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I'm sure this will go very differently from the last cryptocurrency bubble, where a whole bunch of merchants started accepting them, just to realize half a year

by ATsch 5y ago

I'm sure this will go very differently from the last cryptocurrency bubble, where a whole bunch of merchants started accepting them, just to realize half a year later that beneath the hype, nobody was really interested in using these so-called currencies as an actual currency and quietly shelved it.

TomGullen 5y ago
Used to be a big Bitcoin advocate, we accepted it on our website but removed it due to it just not being worth it for the odd sale with the extra accounting required. Bitcoins original goal was to be an online currency, this has not transpired nor do I think it ever will which is why I (unfortunately!) got out. Talking to random people on the street the main feeling I'm getting now is as some sort of gold analogue, which I also think is doomed to fail. I just don't see Bitcoin growing out of it's main use which is criminality and unregulated gambling.
- rufusroflpunch 5y ago
  I think you're not correct, your timescale is just too short. Monetization happens in three phases, roughly. First, it is the store-of-value phase. Anticipation of future value, based on past and present value, will cause people to hoard a good as a savings technique. Bitcoin is still in this phase. Usually when you say this on the internet, someone will come in and say "Oh, but Bitcoin's volatility makes it a poor store-of-value!" But again, it's short-sighted. Looking at the 200 WMA will easily demonstrate the store-of-value aspect of Bitcoin. Second phase is "medium of exchange". This is the thing people always point to and say that Bitcoin has failed. But it hasn't failed, it just hasn't reached it yet. This phase is started when a good becomes valuable enough that merchants begin to demand or incentivize payments in the good. As you mentioned, there are accounting, tax and technological impediments currently that make it less convenient to accept Bitcoin payments. These will be overcome with time, however, as the impediments are eliminated, or the value of Bitcoin makes it economically worthwhile to transact anyway. The final phase will be "unit of account". Once a Bitcoin circular economy starts, people will begin to think of prices in Bitcoin, instead of dollars, euros, etc. This may sound far-fetched to skeptics, but I consider this to be a near guarantee to happen eventually. Bitcoin's network effects and unique balance of incentives more or less ensures that it can't be killed, that everyone is better off participating in the network or they will be worse off in the long run.
- ATsch 5y ago
  Indeed this is by design. Cryptocurrencies are deflationary, which means that it is always better to hold your coins than to spend them. They must be deflationary as there is no reason to mine them or buy in early other than the promise of future gains. Working well as an investment is antithetical to working well as a currency.

by ATsch 5y ago

TomGullen 5y ago

Used to be a big Bitcoin advocate, we accepted it on our website but removed it due to it just not being worth it for the odd sale with the extra accounting required. Bitcoins original goal was to be an online currency, this has not transpired nor do I think it ever will which is why I (unfortunately!) got out. Talking to random people on the street the main feeling I'm getting now is as some sort of gold analogue, which I also think is doomed to fail. I just don't see Bitcoin growing out of it's main use which is criminality and unregulated gambling.

rufusroflpunch 5y ago
I think you're not correct, your timescale is just too short. Monetization happens in three phases, roughly. First, it is the store-of-value phase. Anticipation of future value, based on past and present value, will cause people to hoard a good as a savings technique. Bitcoin is still in this phase. Usually when you say this on the internet, someone will come in and say "Oh, but Bitcoin's volatility makes it a poor store-of-value!" But again, it's short-sighted. Looking at the 200 WMA will easily demonstrate the store-of-value aspect of Bitcoin. Second phase is "medium of exchange". This is the thing people always point to and say that Bitcoin has failed. But it hasn't failed, it just hasn't reached it yet. This phase is started when a good becomes valuable enough that merchants begin to demand or incentivize payments in the good. As you mentioned, there are accounting, tax and technological impediments currently that make it less convenient to accept Bitcoin payments. These will be overcome with time, however, as the impediments are eliminated, or the value of Bitcoin makes it economically worthwhile to transact anyway. The final phase will be "unit of account". Once a Bitcoin circular economy starts, people will begin to think of prices in Bitcoin, instead of dollars, euros, etc. This may sound far-fetched to skeptics, but I consider this to be a near guarantee to happen eventually. Bitcoin's network effects and unique balance of incentives more or less ensures that it can't be killed, that everyone is better off participating in the network or they will be worse off in the long run.
ATsch 5y ago
Indeed this is by design. Cryptocurrencies are deflationary, which means that it is always better to hold your coins than to spend them. They must be deflationary as there is no reason to mine them or buy in early other than the promise of future gains. Working well as an investment is antithetical to working well as a currency.