What do you think of adding a low% of crypto allocation

[LateStarter]

Please explain how and why Bitcoin collapses “when the scheme runs out of new entrants”.
You seem to be describing a Ponzi scheme. Contrary to popular bullshit, Bitcoin is very clearly not a Ponzi scheme - Bitcoin has no requirement for an infinite supply of new entrants.
Some like to describe Bitcoin as a ‘distributed Ponzi scheme’. As far as I can tell, this term is meaningless and only serves as a vehicle to smuggle the ‘Ponzi’ slur into where it doesn’t belong.

I heartily agree.  Nothing about Bitcoin meets any definition of a Ponzi scheme.   It is not helpful to interject that term in regards to Bitcoin and I wish people would stop doing it.  I also wish people would stop saying the price will go to zero, because there is scant evidence that it will go to zero because some people clearly want to own it. 

Bitcoin's price--like all commodities--is set by supply and demand.  The more people who want it, the more the price goes up, and vice versa.  I've stated this many times on this board over the course of the years.  But supply and demand means a rising Bitcoin price requires new entrants. 

However, the price cannot go up indefinitely.  It will top out because the world population is finite. When the number of new buyers tops out the price will stop rising.  When we've discussed Bitcoin over the years, the pro argument always comes down to "line go up."  And if you don't buy "have fun staying poor."   Sure, there are some use cases around the margins.  Like if you live in Zimbabwe or some such.  But that's not most people and that's not the reason most people buy Bitcoin.  Most people--and by "most people" I mean essentially everyone--buy Bitcoin because they believe the price will go up. 

At some point, the number of people who want to own Bitcoin will reach a peak.  Mathmatically, it must.

I heartily agree. The Bitcoin price (purchasing power) will level off as we approach maximum adoption, and probably just track global GDP.

Yes, most current Bitcoiners are in it for big prospective gains (and the revolution) - we’re still in the wild times of early adoption. As we progress and things settle down – lower price rises, lower volatility, wider recognition, understanding and acceptance, etc. - it will appeal to a progressively wider audience. Future Bitcoiners will be ordinary folks just choosing better money as a store_of_value, medium_of_exchange and unit_of_account.

[GuitarStv]

The Bitcoin price (purchasing power) will level off as we approach maximum adoption, and probably just track global GDP.

One selling point of bitcoin that keeps getting yelled at me is that it is permanently limited in number.  That means that purchasing power should never level off, it will always be deflationary.  How could it ever track global GDP?  You are expecting global GDP to never increase?

Future Bitcoiners will be ordinary folks just choosing better money as a store_of_value, medium_of_exchange and unit_of_account.

Why though?

Bitcoin is more expensive and less convenient to use than any other form of currency.  It has never really caught on as a medium of exchange and unit of account for this reason.  But let's say there's a magical unspecified thing that happens at some point that reverses that.  By design, bitcoin will always be deflationary - so spending it will forever be a bad idea.  So why would people choose to spend it when it will certainly be worth more later?

The best you can hope for is use as a store of value, sort of like gold . . . if there were never going to be any more gold mines.  And if gold had zero intrinsic or utility value.

[blue_green_sparks]

I guess I am still hawk-tuah-ish on crypto. I thought I wanted to acquire some a while back (and wow, it would have done very well), but my eyebrows started twitching and I got a sudden pain in my chest.

[LateStarter]

The Bitcoin price (purchasing power) will level off as we approach maximum adoption, and probably just track global GDP.

One selling point of bitcoin that keeps getting yelled at me is that it is permanently limited in number.  That means that purchasing power should never level off, it will always be deflationary.  How could it ever track global GDP?  You are expecting global GDP to never increase?

I didn’t mean flat, just more level than now. Ultimately = GDP growth.
People store value in Bitcoin. They also invest and produce and earn, and then store more value in Bitcoin.

Future Bitcoiners will be ordinary folks just choosing better money as a store_of_value, medium_of_exchange and unit_of_account.

Why though?
Bitcoin is more expensive and less convenient to use than any other form of currency.  It has never really caught on as a medium of exchange and unit of account for this reason.

Bitcoin via eg. lightning is not more expensive or less convenient to use than any other form of currency. And it’s getting better every day.

It’s madness to say it’s never really caught on – as though it’s been around for ever. Bitcoin is very different to what people are used to - it’s difficult to understand – it’s counterintuitive - the vast vast majority don’t know a damned thing about it . . . . yet. Adoption is low and slow, but more each day and maybe accelerating, but it's still going to take time.
Compare early 1990’s internet. Clunky, hard to use, niche, mostly useless, most will never need it, what the hell is it even ??? Never really caught on – until it did.

But let's say there's a magical unspecified thing that happens at some point that reverses that.  By design, bitcoin will always be deflationary - so spending it will forever be a bad idea.  So why would people choose to spend it when it will certainly be worth more later?

Because that’s all that, or most of what, many of us will have. Why hold any debasing fiat ?

[Telecaster]

I sympathize with Bitcoin not having the same characteristics of USD or the Euro, but according to the dictionary that battle has already been lost.

"cryptocurrency - noun

any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions"
https://www.merriam-webster.com/dictionary/cryptocurrency

Now look at the definition of "currency."

something (as pieces of stamped metal or printed paper) customarily and legally used as a medium of exchange, a measure of value, or a means of payment

If we look at the most popular crypto, Bitcoin, it is not customarily used as a medium of exchange.  It is never used as a measure of value (nothing is priced in Bitcoin).  And only extremely rarely is it used as a means of payment.  In almost all cases, using Bitcoin requires an app to convert Bitcoin to USD (or other currency) which is then used to complete the transaction.

The most charitable view is that Bitcoin is currency adjacent.  It kinda sorta meets the definition of currency, but not really.

LOTS of people's crypto investments have gone to zero, because it is so easy to steal and because many of the unregulated "services" like wallets and exchanges probably engage in self-hacking insider jobs. Remember when FTX was recommended as one of the legit services?

The quoted price can keep going up, even as many people lose their entire investments. That's a key difference in how we think about mainstream investments as opposed to crypto. When's the last time you had a bond, or a share of stock, stolen from your portfolio at Fidelity, Schwab, or Vanguard? That kind of thing happens all the time in crypto-world, and essentially sustains crypto-world.

In context, I was talking about Bitcoin specifically, not crypto in general.  IMO, only a total idiot would keep their crypto on an exchange.  That's just stupid on a huge number of levels. 

But you can self-custody Bitcoin, and that's the general recommendation in the community ("not your keys, not your coins").   The Bitcoin community has recycled a lot of goldbug arguments, and added a few new ones.   Just like goldbugs, Bitcoiners, some of them at least, are true believers.  A twist is that lots of Bitcoiners are just there for the price action.   The next sell-off (and there is always a sell-off around the corner) will shake out the weak hands but the true believers will remain.

I don't like to use the Beanie Baby comparison because it sounds dismissive, but in this specific case it is applicable because even after the big crash, there is still a robust Beanie Baby market on eBaby.   Top Beanies still go for thousands of dollars.   So even if most of the people hoping to get in on the price action were shaken out, a number still remain even to this day.  So no, I don't think Bitcoin is going to zero. 

[Telecaster]

Adoption is low and slow, but more each day and maybe accelerating, but it's still going to take time.
Compare early 1990’s internet. Clunky, hard to use, niche, mostly useless, most will never need it, what the hell is it even ??? Never really caught on – until it did.

This analogy comes up a lot, and boy I can't disagree more with it.   I was using the Internet in the early 1990s and it was both incredibly exciting and useful.  Usenet was around back then, and it was a great resource.  And there was file sharing (the original Doom game was shareware) and of course email.   I was even using it for work back then, as we needed access to government databases (which were an overnight download), but it beat a physical visit to the agencies.  We thought the Internet was great and could see tons of potential.  Obviously, lots of things needed to happen to realize that potential, but they did happen, and in fairly short order too.   The web browser became widely available in about 1994 IIRC, and Amazon and e-commerce were right behind.   

Bitcoin was released as a fully developed app, ready to go, in 2008 which included all of the virtuous features of Bitcoin including scarcity, self-custody, and peer-to-peer transactions.   All of the innovations since then have been to remove the virtuous features, for example centralized transactions and holding on exchanges.   In other words, to make to it more like the traditional financial system.   That leaves scarcity which is just a bet on price action.   

[MustacheAndaHalf]

Glenstache -

While Bitcoin has lived on, there is a survivorship bias. Many, many cryptocurrencies have also failed for various reasons. Maybe the survivorship bias is what gives it the psychological validity for a currency (any currency, really) to be viewed as a store of value. Maybe we just have not seen enough time yet for what will replace it. Currencies that are used for regular transactions seem to work best for the broader economy when their value is relatively stable rather than a source of speculation in and of themselves. Currency is an abstract substitute for barter. Currency distorts the economy if the value relative to bartered items shifts significantly betwee potential transactions regardless of if that shift is inflationary or deflationary.

That graph treats "Joke or No Purpose" as a collapse.  The problem is that joke coins have not collapsed, like DOGE (#7) and SHIB (#12).  Those coins haven't collapsed, and were both started as jokes.  Their "joke" category needs an asterisk.

Bitcoin has a futures market, and as of this year, many ETFs directly tracking Bitcoin.  Maybe Ethereum follows later, but for now Bitcoin's status is unique.  It is the largest and oldest cryptocurrency.  It is not vying for survival with other cryptocurrencies - I'm not seeing the case for survival bias.

Is this a "crypto" allocation generally or a "BTC" allocation specifically? There are plenty of people throwing money at non-BTC crypto assets with wildly different results. BTC seems likely to be around for the near future with a non-zero value, but that is not universally true for other crypto assets and I think there is still a case for survivorship bias in the crypto space as a whole. I understand that there are a number of other financial instruments that are tracking BTC which gives it an air of legitimacy and sense of acceptance by the financial power players. This is great for BTC. It remains a highly volatile space and all the caveats regarding market timing and warnings that past gains do not predict future performance still apply.

CoinMarketCap lists 10,313 cryptocurrencies.  Binance (389 coins), ByBit (520 coins) and Coinbase (240 coins) only support a tiny fraction of the total - even though supporting more cryptocurrencies is an important feature.  That leaves 95% of cryptocurrencies you can't buy on the three largest crypto exchanges.  If we're discussing what customers can buy, do the other 9800 coins matter?

BTC and ETH are available on every crypto exchange, and are the largest by trading volume and market cap (ignoring USDT, which is the crypto equivalent of USD).  Someone fearing survivorship bias could invest in those two.  In the case of Bitcoin, someone can buy any of a number of ETFs (like IBIT, by iShares).  With Ethereum, I'm only aware of ETHE, but regulations could change.

The top 10 coins on CoinMarketCap contain many coins that have existed for years, and are less likely to collapse.  The one exception is PEPE, which was created in 2023, and I don't know much about it.  Someone wanting to go outside ETH and BTC could buy these on a crypto exchange (and maybe on Robinhood).

I draw the line at the first page on CoinMarketCap, which shows the top 100 coins.  Some of those are riskier and less well known, but that filters out a lot of the problems with the bottom 10,213 coins.
https://coinmarketcap.com/

Just to reiterate, I own zero crypto right now.  I'm not buying or selling anything in this message.  I would rather wait for a stock market crash, which I expect will hammer the price of cryptocurrencies.  Then I can think about buying or not.

[seattlecyclone]

Bitcoin via eg. lightning is not more expensive or less convenient to use than any other form of currency.

That's an interesting assertion. If it were true I would expect that if you look at the average human going around conducting their day-to-day activities, for every potential transaction the person might want/need to do, the other party to the transaction is 1) no more likely to reject an offer of a Bitcoin payment as an offer of payment in the most popular local fiat currency, 2) not going to add any surcharges for Bitcoin use that would not apply to payments in the locally popular fiat currency, and 3) require no more time or human effort for either party to complete the transaction in Bitcoin as in the locally popular fiat currency.

In my particular life and city, we can stop at point #1. Everyone I do business with accepts USD. That is the default, expected currency for all licit transactions. Perhaps a small minority of merchants around here accept BTC in addition to USD, but they don't do a good job of advertising it if so, and I strongly doubt I could go a week offering to pay every bill in BTC and having nobody demand I use USD instead.

Is my area unusual in this regard? Do most humans live in an area where BTC is as likely to be accepted as a fiat currency? I have seen no evidence that this is currently true.

Adoption is low and slow, but more each day and maybe accelerating, but it's still going to take time.
Compare early 1990’s internet. Clunky, hard to use, niche, mostly useless, most will never need it, what the hell is it even ??? Never really caught on – until it did.

This analogy comes up a lot, and boy I can't disagree more with it. I was using the Internet in the early 1990s and it was both incredibly exciting and useful.

+1

I was in elementary school in the early 1990s. I just barely remember the system where if you wanted to discover basically any information you had to go to a library and look for a book about the subject. If the nearest library didn't have detailed enough books on the topic of your interest you had to go to a larger, farther-away library to look at their books (or microfilm, etc.). My parents grew up in that system and my elementary teachers were introducing it as well for early research projects, but even then there were signs that changes were afoot.

During this time my father would occasionally sign up for a free trial of some online service or another (sometimes Prodigy, sometimes AOL, sometimes CompuServe, whatever service bundled a floppy disk with his monthly computing magazine). It was fun to have access to that, and even then you could see some utility from the service, but not enough that my middle-class parents (both with computer science degrees!) saw it worthwhile to maintain a paid subscription.

I remember when the one Mac in my elementary school classroom got access to this service delivered by coaxial cable that had a limited information feed: news articles, weather reports, stock quotes, etc. The ability to have certain up-to-the-minute information available felt truly amazing at the time, even though the UI and breadth of available information were vastly underdeveloped compared to even the early Web that I had in middle school a few years later. I remember our elementary class was tracking the progress of a polar expedition where the explorers somehow transmitted diaries online, and that was really something special.

From there to Facebook was not even ten years. All throughout the process it was obvious that the Internet offered broadly useful capabilities for long-distance information exchange and human connection that were clearly better than other options, and it just kept getting better developed as time went on.

I just don't see Bitcoin comparing favorably to that process. I was around during the early days of Bitcoin and mined a couple BTC with my CPU in 2011 just to see what all the fuss was about. It was an interesting curiosity at the time and if you told me then it had the potential to be as big of an advancement as the Internet was I wouldn't have disagreed too much at the time. But since then...the basic function of the network is the same now as it was 13 years ago. During that whole time people have been hyping up how BTC was the future of money, but it hasn't translated into daily active users in nearly the same way as the Web did. The talk is still a lot more about the potential future than the actual utility at present, and that just wasn't the case 13 years into the Web's existence.

[YttriumNitrate]

Good currencies are boring and don't add additional risk to a transaction. If I'm buying a house, I want to be worried about the quality of the foundation and plumbing rather than whether the currency I'm using will be going up or down 30%.

If bitcoin were to become a good currency, it would need to become boring, and I don't think most of the people holding bitcoin right now want it to become boring. The transition to being a good currency would be interesting though. Would it retain its value after celebrities stop hyping it? Would there be a rush to the door as the current investors cash out to fund the next big investment?

[lifeanon269]

Bitcoin via eg. lightning is not more expensive or less convenient to use than any other form of currency.

That's an interesting assertion. If it were true I would expect that if you look at the average human going around conducting their day-to-day activities, for every potential transaction the person might want/need to do, the other party to the transaction is 1) no more likely to reject an offer of a Bitcoin payment as an offer of payment in the most popular local fiat currency, 2) not going to add any surcharges for Bitcoin use that would not apply to payments in the locally popular fiat currency, and 3) require no more time or human effort for either party to complete the transaction in Bitcoin as in the locally popular fiat currency.

In my particular life and city, we can stop at point #1. Everyone I do business with accepts USD. That is the default, expected currency for all licit transactions. Perhaps a small minority of merchants around here accept BTC in addition to USD, but they don't do a good job of advertising it if so, and I strongly doubt I could go a week offering to pay every bill in BTC and having nobody demand I use USD instead.

Is my area unusual in this regard? Do most humans live in an area where BTC is as likely to be accepted as a fiat currency? I have seen no evidence that this is currently true.

I want to add a point that the biggest hurdle to bitcoin being used for economic transactions and purchasing of goods isn't a technological hurdle. It is a policy hurdle. People and businesses would be far more willing to use bitcoin for economic transactions if it there weren't overly burdensome taxation policies that run against that purpose. The fact that it is treated as a commodity rather than a currency in tax code is what prevents it from being used more as a currency. No one wants to maintain cost basis spreadsheets for every daily purchase they make and calculate their tax liability from all that so they don't run afoul of the IRS. What bitcoin needs in order to be usable as a currency is a change to tax policy to allow it do be used as such.

I conduct bitcoin transactions on a regular basis. I do so over the lightning network and broadcast on-chain. It is extremely easy and have never had any issues with a transaction not going through. I find it far easier to do on my phone as opposed to inputting my CC# to make a payment considering my phone automatically opens my wallet app and I just push a button to send the payment. There are several vendors that accept bitcoin and I choose to make my payment with that rather than CC#. But, until tax policy changes, I just going to exchange bitcoin for dollars a couple times a month and make payments with dollars so that I'm not in tax hell trying to figure out my cost basis for a vast majority of my daily transactions.


I've made this same mistake in semantics as well, but I also want to clarify that bitcoin doesn't need new entrants for it to go up in price. The arbitrary price of bitcoin is a relative exchange rate to a particular currency. If we're talking US dollars, then it is the correlating value between the pair of currencies. Since US dollars are printed ad infinitum, then any scarce asset or commodity can go up in price even if there is no change in the demand of that asset simply because of the devaluation of one side of that trading pair. So the price of bitcoin can absolutely go up relative to the US dollar without additional demand for bitcoin while its economic value stays the same relative to other scarce assets. So it can absolutely be a hedge against inflation in this regard without requiring new entrants or additional demand for bitcoin. This is something that people who scream "ponzi scheme" fail to understand.


Also, I am really curious for those that see bitcoin going to zero, what exactly that scenario looks like to them. A big part of my job as an Information Security professional is risk management. I've been in bitcoin since 2013 and when I first started acquiring bitcoin, I performed quit a bit of risk analysis to try and determine all the potential scenarios I could think of where bitcoin would not be valuable to anyone. That is, it's price reaches $0. At the time, in 2013, I came up with 3 major scenarios that could play out where that was a possibility. Today, out of those scenarios, I don't see any of them even being a remote possibility at this point. So for the naysayers? What exactly are your scenarios? Do those scenarios really prevent you from putting a small allocation into bitcoin know what we know about the macro economic conditions today?

To me, there is greater risk in not having a small allocation than there is in having one. Having all my investments tied to fiat currencies I view as a huge risk. Seeing the U.S. debt to GDP ratio at an unsustaninable 120% is frightening and while you may think there is a non-zero chance that bitcoin goes to zero, there is also a non-zero chance that many other fiat currencies do as well. For most of those fiat currencies, that non-zero chance is far higher than bitcoin's chance, IMO.

[ChpBstrd]

I want to add a point that the biggest hurdle to bitcoin being used for economic transactions and purchasing of goods isn't a technological hurdle. It is a policy hurdle. People and businesses would be far more willing to use bitcoin for economic transactions if it there weren't overly burdensome taxation policies that run against that purpose. The fact that it is treated as a commodity rather than a currency in tax code is what prevents it from being used more as a currency. No one wants to maintain cost basis spreadsheets for every daily purchase they make and calculate their tax liability from all that so they don't run afoul of the IRS. What bitcoin needs in order to be usable as a currency is a change to tax policy to allow it do be used as such.

If I as a U.S. citizen preferred to hold and earn Euros or Yen and constantly exchange them for dollars so that I could transact domestically, I'd be in a similar position. Every transaction would be accompanied by a forex trade that would generate a gain or a loss for tax purposes. And Yen/Euros are definitely currencies. So I'm not sure why short term capital gains/losses from trading currencies are any simpler to account for than short term capital gains/losses from trading commodities? Perhaps you can explain? Also, it seems to me like either way you'd have to pay some "helper" to facilitate transactions and keep an accounting ledger.

In a possible-future world where the government declares bitcoin transactions for dollars to be tax-free, or declares the U.S. to be a dual-currency country with USD and, say, TrumpCoins both as official currencies, it would become unnecessary for regular consumers to do all this accounting or pay taxes on gains. Seems to me like this is the policy change required to remove the "hurdle" to businesses and consumers. Otherwise people won't use crypto for the same reasons they don't use Yen or Euros in the United States. I'm not criticizing, because I actually think this is a political possibility, but just clarifying exactly what policy would be necessary.

And in terms of the "biggest hurdle" I'm surprised electricity consumption costs are not up there. Who would pay the cost of running armies of servers to crunch a whole economy of crypto transactions?

Also, I am really curious for those that see bitcoin going to zero, what exactly that scenario looks like to them.

I think the quoted price and the outcome investors receive are two different things. The quoted price could go to a hundred million dollars per coin, but if most ordinary Joe investors over a 10 or 20 year span lose their coins to scams and hacks, then the investment went to zero for them, despite the high quote. Maybe cold wallets are safer, but admitting that is like admitting crypto will never be used as a currency.

Prime steak may be worth $20 a pound, but it would be a fallacy to say it's worth $20/pound even after being dropped into shark-infested waters. I'd argue a lot of people are storing and using crypto in the equivalent way. "Just use Coinbase" is not a reassuring answer after FTX and Binance.

95%+ of crypto sales are wash sales by large actors attempting to pull up or down the price, so the price is always an artificial creation. The real activity is the feeding frenzy of the sharks. Lots of people are getting their USD back from crypto trades, but others have not been so lucky. Others only think they are holding an asset, when in fact the people on the other end of the website made off with their actual coins years ago and left them with a number on a screen.

So the quoted price could go up forever until a point of cultural understanding occurs that you cannot consistently make money this way. At that point investor demand could dry up and the wash sales could go back and forth pumping the price forever in the hopes of luring more USD into the ecosystem.

[waltworks]

All phones support paying by credit card, with no need to enter any numbers or do anything. That's been the case for years. It's great that you can do it with Bitcoin too, but it's not an advantage.

I run a small business that caters almost exclusively to wealthy white dudes who are into tech. I have NEVER, in the ~15 years that Bitcoin has been around, been offered payment in Bitcoin. Not once. I don't think I could pay for anything at any merchant in my entire town with Bitcoin, either, even the cool/hip local shops. Can I buy a burger at a restaurant? Can I buy groceries? Can I buy some threads at the thrift store?

The answer is universally "no". And it's still "no" if you have some complex way of selling some Bitcoin to get dollars and then buying something, because by that standard VTSAX is accepted as currency at Burger King too.

-W

[waltworks]

Having all my investments tied to fiat currencies I view as a huge risk. Seeing the U.S. debt to GDP ratio at an unsustaninable 120% is frightening and while you may think there is a non-zero chance that bitcoin goes to zero, there is also a non-zero chance that many other fiat currencies do as well. For most of those fiat currencies, that non-zero chance is far higher than bitcoin's chance, IMO.

I'm curious about this statement, because while I think hyperinflation would be really bad, it also would (setting aside damage to the real economy) just mean your investments (real estate, stocks, etc) mostly went up in value to go along with the decline in the value of the fiat currency. The dollar going to 1/100 of it's old value doesn't mean your rental property is suddenly also worth nothing, it means you raise the rent a lot.

If you have bonds or dollars under a mattress, you're hosed, of course.

-W

[GuitarStv]

Having all my investments tied to fiat currencies I view as a huge risk. Seeing the U.S. debt to GDP ratio at an unsustaninable 120% is frightening and while you may think there is a non-zero chance that bitcoin goes to zero, there is also a non-zero chance that many other fiat currencies do as well. For most of those fiat currencies, that non-zero chance is far higher than bitcoin's chance, IMO.

I'm curious about this statement, because while I think hyperinflation would be really bad, it also would (setting aside damage to the real economy) just mean your investments (real estate, stocks, etc) mostly went up in value to go along with the decline in the value of the fiat currency. The dollar going to 1/100 of it's old value doesn't mean your rental property is suddenly also worth nothing, it means you raise the rent a lot.

If you have bonds or dollars under a mattress, you're hosed, of course.

-W

This is the fundamental difference between a currency and whatever crypto is.

If you have dollars under a mattress, you're hosed.  It's a currency, designed to be spent.

If you have bitcoin under a mattress, (and bitcoin hasn't totally tanked during the hyperinflation) that's the ideal scenario.  It's a commodity, designed to be hoarded only.

[lifeanon269]

All phones support paying by credit card, with no need to enter any numbers or do anything. That's been the case for years. It's great that you can do it with Bitcoin too, but it's not an advantage.

I didn't say it was an advantage. I said that I find it easier for myself. I use GrapheneOS on an Google Pixel phone, so I don't have my CC#'s stored in a digital wallet on my phone. So for me it is easier to pay via bitcoin than putting credit card numbers into a website. I do have my CC# stored in a few commonly used merchants (eg, Amazon), so paying CC is easy for me there. But either way however, my point still stands. Paying via bitcoin is not a technical issue since it can be done just as easily as other payment methods today.

I run a small business that caters almost exclusively to wealthy white dudes who are into tech. I have NEVER, in the ~15 years that Bitcoin has been around, been offered payment in Bitcoin. Not once. I don't think I could pay for anything at any merchant in my entire town with Bitcoin, either, even the cool/hip local shops. Can I buy a burger at a restaurant? Can I buy groceries? Can I buy some threads at the thrift store?

The answer is universally "no". And it's still "no" if you have some complex way of selling some Bitcoin to get dollars and then buying something, because by that standard VTSAX is accepted as currency at Burger King too.

-W

Again, as I said before, this isn't because of technical issues with bitcoin and absolutely is a policy issue. People aren't going to make payments with an asset that is classified as a commodity for tax purposes. It just doesn't make sense and is overly cumbersome to attempt to calculate a separate cost basis on thousands of transactions over the course of a year. Combine that with the fact that, yes, in our modern financial world, making digital payments at your local merchant with trustworthy and well regulated financial institutions is pretty easy.

There are a large percentage of us on these forums that are millionaires and so the context with which we're all coming from is heavily biased toward the privileged in society.

And in terms of the "biggest hurdle" I'm surprised electricity consumption costs are not up there. Who would pay the cost of running armies of servers to crunch a whole economy of crypto transactions?

The electricity costs of the bitcoin network don't go up the more transactions are made. I am very big on environmental causes. I drive an electric car, I am a vegan, I have solar panels on my house and I see bitcoin as a big part of moving toward a more sustainable economy. Our current central banking money system is hugely wasteful. It is only sustainable financially because it is extremely wasteful environmentally. It's entire scheme is propped up based on the idea of GDP which is an archaic form of measuring human and economic progress that we as a human society must desperately move away from. Measuring economic success in GDP doesn't measure human happiness, or literacy rates, or health care progress, or work life balance, etc. The only way that fiat currencies can continue to succeed under modern monetary theory (MMT) is by continuing to push GDP higher at all costs. People harp on the scourges of capitalism, but it is this facet of our monetary system that corrupts the entire system more than anything else.

I find that frugality and environmentalism go hand-in-hand. There are a lot of people that don't consider the environmental and carbon costs of all the "stuff" they buy. They only think of carbon costs in terms of emissions without realizing everything they purchase has a carbon cost. Buying a new phone every year or a new car every two years has massive carbon and environmental costs to it. This means that expecting the GDP to go up perpetually in the way that MMT requires is wholly unsustainable. This doesn't even take into account the fact that central banking and its participants directly contribute to the fossil fuel industry and your deposits in those institutions directly contribute to that regardless of whether you're invested in them or not to the tune of over $7 trillion the last few years alone.

The vast majority of the energy costs of bitcoin today goes toward production of new bitcoin. Take a look at a block explorer and you'll see that a vast majority of the mining incentive (3.125btc/block) comes from the subsidy whereas only a small percentage comes from transaction fees. Only about 1-2% of the current incentive comes from fees. So a vast majority of the energy use for bitcoin so far has come from production of new bitcoin. Bitcoin, being a digital asset and just a number in a ledger, can be infinitely reused over and over again without needing to "reproduce" it. So for today's energy cost to produce this bitcoin, you now have a monetary instrument that can be infinitely reused for future transactions for generations to come.

The production of new bitcoin gets cut in half roughly every 4 years. So there will come a time where there is a transition away from energy being spent for the production of new bitcoin to energy being spent to facilitate transactions incentivized through transaction fees. There is very little overhead to bitcoin mining. This means that the fees spent to settle a bitcoin transaction will be extremely close to the cost of electricity needed to confirm it. This is a very efficient monetary network in comparison to what we have today where the overhead to facilitate transactions and all that comes with it (mediation, security, logistical, building, etc) is very high. There will be a future with bitcoin where the cost in fees for a bitcoin transaction will roughly equal the cost in electricity used to confirm it.

The efficiency of this monetary network needs to be understood and compared in relative terms to what we have today. Obviously there is an environmental cost to everything we do today. Producing electric cars absolutely has an environmental and carbon cost. They're only considered more sustainable when you look at them in comparison to gas ICE cars most people drive today. Similarly, with bitcoin, there are obviously environmental costs to operating the network and the electricity use it requires. However, when you compare it to our current monetary and banking system we have today, it pales in comparison with those costs.

If I as a U.S. citizen preferred to hold and earn Euros or Yen and constantly exchange them for dollars so that I could transact domestically, I'd be in a similar position. Every transaction would be accompanied by a forex trade that would generate a gain or a loss for tax purposes. And Yen/Euros are definitely currencies. So I'm not sure why short term capital gains/losses from trading currencies are any simpler to account for than short term capital gains/losses from trading commodities? Perhaps you can explain? Also, it seems to me like either way you'd have to pay some "helper" to facilitate transactions and keep an accounting ledger.

To be fair and provide clarification, foreign currency exchanges already have some tax exemptions in place (Section 988). For example, all foreign currency exchanges for personal reasons that have less than $200 in capital gains are tax free. This means that you can spend thousands of dollars in a single transaction without needing to worry about cost basis for that foreign currency. There are also travel exemptions in place for those travelling with foreign currencies.

Even something like that where gains of less that $200 are exempt with bitcoin would go a long way toward allowing it to be used for every day transactions. Someone could then pay their $300 in groceries with bitcoin without needing to then worry about later reporting the gains and cost basis to the IRS. There are very much policy hurdles in place that prevent bitcoin from being used as a currency and those are absolutely some of the primary reasons we don't see it used as such. I don't need the IRS coming after me because I failed to report thousands of bitcoin purchases over the course of a year and being audited and then required to determine the cost basis for all those transactions would be an impossible financial nightmare. To be fair, there have been several bills drafted that seek to do just that with bitcoin, but in the past didn't get much traction. I could definitely see these gaining more legislative action now.

If you have bitcoin under a mattress, (and bitcoin hasn't totally tanked during the hyperinflation) that's the ideal scenario.  It's a commodity, designed to be hoarded only.

This is also another tiring fallacy. The idea that because you have a more sound monetary system and currency doesn't mean that someone will hoard bitcoin and forgo using it for purchases. Do you really think someone is going to forgo feeding themselves and starve because they would rather hoard their virtual supply of bitcoin at all costs? What about providing a roof over their head for them and their family? People's needs and desires don't just disappear. There are still things people need and things they desire to own or pursue that would push them to spend their bitcoin. Would it mean that people will become better savers? Probably, but that's a good thing. It reminds me of the Mr Money Mustache post, "What if Everyone Became Frugal?"

https://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

Would there be an economic contraction in the event that everyone suddenly becomes more frugal? Absolutely. But, IMO, I think that is beneficial and very much needed in today's consumerist society. I think it would lead toward more happiness in the long run.

It is no surprise that the country that created the Gross National Happiness index, Bhutan, uses its excess hydro electricity to mine bitcoin and holds bitcoin.

[GuitarStv]

If you have bitcoin under a mattress, (and bitcoin hasn't totally tanked during the hyperinflation) that's the ideal scenario.  It's a commodity, designed to be hoarded only.

This is also another tiring fallacy. The idea that because you have a more sound monetary system and currency doesn't mean that someone will hoard bitcoin and forgo using it for purchases. Do you really think someone is going to forgo feeding themselves and starve because they would rather hoard their virtual supply of bitcoin at all costs? What about providing a roof over their head for them and their family? People's needs and desires don't just disappear. There are still things people need and things they desire to own or pursue that would push them to spend their bitcoin. Would it mean that people will become better savers? Probably, but that's a good thing. It reminds me of the Mr Money Mustache post, "What if Everyone Became Frugal?"

https://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

Would there be an economic contraction in the event that everyone suddenly becomes more frugal? Absolutely. But, IMO, I think that is beneficial and very much needed in today's consumerist society. I think it would lead toward more happiness in the long run.

It is no surprise that the country that created the Gross National Happiness index, Bhutan, uses its excess hydro electricity to mine bitcoin and holds bitcoin.

Calling bitcoin a currency or a 'more sound monetary system' is another tiring fallacy.

Under ideal conditions, the only thing that bitcoin has shown any value at is as a commodity for hoarding.  I don't think someone is going to starve and forgo feeding themselves to hoard it during a hyperinflationary period - they'll use a real currency to buy food.  If they don't have enough real currency, they will probably convert their bitcoin into one (if they can).  Bitcoin is a deflationary store of value by design.  That means that the more you avoid spending it, the better you will be - always.  This is one reason (of many) why it isn't likely to ever be used as a currency.

All of the hypothetical scenarios you raise where Bitcoin comes to power and is heavily used depend upon a total collapse of existing financial systems and a complete re-writing of the economic rules that have been used for the past couple hundred years, and a completely different usage pattern of crypto than has happened anywhere in the world so far.  Possible?  Sure, anything's possible.  Likely?  Eh . . . there's a lot of momentum that you're fighting to make that a reality.  Assuming that total collapse/re-writing of the rules scenario doesn't come to pass, I don't see a way for crypto to ever end up on top or be used in the way you envision.

[lifeanon269]

Calling bitcoin a currency or a 'more sound monetary system' is another tiring fallacy.

Under ideal conditions, the only thing that bitcoin has shown any value at is as a commodity for hoarding.  I don't think someone is going to starve and forgo feeding themselves to hoard it during a hyperinflationary period - they'll use a real currency to buy food.  If they don't have enough real currency, they will probably convert their bitcoin into one (if they can).  Bitcoin is a deflationary store of value by design.  That means that the more you avoid spending it, the better you will be - always.  This is one reason (of many) why it isn't likely to ever be used as a currency.

If someone doesn't have access to a more stable currency and their local fiat currency has or is collapsing and they safeguarding their wealth with bitcoin that they had access to, how would they convert their bitcoin to a "real" currency as you mentioned? As I mentioned, there are a lot of people moving to bitcoin in these inflationary environments because there is no other currency they can easily move to locally. I already address your final statement in this paragraph and you avoided addressing the points I made that did just that previously. Yes, people will be prone to saving more with a currency that isn't inflated away or debased. But that doesn't mean their needs and desires go away. The will still need food, shelter, clothing and have a desire for other things in life.

To put your words another way that might make more sense to those on these forums:

"That means that the more you save, the better you will be - always."

Ummmm, yes?! That's exactly right!!!

All of the hypothetical scenarios you raise where Bitcoin comes to power and is heavily used depend upon a total collapse of existing financial systems and a complete re-writing of the economic rules that have been used for the past couple hundred years, and a completely different usage pattern of crypto than has happened anywhere in the world so far.  Possible?  Sure, anything's possible.  Likely?  Eh . . . there's a lot of momentum that you're fighting to make that a reality.  Assuming that total collapse/re-writing of the rules scenario doesn't come to pass, I don't see a way for crypto to ever end up on top or be used in the way you envision.

Past couple hundred years? I think you need to read up a little more on the history of the US dollar. Current modern monetary theory which our current central banking policies employ is only a few decades old in practice.

FWIW, I don't foresee bitcoin replacing the US dollar, at least not in my lifetime. A total collapse of the US dollar would be bad for everyone, including bitcoin holders. But there is a ton of grey area in there. Just because I don't see the US dollar failing entirely doesn't mean I don't see bitcoin also as a life raft for my wealth against reckless monetary policy. Also, there are a lot of fiat currencies in our world outside of the US dollar. The US Dollar is obviously the fiat currency best positioned with its place as a reserve currency throughout the world. There are a ton of lesser fiat currencies that have and will collapse in the coming years. Make no mistake, bitcoin will continue to see a growing role in these environments that many privileged enough in these forums can't seem to grasp.

[waltworks]

Dude, nobody is worried about the tax implications of buying a $10 burger with Bitcoin. Nobody.

They can't buy the burger because the merchant won't accept it, because it's unstable and more of a pain than just using cash or a credit card. Hell, merchants will accept paying 2-3% swipe fees rather than accept Bitcoin!

-W

[lifeanon269]

Dude, nobody is worried about the tax implications of buying a $10 burger with Bitcoin. Nobody.

They can't buy the burger because the merchant won't accept it, because it's unstable and more of a pain than just using cash or a credit card. Hell, merchants will accept paying 2-3% swipe fees rather than accept Bitcoin!

-W

The tax implications are exactly why there isn't adoption from a PoS standpoint. Look at the vast majority of merchants that accept credit card transactions. They don't want to have to worry about dealing with the payment network themselves, so they typically onboard a vendor to handle that for them via a payment terminal, such as Square, NCR, Clover, etc. That means they don't need to host backend payment processing servers themselves in a datacenter. All they need is a simple card terminal and internet connection and the SaaS vendor handles it for them. Not many merchants interact directly with VISA. Financial institutions are generally the institutions that interoperate with VISA, not merchants and users.

A shop could host their bitcoin node and integrate it into their payment terminals and webshop, but that's more work than a lot of businesses want to put into it. So they're looking for those similar vendors to do it for them in the same way vendors today manage VISA transactions for them. However, these payment processors for bitcoin have a lot of headwinds for adoption and thus find it hard to gain market.

Make no mistake, the tax implications are a big part of the headwind for these processors that are necessary for merchant adoption. You then have a chicken and the egg situation with PoS adoption where merchants don't want to accept bitcoin because they're looking for merchants to do it for them (especially considering the low volume of bitcoin purchasing that would be expected) and thus customers that own bitcoin can't spend it even if they want to. Just look at Cash App as an example of a potential PoS vendor. They're integrated with Square and you can often pay with bitcoin right from CashApp. But it just doesn't make sense to pay with bitcoin because CashApp, being a regulated entity, provides you with a 1099-B form for all your bitcoin transactions throughout the year. Like I said, no one wants to be forced to report all their daily transactions for tax purposes. And if you're in control of your own wallet, while you have some privacy gains and don't need to worry about a 1099-B, it means there are even less merchants that operate directly with the bitcoin network and you now also need to do your own cost basis calculation and tracking. I could care less about the tax cost of a $10 transaction, but I certainly care about the need to report that tax cost to the IRS. Not worth my time.

[GuitarStv]

Calling bitcoin a currency or a 'more sound monetary system' is another tiring fallacy.

Under ideal conditions, the only thing that bitcoin has shown any value at is as a commodity for hoarding.  I don't think someone is going to starve and forgo feeding themselves to hoard it during a hyperinflationary period - they'll use a real currency to buy food.  If they don't have enough real currency, they will probably convert their bitcoin into one (if they can).  Bitcoin is a deflationary store of value by design.  That means that the more you avoid spending it, the better you will be - always.  This is one reason (of many) why it isn't likely to ever be used as a currency.

If someone doesn't have access to a more stable currency and their local fiat currency has or is collapsing and they safeguarding their wealth with bitcoin that they had access to, how would they convert their bitcoin to a "real" currency as you mentioned? As I mentioned, there are a lot of people moving to bitcoin in these inflationary environments because there is no other currency they can easily move to locally. I already address your final statement in this paragraph and you avoided addressing the points I made that did just that previously. Yes, people will be prone to saving more with a currency that isn't inflated away or debased. But that doesn't mean their needs and desires go away. The will still need food, shelter, clothing and have a desire for other things in life.

To put your words another way that might make more sense to those on these forums:

"That means that the more you save, the better you will be - always."

Ummmm, yes?! That's exactly right!!!

Effectively no merchants take bitcoin as payment.  It's like trying to pay for something in Beanie Babies.  Maybe somewhere out there is a person who would trade you food for Beanie Babies, but for the overwhelming majority of folks you'll need to convert them into some sort of currency if you want to use them to buy.  Sure, if there exists no local currency that a person can use they may resort to a barter system - crypto would work fine in this scenario, just like any other commodity (beanie babies, tulip bulbs, cows, seashells, jewelry, whatever you've got at hand).  But it's not really working as a currency there.  Unless you call all commodities currency.

All of the hypothetical scenarios you raise where Bitcoin comes to power and is heavily used depend upon a total collapse of existing financial systems and a complete re-writing of the economic rules that have been used for the past couple hundred years, and a completely different usage pattern of crypto than has happened anywhere in the world so far.  Possible?  Sure, anything's possible.  Likely?  Eh . . . there's a lot of momentum that you're fighting to make that a reality.  Assuming that total collapse/re-writing of the rules scenario doesn't come to pass, I don't see a way for crypto to ever end up on top or be used in the way you envision.

Past couple hundred years? I think you need to read up a little more on the history of the US dollar. Current modern monetary theory which our current central banking policies employ is only a few decades old in practice.

FWIW, I don't foresee bitcoin replacing the US dollar, at least not in my lifetime. A total collapse of the US dollar would be bad for everyone, including bitcoin holders. But there is a ton of grey area in there. Just because I don't see the US dollar failing entirely doesn't mean I don't see bitcoin also as a life raft for my wealth against reckless monetary policy. Also, there are a lot of fiat currencies in our world outside of the US dollar. The US Dollar is obviously the fiat currency best positioned with its place as a reserve currency throughout the world. There are a ton of lesser fiat currencies that have and will collapse in the coming years. Make no mistake, bitcoin will continue to see a growing role in these environments that many privileged enough in these forums can't seem to grasp.

Economic policies have changed over time many times, but there has been well over 200 years around the world of using government backed fiat currency to pay for goods.  Bitcoin is an intrinsically valueless electronic blip that has been a thing for only sixteen years, requires serious environmental destruction to exist at all, and has never caught on for paying for goods.  I'm not sure I understand the advocating for the replacement of the well established former with the brand new and unproven latter.

[Glenstache]

It should also not be a baseline assumption that everyone supports the idea of a currency that does not have central bank control. The ability to regulate monetary supply has significant benefits. I am skeptical of the libertarian fever dream of a life without central banking, be that strict adherence to a gold standard or digital equivalent.

There are also examples of smaller countries worried about currency inflation simply adopting the US dollar as their national currency. The (relative) stability of the USD is the benefit. BTC and crypto in general don't have the right stability and simplicity for this type of use right now. At a minimum, there will have to be broad enough education and common understanding that conversations about crypto don't devolve to "but you just don't understand!" before widespread adoption is reasonably expected.

As to adding a low percentage crypto, that's up to the risk tolerance and choices of the individual. But, to be clear, that is a speculative decision that BTC/other crypto will go up in value and thus should be considered as a commodity-type investment decision. If that is how it is treated, then maybe it's also fair that the tax code be in line with that.

[lifeanon269]

Effectively no merchants take bitcoin as payment.  It's like trying to pay for something in Beanie Babies.  Maybe somewhere out there is a person who would trade you food for Beanie Babies, but for the overwhelming majority of folks you'll need to convert them into some sort of currency if you want to use them to buy.  Sure, if there exists no local currency that a person can use they may resort to a barter system - crypto would work fine in this scenario, just like any other commodity (beanie babies, tulip bulbs, cows, seashells, jewelry, whatever you've got at hand).  But it's not really working as a currency there.  Unless you call all commodities currency.

I am not sure where this quantification comes from. What do you mean by "effectively"? Do you mean relative to those that accept VISA, mastercard, etc? I'm not disputing that at all. Those payment processors are massive and dwarf any merchants that accept bitcoin as payment. "Effectively" isn't a quantitative term though. So if you're implying that there are no merchants that accept bitcoin, then I disagree with that. Just about any vendor within the bitcoin space accepts bitcoin as a form of payment. Namecheap, where I purchase all my domain names accepts bitcoin as payment and I choose to pay with bitcoin with them. Those moving an industry forward are usually those that adopt it first and with bitcoin it isn't any different. Those that are highly involved with bitcoin, and that includes on the peer-to-peer side, are often those that are accepting bitcoin as a form of payment first.

You routinely throw out beanie babies, tulip bulbs, etc as comparisons to bitcoin. You seem insinuate that people in regions that are experiencing high inflation can use these things are forms for payment. That's quite a ridiculous claim to make. These are real world events that are taking place in these regions and we're seeing real world usage of bitcoin in these areas. There is a reason why we're not seeing people use beanie babies, tulip bulbs, and other random commodities in these regions as a form of payment to the extent that we see bitcoin usage.

You say "they may resort to a barter system" system and then say "it's not really working as a currency there". But a barter system has a problem with the coincidence of wants. Both parties must need what the other party is offering. Introducing a currency to this system is specifically for the resolution of the coincidence of wants problem. Bitcoin being introduced to solve that problem is exactly the solution using money here provides. So I am not sure what you're claiming here. Not all commodities make good currencies. Fungibility, divisibility, verifiability, scarcity, transporting/transmissible, etc are all various properties that would allow a commodity to be a better currency. Bitcoin excels at a lot of these properties which is what allows it to be used by individuals in these situations as a currency for their needs.

Economic policies have changed over time many times, but there has been well over 200 years around the world of using government backed fiat currency to pay for goods.  Bitcoin is an intrinsically valueless electronic blip that has been a thing for only sixteen years, requires serious environmental destruction to exist at all, and has never caught on for paying for goods.  I'm not sure I understand the advocating for the replacement of the well established former with the brand new and unproven latter.

For sure, policies have changed. But my critique against today's fiat currencies were against MMT that results in their inflationary debasement. Fiat currencies in their debt-based form have only been around for several decades. Most fiat currencies prior to this were representative currencies that were currencies representing the value of something else in reserve. Or they were coinage that were issued by the government such as the bimetallism debate of the late 1800's. Almost all fiat currencies today are debt-based currencies.

requires serious environmental destruction to exist at all

Sometimes I wonder if you read my posts at all. I responded to this already and you made some factually incorrect claims about bitcoin and its energy use (energy use = # of transactions) that I refutted. Not sure how you can make this claim while disregarding the far greater environmental destruction as a result of our current monetary system.

[LateStarter]

Adoption is low and slow, but more each day and maybe accelerating, but it's still going to take time.
Compare early 1990’s internet. Clunky, hard to use, niche, mostly useless, most will never need it, what the hell is it even ??? Never really caught on – until it did.

This analogy comes up a lot, and boy I can't disagree more with it.   I was using the Internet in the early 1990s and it was both incredibly exciting and useful.  Usenet was around back then, and it was a great resource.  And there was file sharing (the original Doom game was shareware) and of course email.   I was even using it for work back then, as we needed access to government databases (which were an overnight download), but it beat a physical visit to the agencies.  We thought the Internet was great and could see tons of potential.  Obviously, lots of things needed to happen to realize that potential, but they did happen, and in fairly short order too.   The web browser became widely available in about 1994 IIRC, and Amazon and e-commerce were right behind.   

Your individual experience is utterly irrelevant - you represent a single data point in a set of 5.5 billion.

Number of Internet Users shows approximately 7 million worldwide internet users in 1992. Congrats on being one of those 7 million early adopter enthusiasts, but spare a thought for the remaining 99.99% of the world population who knew very little or zero about it.

[GuitarStv]

Effectively no merchants take bitcoin as payment.  It's like trying to pay for something in Beanie Babies.  Maybe somewhere out there is a person who would trade you food for Beanie Babies, but for the overwhelming majority of folks you'll need to convert them into some sort of currency if you want to use them to buy.  Sure, if there exists no local currency that a person can use they may resort to a barter system - crypto would work fine in this scenario, just like any other commodity (beanie babies, tulip bulbs, cows, seashells, jewelry, whatever you've got at hand).  But it's not really working as a currency there.  Unless you call all commodities currency.

I am not sure where this quantification comes from. What do you mean by "effectively"? Do you mean relative to those that accept VISA, mastercard, etc? I'm not disputing that at all. Those payment processors are massive and dwarf any merchants that accept bitcoin as payment. "Effectively" isn't a quantitative term though. So if you're implying that there are no merchants that accept bitcoin, then I disagree with that. Just about any vendor within the bitcoin space accepts bitcoin as a form of payment. Namecheap, where I purchase all my domain names accepts bitcoin as payment and I choose to pay with bitcoin with them. Those moving an industry forward are usually those that adopt it first and with bitcoin it isn't any different. Those that are highly involved with bitcoin, and that includes on the peer-to-peer side, are often those that are accepting bitcoin as a form of payment first.

You routinely throw out beanie babies, tulip bulbs, etc as comparisons to bitcoin. You seem insinuate that people in regions that are experiencing high inflation can use these things are forms for payment. That's quite a ridiculous claim to make. These are real world events that are taking place in these regions and we're seeing real world usage of bitcoin in these areas. There is a reason why we're not seeing people use beanie babies, tulip bulbs, and other random commodities in these regions as a form of payment to the extent that we see bitcoin usage.

You say "they may resort to a barter system" system and then say "it's not really working as a currency there". But a barter system has a problem with the coincidence of wants. Both parties must need what the other party is offering. Introducing a currency to this system is specifically for the resolution of the coincidence of wants problem. Bitcoin being introduced to solve that problem is exactly the solution using money here provides. So I am not sure what you're claiming here. Not all commodities make good currencies. Fungibility, divisibility, verifiability, scarcity, transporting/transmissible, etc are all various properties that would allow a commodity to be a better currency. Bitcoin excels at a lot of these properties which is what allows it to be used by individuals in these situations as a currency for their needs.

Ah, OK.  We want more well defined numbers.  Sure.  About 15,174 businesses worldwide (https://buybitcoinworldwide.com/how-many-businesses-accept-bitcoin/) accept bitcoin for payment.  There exist approximately 334,000,000 businesses worldwide (https://www.businessdasher.com/small-business-statistics/#:~:text=There%20are%20approximately%20334%20million,of%20the%20current%20business%20landscape.).  So we can figure that somewhere around 0.0045% of businesses worldwide take bitcoin as payment.  To give you an idea of how unbelievably small this is, estimates are that around 400,000 businesses worldwide take barter for payment (https://hbr.org/2012/09/the-exploding-business-of-bart) . . . at least an order of magnitude higher than will barter with bitcoin.

Or to put it in simpler terms . . . effectively no merchants take bitcoin.  It is not a currency or real method of trade currently used.

I throw out examples of other commodities when discussing bitcoin, because it currently functions as a commodity.  We have seen people barter commodities in the past in periods of hyperinflation (granted, not with tulip bulbs and beanie babies . . . but certainly with some of the other commodities that were listed).

There is a reason we are not seeing bitcoin usage as a currency pretty much anywhere.  These reasons have been well discussed so far.  Currently, bitcoin (and all forms of crypto) suck for use as a currency.  Since crypto is a commodity users run into the very problem that you mentioned - the issue of coincidence of wants.  Very few people want crypto, so it's tough to barter with.  That's why transactions with it are almost always converted to a real currency immediately after the transaction completes.

Economic policies have changed over time many times, but there has been well over 200 years around the world of using government backed fiat currency to pay for goods.  Bitcoin is an intrinsically valueless electronic blip that has been a thing for only sixteen years, requires serious environmental destruction to exist at all, and has never caught on for paying for goods.  I'm not sure I understand the advocating for the replacement of the well established former with the brand new and unproven latter.

For sure, policies have changed. But my critique against today's fiat currencies were against MMT that results in their inflationary debasement. Fiat currencies in their debt-based form have only been around for several decades. Most fiat currencies prior to this were representative currencies that were currencies representing the value of something else in reserve. Or they were coinage that were issued by the government such as the bimetallism debate of the late 1800's. Almost all fiat currencies today are debt-based currencies.

I mean . . . the US killed the limited Breton-Woods gold standard in 1971, but effectively dropped it under FDR in the '30s, making it a 'debt-based currency' for quite a while.  The argument can be made that since the US has continuously kept debt since 1791 and all fiat currency issued has been backed on the word of this indebted government country that it has been a 'debt-based currency' for much longer.

requires serious environmental destruction to exist at all

Sometimes I wonder if you read my posts at all. I responded to this already and you made some factually incorrect claims about bitcoin and its energy use (energy use = # of transactions) that I refutted. Not sure how you can make this claim while disregarding the far greater environmental destruction as a result of our current monetary system.

All blockchain hashing algorithm based crypto requires serious environmental damage to exist during the hashing phase.  Claiming otherwise is factually incorrect.  It's baked into the whole design of the hashing.  At the risk of sounding like a crypto hype-man . . . you do understand the technology underlying crypto, right?

The current monetary system does involve environmental damage.  Unless you believe that crypto will entirely replace all existing monetary systems, then these systems will remain in place whether bitcoin succeeds or fails.  So we're talking about current banking environmental damage + bitcoin environmental damage vs current banking environmental damage.  It's there whatever happens, so doesn't seem like there's much point discussing it.

[Telecaster]

I want to add a point that the biggest hurdle to bitcoin being used for economic transactions and purchasing of goods isn't a technological hurdle. It is a policy hurdle.

There are two more major hurdles in this application, and IMO both of them are even bigger than taxes.   One is that Bitcoin provides zero advantages over the traditional payment system.  I can't think of a single time in my entire life when Bitcoin would have solved a payment problem, or even would have made a single payment even slightly easier.   

The other is that Bitcoin is too volatile to use as a payment system.  There is lots of discussion about the eroding value of the USD, which is about 3.5%/year on average.   Google tells me that as of the time of this post, Dec 9, 8:11 PM UTC, Bitcoin has lost 4.1% of its value in the last 24 hours.   That is far, far too volatile for business applications.  Doesn't work, full stop.   

Sure, maybe one day enough people will jump on the bandwagon such that Bitcoin will only change by about 3.5% in one year, but then you lose the investment case.    With no investment case, then people will sell.   

I've made this same mistake in semantics as well, but I also want to clarify that bitcoin doesn't need new entrants for it to go up in price. The arbitrary price of bitcoin is a relative exchange rate to a particular currency. If we're talking US dollars, then it is the correlating value between the pair of currencies. Since US dollars are printed ad infinitum, then any scarce asset or commodity can go up in price even if there is no change in the demand of that asset simply because of the devaluation of one side of that trading pair. So the price of bitcoin can absolutely go up relative to the US dollar without additional demand for bitcoin while its economic value stays the same relative to other scarce assets. So it can absolutely be a hedge against inflation in this regard without requiring new entrants or additional demand for bitcoin. This is something that people who scream "ponzi scheme" fail to understand.

In theory, Bitcoin could be a hedge against inflation as you suggest. However, we know as a iron-clad fact that in the real world, its price behavior is not correlated with the dollar. For example, in 2021, the US dollar experienced a small bout of inflation, and Bitcoin's price plummeted—the opposite of what should have happened if it were a hedge against inflation. Then, as inflation cooled, Bitcoin's price shot back up.

In reality, Bitcoin's price is determine by supply and demand and nothing else.   New entrants are required for Bitcoin's price to go up. 

[Telecaster]

Adoption is low and slow, but more each day and maybe accelerating, but it's still going to take time.
Compare early 1990’s internet. Clunky, hard to use, niche, mostly useless, most will never need it, what the hell is it even ??? Never really caught on – until it did.

This analogy comes up a lot, and boy I can't disagree more with it.   I was using the Internet in the early 1990s and it was both incredibly exciting and useful.  Usenet was around back then, and it was a great resource.  And there was file sharing (the original Doom game was shareware) and of course email.   I was even using it for work back then, as we needed access to government databases (which were an overnight download), but it beat a physical visit to the agencies.  We thought the Internet was great and could see tons of potential.  Obviously, lots of things needed to happen to realize that potential, but they did happen, and in fairly short order too.   The web browser became widely available in about 1994 IIRC, and Amazon and e-commerce were right behind.   

Your individual experience is utterly irrelevant - you represent a single data point in a set of 5.5 billion.

Number of Internet Users shows approximately 7 million worldwide internet users in 1992. Congrats on being one of those 7 million early adopter enthusiasts, but spare a thought for the remaining 99.99% of the world population who knew very little or zero about it.

You made the claim that in 1992 the Internet was viewed as "mostly useless" (among other things).    Presumably, someone would have had to have heard of the Internet to conclud it was "mostly useless."   Although many or most people at the time might have been unaware of it, that is NOT how it was viewed by the people who did know about it, even if they weren't users.  It should be noted that most households didn't have computers at the time, so many people didn't have the option of using it in the first place.   

At that time were services similar to the Internet that had millions of subscribers like AOL, Prodigy, and Compuserve where you could chat online, download files, IM, play games and even do shopping.   It wasn't a big leap at the time to see how those services could be vastly expanded.   

Another predecessor at this time was called Bitnet which was mostly academic focused and ran on institutional mainframes.  I used to entirely to chat with friends at other schools, but it didn't take much imagination to see how it would be handy for home use.   Again, your "mostly useless" does not seem to square with the experiences of people who were using it. 

All of this required computers to increase in power and come down in cost, which was already happening on almost a monthly basis.    I assure you, while some people may have been baffled by the potential the Internet and similar at that time, lots of people understood the upside immediately.   By about 1996 corporate email was almost ubiquitous.    Your Bitcoin/Internet adoption analogy does not square with observation, at all.   

[lifeanon269]

Ah, OK.  We want more well defined numbers.  Sure.  About 15,174 businesses worldwide (https://buybitcoinworldwide.com/how-many-businesses-accept-bitcoin/) accept bitcoin for payment.  There exist approximately 334,000,000 businesses worldwide (https://www.businessdasher.com/small-business-statistics/#:~:text=There%20are%20approximately%20334%20million,of%20the%20current%20business%20landscape.).  So we can figure that somewhere around 0.0045% of businesses worldwide take bitcoin as payment.  To give you an idea of how unbelievably small this is, estimates are that around 400,000 businesses worldwide take barter for payment (https://hbr.org/2012/09/the-exploding-business-of-bart) . . . at least an order of magnitude higher than will barter with bitcoin.

As I already said, "I'm not disputing that at all." I'm not going to debate something we already agree on and that I've already said I am not arguing against. At this point I feel you're just making a strawman.

There is a reason we are not seeing bitcoin usage as a currency pretty much anywhere.  These reasons have been well discussed so far.  Currently, bitcoin (and all forms of crypto) suck for use as a currency.  Since crypto is a commodity users run into the very problem that you mentioned - the issue of coincidence of wants.  Very few people want crypto, so it's tough to barter with.  That's why transactions with it are almost always converted to a real currency immediately after the transaction completes.

We are seeing increased bitcoin usage in high inflationary environments. There are much higher reports of ownership of bitcoin in emerging markets such as Nigeria, Venezuela, Turkey, etc. Ownership rates are far higher in places like these compared with western nations that aren't experiencing high inflation. It would stand to reason that higher ownership numbers also equates to higher usage numbers amongst its population. These are not people with bitcoin sitting in their investment accounts. At the same time we don't really have a good method of tracking transactions that are being used here either. So all we can really go on is surveys and such that attempt to track how many people are using bitcoin in these regions.

I'm in no delusion that bitcoin is threatening US dollar hegemony. As I mentioned, I am not disputing the US dollar transaction counts dwarf those of bitcoin. You're putting words in my mouth there.

I mean . . . the US killed the limited Breton-Woods gold standard in 1971, but effectively dropped it under FDR in the '30s, making it a 'debt-based currency' for quite a while.  The argument can be made that since the US has continuously kept debt since 1791 and all fiat currency issued has been backed on the word of this indebted government country that it has been a 'debt-based currency' for much longer.

Holding debt is one thing. That doesn't make the currency in use debt-based. Financing that debt using monetary policy is another. We previously would finance debt and pay that debt's interest through taxation. We now pay that debt and its interest back by inflating it away. Big difference.

All blockchain hashing algorithm based crypto requires serious environmental damage to exist during the hashing phase.  Claiming otherwise is factually incorrect.  It's baked into the whole design of the hashing.  At the risk of sounding like a crypto hype-man . . . you do understand the technology underlying crypto, right?

Listen, I'm not going to assume your knowledge level of a particular subject. I'm just going to refute things by responding to the claim as it was made, so I'd appreciate it if you don't imply I don't know anything about bitcoin or cryptocurrencies by asking if I know how they work. I'll assume that you do and you can assume that I do. If you make a claim that is incorrect, then I respond in kind on why I think that. That's the best course of a discussion like this. I work in a computer science field and work on several open source bitcoin related projects, so I'll just leave my experience as that and leave the rest of my written word for the discussion at hand.

I will apologize because you and some others are making the same claims at times, so sometimes it can seem like I am responding to the same person when in reality it is two different people (you and Chpbstrd) responding with the same exact response that I already made a rebuttal to. So in that sense, I apologize since I might have assumed you read my response when you might not have. But it was only a few posts back, so I would've thought you read it. That being said, you can read my response on bitcoin's energy use that I already made in response to ChpBstrd below:

And in terms of the "biggest hurdle" I'm surprised electricity consumption costs are not up there. Who would pay the cost of running armies of servers to crunch a whole economy of crypto transactions?

The electricity costs of the bitcoin network don't go up the more transactions are made. I am very big on environmental causes. I drive an electric car, I am a vegan, I have solar panels on my house and I see bitcoin as a big part of moving toward a more sustainable economy. Our current central banking money system is hugely wasteful. It is only sustainable financially because it is extremely wasteful environmentally. It's entire scheme is propped up based on the idea of GDP which is an archaic form of measuring human and economic progress that we as a human society must desperately move away from. Measuring economic success in GDP doesn't measure human happiness, or literacy rates, or health care progress, or work life balance, etc. The only way that fiat currencies can continue to succeed under modern monetary theory (MMT) is by continuing to push GDP higher at all costs. People harp on the scourges of capitalism, but it is this facet of our monetary system that corrupts the entire system more than anything else.

I find that frugality and environmentalism go hand-in-hand. There are a lot of people that don't consider the environmental and carbon costs of all the "stuff" they buy. They only think of carbon costs in terms of emissions without realizing everything they purchase has a carbon cost. Buying a new phone every year or a new car every two years has massive carbon and environmental costs to it. This means that expecting the GDP to go up perpetually in the way that MMT requires is wholly unsustainable. This doesn't even take into account the fact that central banking and its participants directly contribute to the fossil fuel industry and your deposits in those institutions directly contribute to that regardless of whether you're invested in them or not to the tune of over $7 trillion the last few years alone.

The vast majority of the energy costs of bitcoin today goes toward production of new bitcoin. Take a look at a block explorer and you'll see that a vast majority of the mining incentive (3.125btc/block) comes from the subsidy whereas only a small percentage comes from transaction fees. Only about 1-2% of the current incentive comes from fees. So a vast majority of the energy use for bitcoin so far has come from production of new bitcoin. Bitcoin, being a digital asset and just a number in a ledger, can be infinitely reused over and over again without needing to "reproduce" it. So for today's energy cost to produce this bitcoin, you now have a monetary instrument that can be infinitely reused for future transactions for generations to come.

The production of new bitcoin gets cut in half roughly every 4 years. So there will come a time where there is a transition away from energy being spent for the production of new bitcoin to energy being spent to facilitate transactions incentivized through transaction fees. There is very little overhead to bitcoin mining. This means that the fees spent to settle a bitcoin transaction will be extremely close to the cost of electricity needed to confirm it. This is a very efficient monetary network in comparison to what we have today where the overhead to facilitate transactions and all that comes with it (mediation, security, logistical, building, etc) is very high. There will be a future with bitcoin where the cost in fees for a bitcoin transaction will roughly equal the cost in electricity used to confirm it.

The efficiency of this monetary network needs to be understood and compared in relative terms to what we have today. Obviously there is an environmental cost to everything we do today. Producing electric cars absolutely has an environmental and carbon cost. They're only considered more sustainable when you look at them in comparison to gas ICE cars most people drive today. Similarly, with bitcoin, there are obviously environmental costs to operating the network and the electricity use it requires. However, when you compare it to our current monetary and banking system we have today, it pales in comparison with those costs.

The current monetary system does involve environmental damage.  Unless you believe that crypto will entirely replace all existing monetary systems, then these systems will remain in place whether bitcoin succeeds or fails.  So we're talking about current banking environmental damage + bitcoin environmental damage vs current banking environmental damage.  It's there whatever happens, so doesn't seem like there's much point discussing it.

Yes, I realize there won't be an overnight transition and I already acknowledged that I highly doubt bitcoin will replace the US dollar in my lifetime. I do hope for a transition to a more sustainable monetary system however. What we have today with MMT is grossly unsustainable, both financially and environmentally. So in the meantime, my hope for bitcoin is even just a bit of a check and balance against the current systems. If bitcoin exists as a check against more reckless monetary policies around the world, then that means even just a little less reckless spending results in less environmental destruction. Perhaps the hope is that with a little bit of a check in place against that spending and more subdued monetary policies, then bitcoin's energy use is worthwhile in relation to that. Also, if in the end there are people who's wealth would've otherwise been completely destroyed because of fiat currencies collapsing are saved through bitcoin, then that certainly has its merits for its electricity consumption as well. It certainly beats the energy used for so many frivolous things in today's society that go unnoticed.

[Telecaster]

Ah, OK.  We want more well defined numbers.  Sure.  About 15,174 businesses worldwide (https://buybitcoinworldwide.com/how-many-businesses-accept-bitcoin/) accept bitcoin for payment.  There exist approximately 334,000,000 businesses worldwide (https://www.businessdasher.com/small-business-statistics/#:~:text=There%20are%20approximately%20334%20million,of%20the%20current%20business%20landscape.).  So we can figure that somewhere around 0.0045% of businesses worldwide take bitcoin as payment.  To give you an idea of how unbelievably small this is, estimates are that around 400,000 businesses worldwide take barter for payment (https://hbr.org/2012/09/the-exploding-business-of-bart) . . . at least an order of magnitude higher than will barter with bitcoin.

Or to put it in simpler terms . . . effectively no merchants take bitcoin.  It is not a currency or real method of trade currently used.

The true number is far, far smaller than that.   For example, your link claims Microsoft accepts Bitcoin.  This is 100% false.   Microsoft accepts payments from Bitpay, which converts your Bitcoin to dollars, which it then pays to Microsoft.   Microsoft does not now and has never accepted native Bitcoin for payments.   

The only major company I'm aware of that ever allowed native Bitcoin payments (as opposed to using a payments processor) is Tesla.   And they only did it for a few weeks, and it is not clear if they ever accepted even a single Bitcoin payment.   

[LateStarter]

Adoption is low and slow, but more each day and maybe accelerating, but it's still going to take time.
Compare early 1990’s internet. Clunky, hard to use, niche, mostly useless, most will never need it, what the hell is it even ??? Never really caught on – until it did.

This analogy comes up a lot, and boy I can't disagree more with it.   I was using the Internet in the early 1990s and it was both incredibly exciting and useful.  Usenet was around back then, and it was a great resource.  And there was file sharing (the original Doom game was shareware) and of course email.   I was even using it for work back then, as we needed access to government databases (which were an overnight download), but it beat a physical visit to the agencies.  We thought the Internet was great and could see tons of potential.  Obviously, lots of things needed to happen to realize that potential, but they did happen, and in fairly short order too.   The web browser became widely available in about 1994 IIRC, and Amazon and e-commerce were right behind.   

Your individual experience is utterly irrelevant - you represent a single data point in a set of 5.5 billion.

Number of Internet Users shows approximately 7 million worldwide internet users in 1992. Congrats on being one of those 7 million early adopter enthusiasts, but spare a thought for the remaining 99.99% of the world population who knew very little or zero about it.

You made the claim that in 1992 the Internet was viewed as "mostly useless" (among other things).    Presumably, someone would have had to have heard of the Internet to conclud it was "mostly useless."   Although many or most people at the time might have been unaware of it, that is NOT how it was viewed by the people who did know about it, even if they weren't users.  It should be noted that most households didn't have computers at the time, so many people didn't have the option of using it in the first place.   

At that time were services similar to the Internet that had millions of subscribers like AOL, Prodigy, and Compuserve where you could chat online, download files, IM, play games and even do shopping.   It wasn't a big leap at the time to see how those services could be vastly expanded.   

Another predecessor at this time was called Bitnet which was mostly academic focused and ran on institutional mainframes.  I used to entirely to chat with friends at other schools, but it didn't take much imagination to see how it would be handy for home use.   Again, your "mostly useless" does not seem to square with the experiences of people who were using it. 

All of this required computers to increase in power and come down in cost, which was already happening on almost a monthly basis.    I assure you, while some people may have been baffled by the potential the Internet and similar at that time, lots of people understood the upside immediately.   By about 1996 corporate email was almost ubiquitous.    Your Bitcoin/Internet adoption analogy does not square with observation, at all.

The internet was 'mostly useless' to 99.99% of the world because they didn't know about it, didn't understand what it was, didn't understand it's potential, etc.
The internet was highly valued by a small minority of early adopters who found great utility and saw a great future . . .

Now replace the 'The internet' with 'Bitcoin' in the above 2 sentences.

The analogy is imperfect - it fails in two significant ways:
(i) There was no heated fervent opposition to the internet (that I'm aware of).
(ii) There was no real risk in taking a chance on the early internet. If it flopped, so what, move on. There is risk in adopting a new money. If it flops, you lose your money. It is reasonable to expect a slower more wary progression.

[waltworks]

Ah, OK.  We want more well defined numbers.  Sure.  About 15,174 businesses worldwide (https://buybitcoinworldwide.com/how-many-businesses-accept-bitcoin/) accept bitcoin for payment.  There exist approximately 334,000,000 businesses worldwide (https://www.businessdasher.com/small-business-statistics/#:~:text=There%20are%20approximately%20334%20million,of%20the%20current%20business%20landscape.).  So we can figure that somewhere around 0.0045% of businesses worldwide take bitcoin as payment.  To give you an idea of how unbelievably small this is, estimates are that around 400,000 businesses worldwide take barter for payment (https://hbr.org/2012/09/the-exploding-business-of-bart) . . . at least an order of magnitude higher than will barter with bitcoin.

Or to put it in simpler terms . . . effectively no merchants take bitcoin.  It is not a currency or real method of trade currently used.

The true number is far, far smaller than that.   For example, your link claims Microsoft accepts Bitcoin.  This is 100% false.   Microsoft accepts payments from Bitpay, which converts your Bitcoin to dollars, which it then pays to Microsoft.   Microsoft does not now and has never accepted native Bitcoin for payments.   

The only major company I'm aware of that ever allowed native Bitcoin payments (as opposed to using a payments processor) is Tesla.   And they only did it for a few weeks, and it is not clear if they ever accepted even a single Bitcoin payment.

NewEgg used to back in the day. Not sure if they still do (or still exist?)

Plus there's @lifeanon269's web hosting company. There are probably some other little companies run by crypto enthusiasts out there, so I don't doubt you can find at least one merchant and maybe several in your state that accepts it.

It's shitty money because it's many orders of magnitude too volatile. It's poorly designed as a replacement for fiat. It's never used for anything but hoarding/speculation, and it's not going to overcome those problems.

But it could still go up in value a lot, so there's that.

-W

[lifeanon269]

There are two more major hurdles in this application, and IMO both of them are even bigger than taxes.   One is that Bitcoin provides zero advantages over the traditional payment system.  I can't think of a single time in my entire life when Bitcoin would have solved a payment problem, or even would have made a single payment even slightly easier.   

The other is that Bitcoin is too volatile to use as a payment system.  There is lots of discussion about the eroding value of the USD, which is about 3.5%/year on average.   Google tells me that as of the time of this post, Dec 9, 8:11 PM UTC, Bitcoin has lost 4.1% of its value in the last 24 hours.   That is far, far too volatile for business applications.  Doesn't work, full stop.   

Sure, maybe one day enough people will jump on the bandwagon such that Bitcoin will only change by about 3.5% in one year, but then you lose the investment case.    With no investment case, then people will sell.   

New entrants are required for Bitcoin's price to go up.

I don't think those issues are bigger than the policy hurdle.

Bitcoin can certainly provide additional benefits over traditional payment rails. Worst case is that it is just as easy.

For example, transacting with bitcoin can be cheaper than current payment rails which are around 3%. If a merchant offers discounts to those paying in bitcoin (of which I have seen a few merchants do this), then that could be one incentive to use bitcoin over traditional methods.

Privacy can also be another benefit. A spouse in an abusive relationship might seek out a more private means of transacting that doesn't leave a trail for their spouse to track. Or you may simply be a consumer who doesn't want every merchant they do business with to have your personal  information. In that sense, using bitcoin is more akin to using cash as payment.

I also don't see volatility as being a major hurdle. If your unit of account is dollars and you're paid in dollars, then the merchant's you deal with likely will simply peg the price of their goods to the dollar and the bitcoin at the PoS will simply use the current exchange rate.

If we're at a point where people are being paid in bitcoin and their unit of account is bitcoin, we're already likely at a stage where bitcoin is a large part of our economy and therefore far less volatile. It's volatility will naturally go down as its market size grows and it has already shown to be doing just that.

As I said, I don't think either of these problems are as big of a hurdle as the tax implications, which aren't a problem inherent to bitcoin itself.

Also, as I already said in the very post you responded to, bitcoin doesn't need new entrants for its exchange rate price to go up. It does for its relative economic value to go up, but not its dollar price. That's an important distinction.

[YttriumNitrate]

The tax implications are exactly why there isn't adoption from a PoS standpoint. Look at the vast majority of merchants that accept credit card transactions. They don't want to have to worry about dealing with the payment network themselves, so they typically onboard a vendor to handle that for them via a payment terminal, such as Square, NCR, Clover, etc. That means they don't need to host backend payment processing servers themselves in a datacenter. All they need is a simple card terminal and internet connection and the SaaS vendor handles it for them. Not many merchants interact directly with VISA. Financial institutions are generally the institutions that interoperate with VISA, not merchants and users.

A shop could host their bitcoin node and integrate it into their payment terminals and webshop, but that's more work than a lot of businesses want to put into it. So they're looking for those similar vendors to do it for them in the same way vendors today manage VISA transactions for them. However, these payment processors for bitcoin have a lot of headwinds for adoption and thus find it hard to gain market.

Any idea what percent of cannabis shops accept bitcoin? Since they are often locked out from the major electronic payment systems, it seems like that would be the ideal situation for bitcoin. If there isn't widespread adoption among cannabis shops, that would suggest more fundamental problems with using bitcoin as a currency.

[waltworks]

Anyone want to make a friendly wager about whether I'll be able to buy a, say, Wendy's frosty (unless someone has a better idea) with Bitcoin (and no, not by using an app that sells some bitcoin for dollars and then pays Wendy's in dollars) in the next 5 years? 10 years? 20 years?

Say, $100 donation (in bitcoin, if your charity accepts it...) to the charity of your choice. I'm a Doctors Without Borders guy, FWIW.

-W

[lifeanon269]

Anyone want to make a friendly wager about whether I'll be able to buy a, say, Wendy's frosty (unless someone has a better idea) with Bitcoin (and no, not by using an app that sells some bitcoin for dollars and then pays Wendy's in dollars) in the next 5 years? 10 years? 20 years?

Say, $100 donation (in bitcoin, if your charity accepts it...) to the charity of your choice. I'm a Doctors Without Borders guy, FWIW.

-W

Sure, why not.

I can make the donation to Doctor's Without Borders using bitcoin, if that's OK with you:

https://thegivingblock.com/donate/doctors-without-borders-u-s-a-inc/

I say you'll be able to make a purchase at Wendy's directly with bitcoin using whatever wallet app you want in 10 years. Wendy's can use a payment processor for their bitcoin acceptance and I make no claim as to whether they keep or hold the bitcoin on their end. All that matters is that I as a customer was able to make the purchase with bitcoin.

You can also donate to Doctor's Without Borders. That's certainly a worthy cause. Whoever wins the other makes the donation. I'm good for it.

[dandarc]

From the giving block's website:

"Automatic
Say goodbye to price volatility. Crypto donations automatically sell for cash instantaneously, 24/7."

So no, you're not giving doctors without borders crypto. You're having giving block's sell your crypto for actual money and then forward those USD to the charity.

[lifeanon269]

I didn't suggest otherwise.

I even mentioned the same type of thing when referring to what the requirement of Wendy's would be in 10 years. The main point is that I can use bitcoin directly on the sender/payer side to make the transaction.

[Metalcat]

There was a furniture store in my city that advertised that it accepted Bitcoin as payment on a billboard on the side of its building. I don't know if they still do, it was visible on my commute from work a few years ago, but I remember finding it interesting at the time.

[LateStarter]

From the giving block's website:

"Automatic
Say goodbye to price volatility. Crypto donations automatically sell for cash instantaneously, 24/7."

So no, you're not giving doctors without borders crypto. You're having giving block's sell your crypto for actual money and then forward those USD to the charity.

Probably true, but it ain't necessarily so - the non-profit has the choice.

From the giving block's website:

blah blah . . , and it automatically converts crypto to cash (but you can also choose to HODL your crypto donations).

[MustacheAndaHalf]

Lightning Network transaction volume is growing quickly.  How much of that is criminal activity, which differs from the long-term growth in consumer usage?   I think criminals have a motivation to use the Lightning Network:
"The Lightning Network is interfering with law enforcement’s ability to trace the proceeds of ‘crypto’ crime, according to a new report from Europe’s top cops."
https://coingeek.com/lightning-network-an-obstacle-for-criminal-investigations-says-europol/


When Bitcoin's price crashes, people holding Bitcoin for spending will suddenly see their purchasing power drop.  I think that will be an interesting test of Lightning Network usage.  If Bitcoin drops by 50% or 75%, people may stop spending and wait for it to recover.

[Juan Ponce de León]

As an actual bitcoiner, I couldn't care less about spending my bitcoin at Wendy's or anywhere else.  Gold has a 17 trillion dollar market cap and you can't spend gold bullion at Wendy's.  I don't expect bitcoin to replace fiat, in fact it's better if it doesn't.  I'm a big fan of fiat and I think they should print more of it.  And they will print more of it, the more they print the better it is for bitcoin.  There is something like 900 trillion$ in global assets, bitcoin only needs to capture a small % of that pie for current holders to do extremely well.  I've already done extremely well but I think there's a long road to go yet and I am strapped in for the ride. 

I have no doubt I'll check back on this thread in another couple of years and the bitcoin price will be magnitudes higher again, nation states mining it, using it as a treasury asset and possibly even utilizing it for international trade and there'll be the same old characters here saying 'backed by nothing' 'can't buy a coffee with it at Wendy's' LMAO.  Maybe you guys should just get a small allocation, just in case it catches on.  But I also don't care if you don't.  I tell most people I talk to about Bitcoin not to buy, because most people just don't have the mentality to be able to hold long term.  Bitcoin has long passed the point where it relies on individual plebs onboarding fiat to increase the price.  Now we have nation states, corporations and pension funds doing that for us.  You can argue if that is good or bad, but the beauty of bitcoin to me is that anyone can use it, your friends and your enemies.  Even people with completing opposing views of what bitcoin is even for or what its goals are.  Tip: bitcoin has no goals, bitcoin is just bitcoin.

[MustacheAndaHalf]

I have no doubt I'll check back on this thread in another couple of years and the bitcoin price will be magnitudes higher again, nation states mining it, using it as a treasury asset and possibly even utilizing it for international trade and there'll be the same old characters here saying 'backed by nothing' 'can't buy a coffee with it at Wendy's' LMAO.

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

[Juan Ponce de León]

I have no doubt I'll check back on this thread in another couple of years and the bitcoin price will be magnitudes higher again, nation states mining it, using it as a treasury asset and possibly even utilizing it for international trade and there'll be the same old characters here saying 'backed by nothing' 'can't buy a coffee with it at Wendy's' LMAO.

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

Ok buddy I'll let you have that one, you're the magnitude expert here.  Are you still shorting bitcoin?

[MustacheAndaHalf]

I have no doubt I'll check back on this thread in another couple of years and the bitcoin price will be magnitudes higher again, nation states mining it, using it as a treasury asset and possibly even utilizing it for international trade and there'll be the same old characters here saying 'backed by nothing' 'can't buy a coffee with it at Wendy's' LMAO.

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

Ok buddy I'll let you have that one, you're the magnitude expert here.  Are you still shorting bitcoin?

Your words suggest Bitcoin at $9.7M USD each by Dec 2026.  And when I ask if that is what you mean... you say nothing.  If you have no doubt, why are you suddenly cagey about what you just posted?

I shorted Microstrategy for 24 hours (11/20 to 11/21, $MSTZ) and made a +42% return, but other than that have not shorted crypto recently.  I currently hold no short or long positions on crypto.

[Juan Ponce de León]

I have no doubt I'll check back on this thread in another couple of years and the bitcoin price will be magnitudes higher again, nation states mining it, using it as a treasury asset and possibly even utilizing it for international trade and there'll be the same old characters here saying 'backed by nothing' 'can't buy a coffee with it at Wendy's' LMAO.

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

Ok buddy I'll let you have that one, you're the magnitude expert here.  Are you still shorting bitcoin?

Your words suggest Bitcoin at $9.7M USD each by Dec 2026.  And when I ask if that is what you mean... you say nothing.  If you have no doubt, why are you suddenly cagey about what you just posted?

I shorted Microstrategy for 24 hours (11/20 to 11/21, $MSTZ) and made a +42% return, but other than that have not shorted crypto recently.  I currently hold no short or long positions on crypto.

Yes I get it mate, you take everything 100% literally.  I'm a bit lower down the spectrum and we struggle to converse.  It was very effective way to ignore all of the points I made in my post, I've already admitted I got the 'magnitude' part wrong LMAO.  Anyway, nothing changes here.  Like talking to brick walls so I will check back in another year or two.

[LateStarter]

Lightning Network transaction volume is growing quickly.  How much of that is criminal activity, which differs from the long-term growth in consumer usage?   I think criminals have a motivation to use the Lightning Network:
"The Lightning Network is interfering with law enforcement’s ability to trace the proceeds of ‘crypto’ crime, according to a new report from Europe’s top cops."
https://coingeek.com/lightning-network-an-obstacle-for-criminal-investigations-says-europol/

WhatApp message volume is growing quickly.  How much of that is criminal activity, which differs from the long-term growth in consumer usage?   I think criminals have a motivation to use WhatsApp:
"European Police Chiefs call for industry and governments to take action against end-to-end encryption roll-out"
https://www.europol.europa.eu/media-press/newsroom/news/european-police-chiefs-call-for-industry-and-governments-to-take-action-against-end-to-end-encryption-roll-out

Europol is just anti-privacy. How about you ?

[lifeanon269]

As an actual bitcoiner, I couldn't care less about spending my bitcoin at Wendy's or anywhere else. 

I mean, I agree with you, but at the same time I want as little friction to being able to use my bitcoin as possible. I have enough bitcoin to live off of for the rest of my life. So I'd prefer it if I didn't have to use Bisq or Robosats all the time to convert to dollars for spending. If cap gains were removed for small purchases and you could spend it directly at retailers, then that would go a long way to making life easier for those that want to live off their bitcoin stash.

Bitcoin certainly has different uses for different people and that's what makes its widespread adoption/use all the more inevitable.

[lifeanon269]

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

You're being pedantic.

But I can be pedantic too.

He didn't say "order of magnitudes" higher. He said magnitudes higher. Big difference. If the current magnitude of a bitcoin is $100k, then a couple magnitudes higher would be $300k.

[MustacheAndaHalf]

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

You're being pedantic.

But I can be pedantic too.

He didn't say "order of magnitudes" higher. He said magnitudes higher. Big difference. If the current magnitude of a bitcoin is $100k, then a couple magnitudes higher would be $300k.

Google "magnitudes more":

AI Overview
"Magnitudes more" is a term that refers to the order of magnitude

[MustacheAndaHalf]

I have no doubt I'll check back on this thread in another couple of years and the bitcoin price will be magnitudes higher again, nation states mining it, using it as a treasury asset and possibly even utilizing it for international trade and there'll be the same old characters here saying 'backed by nothing' 'can't buy a coffee with it at Wendy's' LMAO.

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

Ok buddy I'll let you have that one, you're the magnitude expert here.  Are you still shorting bitcoin?

Your words suggest Bitcoin at $9.7M USD each by Dec 2026.  And when I ask if that is what you mean... you say nothing.  If you have no doubt, why are you suddenly cagey about what you just posted?

I shorted Microstrategy for 24 hours (11/20 to 11/21, $MSTZ) and made a +42% return, but other than that have not shorted crypto recently.  I currently hold no short or long positions on crypto.

Yes I get it mate, you take everything 100% literally.  I'm a bit lower down the spectrum and we struggle to converse.  It was very effective way to ignore all of the points I made in my post, I've already admitted I got the 'magnitude' part wrong LMAO.  Anyway, nothing changes here.  Like talking to brick walls so I will check back in another year or two.

I'm pushing you to make your prediction clear, instead of being vague.  I've asked you twice if your prediction was $9.7M BTC/USD, and you repeatedly refuse to say "Yes" or "No, I predict ...".  You refuse to be accountable for making a prediction.

[lifeanon269]

"another couple of years", from Dec 2024, would mean Dec 2026.
"the bitcoin price will be magnitudes higher again", where two orders of magnitude would be 100x or more

Bitcoin's current price is $97,090/USD.  You are claiming that by Dec 2026, BTC/USD will hit $9,709,000?

You should have more doubt.

You're being pedantic.

But I can be pedantic too.

He didn't say "order of magnitudes" higher. He said magnitudes higher. Big difference. If the current magnitude of a bitcoin is $100k, then a couple magnitudes higher would be $300k.

Google "magnitudes more":

AI Overview
"Magnitudes more" is a term that refers to the order of magnitude

You didn't get it, did you?

I was being pedantic. Yes, saying "magnitudes more" usually implies they're talking about orders of magnitudes in mathematics with powers of 10. But since it wasn't specified what magnitude or modulus they're referring to, you could be pedantic and say they're referring to a different magnitude other than a power of 10. Thus I was being pedantic just as you were in your original comment.

And stop using AI to look shit up. lol

And why are you so insistent about being the accountability police here? As if anyone is holding anyone accountable for the shit they say here...