Topic: "Merchant acceptance is NEGATIVE for bitcoin" - page 3. (Read 4310 times)

Merchants adoption is positive. I understand the point you are trying to make but merchants only drive the prove down because all of a sudden the amount of merchants increased a lot, while the number of bitcoin users did not increase nearly as much. So there's a lot of selling pressure. However we managed to break the negative downtrend even with all the selling pressure so we are fine.

Also, having more merchants makes bitcoin more legitimate, since it's more valueable as a currency if it can be used frictionless at more stores. And the selling is also a good thing because it adds liquidity to the market.

On top of that you can avoid dropping the price while paying with bitcoins, and in the same time really he'll the bitcoin market and it will not cost you anything, by the following method.

1) buy an item at the merchant using bitcoin
2) the merchant will likely instantly sell the bitcoins (automatically by bit pay), likely dropping the price slightly
3) you instantly buy back the value of the coins with dollars, the same amount of dollars that you just spent in the store
4) you haven't lost money, (maybe even made a very small gain), bitcoin gained some volume (1 sell from the store, 1 buy from you) and you still have the same amount of bitcoins. And the merchant received a bitcoin transaction, which makes them notice people actually like paying with bitcoin (so more merchant will accept it, and more users will use bitcoin once more merchants accept it)

So, it's a good thing.

If merchants don't accept bitcoin, we should all sell.  The hope is that someday merchants will accept and eventually keep.  Not just merchants, but everyone. 

Necessary evil for now

Why can't a business hold and use bitcoin as they do fiat? Because not enough business's accept bitcoin for everyday use (for rent, suppliers/manufacturers, payroll, and whatever other various bills) so the next step is creating bitcoin ecosystems

It would be great if Overstock or some other large company offered employee salaries and bitcoin as a form of payment to suppliers, I'm sure they could save a ton on money transfer fees for large orders so it could be beneficial to both

Peter will change his tune as he sees BTC is overcoming the early growing pains. 

Peter also likes to beat the tired "it's really volatile!" drum. Well, duh... We're bootstrapping the world's first decentralized currency from nothing to global scale. Of course is going to be a wild ride!

Peter's criticisms are almost always quite myopic. He basically resorts to saying bitcoin will never work because the ecosystem has flaws *now* (eg, his focus on volatility and merchants insta-converting). Anyone who says bitcoin is a bad idea because it doesn't go from nothing to global domination in one perfect binary step is either stupid or trying to manipulate the conversation.

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.

This is just BS. Don't these people have any common sense? From where will all those merchants get Bitcoin? Bitcoins are not created out of thin air. Their customers will convert fiat to Bitcoin (or just mine them) in order to pay for goods and services in BTC. So for every 10 BTC worth of sell orders, there will be an equivalent 10 BTC worth of buy orders as well.

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.

Peter is a smart investor but wrong about Bitcoin due in part to not understanding the technology completely and partially to protect his investments in gold and silver which are being negatively impacted by Bitcoin.

Even if merchants immediately sell Bitcoin that doesn't drive down the cost of Bitcoin as the individuals spending bitcoins typically are re-buying on a regular basis or immediately. While it would be better if merchants kept bitcoins it still is beneficial for the eco-system because the larger amount of transactions floating around show the demand for this payment mechanism and temporarily tie up those funds causing more demand overall.

 

I watched a talk on the economy between Peter Schiff and Joe Rogan; at the end they discuss Bitcoin, and Peter shares his criticism. He says, essentially, that the more merchants that are accepting bitcoin the more the price of bitcoin will fall, because they instantly convert it back to fiat (thus putting in SELL orders). So customers who own bitcoins and use them actually sell them onto the market, indirectly. This wouldn't be a problem if bitcoin was the main currency for merchants, customers, suppliers, etc, but that is not on the realistic horizon yet.

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

Reference: https://www.youtube.com/watch?v=8IHU42j3evQ (@2:36:15)