Not by itself but it will help. Using bitcoin needs to get easier and safer before we see greater adoption by consumers.

[bountygiver]

The actual problem is merchants are cashing BTC for bank currency immediately because they have limited use of them. When enough merchants accepts them, they'll no longer need to cash out which will be good for BTC then.

[Siegfried]

Vinny Lingham has a nice piece in Medium where he explores this angle

Link?

[marcus_of_augustus]

So, I was wondering, could this be part of the reason why prices have consistently gone down as merchant acceptance has gone up?

Yes, that's right. Also there was a bubble.

Greater merchant acceptance just means that early adopters dust off their paper wallets and bring coins out of cold storage to spend. That increases the supply of bitcoins while demand remains constant because no one is buying bitcoins to spend when other payment methods are more convenient.

This is good for what buyers there are. These old coins are now in the hands of newer speculators/investors. The price of a bitcoin has gone down so more people can afford to put their money in.

Greater merchant adoption also means that they start mentioning bitcoin in their marketing materials so that creates awareness. That could boost prices. Will it be enough to entice consumers to use bitcoin? Not by itself but it will help. Using bitcoin needs to get easier and safer before we see greater adoption by consumers.

Yes, it is a net benefit because of the increased dispersal.

It will weigh on the price, temporarily, but the net effect is it makes it easier to get bitcoins into more hands because the current holders have more places to spend them, in easier ways, and willing buyers can get them at a cheaper price ...

... it is just another phase/wave in the adoption curve, nothing to get too excited about.

[~Coinseeker~]

The actual problem is merchants are cashing BTC for bank currency immediately because they have limited use of them. When enough merchants accepts them, they'll no longer need to cash out which will be good for BTC then.

Actually, most merchants are using Bitpay or Coinbase, so they never touch BTC.  Bitpay and Coinbase are dumping Bitcoin and capturing juicy spreads at the same time.  I'm not sure this talking head in the OP is correct though because it doesn't matter how many merchants you have, if consumers aren't buying them to pay for stuff.  This is just current BTC holders shopping, as is evidenced by a recent poll I saw at Coindesk, that said that 75% of merchants had seen little to no growth in revenue.  Of course, people can't spend what they don't have.  

So to say merchants are adopting Bitcoin, is really inaccurate.  BitPay and Coinbase adopted Bitcoin, merchants are still using the same old fiat.  They're just riding the hype and hoping to cash in on a little bit of the money current BTC holders have.  The price keeps dropping because consumer demand to buy BTC is not there.  It's really as simple as that.  If people wanted them, they'd buy them.  Numbers don't lie.  You can blame China if you want, that only highlights the lack of consumer demand from the rest of the world.

[Nagle]

Actually, most merchants are using Bitpay or Coinbase, so they never touch BTC.  Bitpay and Coinbase are dumping Bitcoin and capturing juicy spreads at the same time.  I'm not sure this talking head in the OP is correct though because it doesn't matter how many merchants you have, if consumers aren't buying them to pay for stuff.  This is just current BTC holders shopping, as is evidenced by a recent poll I saw at Coindesk, that said that 75% of merchants had seen little to no growth in revenue.  Of course, people can't spend what they don't have.  

Right. Coinbase will guarantee a Bitcoin price for a few minutes for merchants, so merchants take zero risk on Bitcoin volatility. Merchants are never in Bitcoins at all.

With 10-20% volatility in a day, few merchants want to be. Those who really are in Bitcoin are usually selling something with a huge markup.

[Dr.Zaius]

It seems that Peter pointed a fact that nobody noticed. But as the market is manipulated, who knows.

Anyone that can think understands the obvious.

Merchant "adoption" means bitpay and coinbase. These are just exchange services, basically providing more outs for someone to sell BTC at.

Now ask yourself who has BTC and is willing to sell? Miners, those with substantial capital gains, and those few that earn BTC incomes.

Merchant adoption does nothing for the value of a BTC.

As long as BTC is exchangeable for fiat, every merchant has "adopted" it. Do merchants have to "adopt" gold for its price to rise? No.


Example.
If i sell my BTC for USD and spend at BestBuy that is the same thing as BTC-->Bitpay--->USD-->BestBuy.

Now think about that.

The only thing that matters for the BTC value to rise is an expanding pool of fiat BID.

[linuxnewbie]

If you own a single satoshi for even a thousandth of a second, you contribute to the demand for BTC. This tends to push the price of BTC up, or at least slow down a decline in the price.

Consider this example: if you buy oil in dollars, even if the seller converts the dollars to a different currency a thousandth of a second later, you are both contributing to the demand for dollars.