More than 20,000 households getting their salary in bitcoin

[MilesJohan]

I actually subscribed to bitwage for a month, but had to switch back because the price was falling and I feared losing money on it.
Thinking of restarting it now.

[Elwar]

But how do they calculate how much BTC do they need to pay? they directly convert it from how many dollar/eur that salary would normally be?
What if dollar/eur didnt exsist? we will always dependant of fiat to make this equivalence?

So if war money did not exist and all we had were bitcoins....how do you think they would calculate pay?

 

I have no idea, you tell us. I guess whatever people is willing to pay for your goods like food, water whatever.

Anyway thats delusional. Fiat is not going anywhere and people is used to deal with a currency that doesnt move up and down like crazy.

I see Bitcoin as gold, not as a fiat currency.

Umm...there are no words...

People honestly believe that if euro or dollar did not exist we would all be trying to figure out what someone's salary is in Bitcoin?

Just like how we price gold in dollars...if there were no dollars then the price of gold would be unknown, people standing around with gold coins dumbstruck as to what its value is. Can it buy a piece of candy, a house, pay for a whole country? Who knows...there are no dollars to price it in. Is that about how it would work?

 

[Elwar]

how on earth will this equate to:

$1 billion each year flowing into Bitcoin

People still will need to pay rent, mortgage, fuel, phone, heat etc... so the majority will just be going out of btc anyway.  This is the main problem I cant wrap my head around with mass adoption.  At the end of the day, the money goes back to fiat.

Imagine for a moment that those 20,000 people are paid on a weekly basis. Half are paid on Friday night, half are paid on Wednesday morning.

Now imagine that on average it took a half a week for people to spend all of their bitcoins. For simplicity, they spend all of their bitcoins a half week after they get paid.

So the Friday night employees spend all of their bitcoins on Wednesday morning and the Wednesday morning people spend all of their bitcoins on Friday night.

This would mean that at any time, half of the 20,000 people have all of the bitcoins they were paid.

This is the equivalent of 10,000 people holding bitcoins. Or 20,000 people having half of their bitcoins.

This would be $500 million worth of bitcoins at today's prices.

From my own experience getting paid in bitcoins I tend to wait to buy/pay for things until the price goes up. I don't buy things right when I get paid. And I make a lot more than the household income in the US so it would not necessarily need to be 20,000.

But if you say that people will be paying for things with bitcoins that are converted to war money...then there would have to exist a market that accepts bitcoins. The more places that accept bitcoins, the more people will be willing to get paid in bitcoins. The more bitcoins will be held and not immediately converted to war money.

The closer that number of bitcoins held gets to 14 million...the higher the value of each bitcoin.

[1Referee]

For merchants holding Bitcoin after a sale is quite a nightmare at this point.

If they sell a tv for $1000 in Bitcoin and after the sale a few days later the price plummets +30% which is a disaster for them.

How can you convice them to hold their coins if this isn't something you can fix within a decent amount of years.

How do you wash out very early adopters, thieves with 500K BTC, etc.

And don't forget Satoshi himself has also a few hundred K worth of BTC. They are sleeping at this point, but you never know when they move, if ever.

This all are huge risks for businesses and services holding Bitcoin instead of converting to fiat.

[turvarya]

Once we reach 20k households getting paid in bitcoin I believe at that point we will have reached mass adoption.

Can you kindly explain why you think 20k is considered mass adoption according to you?

I think any industry with a billion in revenue per year is something the market will respond to and service. The price would need to rise 6 times to accommodate the demand.

Don't you think the money that's flowing into Bitcoin as you say will also flow out of Bitcoin at some point?

There have to be plenty of places, and I mean places where we can buy daily needs with Bitcoin. Which isn't the case at this point.

What's the point of accepting Bitcoin as salary when you will exchange them for fiat anyway.

It's nice to buy domains, servers, phones, etc. But we need super markets, gas stations and what not to accept Bitcoin in order to keep as much money IN Bitcoin.

Yes, most merchants do tend to convert immediately to war money but unless you immediately spend all of your money, you will probably take the length of your pay period to spend the money which means that on average you are holding bitcoins for half of the pay period. Over the course of the year you have held bitcoins for half a year on average. This still equals have a billion in bitcoins every year. That more than covers mining costs.

Which means more adoption, more people paid in bitcoins and more spending. No matter if merchants keep it in bitcoins or not, that steady stream incoming will make up for any conversion by the merchants.

Only about 1/6th of all bitcoins is traded on the exchanges. So those 20,000 would be sucking out over 220 bitcoins each (at current prices) while only 110 bitcoins per household would be available on the exchange. Accounting for only holding half of the time means that those 20k households would be buying every bitcoin on the exchange at current volume and current prices. That's not counting other investors.

Where did you get that number from?

[Elwar]

Once we reach 20k households getting paid in bitcoin I believe at that point we will have reached mass adoption.

Can you kindly explain why you think 20k is considered mass adoption according to you?

I think any industry with a billion in revenue per year is something the market will respond to and service. The price would need to rise 6 times to accommodate the demand.

Don't you think the money that's flowing into Bitcoin as you say will also flow out of Bitcoin at some point?

There have to be plenty of places, and I mean places where we can buy daily needs with Bitcoin. Which isn't the case at this point.

What's the point of accepting Bitcoin as salary when you will exchange them for fiat anyway.

It's nice to buy domains, servers, phones, etc. But we need super markets, gas stations and what not to accept Bitcoin in order to keep as much money IN Bitcoin.

Yes, most merchants do tend to convert immediately to war money but unless you immediately spend all of your money, you will probably take the length of your pay period to spend the money which means that on average you are holding bitcoins for half of the pay period. Over the course of the year you have held bitcoins for half a year on average. This still equals have a billion in bitcoins every year. That more than covers mining costs.

Which means more adoption, more people paid in bitcoins and more spending. No matter if merchants keep it in bitcoins or not, that steady stream incoming will make up for any conversion by the merchants.

Only about 1/6th of all bitcoins is traded on the exchanges. So those 20,000 would be sucking out over 220 bitcoins each (at current prices) while only 110 bitcoins per household would be available on the exchange. Accounting for only holding half of the time means that those 20k households would be buying every bitcoin on the exchange at current volume and current prices. That's not counting other investors.

Where did you get that number from?

I calculated it back in 2011 when MtGox released their numbers and it was easier to calculate from a single exchange. It might not be the same number now but I don't see it being much higher (back then about the only thing you could do with Bitcoin was hold it or trade it on the exchange.