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A Bitcoin IPO such as Coinbase could trigger mainstream merchant adoption

7 points by bernardlunn 12y ago

phodo 12y ago
I agree with OP's point. To add to it, I would like to point out that as it stands - in the world of the "banked" (as opposed to the "unbanked") - bitcoin, the currency, is a nice to have for consumers. And you need the consumer side to work... not just merchants. Bitcoin is more advantageous to merchants, in the form of transaction fee savings. An IPO will generate interest and adoption across merchants, but beyond the novelty of buying something in bitcoin, consumers want to "show me da money". They need to be shown the savings [ Hopefully, by that time, we will also have ease-of-use addressed, either via coinbase /startups/ mobile apps / hardware wallets (e.g. case). Hopefully we will also have less volatility yielding more consumers to think of btc as a short-medium term store of value ] For the "banked", the single digit percentage transaction fee savings need to be passed on, en masse, from merchant to consumer at the point of sale in the form of bitcoin discounts. So if I want to buy a flat screen tv from best buy, it would cost me $699 using credit, but cost me $679 equivalent for btc, and in a manner that does not make the merchant lose money. If the merchant chooses to convert to credit on the back end then naturally those savings cannot occur since the transaction fees need to be paid to the credit card guys. What about cash/fiat? Cash/fiat payments be priced at 699 or 679. For the short run, they should stay at 699, so there is an easy, quantifiable net benefit to consumers when using bitcoin. In the long run, once btc is diffused in society, the price of the flat screen tv via cash/fiat will either stay at the 699 price, or cash/fiat pricing will move down to the 679 price to match btc. Probably the former. There might be other "externalities" at play here that make the value prop to consumers beyond price more compelling: convenience, controlled spending (via smart contracts parent to child), etc. For the "unbanked" there is a broader set of value props for the average consumer in those societies, e.g. zero-low% remittence, access, making them "banked", etc. tl;dr: to really boost adoption with consumers, consumer-side savings need to be considered when buying with bitcoin.

7 points by bernardlunn 12y ago

phodo 12y ago

I agree with OP's point. To add to it, I would like to point out that as it stands - in the world of the "banked" (as opposed to the "unbanked") - bitcoin, the currency, is a nice to have for consumers. And you need the consumer side to work... not just merchants. Bitcoin is more advantageous to merchants, in the form of transaction fee savings. An IPO will generate interest and adoption across merchants, but beyond the novelty of buying something in bitcoin, consumers want to "show me da money". They need to be shown the savings [ Hopefully, by that time, we will also have ease-of-use addressed, either via coinbase /startups/ mobile apps / hardware wallets (e.g. case). Hopefully we will also have less volatility yielding more consumers to think of btc as a short-medium term store of value ] For the "banked", the single digit percentage transaction fee savings need to be passed on, en masse, from merchant to consumer at the point of sale in the form of bitcoin discounts. So if I want to buy a flat screen tv from best buy, it would cost me $699 using credit, but cost me $679 equivalent for btc, and in a manner that does not make the merchant lose money. If the merchant chooses to convert to credit on the back end then naturally those savings cannot occur since the transaction fees need to be paid to the credit card guys. What about cash/fiat? Cash/fiat payments be priced at 699 or 679. For the short run, they should stay at 699, so there is an easy, quantifiable net benefit to consumers when using bitcoin. In the long run, once btc is diffused in society, the price of the flat screen tv via cash/fiat will either stay at the 699 price, or cash/fiat pricing will move down to the 679 price to match btc. Probably the former. There might be other "externalities" at play here that make the value prop to consumers beyond price more compelling: convenience, controlled spending (via smart contracts parent to child), etc. For the "unbanked" there is a broader set of value props for the average consumer in those societies, e.g. zero-low% remittence, access, making them "banked", etc. tl;dr: to really boost adoption with consumers, consumer-side savings need to be considered when buying with bitcoin.