[2014-07-26] Building a Bitcoin Economy: How to Close the Loop

[epere]

http://bitcoinmagazine.com/14618/building-bitcoin-economy-close-loop/

There are two main obstacles to accomplishing this. One is that a Bitcoin enthusiast drawn to a Bitcoin venue or store might not want to spend his or her bitcoins, due to the hoarding instinct. To an extent, this can be remedied by providing discounts: if people save enough money by using Bitcoin, it counteracts the cost of repurchasing their spent bitcoins. Unless the customers are lazy, apathetic to profit, and unconcerned with legitimizing cryptocurrency, this should alleviate the symptoms.

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[Kprawn]

I cannot see how a merchant would benefit from this? {Giving discounts to bitcoin users} He saves on bank fees, and then he has to use those savings to fund discounts?

People would switch to bitcoins because of ease of use and also because small transactions would still be viable with bitcoins use.

[gbooz]

It might be useful for merchant only in the case BTC price will go up and this will create an extra gain.

[Chef Ramsay]

It might be useful for merchant only in the case BTC price will go up and this will create an extra gain.

Merchants have everything to gain by accepting it while giving discounts as there's already a normal markup on most items. So, cut it enough for people to want to trade you their Bitcoin for products and the more this happens and these merchants keep even a small amount of their Bitcoin sales in house as time goes by, there's no way the Bitcoin doesn't appreciate. People are suckers for deals and most women have value savers tickets on their key chains for a reason.

[gbooz]

It might be useful for merchant only in the case BTC price will go up and this will create an extra gain.

Merchants have everything to gain by accepting it while giving discounts as there's already a normal markup on most items. So, cut it enough for people to want to trade you their Bitcoin for products and the more this happens and these merchants keep even a small amount of their Bitcoin sales in house as time goes by, there's no way the Bitcoin doesn't appreciate. People are suckers for deals and most women have value savers tickets on their key chains for a reason.

Actually price fluctuations of BTC and high expectations of BTC holders makes BTC more like speculative asset, but not the currency. Today, to pay bitcoins for organic wine would be the same as to pay for your drink with the Microsoft shares in the 80's. So, I would not expect that merchant's discounts will "close the loop".