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Bitcoin doesn't have to replace the dollar, it just has to replace Paypal and some credit card business.
by pkulak 16y ago
Bitcoin doesn't have to replace the dollar, it just has to replace Paypal and some credit card business.
- mbreese 16y agoBut Paypal and credit cards are based on the USD, or whatever the local currency is. So, in effect, it does have to beat the dollar. Bitcoin must be advantageous enough so that people will want to use that over the standard local currency (e.g. USD). Because, you're assuming that you'd have to convert USD to Bitcoin and then spend the Bitcoins. If you received Bitcoins, you'd need to then convert them back out as dollars. When you do a credit card transaction, you don't convert the money to a different currency. With Paypal, you have the option to receive money and then spend it without adding funds or incurring transaction fees, but how many people really do that? But, if the system is big enough, you'd be able to limit the USD <-> Bitcoin conversions and transact more of your business in Bitcoins. However, in order for that to happen, it has a lot of currency inertia to overcome.
- pkulak 16y agoIf Amazon took bitcoin, and I could use it to pay people on Craigslist, and maybe some other little things like that, I would probably just keep a bitcoin account around with a useable balance. If it got low I'd fill it with USD, and if I needed some funds out of it I'd take some USD out. But I don't think I'd need to do a USD conversion for every single little transaction. Think about if the NYT decided to charge a half a penny to read an article? There's no way for them to collect that right now (it's too small), but bitcoin would work for that, and I sure wouldn't be converting half a cent USD every time I read an article.