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Author Topic: Can someone please explain to me WHY I should accept BTC over gold or silver?  (Read 5951 times)
DERP
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May 18, 2011, 10:17:34 PM
 #1

I have read that concerns over hoarding BTC can be alleviated by more people accepting BTC. But why should I? Why should I accept your BTC as payment for something in leiu of something like a goldgram?

Please, if you can, explain WHY. I have noticed that when discussion of gold comes up here on this forum people seem to ask pointed questions in response to why BTC is as legitimate or even better than gold as a currency without actually constructing a solid point.
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SgtSpike
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May 18, 2011, 10:19:47 PM
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Because you can send it instantly over the interwebz?  Because you can store all your wealth on the back of a stamp?  Because it isn't practical to pay someone $1 or $0.50 worth of gold, but you can pay bitcoins in any fraction you like.

That's all I can think of.  Smiley  But mostly being able to send it online and anonymously.
NghtRppr
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May 18, 2011, 10:26:51 PM
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I have read that concerns over hoarding BTC can be alleviated by more people accepting BTC. But why should I? Why should I accept your BTC as payment for something in leiu of something like a goldgram?

It's better to accept two payment methods rather than one. Some people have gold but no BTC. Some people have BTC but no gold. You expand your potential market by accepting either.
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May 18, 2011, 10:29:12 PM
 #4

goldgram?

Those services are centralized in that you HAVE to go through a 3rd party that has absolute control over account and balance. Simply put, it's not easy to hold "digitalized" gold, and it creates a security gap. Bitcoin goes around that, since it's digital to begin with. Bitcoin also has the potential to turn into a currency as is, when gold needs that digital layer.

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DERP
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May 18, 2011, 10:39:11 PM
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Because you can send it instantly over the interwebz?  Because you can store all your wealth on the back of a stamp?  Because it isn't practical to pay someone $1 or $0.50 worth of gold, but you can pay bitcoins in any fraction you like.

That's all I can think of.  Smiley  But mostly being able to send it online and anonymously.

With a goldgram it is not very difficult for me to sell my gold for money, then send the currency I traded it for to a person on the internet.

Storing my gold on the back of a stamp? Is this really WHY I should start accepting your BTC? I should do work for you in BTC because I can "store my wealth on the back of a stamp"? What is this supposed to mean to me? It means nothing. Please explain further.

It isn't practical to pay someone in small amounts of gold? Sure, maybe for a buck or half a buck, there might not be a more convenient way to pay someone. But is this really supposed to allure me into accepting BTC for labor? If I need to pay someone a buck or two, I will just pay them a buck or two. I do not see what advantage BTC has over USD in this regard.

What benefit is there to conducting my transactions anonymously online?

How much does it cost me to generate BTC? Surely the lack of an exchange is a severe disadvantage for the currency. How am I supposed to negotiate payment in exchange for my time and labor for BTC when there is simple way to discover a price? How am I supposed to know what stores are accepting in BTC as market conditions change?

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It's better to accept two payment methods rather than one. Some people have gold but no BTC. Some people have BTC but no gold. You expand your potential market by accepting either.

A payment in a commodity that has no known exchange rate for any given time. A commodity that is very new and its future uncertain to those new to the BTC.

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Those services are centralized in that you HAVE to go through a 3rd party that has absolute control over account and balance. Simply put, it's not easy to hold "digitalized" gold, and it creates a security gap. Bitcoin goes around that, since it's digital to begin with. Bitcoin also has the potential to turn into a currency as is, when gold needs that digital layer.

So you say BTC is more "secure"? Tell me again why this security is so much better than trusting a DGC service, even though BTC has no exchange and prices cannot be determined by market participants nearly as easy as gold or silver.

I do appreciate all of your input on this subject so far and I hope that you continue to participate in this discussion.
hazek
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May 18, 2011, 10:42:41 PM
 #6

I have read that concerns over hoarding BTC can be alleviated by more people accepting BTC. But why should I? Why should I accept your BTC as payment for something in leiu of something like a goldgram?

Please, if you can, explain WHY. I have noticed that when discussion of gold comes up here on this forum people seem to ask pointed questions in response to why BTC is as legitimate or even better than gold as a currency without actually constructing a solid point.

Well why would you accept a goldgram? What sort of properties of that commodity draw you to buy it and trade in it? I don't know about you but I imagine what those properties might be and for me Bitcoin has the same crucial properties and a few extra and that's why I use it.

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

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DERP
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May 18, 2011, 10:44:25 PM
 #7

Lets talk about this:

http://blog.bitcoinwatch.com/wp-content/uploads/2011/05/BTCUSD20110512hourlylog.png

Is this a price chart for BTC? How do they determine values like this? Is there an exchange built right into BTC?
DERP
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May 18, 2011, 10:46:59 PM
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I have read that concerns over hoarding BTC can be alleviated by more people accepting BTC. But why should I? Why should I accept your BTC as payment for something in leiu of something like a goldgram?

Please, if you can, explain WHY. I have noticed that when discussion of gold comes up here on this forum people seem to ask pointed questions in response to why BTC is as legitimate or even better than gold as a currency without actually constructing a solid point.

Well why would you accept a goldgram? What sort of properties of that commodity draw you to buy it and trade in it? I don't know about you but I imagine what those properties might be and for me Bitcoin has the same crucial properties and a few extra and that's why I use it.

Because I believe gold's role as a currency for so long adds to its reputability. Gold prices can be determined easily in our modern era with supply and demand for the commodity, as price fluctuations can be ascertained to a degree by observing the marketplace. Gold can also be liquidated almost anywhere in the world. I can pay for things in gold with the buyer and seller knowing exactly at any given time the value of the transaction against dozens of different commodities, equities or currencies.

Does BTC has these qualities? It obviously is not time tested as gold is, but what about the other points.

Edit: I have edited my post to add a few lines, I apologize if you missed it.
NghtRppr
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May 18, 2011, 10:51:09 PM
 #9

A payment in a commodity that has no known exchange rate for any given time. A commodity that is very new and its future uncertain to those new to the BTC.

That's long term uncertainty. Take payments in BTC, sell the BTC in the short term and make your prices reflect that uncertainty. Then, if/when BTC crashes, it won't matter. It's fairly straightforward. You expand your market by accepting more than one method of payment.

Are you actually running a business that this would apply to or are you just looking for a debate?
DERP
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May 18, 2011, 11:01:21 PM
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A payment in a commodity that has no known exchange rate for any given time. A commodity that is very new and its future uncertain to those new to the BTC.

That's long term uncertainty. Take payments in BTC, sell the BTC in the short term and make your prices reflect that uncertainty. Then, if/when BTC crashes, it won't matter. It's fairly straightforward. You expand your market by accepting more than one method of payment.

Are you actually running a business that this would apply to or are you just looking for a debate?

I don't own any BTC and only heard about it last week. I came here because I wanted to see what the likely economic discussions were regarding BTC and other asset classes.

I DO own many USD which over the past five years or so I have been steadily trading for other things that will appreciate more, such as equities and commodities. Basically beyond paying for groceries and utility bills, USD serves basically two roles for me: to trade for gold equities and commodities, and to pay for things in the remote chance that my credit cards are declined. So as far as short-term currencies go, I am not really interested in holding things short-term unless I want to speculate, but there doesn't seem to be much opportunity to speculate in BTC.

I have read some of the posts on here regarding anticipated problems concerning the longer term viability of BTC, but I am still left wondering why I should accept BTC as payment for something. If you can pay me in USD, CAD, AUD, or gold or something, then why should I choose BTC over any of those other items?

EDIT: I mean it seems to me that basically it boils down to confidence in the currency to stay viable over the long-term. And since newcomers are not going to instantly understand the cryptopgraphic principles behind BTC, why do you expect that this will continue to grow?
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May 18, 2011, 11:04:21 PM
 #11

So you say BTC is more "secure"? Tell me again why this security is so much better than trusting a DGC service.

Because the DGC provider of your choice can chose tomorrow to freeze your account, let's say because some government felt like getting in the way at a whim. With BTC, your wealth is in your wallet and no one can do a thing to it. To use DGCs, you have to go through a middle man. That middle man is a single point of failure, because he has full control over your entire deposit. With BTC, there is no need for a middle man, for BTC is naturally digital. This avoids that single point of failure case.

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even though BTC has no exchange and prices cannot be determined by market participants nearly as easy as gold or silver.

That is true, for the BTC market is still quite thin. It still needs time to grow. That's a disadvantage. The advantage is that this growth holds a much higher potential for appreciation than gold does, since gold has already spread to its full market capacity. Technically, you'd be willing to sacrifice convenience for more security and the chance to get a great return on investment for simply sitting on your wallet.

As such, you should consider keeping a little of your wealth in BTC, let's say 1-10%. If you find it to eventually suit your expected level of convenience and usability, you can then start to move more of your wealth on the system.

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BitLex
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May 18, 2011, 11:06:44 PM
 #12

If you can pay me in USD, CAD, AUD, or gold or something, then why should I choose BTC over any of those other items?
well, actually BTC would fall under the or something category, so you don't choose it over any of those, it IS one of those.

what if i don't own any USD or CAD or AUD or gold, but BTC? (actually, the only USD i currently have are on MtGox, never had any CAD or AUD or gold, ever)
don't want me as your customer? fine, i'll find another seller who wants my BTC then.

NghtRppr
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May 18, 2011, 11:06:59 PM
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If you can pay me in USD, CAD, AUD, or gold or something, then why should I choose BTC over any of those other items?

I hate to sound like a broken record but again, adding one more method of payment expands your market. I'm not suggesting you forsake all other forms of currency for BTC or even prefer BTC over anything else. I am only suggesting that you should accept BTC as payment because you can stand to make extra revenue that you would not have made before, especially if you have something that appeals to the Bitcoin crowd or isn't currently being offered.
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May 18, 2011, 11:11:51 PM
 #14

If you can pay me in USD, CAD, AUD, or gold or something, then why should I choose BTC over any of those other items?

I hate to sound like a broken record but again, adding one more method of payment expands your market. I'm not suggesting you forsake all other forms of currency for BTC or even prefer BTC over anything else. I am only suggesting that you should accept BTC as payment because you can stand to make extra revenue that you would not have made before, especially if you have something that appeals to the Bitcoin crowd or isn't currently being offered.

If I make a transaction in BTC and the seller does not deliver, what recourse is there?

Where can I find a list of stores accepting BTC?
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May 18, 2011, 11:14:21 PM
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A payment in a commodity that has no known exchange rate for any given time. A commodity that is very new and its future uncertain to those new to the BTC.

That's long term uncertainty. Take payments in BTC, sell the BTC in the short term and make your prices reflect that uncertainty. Then, if/when BTC crashes, it won't matter. It's fairly straightforward. You expand your market by accepting more than one method of payment.

Are you actually running a business that this would apply to or are you just looking for a debate?

I don't own any BTC and only heard about it last week. I came here because I wanted to see what the likely economic discussions were regarding BTC and other asset classes.

I DO own many USD which over the past five years or so I have been steadily trading for other things that will appreciate more, such as equities and commodities. Basically beyond paying for groceries and utility bills, USD serves basically two roles for me: to trade for gold equities and commodities, and to pay for things in the remote chance that my credit cards are declined. So as far as short-term currencies go, I am not really interested in holding things short-term unless I want to speculate, but there doesn't seem to be much opportunity to speculate in BTC.

I have read some of the posts on here regarding anticipated problems concerning the longer term viability of BTC, but I am still left wondering why I should accept BTC as payment for something. If you can pay me in USD, CAD, AUD, or gold or something, then why should I choose BTC over any of those other items?

EDIT: I mean it seems to me that basically it boils down to confidence in the currency to stay viable over the long-term. And since newcomers are not going to instantly understand the cryptopgraphic principles behind BTC, why do you expect that this will continue to grow?
You need to check out www.mtgox.com if you think there isn't ample opportunity to speculate in bitcoins.

Why not pay in USD?  Uhhh, good question.  I think the idea is that USD is an inflationary currency controlled by the government, and not many people here like the idea of their money being devalued at the whim of the government.  Also, anonymity, though you already mentioned that that wasn't an important factor for you.  Also, easier to do.  You can send USD with services like Paypal, but it can be complicated, and you can get chargebacks as a seller, etc.  Mostly it's the lack of central control - that no one else can add money to the supply at any time.  It's completely secure in that manner, in that there will never be more than 21 million coins in total.

Why not pay in gold?  Because not very many people accept straight-up gold as payment anymore.  Because it is difficult to know the exact value of the gold you hold.  Because you have to go through the whole process of selling gold, getting your gold verified, getting a goldgram, sending said goldgram, etc.  Bitcoin is EASY.  You just copy/paste an address you want to send bitcoins to, enter the total number to send, and bam.  You're done.

Back of a stamp?  Well, basically what I mean is, your entire private key for your wallet can be stored in a very small digital (or analog, if you choose) space.  I was kind of making a jab at the Mission Impossible movies though, where they store some sort of digital medium on the underside of a stamp on a postcard.

You can use a service like clearcoin to ensure the seller delivers.  If they don't, you can have the funds refunded to your account.  Of course, this poses a risk to the seller as well...
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May 18, 2011, 11:19:15 PM
 #16

As such, you should consider keeping a little of your wealth in BTC, let's say 1-10%. If you find it to eventually suit your expected level of convenience and usability, you can then start to move more of your wealth on the system.

Is this a recommendation to trade USD for BTC? I mean, there is a difference for a new comer between letting BTC generate and actually trading currency for BTC. For example, I do still do not understand the long-term viability of BTC, how prices are determined, and how anyone can predict the future success of BTC. If people generating BTC do not grasp each of these subjects then how long would you expect for BTC to deliver a greater return than gold? What is the time horizon for this?
NghtRppr
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May 18, 2011, 11:20:45 PM
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If I make a transaction in BTC and the seller does not deliver, what recourse is there?

There are no chargebacks. Either insist that you receive the goods before sending BTC or use an escrow service if you don't want to expose yourself to that kind of risk.

Where can I find a list of stores accepting BTC?

https://en.bitcoin.it/wiki/Trade
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May 18, 2011, 11:23:32 PM
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Bitcoin2cash gave the correct answer.

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DERP
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May 18, 2011, 11:29:17 PM
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You need to check out www.mtgox.com if you think there isn't ample opportunity to speculate in bitcoins.

I notice on that website they allow users to trade in dark pools. This basically allows for large transactions to occur without sending a corresponding price signal to other market participants. How exactly is this beneficial to the market as whole, as opposed to those in the dark pools?

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Why not pay in USD?  Uhhh, good question.  I think the idea is that USD is an inflationary currency controlled by the government, and not many people here like the idea of their money being devalued at the whim of the government.  Also, anonymity, though you already mentioned that that wasn't an important factor for you.  Also, easier to do.  You can send USD with services like Paypal, but it can be complicated, and you can get chargebacks as a seller, etc.  Mostly it's the lack of central control - that no one else can add money to the supply at any time.  It's completely secure in that manner, in that there will never be more than 21 million coins in total.

I accept your opinion that USD is not a good store of value. As I said earlier, USD is basically a short-term currency for me as I am more interested in purchasing equities and commodities as stores of value. In this respect, USD seems to be a superior choice for a short-term currency because it is accepted is many more places than BTC, it is readily recognizable to basically everyone on the globe, and it can be transacted easily in physical form without a need for computerized devices.

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Why not pay in gold?  Because not very many people accept straight-up gold as payment anymore.  Because it is difficult to know the exact value of the gold you hold.  Because you have to go through the whole process of selling gold, getting your gold verified, getting a goldgram, sending said goldgram, etc.  Bitcoin is EASY.  You just copy/paste an address you want to send bitcoins to, enter the total number to send, and bam.  You're done.

Not many people in countries that have been dominated by banking and mortgage markets. For example I can buy a very, very nice property in Viet Nam with a very large amount of open land for just few gold coins. The value of the coins can be easily determined by looking at central exchanges located in any number of different cities on the globe. It is not the fault of gold that Westerners do not know the value of it and I would not consider that a weak point against gold.

What do you think is the best way I can trade my BTC for the same property in Viet Nam? What angle should I use?

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You can use a service like clearcoin to ensure the seller delivers.  If they don't, you can have the funds refunded to your account.  Of course, this poses a risk to the seller as well...

How does clearcoin operate and how do they verify transactions? What kind of a commission do they charge?
DERP
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May 18, 2011, 11:38:11 PM
 #20

Guys I just want to say again how much I appreciate your help and input. Please know that I am grateful.
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