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>> Who is buying goods or services using bitcoins? Anyone? That is just because nobody wants to sell something using a mega-volatile "currency", unless they wan

>> Who is buying goods or services using bitcoins? Anyone? That is just because nobody wants to sell something using a mega-volatile "currency", unless they want to speculate... There's some truth to that in terms of merchant acceptance of BTC not being widespread (even though from a merchant perspective BTC is very attractive compared to regular methods of payments). That said - couple of comments. 1. All of the "enterprise" type BTC payment acceptance systems that I'm aware of end up with fiat currency transferred to merchant's bank. They typically don't keep BTC balance. So the "speculation" point isn't really valid. 2. This ^^^ is one of the biggest hurdles in the way of a more widespread BTC acceptance. Banks are very suspicious of BTC-originating TXs for various reasons (AML, regulatory compliance etc) so it's not an easy thing to set up an end-to-end payment acceptance flow with BTC from that perspective.

nucatus 9y ago
All these merchants are using a spot rate of the BTC to dollars or other traditional, universally accepted currencies. They are not using the BTC to price their goods and services, but they use the BTC as an extra form of payment. At the end of the day, those BTC are exchanged into dollars, or even right away, making the the dollar the de-facto currency you used for purchasing the goods or services.
PeterisP 9y ago
If they'd keep BTC balance, it wouldn't ease up any hurdles - the AML&other compliance issues aren't set by banks, but by regulations which apply to everyone doing significant amounts of trade. If the merchant receives the funds in a fiat currency account in a bank, then the bank worries about AML and related issues so that the merchant wouldn't have to do that - receiving money to a regulated financial institution exempts your business from most of these regulations, but if merchants such as NewEgg, Expedia, CheapAir and others would accept BTC "directly", then the same rules as for cash transaction would apply, namely, they are responsible for ensuring that high value transactions or repeated low value transactions that add up to a lot of value cannot be anonymous, they become responsible from enforcing KYC (know your customer) requirements, they become responsible for any laundering done through their channel if someone finds a way to do this, etc. The only way how a legitimate business can deal with cryptocurrency (or cash) in large volumes is if they can ensure that the expected benefits of cryptocurrency (unrestricted ability of anonymous/pseudonymous trade) don't get used. The only high-value goods that get sold/bought with BTC are illegal items. The regulations don't affect selling coffee for BTC (but high transaction fees do), but if you want to do serious transactions - transfer wealth, buy lots of electronics, cars or real estate, settle financial deals or stock purchases - then that won't work with anonymous cryptocurrency unless you have appropriate paperwork documenting how you got it, or are ready to pay extra tax (you know that if you bought BTC for $10/coin and sell it for $1000/coin, then the difference is taxable income, right?). It's the same manner as allowing your customers to pay for stuff with a briefcase of cash - you can do that, but you'd need to report the transaction, identify the customer, and that customer would either have a clear source for that briefcase of cash or would have a talk with IRS.
- ChemicalWarfare 9y ago
  >> If they'd keep BTC balance, it wouldn't ease up any hurdles That's the thing - they don't want to keep BTC balance which means merchants or their payment processors have to deal with the banks who are very reluctant to deal with BTC-originating payments which is a pretty significant obstacle in the way of BTC payments becoming more mainstream.

nucatus 9y ago

All these merchants are using a spot rate of the BTC to dollars or other traditional, universally accepted currencies. They are not using the BTC to price their goods and services, but they use the BTC as an extra form of payment. At the end of the day, those BTC are exchanged into dollars, or even right away, making the the dollar the de-facto currency you used for purchasing the goods or services.

PeterisP 9y ago

If they'd keep BTC balance, it wouldn't ease up any hurdles - the AML&other compliance issues aren't set by banks, but by regulations which apply to everyone doing significant amounts of trade. If the merchant receives the funds in a fiat currency account in a bank, then the bank worries about AML and related issues so that the merchant wouldn't have to do that - receiving money to a regulated financial institution exempts your business from most of these regulations, but if merchants such as NewEgg, Expedia, CheapAir and others would accept BTC "directly", then the same rules as for cash transaction would apply, namely, they are responsible for ensuring that high value transactions or repeated low value transactions that add up to a lot of value cannot be anonymous, they become responsible from enforcing KYC (know your customer) requirements, they become responsible for any laundering done through their channel if someone finds a way to do this, etc. The only way how a legitimate business can deal with cryptocurrency (or cash) in large volumes is if they can ensure that the expected benefits of cryptocurrency (unrestricted ability of anonymous/pseudonymous trade) don't get used. The only high-value goods that get sold/bought with BTC are illegal items. The regulations don't affect selling coffee for BTC (but high transaction fees do), but if you want to do serious transactions - transfer wealth, buy lots of electronics, cars or real estate, settle financial deals or stock purchases - then that won't work with anonymous cryptocurrency unless you have appropriate paperwork documenting how you got it, or are ready to pay extra tax (you know that if you bought BTC for $10/coin and sell it for $1000/coin, then the difference is taxable income, right?). It's the same manner as allowing your customers to pay for stuff with a briefcase of cash - you can do that, but you'd need to report the transaction, identify the customer, and that customer would either have a clear source for that briefcase of cash or would have a talk with IRS.

ChemicalWarfare 9y ago
>> If they'd keep BTC balance, it wouldn't ease up any hurdles That's the thing - they don't want to keep BTC balance which means merchants or their payment processors have to deal with the banks who are very reluctant to deal with BTC-originating payments which is a pretty significant obstacle in the way of BTC payments becoming more mainstream.