posted on Apr, 27 2013 @ 08:15 PM
Originally posted by purplemer
The worldwide street currency is taking to the streets and gaining in popularity. People are finding it easier and cheaper than using credit cards.
Using Bitcoins takes power away from the banking
Except for the fact these merchants have to immediately convert the bitcoins to Euros in order to pay taxes, rent, utilities, suppliers, etc. That
requires an exchange and a bank, or a processor and a bank. Credit cards also require a processor and a bank, cash just requires a bank. Bitcoin
merely replaces the well-developed, heavily-regulated credit card middleman with the brand new, untested Bitcoin middleman.
Merchants also have to hope the price of BTC hasn't crashed, as it is wont to do, before they get a chance to sell theirs. Fiat currency in developed
nations has a fairly predictable value from day to day. Bitcoin is all over the place. And whenever it starts to plummet, the major exchanges go
offline and claim they were being DDOSed, so good luck getting out of BTC before they lose half their value.
Then there's the bitcoin holders themselves. It's a deflationary currency, meaning while it lasts it increases in value over time. Bitcoin holders
are therefore more likely to hold on to it than they would national currencies. Merchants don't want people to hold their money, they want people to
spend their money. And the non-reversible nature of bitcoin transactions means no one with any sense will make large purchases with bitcoin. There's
a reason spend-centric card issuers like AmEx load their cards up with purchase protection features--they know that people are more willing to spend
money that way. You can't do that with Bitcoin.
As a gimmick, this will work for a little while. It's kind of like accepting Ithaca Hours or Disney Dollars or some other promotional scrip. It gets
you in the news, and it gets a few people in your store who might not otherwise have come. But it doesn't signal a worldwide revolution in money.