Topic: Why Is Getting Bitcoin "Accepted" As A Form Of Payment So Important??? - page 2. (Read 6122 times)

The fact that companies such as Paypal work on such tiny margins and still need to charge 2-3% transaction fees suggests that the whole industry suffers from systemic inefficiencies, and that a shake up is long overdue.

Bitcoin doesn't have the costs that those companies have, so it can always out-compete them in terms of transaction fees.  No bonuses, no middle management, no legal departments, no call centers, no red tape, no marketing costs, no office buildings, no dispute resolution, no chargeback, no cost from chasing fraudsters.

Sure, Bitcoin suffers from scamming too but these costs are carried by the scammed individuals, not collectively by all users as with Paypal and credit cards.  Bitcoin users rely on a reputation system and  take personal responsibility for how much risk they are prepared to take.   That also removes the moral hazard and reduces system-wide fraud losses.  Bitcoin users can also optionally use escrow, but again then they have to pay for the incurred costs individually.

 


The bulk of Bitcoin purchases hass been from investors so far.

Not by any definition of that term that I have ever heard.  Even an American gold Eagle isn't legal tender because of the gold content of the coin, but because of the face value stamped into the side of it.

Who are you talking to?  It looks like you are trying to respond to me, but I didn't even address gold as a currency.

The answer to this actually answers the OP question of why it's important that Bitcoin gains prevalence as an accepted method of payment.

What gives currency value is the existence and high-availability (currency liquidity) of transaction counterparties -- that somebody always wants to be at the other end of your transactions. The second you can't find a buyer for your Bitcoins or a seller that will let you buy into the Bitcoin system, Bitcoin no longer has value. After all, the value of a Bitcoin (like the USD->BTC conversion rate) is a direct measure of how many people want Bitcoin.

Until there's a commercial market for Bitcoins, all Bitcoin counterparties are fellow speculators and investors and the Bitcoin exchange is fueled by fickle things like novelty rather than reliable things like food and the human desire to buy things that we don't really need. The intrinsic value of a currency isn't its ductility or conductivity (i.e. gold) -- they are flatly irrelevant --, but actually the reliability and ease of finding a counterparty to your transaction. A commercial market is what entrenches the transactional reliability of a currency. It creates cycles of exchange and networks of trade that entrench and distribute the investment of the currency across a lot of people, which increases the chance that there's always someone out there that wants to trade with you.

What do billionaires pay bankers in Switzerland million dollar fees for? To store value for them, secretly.

So yes, simply being a safe way to store a value seems to be enough to sustain bitcoin alone.

And I'm not saying we should totally forget getting bitcoin accepted as a form of payment... but it will be much much easier a task once bitcoins are worth $10 to $100 each.

Gold is not currency. Not typically at least. I'm talking about gold bullion. What most gold investors purchase and deal in. Nobody is seriously investing billions of dollars buying $500 gold coins...

I want all of this as well. I'm just saying I think it would be easier to tackle a simpler problem first (getting investment in this great idea) and more beneficial to all of our overall goals.

I guess this is one of those "what came first" conundrums... there are solid arguments for both sides.

You're talking about minted gold coins there. Not gold bullion. Yes, a minted gold coin is legal tender. But that is not what I was referring to. I meant gold in terms of bullion/bars/what most of it is held in.

So? Their margins don't matter if their costs are orders of magnitude higher and their services unreliable.

Bitcoin can be a reliable store of value, as can gold, silver, US Savings Bonds, or many other things.  There are investment vehicles that exist specificly as a store of value, such as US Savings Bonds, but even that isn't a certainty, and I can think of no such intentional structures that do not have counter party risk.  Commodities do not have counterparty risk if one takes delivery, but there are storage risks.

This is a good point. Can bitcoin be a reliable store of value (as it currently is) without being supported by its use as a highly convenient electronic payment method? Can something be established solely as a store of value? Where does the value come from? I'm guessing it being a highly convenient store of value... But I can't wrap my head around it to be convinced that it can be enough...

Indeed.  Currencies, in general, make for poor forms of savings.  That's not why they exist.  Bitcoin exists as an Internet cash equivalent, and if performs that function very well.  If you are looking for a store of value, there are much better choices.

Gold is useful for lots of other things, like plumbing, ductwork, electrical wire, and as a general anti corrosive coating.  It is useful for lots of things just like any other metal.  Only because of its high price does it not make sense to use gold for everyday things, and that high price is due to its rarity and value as money.

Before something can be a store of value, it needs to have value. Gold gained this initially through being wanted for use in jewelry. The only way bitcoin can gain value, is by proving its worth as a useful (or even best) means of electronic payment.

Personally, I'm not looking for a store of value.  I want a low-cost, non-reversible, resilient means of Internet payment.  Bitcoin does that better than gold or silver, so that's why I work towards its success.

If it was recognized gold bullion coins and I walked in there and had a plausible reason for why I wanted to do the transaction that way, why should they say no and lose a sale?  They would do a thousand jumping jacks on the showroom floor upon request, or bring in a masseuse to rub you down while you signed the papers, if you seriously convinced them that's what it took for you to buy the car from them, as silly as it sounds.

How would the car dealership know it was 24K gold?  How do they know that when they hand me the keys for a test drive, I'm not going to just drive off and never return?  I'm sure they'd make sure they had some sort of recourse before accepting such a deal (after rolling their eyes etc.)

CC Companies do not always side with the seller in my experience. I have fond memories of a few hours spent on the phone to my company which confirm this.

Look, guys, I'm not trying to ruin your spirits or bash bitcoin in any way. I simply thought it would make more sense to add some value to the currency first, before we both with trying to get anybody to spend it.

Yes, you're right. We could try to create our own banks, our own bitcoin credit cards, we could integrate bitcoin with visa, mastercard and all of the local debit cards in the world... but I think we will die trying. Without any real value in the system at least... why would visa/banks/anybody even look at us when the average value of the entire currency is only a few million bucks?

Try it. Unless it's obviously 10x the car's value or something... they'll tell you to take it to a bank first.

Even if it was 10x the car's value. How would a car dealership know it was real 24k gold?

Sorry for the double posts guys... But I am no good with multi-quote.

I don't believe that circumventing government taxes is going to help our cause at all. In fact I think it will be our downfall.

If your government charges too high of a tax bracket or other ridiculous fees there are already ways around this.

I like your quip, but.... That's all it is, a quip.

Horse breeders did not work on fractions of a percent.

And...

This isn't the 1800s.