battani

You raise interesting points, but you make many, many assumptions. It's totally possible that they may all come true, but there is a lot of speculation in your analysis.

Also, you assume that BTCUSD price will rise as bitcoin gains adoption (that is the basis of your analysis). But there is no correlation between price and adoption.

It's not hard to imagine a world where 1 BTC is stable at ~$10K for example. Denominations would be in milli- and micro-BTC, and BTCUSD price would be an afterthought.

> One day, there may be a number I can call to when my bitcoin goes missing.

Why would I even need such infrastructure if I can already do that today with my bank?

Sam is making valid points. But bitcoin's survival is not a function of its price in USD, and its adoption rate is also not a function of its price in USD. If we want to think of bitcoin as a currency, we have to stop thinking of it as a store-of-value/investment asset and start thinking of it as an efficient means of exchange.

There is no such thing as "buy pressure" or "sell pressure" in liquid markets (BTCUSD is liquid enough to qualify). Buying and selling are two sides of the same coin. There are scenarios that push people to sell (as mentioned in the article, miners selling to pay for electricity), but the volume of such trade orders is just a fraction of the volume built up by speculation, and speculation goes both ways.

I would argue that bitcoin's default "price pressure" is up because there is no easy way to short it (for the average trader) and early adopters (who own a large amount of bitcoin) are extremely evangelistic holders and buyers.

The argument that bitcoin may not survive is a valid one. Not because it's not being adopted by merchants (merchants couldn't care less about bitcoin, they receive fiat currency), but because consumers are not using it to make purchases or transfer money. Consumer adoption is the real measure of how much the ecosystem is evolving. Merchant adoption is just pure marketing at this point, and I believe that companies such as Coinbase and BitPay that are pursuing merchant adoption aggressively are in the wrong business.

I feel nobody here likes to hear it and I feel like a lot of people in SV are tuning this out, but bitcoin is really, really struggling to find a relevant use case, especially with consumers. Regular consumers have absolutely no reason to use bitcoin. The "1-click" payment and 1% price discount are not appealing enough to the average Joe who already gets 1-2% cash back, airline miles, and consumer protection on his credit card (and 1-click checkouts on many e-commerce platforms). And more regulation isn't helping the "crypto-anarchist" decentralization angle either.

Bitcoin is great, for MERCHANTS.

But payments is a two-sided market. A winning product must appeal to both sides, the buyer and the seller. Bitcoin appeals to the seller at the expense of the buyer. Even if the blockchain technology overcomes all of its flaws, we would have bootstrapped a value exchange system that does not offer greater benefit to the one that exists today.

Many are making the flawed and simplistic analogy of comparing bitcoin/blockchain technology to the early days of the Internet... That analogy is not valid. When it comes to money, consumers actually want a central authority. They want to be insured and cuddled and protected and not run the risk (however small) of being criminally liable for transactions and have someone to speak with if they make an erroneous transaction or have their card stolen. And they can already do all that, which makes it tremendously difficult to compel them to change the habits they've had in forever to adopt a system that does not provide them with significant advantages.

I've been in bitcoin since 2011 and used to be a big believer, but I don't see bitcoin or blockchain technology gaining traction with consumers, because it simply doesn't solve a problem for them.

It could be destined to eternally remain a store of value (like gold) or find targeted applications (like machine-to-machine payments). The underlying blockchain technology could be of more use if adopted by the banking system, for example, but that is still far in the future.

The author is making valid points.

Nobody here likes to hear it, and I feel like a lot of people in SV are tuning this out, but bitcoin is really, really struggling to find a relevant use case, especially with consumers. Regular consumers have absolutely no reason to use bitcoin. The "1-click" payment and 1% price discount are not appealing enough to the average Joe who already gets 1-2% cash back, airline miles, and consumer protection on his credit card (and 1-click checkouts on many e-commerce platforms). And more regulation isn't helping the "crypto-anarchist" decentralization angle either. Add price volatility to that and it kills the consumer use case.

Bitcoin is great, FOR MERCHANTS.

BUT PAYMENTS IS A TWO-SIDED MARKET. A winning product must appeal to both sides, the buyer and the seller. Bitcoin appeals to the seller at the expense of the buyer. Even if the blockchain technology overcomes all of its flaws, we would have bootstrapped a value exchange system that does not offer greater benefit to the one that exists today.

Many are making the flawed and simplistic analogy of comparing bitcoin/blockchain technology to the early days of the Internet... That analogy is not valid. When it comes to money, consumers actually WANT a central authority. They want to be insured and cuddled and protected and not run the risk (however small) of being criminally liable for transactions and have someone to speak with if they make an erroneous transaction or have their card stolen. And they can already do all that, which makes it tremendously difficult to compel them to change the habits they've had in forever to adopt a system that does not provide them with significant advantages.

I've been in bitcoin since 2011 and used to be a big believer, but I don't see bitcoin or blockchain technology gaining traction with consumers, because it simply doesn't solve a problem for them.

It could be destined to eternally remain a store of value (like gold) or find targeted applications (like machine-to-machine payments). The underlying blockchain technology could be of more use if adopted by the banking system, for example, but that is still far in the future.

There is a lot of uncertainty surrounding the MaidSafe IPO. Exercise due diligence before sending coins over to them. More info here: https://bitcointalk.org/index.php?topic=579797.320

Bitcoin price action has been suffering for the past few weeks. First the Mt Gox debacle, then China banning banks from processing it, then the IRS declaring it taxable as a property.

The major impact of that last decision will be on consumer adoption. Now, every time I want to make a transaction, I need to keep track of my taxes. I know that some wallet services are already developing ways to keep track of this automatically, but that's just an extra headache for the average consumer. This in essence will force consumers to think of bitcoin more as an investment, rather than a "currency" they can spend, and that will impede adoption.

I know nobody here likes to hear it, and I feel like a lot here in SV are tuning this out, but bitcoin is really, really struggling to find a relevant use case with consumers. Regular consumers have absolutely no reason to use bitcoin. The "1-click" payment and 1% price discount are not appealing enough to the average Joe who already gets 1-2% cash back, airline miles, and consumer protection on his credit card (and 1-click checkouts on many e-commerce platforms). And more regulation isn't helping the "crypto-anarchist" decentralization angle either. Add price volatility to that and it kills the consumer use case.

But... how about micro-payments? Consumers have always hated them. http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.ht.... (Shirky, 2000)

But... how about international transactions? Hard to beat the fees at https://transferwise.com.

Bitcoin is great, FOR MERCHANTS.

BUT PAYMENTS IS A TWO-SIDED MARKET. A winning product must appeal to both sides, the buyer and the seller. Bitcoin appeals to the seller at the expense of the buyer.

Consumer adoption is going to determine whether or not it succeeds on a grander scale. Unfortunately, Bitcoin does not solve a problem for consumers. Especially with tap-tap mobile payments around the corner.

When it comes to money, consumers want to be insured and cuddled and protected and not run the risk (however small) of being criminally liable for transactions and have someone to speak with if they make an erroneous transaction or have their card stolen. And they can already do all that, which makes it tremendously difficult to compel them to change the habits they've had in forever to adopt a system that does not provide them with significant advantages.

I've been in bitcoin since 2011 and used to be a big believer, but I don't see bitcoin gaining traction with consumers, in part because of the huge regulatory risk. Any significant threat to the banks' business will be met with harmful regulatory control (friendly reminder: Wall Street banks fund the largest political lobbies in Washington). It could be destined to eternally remain a store of value (like gold) or find very targeted applications (like specific types of machine-to-machine payments). The underlying blockchain technology could be of more use (if adopted by the banking system, for example) but that is still far in the future.

Agree with this. Merchants take on absolutely no risk by proposing bitcoin as a payment option because a) they never touch btc b) they still offer the CC alternative. There is no deterioration in customer experience. It's just an additional option that allows Square in this case to tap into a market of evangelistic early adopters who are ready to spend part of their coins.

It's a smart marketing stunt (Square Market has been struggling to compete with more established marketplaces, so this could drive traffic to their service) but in no way points to the evolution of the bitcoin ecosystem. That will have to be measured on the consumer side of the market.

It's easy for merchants to accept bitcoin, because they always propose it alongside a CC payment alternative. And they never risk anything, because they only ever touch USD. So it's all gain for them. (This is more a marketing stunt to drive traffic to Square Market, more than anything else. Square Market has been having trouble competing with more common marketplaces such as Shopify and Amazon).

This doesn't affect consumer adoption though, which is what investors/traders would be looking at.

Also, if the number of bitcoin transactions through such methods goes up, BTC/USD is more likely to go down. Any bitcoin sent to a Square merchant will be picked up by Coinbase and sold at the bid price on the bitcoin markets, which will pressure price action down. (Coinbase then takes the USD from that sell and transfers them to Square).

Good to see. Businesses that offer marketplace services should have no objection to integrating bitcoin as a payment option. It does not deteriorate the merchant or consumer experience (regardless of whether or not they use or hold bitcoin), so they have nothing to lose, and all to gain.

For Square, it's just an extra payment method that they're hoping will help their merchants (and them) tap into the very small percentage of evangelistic early adopters who have made large gains and are now willing to spend some of their coins.

Square is most probably not a supporter of the vision of bitcoin taking over e-commerce payments. Most of their business stems from partnerships with large credit card companies. This is a pure (and smart) marketing play.

I agree. But it's very difficult to find a system that is so appealing to consumers that they'll make the switch, simply because consumers don't have a payments problem. Incremental reductions in friction (e.g. the consumer won't have to enter their credit card details, or, the consumer will save a percent on their purchase) are certainly not compelling enough to justify changing a deep and old habit.

And a new system would have to figure out a way to mitigate the regulatory risk.

Yes, price variability (measured against USD) would deter consumers.

I agree, but it just adds friction. Already, consumers are very comfortable using their credit cards. If you add the mental cost of thinking about taxes, especially when you have to pay capital gains when you pay for something (!!), that's a deterrent for most regular consumers.

Is there any reason in particular you're not using existing solutions, like Venmo or Splitwise?

The IRS now treats bitcoin as a property asset, very much the same way they treat stocks, and not all stocks are prone to speculation. So this is expected news for those who hold bitcoin as an investment.

The major impact of this decision will be on consumer adoption. Now, every time I want to make a transaction, I need to keep track of my taxes. I know that some wallet services are already developing ways to keep track of this automatically, but that's just an extra headache for the average consumer. This in essence will force consumers to think of bitcoin more as an investment, rather than a "currency" they can spend, and that will impede adoption.

I know nobody here likes to hear it, and I feel like a lot here in SV are tuning this out, but bitcoin is really, really struggling to find a relevant use case with consumers. Regular consumers have absolutely no reason to use bitcoin. The "1-click" payment and 1% price discount are not appealing enough to the average Joe who already gets 1-2% cash back, airline miles, and consumer protection on his credit card (and 1-click checkouts on many e-commerce platforms). And more regulation isn't helping the "crypto-anarchist" decentralization angle either. Add price volatility to that and it kills the consumer use case.

But... micro-payments? Consumers have always hated them. http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.ht... (Shirky, 2000)

But... international transactions? Hard to beat the fees at https://transferwise.com.

Bitcoin is great, FOR MERCHANTS. But consumer adoption is going to determine whether or not it succeeds on a grander scale. Unfortunately, Bitcoin does not solve a problem for consumers. Especially with tap-tap mobile payments around the corner.

When it comes to money, consumers want to be insured and cuddled and protected and not run the risk (however small) of being criminally liable for transactions and have someone to speak with if they make an erroneous transaction or have their card stolen. And they can already do all that, which makes it tremendously difficult to compel them to change the habits they've had for in forever to adopt a system that does not provide them with significant advantages.

I've been in bitcoin since 2011 and used to be a big believer, but I don't see bitcoin gaining traction with consumers, in part because of the huge regulatory risk. Any significant threat to the banks' business will be met with harmful regulatory control (friendly reminder: Wall Street banks fund the largest political lobbies in Washington). It could be destined to eternally remain an investment instrument (like gold) or find very targeted applications (like machine-to-machine payments). The underlying blockchain technology could be of more use (if adopted by the banking system, for example) but that is still far in the future.

A few weeks ago, a friend and I had the idea to build an app to send and receive bitcoin over social networks. There have been many times in the past where we wanted to send bitcoin to people on Facebook or Twitter (to tip, or as a gift, or to pay back friends), but could never do it easily. The recipient has to set up a wallet, understand how it all works, and send me their address, among other things.

The entire bitcoin experience seemed to be a real pain for average users. We thought they would be more at ease transacting on platforms they’re familiar with, with people they can identify and trust, as opposed to anonymous addresses.

So we built Coingram: https://coingram.co

It’s quite straightforward: you can send bitcoin to anyone on Facebook or Twitter. You can also receive bitcoin from anyone by sharing a link: coingram.co/[your-username]. And you can send very tiny amounts (as little as 1 micro-bitcoin). Everything is free.

We have many features planned (mobile app, embeddable buttons, attaching media to your transaction) but we think it's reached a point where we want to see if anyone's actually going to use the darn thing.

We think it has some potential. What do you guys think?