We are all participating in a global experiment to move value into Bitcoin. This isn't going to happen all at once, in fact, it will probably never end. But before we have "stable" prices in BTC, we would have to reach some kind of saturation point.
Even as fast as things are growing, we are incredibly far away from that right now. The good news is that so many new businesses are accepting BTC every single day that I don't bother to announce them all any more.
Some things I consider huge as far as "closing the loop" for BTC in the last few weeks:
4 property management companies (Memphis, Vegas, NYC, Houston) are now accepting BTC for rent. This is not one or two people renting their personal houses, there are now thousands of properties you can rent for BTC.
Last year we had a handful of restaurants that accepted BTC. Thanks to Foodler.com, now over 17,000 restaurants, in 48 states, accept BTC.
We are definitely moving forward at a rapid pace.
Topic: We need to break the loop FIAT->BTC->FIAT - page 3. (Read 3757 times)
It is a fools errand. It would limit the entire Bitcoin economy to just those products which can be produced completely with a Bitcoin supply chain, all raw materials, production, labor, etc solely in Bitcoins. We are likely decades (as in plural) if ever from that happening.
Also goods even if priced in BTC have to be competitive to alternate currencies. Here is an example. I will sell you 1 oz gold coin right now for 20 BTC. See nice round number 20 BTC. You won't take it. Why? Because you could sell BTC for USD and buy the same gold coins for cheaper. Why would you pay more just to buy it in BTC? Maybe you would pay a slight premium to avoid the cost and hassle of conversion but to know what a "slight premium" is you need an exchange rate. Of course by the same logic you would gladly buy a 1 oz gold coin for 10 BTC right? Even if you are bearish on gold you could buy the coin for BTC. Sell it and use those USD to buy more BTC. Still nobody (outside of scammer who doesn't intend to deliver) would sell you 1 oz of gold for 10 BTC because they could do the same thing (GLD -> USD -> BTC) and get more than 10 BTC.
Exchange rates will always exist.
Merchants will always have at least some costs in dollars.
Goods will always need to be competitive to other currencies because people have the choice to spend USD/EUR/JPY etc.
Even if you never exchange BTC for fiat or fiat for BTC you need to know an exchange rate to make your services competitive to those offered in other currencies.
Also goods even if priced in BTC have to be competitive to alternate currencies. Here is an example. I will sell you 1 oz gold coin right now for 20 BTC. See nice round number 20 BTC. You won't take it. Why? Because you could sell BTC for USD and buy the same gold coins for cheaper. Why would you pay more just to buy it in BTC? Maybe you would pay a slight premium to avoid the cost and hassle of conversion but to know what a "slight premium" is you need an exchange rate. Of course by the same logic you would gladly buy a 1 oz gold coin for 10 BTC right? Even if you are bearish on gold you could buy the coin for BTC. Sell it and use those USD to buy more BTC. Still nobody (outside of scammer who doesn't intend to deliver) would sell you 1 oz of gold for 10 BTC because they could do the same thing (GLD -> USD -> BTC) and get more than 10 BTC.
Exchange rates will always exist.
Merchants will always have at least some costs in dollars.
Goods will always need to be competitive to other currencies because people have the choice to spend USD/EUR/JPY etc.
Even if you never exchange BTC for fiat or fiat for BTC you need to know an exchange rate to make your services competitive to those offered in other currencies.
Everybody is speaking about how BTC is deflationary... Well, didn't you see how its value just got from $266 to $100 in hours? What was that, the USD deflating?
We mustn't fool ourselves. Bitcoin is not going to be truly deflationary nor a safe store of value if we don't break the loop. While the "value" of Bitcoin is established with its exchange rate for FIAT... We are just fucked, and it will just be a TOY for speculation, while being very vulnerable to attacks from its enemies.
Think about the most likely attack to BTC from its natural enemy, the FED: they own fiat money, and if they feel BTC is a danger for them, they can just pump it to the fucking sky to crash it to almost $0. Explain then about how it is a "store of value" to those who lose everything. How do we avoid that? Breaking the fucking loop FIAT->BTC->FIAT.
We need business that set their prices in BTC, and pay all their costs (including salaries) in BTC. We need to break the laces with fiat money. When we do that, then we will have a really deflationary currency that will truly serve as a store of value. Until BTC's value is related with the exchange rate with fiat... We are fucked, and it will be useless as soon as the FED decides it has to go.
We mustn't fool ourselves. Bitcoin is not going to be truly deflationary nor a safe store of value if we don't break the loop. While the "value" of Bitcoin is established with its exchange rate for FIAT... We are just fucked, and it will just be a TOY for speculation, while being very vulnerable to attacks from its enemies.
Think about the most likely attack to BTC from its natural enemy, the FED: they own fiat money, and if they feel BTC is a danger for them, they can just pump it to the fucking sky to crash it to almost $0. Explain then about how it is a "store of value" to those who lose everything. How do we avoid that? Breaking the fucking loop FIAT->BTC->FIAT.
We need business that set their prices in BTC, and pay all their costs (including salaries) in BTC. We need to break the laces with fiat money. When we do that, then we will have a really deflationary currency that will truly serve as a store of value. Until BTC's value is related with the exchange rate with fiat... We are fucked, and it will be useless as soon as the FED decides it has to go.
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