Topic: the importance of currency exchange for the economy - page 2. (Read 4644 times)
A currency exchange is convienient to begin, but eventually goods and services must be offered for bitcoins to be useful.
Amongst the usages of money there are 1) intermediary for exchange 2) store of value 3) unit of accounting. To me it seems clear that the currency exchange market allow people to use different currency for each of these usages.
Bitcoin is useless for point 1, if I want to exchange it for something, if I have GBP and I want to buy something off amazon going GBP->BTC->USD (or any other combination) is pure waste, I might as well go GBP->USD.
As for point 2, for something to be a store of value, it needs value. For bitcoin to have value it must meet point 1.
Bitcoin in its current state would be destroyed by a run, whereas oil would still be traded by petrol manufacturers and gold by jewelers. The hope is that one day people will constantly trade BTC out of convience, protecting its value for people who save in it.
One of the things you can hear from opponents of bitcoin is :
I once answered that you can exchange bitcoins just in order to buy something. I once bought T-shirts on-line using canadian dollars I just bought for this purchase (using the excellent MadHadder's bitcoin-to-credit-card service).
I know it's not the same as buying directly in bitcoin. But is it, really ? I mean, if currency exchange is quick and efficient enough, there is no practical difference between buying in bitcoin and making a currency exchange just for a product purchase.
Oil is priced in dollar. So I guess when I buy some gaz at a station in Europe, at some point in the exchange chain, there has been some euro-dollar conversion. Yet, nobody would claim "you can't buy oil with euros".
As always, the comparaison between bitcoin and gold is also pertinent. I can't enter a shop and buy stuffs with a gold coin. There are very few things that I can buy directly with physical gold. And yet, most people agree to say that gold is money. Actually, when I need to buy something I sometimes sell a few gold coins in order to get just enough cash to buy the stuff in the same day. So I consider I bought this stuff with gold.
Amongst the usages of money there are 1) intermediary for exchange 2) store of value 3) unit of accounting. To me it seems clear that the currency exchange market allow people to use different currency for each of these usages.
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You can't buy anything with it. It's mostly used for currency exchange and gaming.
I once answered that you can exchange bitcoins just in order to buy something. I once bought T-shirts on-line using canadian dollars I just bought for this purchase (using the excellent MadHadder's bitcoin-to-credit-card service).
I know it's not the same as buying directly in bitcoin. But is it, really ? I mean, if currency exchange is quick and efficient enough, there is no practical difference between buying in bitcoin and making a currency exchange just for a product purchase.
Oil is priced in dollar. So I guess when I buy some gaz at a station in Europe, at some point in the exchange chain, there has been some euro-dollar conversion. Yet, nobody would claim "you can't buy oil with euros".
As always, the comparaison between bitcoin and gold is also pertinent. I can't enter a shop and buy stuffs with a gold coin. There are very few things that I can buy directly with physical gold. And yet, most people agree to say that gold is money. Actually, when I need to buy something I sometimes sell a few gold coins in order to get just enough cash to buy the stuff in the same day. So I consider I bought this stuff with gold.
Amongst the usages of money there are 1) intermediary for exchange 2) store of value 3) unit of accounting. To me it seems clear that the currency exchange market allow people to use different currency for each of these usages.
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