4 ms·

You don't generally hold onto Bitcoin when you take it as payment, you sell it immediately, so no, Microsoft was not "investing" in Bitcoin by taking it as a pa

You don't generally hold onto Bitcoin when you take it as payment, you sell it immediately, so no, Microsoft was not "investing" in Bitcoin by taking it as a payment for their products and they're not shorting Bitcoin either. The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer.

fortythirteen 9y ago
> The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer. Absolutely false. Speculation has driven the value of bitcoin so high that the average transaction fee, at the time of writing this, is about $31. Buying a $59.99 game for Xbox One will cost you $90 in Bitcoin. That is an individual hash, that must be consolidated into a larger wallet for MS to sell off. Consolidating that hash will cost a transaction fee, meaning that, on a $60 game, MS will lose over 50% of the gross profit in a transaction fee. That alone makes it not worth it. The only thing that would allow them to retain a higher percentage of the transaction would be for the Bitcoin bubble to burst, making that whole $60 worthless. Bitcoin could be wholly volatile within it's 2016 prices and MS would be just fine. It is directly because of it's exploded, overpriced value that it's untenable as an actual currency.
- debaserab2 9y ago
  I have a question as a relatively uninformed spectator: where do these transaction fees go and why do they have to be so high?
  - rlanday 9y ago
    A miner that successfully mines a block collects all the transaction fees for transactions in the block. They are high right now because many people want to send transactions, but blocks are capped at 1 MB, limiting the number of transactions that can fit into one block. Blocks are produced approximately once every ten minutes, so a transaction that contains a fee that’s too low will constantly get passed over in favor of higher-fee transactions.
    - deleted 9y ago
      [deleted]
  - fortythirteen 9y ago
    > where do these transaction fees go and why do they have to be so high? They go to the miners who verify transactions. They're high because of the combination of the overall ridiculous price of bitcoin (since the miner gets paid in bitcoin) and the amount of computing power required to successfully mine. The latter means that miners are only willing to verify if the return over time will turn them a profit on the cost of hardware.
- deleted 9y ago
  [deleted]

fortythirteen 9y ago

> The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer. Absolutely false. Speculation has driven the value of bitcoin so high that the average transaction fee, at the time of writing this, is about $31. Buying a $59.99 game for Xbox One will cost you $90 in Bitcoin. That is an individual hash, that must be consolidated into a larger wallet for MS to sell off. Consolidating that hash will cost a transaction fee, meaning that, on a $60 game, MS will lose over 50% of the gross profit in a transaction fee. That alone makes it not worth it. The only thing that would allow them to retain a higher percentage of the transaction would be for the Bitcoin bubble to burst, making that whole $60 worthless. Bitcoin could be wholly volatile within it's 2016 prices and MS would be just fine. It is directly because of it's exploded, overpriced value that it's untenable as an actual currency.

debaserab2 9y ago
I have a question as a relatively uninformed spectator: where do these transaction fees go and why do they have to be so high?
- rlanday 9y ago
  A miner that successfully mines a block collects all the transaction fees for transactions in the block. They are high right now because many people want to send transactions, but blocks are capped at 1 MB, limiting the number of transactions that can fit into one block. Blocks are produced approximately once every ten minutes, so a transaction that contains a fee that’s too low will constantly get passed over in favor of higher-fee transactions.
  - deleted 9y ago
    [deleted]
- fortythirteen 9y ago
  > where do these transaction fees go and why do they have to be so high? They go to the miners who verify transactions. They're high because of the combination of the overall ridiculous price of bitcoin (since the miner gets paid in bitcoin) and the amount of computing power required to successfully mine. The latter means that miners are only willing to verify if the return over time will turn them a profit on the cost of hardware.
deleted 9y ago
[deleted]