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If you use a service like BitPay, which most BitCoin merchants too, you declare your price in dollars and the API uses the current exchange rate to convert it t

by Aqueous 13y ago

If you use a service like BitPay, which most BitCoin merchants too, you declare your price in dollars and the API uses the current exchange rate to convert it to BitCoin, minute-by-minute. The prices float up and down with the currency, so pricing is largely a non-problem. It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace. Why wouldn't you want to sell something for x BTC today when that amount could be worth twice as much tomorrow? For the same reason it doesn't make a whole lot of sense to spend a BitCoin. Eventually the currency will level out when the incentive to spend equalizes with the incentive to receive. This might not happen for a while as long as speculation remains the predominant driving force.

patmcc 13y ago
>>It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace. Why wouldn't you want to sell something for x BTC today when that amount could be worth twice as much tomorrow? By this logic you should put all your available cash into bitcoins right now. Are you? If not, why not?
- Aqueous 13y ago
  I don't put all of my money into BitCoin right now for the same reason I don't put it into any other promising investment. The simple answer is that I don't know everything and something could come out of left field tomorrow and demolish BitCoin's value. A bug in the software, more overbearing government regulation, some government in the world (not the US, I don't think) banning BitCoin, etc.... I'm betting that this won't happen which is why I have as much as I do in BitCoin right now.
trekky1700 13y ago
If you're valuing everything in dollars, setting your price in dollars, and converting to and from dollars, why not just use dollars. I think this is the leap BitCoin is yet to make. When we no longer have to convert it and compare it to dollars. It has loads of benefits over using the dollar, but a lot of those benefits are lost the second you're having it exchanged. For instance, if I wanted to use bitcoin for contracting, my clients would have to convert their dollars into bitcoins, then I'd accept the bitcoins smoothly and easily, and then I'd have to exchange them (sell them) back for dollars to buy groceries and pay for the bus. Whereas right now, I get an Interac e-transfer and in less than 30 seconds I have money I can go to the store with, and it cost the sender only a dollar in fees. Sure, it's taxable, but the second I convert it from bit coins it's trackable anyway. I definitely think this is a model we're going to see a lot more of in the future, but Bitcoin with it's thousand dollar and rising valuation and constant fluctuations is very difficult to get behind and actively use. And with the number of people, just of the people I know, who bought in hoping to cash out, there might be quite the tumble on the way. Who knows though, it will be interesting to watch, that's for sure.
- hnha 13y ago
  I read a great comment at a local forum earlier along the lines of: No one wants bitcoin, everyone wants ... to exchange their bitcoins for as many dollars as possible.
  - waps 13y ago
    Exactly. For the moment it's mostly cementing USD's position further.
- stuhood 13y ago
  Because bitcoin acts as a proxy between the buyer's local currency and the seller's local currency, regardless of what those are. Particularly in the case of digital goods, this opens a buyer up to accepting business from anywhere in the world.
- mrb 13y ago
  "why not just use dollars" Simple: as a merchant, I really like Bitcoin because it reduces fraud to absolutely zero for me (transactions are irreversible)!
  - psionski 13y ago
    Also, if you're selling stuff on the Internet, you can finally accept payments from countries that didn't receive Visa's "blessing".
kandalf 13y ago
I would argue that it doesn't make sense for the average merchant to keep holdings in BitCoin. Most merchants have no desire to take on currency risk (http://en.wikipedia.org/wiki/Foreign_exchange_risk http://en.wikipedia.org/wiki/Foreign_exchange_risk). They're not in the business of speculating, they're in the business of selling things.
interstitial 13y ago
You can also pay in tulips.
- reginaldjcooper 13y ago
  Nice observation. Yes bitcoins are exactly like tulips but moreso. In fact, in the future, bitcoin prices will drop below zero and these idiots will have to pay others to get rid of them. I'm looking forward to the expressions on their dumb faces when they realize they are in a pyramid scheme balanced on top of a bubble resting on top of a bridge over some swampland in Florida.
  - Aqueous 13y ago
    That would probably be the case if any of us were stupid enough to put our retirement savings or anything that we critically need into BitCoin. The smart money is on putting an early investment in, waiting till it doubles or triples then pulling the initial investment out. That way you literally can't lose - at the very worst you break even. Most people have put a quite expendable amount of money into BitCoin. Even without pulling it out, I could stand to lose my initial investment completely right now and not break a drop of sweat.
    - interstitial 13y ago
      Well, you are doing it right. We know from all bubbles past, though, plenty do it wrong -- all in and even all in on credit cards.
dinkumthinkum 13y ago
Do you not see how this makes bitcoin irrelevant. What do the merchants do after they take the payment, now they have worthless bitcoins.
- weavejester 13y ago
  Most Bitcoin payment processors provide merchants with direct bank deposits. It's really little different to using a credit card processor, except the rates are cheaper and the audience smaller.

by Aqueous 13y ago

patmcc 13y ago

>>It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace. Why wouldn't you want to sell something for x BTC today when that amount could be worth twice as much tomorrow? By this logic you should put all your available cash into bitcoins right now. Are you? If not, why not?

Aqueous 13y ago
I don't put all of my money into BitCoin right now for the same reason I don't put it into any other promising investment. The simple answer is that I don't know everything and something could come out of left field tomorrow and demolish BitCoin's value. A bug in the software, more overbearing government regulation, some government in the world (not the US, I don't think) banning BitCoin, etc.... I'm betting that this won't happen which is why I have as much as I do in BitCoin right now.

trekky1700 13y ago

If you're valuing everything in dollars, setting your price in dollars, and converting to and from dollars, why not just use dollars. I think this is the leap BitCoin is yet to make. When we no longer have to convert it and compare it to dollars. It has loads of benefits over using the dollar, but a lot of those benefits are lost the second you're having it exchanged. For instance, if I wanted to use bitcoin for contracting, my clients would have to convert their dollars into bitcoins, then I'd accept the bitcoins smoothly and easily, and then I'd have to exchange them (sell them) back for dollars to buy groceries and pay for the bus. Whereas right now, I get an Interac e-transfer and in less than 30 seconds I have money I can go to the store with, and it cost the sender only a dollar in fees. Sure, it's taxable, but the second I convert it from bit coins it's trackable anyway. I definitely think this is a model we're going to see a lot more of in the future, but Bitcoin with it's thousand dollar and rising valuation and constant fluctuations is very difficult to get behind and actively use. And with the number of people, just of the people I know, who bought in hoping to cash out, there might be quite the tumble on the way. Who knows though, it will be interesting to watch, that's for sure.

hnha 13y ago
I read a great comment at a local forum earlier along the lines of: No one wants bitcoin, everyone wants ... to exchange their bitcoins for as many dollars as possible.
- waps 13y ago
  Exactly. For the moment it's mostly cementing USD's position further.
stuhood 13y ago
Because bitcoin acts as a proxy between the buyer's local currency and the seller's local currency, regardless of what those are. Particularly in the case of digital goods, this opens a buyer up to accepting business from anywhere in the world.
mrb 13y ago
"why not just use dollars" Simple: as a merchant, I really like Bitcoin because it reduces fraud to absolutely zero for me (transactions are irreversible)!
- psionski 13y ago
  Also, if you're selling stuff on the Internet, you can finally accept payments from countries that didn't receive Visa's "blessing".

kandalf 13y ago

I would argue that it doesn't make sense for the average merchant to keep holdings in BitCoin. Most merchants have no desire to take on currency risk (http://en.wikipedia.org/wiki/Foreign_exchange_risk http://en.wikipedia.org/wiki/Foreign_exchange_risk). They're not in the business of speculating, they're in the business of selling things.

interstitial 13y ago

You can also pay in tulips.

reginaldjcooper 13y ago
Nice observation. Yes bitcoins are exactly like tulips but moreso. In fact, in the future, bitcoin prices will drop below zero and these idiots will have to pay others to get rid of them. I'm looking forward to the expressions on their dumb faces when they realize they are in a pyramid scheme balanced on top of a bubble resting on top of a bridge over some swampland in Florida.
- Aqueous 13y ago
  That would probably be the case if any of us were stupid enough to put our retirement savings or anything that we critically need into BitCoin. The smart money is on putting an early investment in, waiting till it doubles or triples then pulling the initial investment out. That way you literally can't lose - at the very worst you break even. Most people have put a quite expendable amount of money into BitCoin. Even without pulling it out, I could stand to lose my initial investment completely right now and not break a drop of sweat.
  - interstitial 13y ago
    Well, you are doing it right. We know from all bubbles past, though, plenty do it wrong -- all in and even all in on credit cards.

dinkumthinkum 13y ago

Do you not see how this makes bitcoin irrelevant. What do the merchants do after they take the payment, now they have worthless bitcoins.

weavejester 13y ago
Most Bitcoin payment processors provide merchants with direct bank deposits. It's really little different to using a credit card processor, except the rates are cheaper and the audience smaller.