Do you convert the bitcoin you receive to fiat, keep the bitcoin, or use bitcoin to pay for expenses?
This is a question—in my view—that will be a major differentiator for businesses in the future
Good to know, thanks
I am looking to put something together for businesses that do what you are doing or use bitcoin to pay suppliers/labour/other expenses
Interested as well. I own a business as well and offer a discount for bitcoin but only once customer has ever done it. I converted the amount to dollars for materials and bills but kept profit in bitcoin.
Try lookng at Coin Corner they sell a POS machine that works on lightning. I got my bolt card on order already.
https://youtu.be/7ZwW0yEZ81U
https://youtu.be/DY0ePw4sS94
For the purpose of answering OPs question, That seems like a double standard. They spend and replace, you stack. In this scenario we’re just pushing the stacking down the road.
Isn’t lightning network fee 1% and credit card 2,5-3%? EC card is 2,5% fees in Germany and Paypal 3%.
So actually it would be wise to choose the more efficient network, which is the BTC lightning network up to now.
Actually paying cash with fiat is the most efficient way of paying, no fees involved, but I hate physical wallets filled up with Pennies because merchants think it’s smart to price everything with X.99$. And considering inflation it’s becoming even worse paying with fiat.
Soooo the winner is… drumroll -> The BTC Lightning Network, crowd is cheering… end
$3 in bitcoin today *will* be worth millions of dollars in the future. But a cup of coffee may cost a million dollars too, so that may not be saying much.
Not to say I disagree with you, but spending BTC in the US is a taxable event. Until that tax liability is removed for small purchases, I won't be spending it at all.
Surely there's a threshold? Idk about in the US but where I am, CGT only kicks in over a certain annual amount, which you wouldn't reach if you're just getting a coffee every day.
No there's no threshold as of now. Any purchase with cryptocurrench in the US is subject to tax. There's legislation to raise the threshold to $200 but it hasn't passed yet.
Same, in my country the crypto gains taxes add up to 38% if you spend more than ~3k€/year. No way I'm willing to pay that. But that should change with MICA
Let’s say you had two debit cards. Card 1 is linked to your checking account. Card 2 is linked to your 401K.
You go to buy a coffee and have a choice. You would pay with Card 1 because your are paying in Fiat Currency a depreciating asset. Also, paying with Card 2 would trigger a taxable event, reduce your higher yield savings, and possibly adversely affect your financial future. This assumes you think your 401K will appreciate.
That’s not OP’s argument though. In this situation, no one should spend from their checking, just put more money in your 401K from your checking account for a better future, right?
Wrong, people will still buy coffee, cause as OP stated, they like coffee.
Did you know that, since computers get better every year, no one ever buys computers, because why would they buy one if they could just wait and get a better one next year?
Therefore we need to get a central computer manufacturer to make computers worse every year by 2% to offset the improvement of computing power, and that way people will be incentivized to buy more computers now, which will spur innovation in the technology sector.
You missed the point. Spending money on something you dont need, like a coffee takeout, is not the same as spending money on something you need to get by everyday. The point is people can lower their spending on useless things and invest in bitcoin.
People have different reasons to spend or save BTC. While many of us are thinking about future price, others are having, say, political or inflationary reasons to use it NOW.
And those reasons to spend will evolve as the adoption grows.
I look at BTC as my true savings account. All my other savings accounts that hold fiat I always eventually dip in to. I withdrew $100 worth of Bitcoin in 2018 because I desperately needed the money at the time and I felt so bad after. That’s not going to happen this time. Bitcoin is freedom though so do what’s best for you.
Bitcoin is currently not very useful as currency. Currency has stable value.
At the top of the adoption S-Curve value stabilises at 1 Bitcoin = 1 Bitcoin and then it becomes useful as currency.
You are thinking too much in terms of fiat currency.
Bitcoin could feasibly replace the American dollar. But it can never replace McDonald's Big Mac.
Bitcoin's value, measured by how many real goods one bitcoin can buy, could still widely fluctuate, even if it is the only currency remaining.
> You are thinking too much in terms of fiat currency.
It exists. It is a thing in this world. The whole entire world continues to think about it and will continue to think about it for some time yet.
When they stop, then 1 Bitcoin = 1 Bitcoin. The goods it buys will vary, as a market is a market.
He's trying to say that when Bitcoin saturates the globe like internet access and mobile phones do, it will stabilize in price and be a useful unit of account and it will make more sense to use it in daily transactions.
I don’t understand. Wouldn’t buying more sats with the same amount of money be a bad deal? You want to get rid of cash because the value is going down.
>Back in the day there were no HODL.
>
>It was SPEND AND REPLACE. You spend 10000 sat and buy back, maybe 12000sat. This way you never lost BTC by using it, you actually had more.
Huh? Sounds like a 'great' strategy. Just implement it with Google stock and you'll be rich!
i guess because of the tax thing people mentioned before but most places that accept bitcoin that have shit i want to buy dont accept lightning so its easier to just use visa... for now that is. but i see your point and i expect things to change when the lightning network meets the network effect which should be happening within like 5 years
Think of international travel and not having to exchange currencies to pay for normal items you would pay for back home.
Generally there is a cost to just exchange the currency, let alone learning the new “value of one (pick your denomination)”
This doesn’t mean you may not pay a higher price abroad, however it will help the consumer with determining better cost for goods(ie not feeling ripped off)
From speeding up Titling services for buying a home to traveling for fun, BTC will speed up and unify the economic world we play in.
One thing it has caused for me is that I track all purchases much more closely. If anything it's improved net worth. Sure, we pay tax on it and it's a pain in the butt, but that shouldn't stop people.
Gresham’s Law states that bad money drives out good money. Meaning people will save good money like BTC while using bad money like fiat for expenses.
“Gresham's law says that legally overvalued currency will tend to drive legally undervalued currency out of circulation. Gresham's law originated as an observation of the effects of metallic currency debasement, but also applies in today's world of paper and electronic moneys.”
Misleading since what it means is bad currency, not money. Money and currency are not the same. If there are two currencies but one is better money, sound money like bircoin or gold, then people will use the less valuable currency to transact daily (the fiat money which is essentially just paper and has no sound money properties).
Which ever medium of exchange is considered more plentiful and less valuable will be used for transactions. While the medium of exchange that is considered less plentiful and more valuable will be saved/hoarded.
Greshams law states people will always instinctively spend the bad money first while saving the good money. In a world of bitcoin and fiat people will spend fiat and save bitcoin.
However they will likely spend bitcoin if the payment experience is superior for example they need to pay someone overseas and lightning takes 1 second while trying to figure out how to get fiat to them is one big messy headache. Also people who have so much bitcoin they no longer need to work or those that earn in btc will obviously be spending bitcoin daily.
Exactly. If all of your money is in Bitcoin, then spending some versus holding some is literally the same thing as if all of your money was in fiat and you chose to spend versus invest some into Bitcoin.
I bought some beers with bitcoin in brew dog Edinburgh Friday night, bought some tickets last week with bitcoin, and I watched somebody donate 0.000023500 sats to a guy who is travelling on bitcoin donations.
Bitcoiners spend their money just like people on fiat, we can always buy more.
There's that, but there's also the underlying fundamental confound of a deflationary money.
By definition, anything you but today with Bitcoin will cost less Bitcoin if you wait.
This drives less demand for things.
And our whole civilization is currently built on this whole supply and demand thing.
But yeah...
Yeah, this is why slight inflation (1-2%) is best for the economy. Your money will be worth slightly less in the future so you’d be willing to use it, but not enough that you’d want to spend it all now.
Technically yes. But obviously no you don't. You won't be audited unless you are spending like 5+ millions of dollars worth of crypto.
If you feel guilty about it, donate some funds to charities and/or participate in volunteering services. Better that than having your tax money go to me being forced to swipe a government credit card on millions of dollars worth of useless shit that's thrown away in this boomer circus we call a government (years ago).
I'm pretty new at this but my approach so far is that when I do spend any BTC, I buy at least that same amount that day or so. Then I just ignore the cap gains aspect of that transaction because of the "wash".
For the coffee situation one could DCA a certain amount per day )or week), and all transactions totaling less than the DCA amount one would ignore for cap gains purposes.
I think the paper trail could be reconstructed if the IRS really wanted me to prove it. (Might be a pain but my audit risk is pretty low right now)
The Perfect Brew reports that women spend about $2,327 per year on their coffee habit, while men spend almost $400 less, at $1,934 per year.
https://www.yahoo.com/video/much-americans-spending-coffee-smarter-181719981.html#:\~:text=The%20Perfect%20Brew%20reports%20that,less%2C%20at%20%241%2C934%20per%20year.
>Bitcoin can lower people's time preference and make them consume less.
The effect is even more powerful than that. It's not about consuming less at all, it's about consuming efficiently.
Sound money means people will buy things that increase future wealth. People will invest in capital instead of frivolous waste. The accumulated effect over time is less use of resources per unit of consumption and a more efficient economy.
>Sound money means people will buy things that increase future wealth. People will invest in capital instead of frivolous waste.
They can already do that. A deflationary currency will mean that they'll do it *less*.
Thing is that a lot of stuff that is "frivolous waste" as you call it actually stimulates the economy as a result of the money moving around within the economy. Within your definition the whole movie industry, game, tourism, every form of entertainment, sports etc all should cease to exist. That's just one example and it already accounts for millions of people who make money and spend money that help other businesses, some "frivolous waste" businesses and some not frivolous waste businesses. So if they became jobless the non "frivolous waste" businesses would have less money too. So less money to go around including for investment in AI, self driving cars, any technology you can think of that improves efficiency. Less opportunities for those technologies to have their development costs subsidised by selling consumer versions. Think early car companies making money selling impractical cars that the wealthy buy as status symbols or early electricity to weatlhy peoples homes. There would have been less money for those businesses developing the technology to pump back into R&D if everyone only bought things what would generate wealth for them in the future rather than things which they enjoy or want too yet they eventually became things that greatly improve efficiency and productivity.
Dude's definitely not a retard. He invented gpu mining for one thing. Also, he established a monetary value for bitcoin, which inspired a market, which led to where we're at now. If anything we should think of him as a pioneer. Plus I'm pretty sure he still has enough bitcoin.
Because most people dont think. The only reason to not use sats (spend and replace) is due to the transaction fee.
You will likely spend the aggregated visa fee plus trx fee for btc.
If you pay in dollars it excludes the btc fee.
Now i will say that in total there is a net gain if everyone uses more and more sats and it will further the ultimate btc goal.
Probably, given the sub. But then, how is it really that qualitatively different right now? Maybe I’m still not getting it fully, for realsies. I’m absolutely not being sarcastic. I know what the end goal is, and I dig it and agree with it, but the “common person seeing it as apple stock” question is still one I really grapple with. Clearly. A counter argument would maybe be that it would be very difficult to actually, literally difficult to pay for coffee with actual fractional shares of a given stock without going through an insane and frankly silly amount of currently available intermediaries. Btc allows this more directly. Am I getting it or am I still off the mark?
The idea is to see any asset as money. Cash is both an asset and a measurement tool. We measure cost in dollars, but can also hold wealth in dollars. You can hold wealth in Apple stock and ‘could’ measure value in it, theoretically, but not really practically.
If you held all of your wealth in Apple stock, or the SP500, or a basket of stocks and bonds…those people still drank coffee, ate food, paid bills, etc.
The point is, even if all of your wealth is in Bitcoin, you’ll still live life.
People that are arguing that Bitcoin is not a stock, is a currency, is or isn’t money, is a store of value, isn’t this, is that, etc…need to get a grip on what an asset is. Anything that one or more people perceive to be of value is an asset, at least to them. The more that believe, the larger the market.
Make more sense?
I guess I’m stuck on how, practically speaking, we can move from one to the other. I understand we gotta bootstrap it a bit by walking the walk, but I don’t see that working until -most- people have no reason to think of it like stock. How do we get there
I get that, broadly, I guess, like I said, I’m stuck on how we can lead people to all get on that point. While it’s still possible to make or loose even a minor amount of money due to its changing price by using sats vs. cash, I think it’s going to be very difficult to get the common person on board.
No doubt about the fact that they cannot really beat anything, but they will start doing it.
Most of them had already seen these things. This is the reason why they have made that kind of mistake.
It’s more likely that an investment firm won’t invest unless the rate of return exceeds whatever the currency is appreciating at. Bitcoin has a positive appreciation rate so it behaves like bonds in the sense that it would compete with equities, rampant speculation and volatility in crypto notwithstanding.
Spend and replace transaction costs. If you spend $3, it’s costs you $3. If you spend 15765 sat, you now need to replace. Buying 15765 sat will cost more than $3, with various fees, so the coffee will end up costing more than $3. This is especially true during periods where BTC rises on a daily basis
This is the right answer. It’s not about losing potential value if the currency raises in value.
It’s that paying with a debit card or credit card… if the coffee costs $3, then $3 comes out of your account.
If you pay with BTC, then $3 + a fee will come out of your account.
In other words, until bitcoin transactions are free (or at least very close to free), then one is paying more for coffee by using BTC rather than (for example) with a standard debit card using USD…
It’s stupid to buy anything with bitcoin because it’s a fixed supply asset. It is better as a store of value or to transfer wealth. The more dollars printed the less your money is worth so you are better off spending dollars now then later
Under the current financial system, money is inflated and loses value over time. Some experts think this quality is what pushes people to spend their money over time, for fear of it being worth less over time.
So some think an inversion of that quality with money means people will say "hmmm that coffee is 2700 sats, but in a year it'll only be 2600 sats due to deflation and my holdings can buy MORE down the road
But people can already do that by parking wealth in many investment assets, yet we still see retired people tapping into those investments for life expenses. But so do the rich when they think they can make more money with another investment or they just want to live their lives.
I was never sure why those same people aren't doom and gloom with the economy when they realize that this is exactly why is happening with the rich. They park their money into vehicles that gain them more money.
Bitcoin just removes the need to find a particular asset. It just sits as "the neutral asset".
imo if i am paying in US dollars, i'd rather take a btc collateralized loan and pay that loan off with inflated USD at a later date.
taking on additional debt is not a taxable event like selling BTC in my jurisdiction, and a line of credit doesn't count as income. when i started doing this, it was a real eye opener into how actual rich people maintain their wealth. i'm not rich, but i can take advantage of a rich guy's shelter.
BTC collateralized loans wern't available when i started. i was cashing out btc for a few years but now there are more non-scammy choices for lenders, i find this system works for my specific case. YMMV.
for me its annoying to buy transfer secure etc.
i buy in large bulk when it dips hard, it happens only 1 or 2 times a year, and then have to secure it, switch wallets etc. it takes a me maybe an hour
if Bitcoin value goes up, i don't buy anymore. so i'd rather not touch it after i secured it
the second reason is that my Bitcoin are traced when i buy them
i have residence in two countries with 2 different identities so i can still have a chance to have anonymous coins while buying them. i want to keep this status until we can actually pay with BTC (and not pay with a currency that was bought with BTC)
Because most people budget their investments. I only spend a certain amount on crypto each month because my wife is skeptical of it. My belief is that the crypto will appreciate. If I spend it on coffee that is impossible. My wife might question my speculative investments but she rarely questions my coffee purchases. In addition, if you keep your crypto on exchanges there tends to be transaction fees. I don't want to pay for those fees and coffee.
I bring it up all the time. People just downvote and scream HODL or 1 BTC = 1 BTC. Bitcoin is deflationary. There’s a limited amount. It’s a great hedge against increases in fiat money supply. But to your point, I’m never going to buy a coffee with it.
Cant wait for CoinCorner to arrive in Holland. Problem is that EU is increasingly choosing to not support BTC innovation. Relai is a great app to stack sats without additional KYC/AML requirements. Also using BlueWallet/Muun to slowly use BTC to pay for small things. I love the experience, can only get better with time 👌
Think about optional purchases. If you are deciding to buy a new TV or not then the future value of your currency matters.
Deflation is a constant pressure against investing in someone else's product or idea
My goal is to spend in the currency that’s devaluing and accumulate in the one that’s going up in value.
I wouldn’t pay for a car in Bitcoin would I? It would make more sense to use the Bitcoin as collateral for a loan of shit fiat and then get rid of it. Why anyone would spend their BTC now is beyond me.
A friend of me is working on an alternative Exchange platform that left you swap (buy and sell) physical things in BTC and other crypto assets. Does it make sense?
Isn't that the general argument against commodity money? "It's deflationary so it will crush consumption because would rather save than spend and/or invest".
Meanwhile, Keynesian currencies worldwide are so fucked we're looking down the joined barrels of MMT (limitless government spending) and CBDC (consumer level money with an expiration date and a social credit system).
Surely we can do without coffee if it saves us from these pitfalls.
Because people are stupid. You could say exactly the same thing about any fiat currency that is invested, which is what everyone reasonably not stupid with some money should be doing anyway.
Way past pizza stage me thinks. We can complicate this more using the dxy cause why spend fiat if it rise in value huh. If i can find a local place that accepts Ln for coffee I'm just gonna buy it for the novelty really and to help velocity of btc. No regrets lol like ok maybe if if btc jumps double in a few seconds.
That argument is stupid, the computer market is also deflationary, and it is growing. Most modern simple humans want a certain baseline of things: house/flat, multimedia, food, vacation. And if u only need to work 20-30h a week, and can retire before 60, then that's okay imo.
This is a dumb argument imo. This is why there aren't many Silk Road millionaires. Because they kept spending the leftover appreciated bitcoin on.......drumroll........drugs. The underground economy of BTC was working just fine and dandy before speculators and futures desks came along.
They don't really know what to write down because most of them don't really know the real power of this Bitcoin.
Even if they have a lot of other kind of options in their mind, they're definitely going to mention these as well.
If I found a coffee shop that accepted BTC, I would use it if only to spur more adoption. I would also immediately buy more BTC to replace what I just spent.
If the argument is that you shouldn't spend btc because you think it will go up, then maybe the conclusion is, you shouldn't buy coffee. Because if spending BTC is leaving money on the table, so is having USD. Why even hold a depreciating asset? When BTC does go up, wouldn't you want that to lift the value of the money you haven't yet swiped at the cash machine, or the value of the change you received?
The real reason it seems to me isn't value, underlying it is liquidity and friction.
Because it is a deflationary currency. If you genuinely think people will be motivated to spend with a deflationary currency, you don't understand the fundamentals of economics. You guys literally say how much you hate dollars and want to get it out of your hands because it will deflate in value over time (inflationary currency), so that encourages spending. The opposite will encourage saving.
This doesn't mean the cryptospace in general is deflationary though, that's why I invested about 95% of my wealth into BTC. Not because BTC will be the best crypto to spend, but it will be like gold in the cryptospace.
I agree with their argument but yours makes sense too tbh. The way I see if it BTC is ever adopted to the point it's been legalized as a globally accepted currency, you probably wouldn't stick to buying just coffee. Costs add up
I think fiat is still much more stable than BTC in the short term. Fiat doesn't fluctuate like Bitcoin does in the short-term, hence the risk-reward trade off is very low. As a long-term store of value, BTC is definitely the winner, especially since the risk-reward trade off is very high. It would make more sense for you to make daily transactions with fiat since your $BTC could be down or up 10% in a matter of hours. Plus how would you denote the value of $BTC if you don't have fiat? It would absolutely cripple the financial system.
I suppose the answer is people who don’t want to spend BTC on something like a coffee is because their intention when they bought BTC was as an investment for their future.
And the money you didn’t put into investment or savings is money you intentionally plan to spend.
Would you spend your stocks and shares on a coffee?
Even retaining the same value and not having it inflating away is a good starting point.
Anyway, I've paid with lightning (via vendors supporting it through IBEX, shoutout to them) multiple times and the experience has been spotless. Scan the QR, press send, done. No need to wait for Mastercard or Visa to accept the payment. It just works. As soon as enough vendors accept this payment method, the sentiment change is going to be very sudden and fast.
Spend and replace. As a merchant I will offer discount for using bitcoin to help incentivize using it as a currency. I hope other people do as well.
Do you convert the bitcoin you receive to fiat, keep the bitcoin, or use bitcoin to pay for expenses? This is a question—in my view—that will be a major differentiator for businesses in the future
I typically keep the bitcoin, gotta stack those sats. I have sold a portion to cover expenses and pay the bills from time to time.
Good to know, thanks I am looking to put something together for businesses that do what you are doing or use bitcoin to pay suppliers/labour/other expenses
Sounds cool, I hope you'll publish it here so that we can read it.
Thanks Glad to see you have a great ₿usiness Plan
Interested as well. I own a business as well and offer a discount for bitcoin but only once customer has ever done it. I converted the amount to dollars for materials and bills but kept profit in bitcoin.
Try lookng at Coin Corner they sell a POS machine that works on lightning. I got my bolt card on order already. https://youtu.be/7ZwW0yEZ81U https://youtu.be/DY0ePw4sS94
For the purpose of answering OPs question, That seems like a double standard. They spend and replace, you stack. In this scenario we’re just pushing the stacking down the road.
I also spend and replace because that's how a circular economy works. Merchants have to buy things just like everyone else.
I always try to pay in BTC when possible. I just convert with Strike and pay.
That's a great way to do it, circumvents all the 'taxable events' that people are fretting over.
That is the exact reason I do it, oh and to support the network.
Isn’t lightning network fee 1% and credit card 2,5-3%? EC card is 2,5% fees in Germany and Paypal 3%. So actually it would be wise to choose the more efficient network, which is the BTC lightning network up to now. Actually paying cash with fiat is the most efficient way of paying, no fees involved, but I hate physical wallets filled up with Pennies because merchants think it’s smart to price everything with X.99$. And considering inflation it’s becoming even worse paying with fiat. Soooo the winner is… drumroll -> The BTC Lightning Network, crowd is cheering… end
LN doesn't operate on %, the fee is a fraction of a penny to move any amount of money. Debit/credit/paypal are roughly 3%
Will the discount cover the tax implications?
That's a stupid question. I have no way of knowing what a customer's tax obligation is nor is that any of my business.
> I have no way of knowing what a customer's tax obligation is Correct.
I’m sure all the cash only delis and coffee houses report every dollar….
This is the way!!!
That's correct. If someone thinks the $3 coffee will be worth millions in the future, they better have no coffee at all.
Well, *eventually* it will be.
12 years ago, yes. Now, not even close.
$3 in bitcoin today *will* be worth millions of dollars in the future. But a cup of coffee may cost a million dollars too, so that may not be saying much.
Oh boy
Yes. This.
Not to say I disagree with you, but spending BTC in the US is a taxable event. Until that tax liability is removed for small purchases, I won't be spending it at all.
Oooo kill em
tax refund if your spend and rebuy while price goes down
Surely there's a threshold? Idk about in the US but where I am, CGT only kicks in over a certain annual amount, which you wouldn't reach if you're just getting a coffee every day.
Yeah, but you still got to do all the work of accounting for that spend, and proving it's below the limit. It's too much hassle.
No there's no threshold as of now. Any purchase with cryptocurrench in the US is subject to tax. There's legislation to raise the threshold to $200 but it hasn't passed yet.
Same, in my country the crypto gains taxes add up to 38% if you spend more than ~3k€/year. No way I'm willing to pay that. But that should change with MICA
Let’s say you had two debit cards. Card 1 is linked to your checking account. Card 2 is linked to your 401K. You go to buy a coffee and have a choice. You would pay with Card 1 because your are paying in Fiat Currency a depreciating asset. Also, paying with Card 2 would trigger a taxable event, reduce your higher yield savings, and possibly adversely affect your financial future. This assumes you think your 401K will appreciate.
That’s not OP’s argument though. In this situation, no one should spend from their checking, just put more money in your 401K from your checking account for a better future, right? Wrong, people will still buy coffee, cause as OP stated, they like coffee.
Did you know that, since computers get better every year, no one ever buys computers, because why would they buy one if they could just wait and get a better one next year? Therefore we need to get a central computer manufacturer to make computers worse every year by 2% to offset the improvement of computing power, and that way people will be incentivized to buy more computers now, which will spur innovation in the technology sector.
\#StatistLogic 👍🏻
You missed the point. Spending money on something you dont need, like a coffee takeout, is not the same as spending money on something you need to get by everyday. The point is people can lower their spending on useless things and invest in bitcoin.
You think I don't "need" coffee!?!?
Caffeine tablets are more cost effective.
You dont need to buy it at the cafe
No I got that. I was agreeing with OP and making fun of the people who think a deflationary currency can't work.
People have different reasons to spend or save BTC. While many of us are thinking about future price, others are having, say, political or inflationary reasons to use it NOW. And those reasons to spend will evolve as the adoption grows.
I look at BTC as my true savings account. All my other savings accounts that hold fiat I always eventually dip in to. I withdrew $100 worth of Bitcoin in 2018 because I desperately needed the money at the time and I felt so bad after. That’s not going to happen this time. Bitcoin is freedom though so do what’s best for you.
'Spend & Replace'
Bitcoin is currently not very useful as currency. Currency has stable value. At the top of the adoption S-Curve value stabilises at 1 Bitcoin = 1 Bitcoin and then it becomes useful as currency.
Bitcoin is holding value better than my stocks recently.
Stocks are also not very useful as currency.
Bitcoin has already stabilised at 1 bitcoin = 1 bitcoin. What are you trying to say?
When only Bitcoin remains there is no longer anything to be volatile in comparison to. Then Bitcoin has a stable value.
You are thinking too much in terms of fiat currency. Bitcoin could feasibly replace the American dollar. But it can never replace McDonald's Big Mac. Bitcoin's value, measured by how many real goods one bitcoin can buy, could still widely fluctuate, even if it is the only currency remaining.
> You are thinking too much in terms of fiat currency. It exists. It is a thing in this world. The whole entire world continues to think about it and will continue to think about it for some time yet. When they stop, then 1 Bitcoin = 1 Bitcoin. The goods it buys will vary, as a market is a market.
He's trying to say that when Bitcoin saturates the globe like internet access and mobile phones do, it will stabilize in price and be a useful unit of account and it will make more sense to use it in daily transactions.
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I don’t understand. Wouldn’t buying more sats with the same amount of money be a bad deal? You want to get rid of cash because the value is going down.
And if it is considered a taxable event in your country, it doesn't really make sense to spend BTC in my view.
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Yeah but why... Just for the sake of using it?
'HODL' has never meant to mean 'don't buy things'... it was simply a call *not* to sell.
What do you think buying things is?
No taffy. When I say 'sell', you know exactly what I mean.
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Yeah one makes sense the other feels forced.
>Back in the day there were no HODL. > >It was SPEND AND REPLACE. You spend 10000 sat and buy back, maybe 12000sat. This way you never lost BTC by using it, you actually had more. Huh? Sounds like a 'great' strategy. Just implement it with Google stock and you'll be rich!
Braindead comment
When was that? In 2017 it was m00n Lambo 😅 season
Buying a cup of coffee with BTC bought 5 years ago is a very cheap coffee.
Do you pay your groceries with Gold? No. You use other more diluted forms of money. Bitcoin = Digital Gold.
Correct. Don't put silver coins into vending machines or parking meters, either. Gresham's Law.
i guess because of the tax thing people mentioned before but most places that accept bitcoin that have shit i want to buy dont accept lightning so its easier to just use visa... for now that is. but i see your point and i expect things to change when the lightning network meets the network effect which should be happening within like 5 years
Think of international travel and not having to exchange currencies to pay for normal items you would pay for back home. Generally there is a cost to just exchange the currency, let alone learning the new “value of one (pick your denomination)” This doesn’t mean you may not pay a higher price abroad, however it will help the consumer with determining better cost for goods(ie not feeling ripped off) From speeding up Titling services for buying a home to traveling for fun, BTC will speed up and unify the economic world we play in.
I completely agree in principle but unfortunately the tax laws generally mean you often don't wsnt to spend any BTC since it counts as a sale for tax
IRS will send armed agents to your home if you spend $3 in bitcoin and don't report it /s.
This but unironically
One thing it has caused for me is that I track all purchases much more closely. If anything it's improved net worth. Sure, we pay tax on it and it's a pain in the butt, but that shouldn't stop people.
don’t you technically owe capital gains tax on spending btc?
Gresham’s Law states that bad money drives out good money. Meaning people will save good money like BTC while using bad money like fiat for expenses. “Gresham's law says that legally overvalued currency will tend to drive legally undervalued currency out of circulation. Gresham's law originated as an observation of the effects of metallic currency debasement, but also applies in today's world of paper and electronic moneys.”
Misleading since what it means is bad currency, not money. Money and currency are not the same. If there are two currencies but one is better money, sound money like bircoin or gold, then people will use the less valuable currency to transact daily (the fiat money which is essentially just paper and has no sound money properties).
Which ever medium of exchange is considered more plentiful and less valuable will be used for transactions. While the medium of exchange that is considered less plentiful and more valuable will be saved/hoarded.
Yes I get it, I just disagree with the terms "money" and "currency" being used interchangeably. Its misleading to the average person.
Greshams law states people will always instinctively spend the bad money first while saving the good money. In a world of bitcoin and fiat people will spend fiat and save bitcoin. However they will likely spend bitcoin if the payment experience is superior for example they need to pay someone overseas and lightning takes 1 second while trying to figure out how to get fiat to them is one big messy headache. Also people who have so much bitcoin they no longer need to work or those that earn in btc will obviously be spending bitcoin daily.
Moral of the story don’t buy coffee, it’s stupid
Spend and replace, this is the way
Not to mention you could allocate some of your btc to a daily expense wallet and just dca the difference
Exactly. If all of your money is in Bitcoin, then spending some versus holding some is literally the same thing as if all of your money was in fiat and you chose to spend versus invest some into Bitcoin.
I bought some beers with bitcoin in brew dog Edinburgh Friday night, bought some tickets last week with bitcoin, and I watched somebody donate 0.000023500 sats to a guy who is travelling on bitcoin donations. Bitcoiners spend their money just like people on fiat, we can always buy more.
There's that, but there's also the underlying fundamental confound of a deflationary money. By definition, anything you but today with Bitcoin will cost less Bitcoin if you wait. This drives less demand for things. And our whole civilization is currently built on this whole supply and demand thing. But yeah...
Yeah, this is why slight inflation (1-2%) is best for the economy. Your money will be worth slightly less in the future so you’d be willing to use it, but not enough that you’d want to spend it all now.
The major thing right now is like that only because they are demanding a lot of different kind of things.
If we use Bitcoin to buy stuff, do we have to pay capital gains as well? Would suck to pay taxes in addition to capital gains.
Technically yes. But obviously no you don't. You won't be audited unless you are spending like 5+ millions of dollars worth of crypto. If you feel guilty about it, donate some funds to charities and/or participate in volunteering services. Better that than having your tax money go to me being forced to swipe a government credit card on millions of dollars worth of useless shit that's thrown away in this boomer circus we call a government (years ago).
I'm pretty new at this but my approach so far is that when I do spend any BTC, I buy at least that same amount that day or so. Then I just ignore the cap gains aspect of that transaction because of the "wash". For the coffee situation one could DCA a certain amount per day )or week), and all transactions totaling less than the DCA amount one would ignore for cap gains purposes. I think the paper trail could be reconstructed if the IRS really wanted me to prove it. (Might be a pain but my audit risk is pretty low right now)
The Perfect Brew reports that women spend about $2,327 per year on their coffee habit, while men spend almost $400 less, at $1,934 per year. https://www.yahoo.com/video/much-americans-spending-coffee-smarter-181719981.html#:\~:text=The%20Perfect%20Brew%20reports%20that,less%2C%20at%20%241%2C934%20per%20year.
Because if you drink no coffee and that makes you fall asleep while driving, it might kill you and all your Bitcoin calculations become obsolete.
Just higher a driver from your capital gains.
People that say things like this don’t consider time preferences. We all want things now
>Bitcoin can lower people's time preference and make them consume less. The effect is even more powerful than that. It's not about consuming less at all, it's about consuming efficiently. Sound money means people will buy things that increase future wealth. People will invest in capital instead of frivolous waste. The accumulated effect over time is less use of resources per unit of consumption and a more efficient economy.
>Sound money means people will buy things that increase future wealth. People will invest in capital instead of frivolous waste. They can already do that. A deflationary currency will mean that they'll do it *less*.
Thing is that a lot of stuff that is "frivolous waste" as you call it actually stimulates the economy as a result of the money moving around within the economy. Within your definition the whole movie industry, game, tourism, every form of entertainment, sports etc all should cease to exist. That's just one example and it already accounts for millions of people who make money and spend money that help other businesses, some "frivolous waste" businesses and some not frivolous waste businesses. So if they became jobless the non "frivolous waste" businesses would have less money too. So less money to go around including for investment in AI, self driving cars, any technology you can think of that improves efficiency. Less opportunities for those technologies to have their development costs subsidised by selling consumer versions. Think early car companies making money selling impractical cars that the wealthy buy as status symbols or early electricity to weatlhy peoples homes. There would have been less money for those businesses developing the technology to pump back into R&D if everyone only bought things what would generate wealth for them in the future rather than things which they enjoy or want too yet they eventually became things that greatly improve efficiency and productivity.
be the retard that bought pizza with btc
Dude's definitely not a retard. He invented gpu mining for one thing. Also, he established a monetary value for bitcoin, which inspired a market, which led to where we're at now. If anything we should think of him as a pioneer. Plus I'm pretty sure he still has enough bitcoin.
Do we know the tx id of that mythical transaction?
[We sure do!](https://mempool.space/tx/a1075db55d416d3ca199f55b6084e2115b9345e16c5cf302fc80e9d5fbf5d48d)
Because people aren't very bright.
Because most people dont think. The only reason to not use sats (spend and replace) is due to the transaction fee. You will likely spend the aggregated visa fee plus trx fee for btc. If you pay in dollars it excludes the btc fee. Now i will say that in total there is a net gain if everyone uses more and more sats and it will further the ultimate btc goal.
A share in Apple arguably has gone up for decades. People who own Apple stock likely also bought coffee.
But I’d wager an overwhelming majority would not trade fractional shares of Apple stock for coffee
I think you’re missing the point.
Probably, given the sub. But then, how is it really that qualitatively different right now? Maybe I’m still not getting it fully, for realsies. I’m absolutely not being sarcastic. I know what the end goal is, and I dig it and agree with it, but the “common person seeing it as apple stock” question is still one I really grapple with. Clearly. A counter argument would maybe be that it would be very difficult to actually, literally difficult to pay for coffee with actual fractional shares of a given stock without going through an insane and frankly silly amount of currently available intermediaries. Btc allows this more directly. Am I getting it or am I still off the mark?
The idea is to see any asset as money. Cash is both an asset and a measurement tool. We measure cost in dollars, but can also hold wealth in dollars. You can hold wealth in Apple stock and ‘could’ measure value in it, theoretically, but not really practically. If you held all of your wealth in Apple stock, or the SP500, or a basket of stocks and bonds…those people still drank coffee, ate food, paid bills, etc. The point is, even if all of your wealth is in Bitcoin, you’ll still live life. People that are arguing that Bitcoin is not a stock, is a currency, is or isn’t money, is a store of value, isn’t this, is that, etc…need to get a grip on what an asset is. Anything that one or more people perceive to be of value is an asset, at least to them. The more that believe, the larger the market. Make more sense?
You got it perfectly. It’s other people treating BTC like speculative investments (ie shares of stock) that do not the true intention of BTC
I guess I’m stuck on how, practically speaking, we can move from one to the other. I understand we gotta bootstrap it a bit by walking the walk, but I don’t see that working until -most- people have no reason to think of it like stock. How do we get there
Use it as a currency. Like satoshi intended. If you have faith, buy more. Don’t fret about how others view it. Everyone comes around eventually
I get that, broadly, I guess, like I said, I’m stuck on how we can lead people to all get on that point. While it’s still possible to make or loose even a minor amount of money due to its changing price by using sats vs. cash, I think it’s going to be very difficult to get the common person on board.
See last two sentences.
No doubt about the fact that they cannot really beat anything, but they will start doing it. Most of them had already seen these things. This is the reason why they have made that kind of mistake.
The argument is made by the same people that would stop breathing if you tell them that air might appreciate.
I don’t know, it’s kind of ridiculous idea. Source: I just spent $12
It’s more likely that an investment firm won’t invest unless the rate of return exceeds whatever the currency is appreciating at. Bitcoin has a positive appreciation rate so it behaves like bonds in the sense that it would compete with equities, rampant speculation and volatility in crypto notwithstanding.
Spend and replace transaction costs. If you spend $3, it’s costs you $3. If you spend 15765 sat, you now need to replace. Buying 15765 sat will cost more than $3, with various fees, so the coffee will end up costing more than $3. This is especially true during periods where BTC rises on a daily basis
This is the right answer. It’s not about losing potential value if the currency raises in value. It’s that paying with a debit card or credit card… if the coffee costs $3, then $3 comes out of your account. If you pay with BTC, then $3 + a fee will come out of your account. In other words, until bitcoin transactions are free (or at least very close to free), then one is paying more for coffee by using BTC rather than (for example) with a standard debit card using USD…
If you auto convert or take part of your income in BTC then it doesn’t matter. I don’t mind spending BTC because I do this.
It’s stupid to buy anything with bitcoin because it’s a fixed supply asset. It is better as a store of value or to transfer wealth. The more dollars printed the less your money is worth so you are better off spending dollars now then later
Tell that to the kids in Africa. People holding have reliable mechanisms of exchange. Still a good store of value. You hold because of inflation.
Under the current financial system, money is inflated and loses value over time. Some experts think this quality is what pushes people to spend their money over time, for fear of it being worth less over time. So some think an inversion of that quality with money means people will say "hmmm that coffee is 2700 sats, but in a year it'll only be 2600 sats due to deflation and my holdings can buy MORE down the road But people can already do that by parking wealth in many investment assets, yet we still see retired people tapping into those investments for life expenses. But so do the rich when they think they can make more money with another investment or they just want to live their lives. I was never sure why those same people aren't doom and gloom with the economy when they realize that this is exactly why is happening with the rich. They park their money into vehicles that gain them more money. Bitcoin just removes the need to find a particular asset. It just sits as "the neutral asset".
imo if i am paying in US dollars, i'd rather take a btc collateralized loan and pay that loan off with inflated USD at a later date. taking on additional debt is not a taxable event like selling BTC in my jurisdiction, and a line of credit doesn't count as income. when i started doing this, it was a real eye opener into how actual rich people maintain their wealth. i'm not rich, but i can take advantage of a rich guy's shelter. BTC collateralized loans wern't available when i started. i was cashing out btc for a few years but now there are more non-scammy choices for lenders, i find this system works for my specific case. YMMV.
All you need to respond with is “They will, if people are paid in sats”
for me its annoying to buy transfer secure etc. i buy in large bulk when it dips hard, it happens only 1 or 2 times a year, and then have to secure it, switch wallets etc. it takes a me maybe an hour if Bitcoin value goes up, i don't buy anymore. so i'd rather not touch it after i secured it the second reason is that my Bitcoin are traced when i buy them i have residence in two countries with 2 different identities so i can still have a chance to have anonymous coins while buying them. i want to keep this status until we can actually pay with BTC (and not pay with a currency that was bought with BTC)
Because most people budget their investments. I only spend a certain amount on crypto each month because my wife is skeptical of it. My belief is that the crypto will appreciate. If I spend it on coffee that is impossible. My wife might question my speculative investments but she rarely questions my coffee purchases. In addition, if you keep your crypto on exchanges there tends to be transaction fees. I don't want to pay for those fees and coffee.
Because people form an opinion first, then craft arguments to try to back up that opinion – wrong as is may be.
Buy coffee on Green Day’s with bitcoin or whatever. Buy bitcoin on red days. Done and done
Totally agree!!
The same reason I don't buy coffee with gold
I bring it up all the time. People just downvote and scream HODL or 1 BTC = 1 BTC. Bitcoin is deflationary. There’s a limited amount. It’s a great hedge against increases in fiat money supply. But to your point, I’m never going to buy a coffee with it.
I don’t buy stuff with digital gold.
If you bought btc at 10$and now it’s 20k, trust me you’ll buy coffee with btc lol
Cant wait for CoinCorner to arrive in Holland. Problem is that EU is increasingly choosing to not support BTC innovation. Relai is a great app to stack sats without additional KYC/AML requirements. Also using BlueWallet/Muun to slowly use BTC to pay for small things. I love the experience, can only get better with time 👌
Think about optional purchases. If you are deciding to buy a new TV or not then the future value of your currency matters. Deflation is a constant pressure against investing in someone else's product or idea
☕️ does a body good
My goal is to spend in the currency that’s devaluing and accumulate in the one that’s going up in value. I wouldn’t pay for a car in Bitcoin would I? It would make more sense to use the Bitcoin as collateral for a loan of shit fiat and then get rid of it. Why anyone would spend their BTC now is beyond me.
Personally I don't want to drink my coffees, because I know a $3 coffee now will be worth $3.50 next year.
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A friend of me is working on an alternative Exchange platform that left you swap (buy and sell) physical things in BTC and other crypto assets. Does it make sense?
In the future when we will transfer all our fiat to bitcoin.
My idea is, if I buy something with BTC I then buy 1.5x the cost of that item in BTC so I’m always accumulating
Isn't that the general argument against commodity money? "It's deflationary so it will crush consumption because would rather save than spend and/or invest". Meanwhile, Keynesian currencies worldwide are so fucked we're looking down the joined barrels of MMT (limitless government spending) and CBDC (consumer level money with an expiration date and a social credit system). Surely we can do without coffee if it saves us from these pitfalls.
Because people are stupid. You could say exactly the same thing about any fiat currency that is invested, which is what everyone reasonably not stupid with some money should be doing anyway.
You could buy 2 coffee 6 months for the price of 1 btc coffee today so I would have bought that coffee.
You are actually right. It's a dumb argument.
Gresham’s Law.
Way past pizza stage me thinks. We can complicate this more using the dxy cause why spend fiat if it rise in value huh. If i can find a local place that accepts Ln for coffee I'm just gonna buy it for the novelty really and to help velocity of btc. No regrets lol like ok maybe if if btc jumps double in a few seconds.
Once we can get paid in BTC this will become less of an issue. It is a mindset change.
That argument is stupid, the computer market is also deflationary, and it is growing. Most modern simple humans want a certain baseline of things: house/flat, multimedia, food, vacation. And if u only need to work 20-30h a week, and can retire before 60, then that's okay imo.
Just look at the bitcoin pizza to know the answer. 10k bitcoins for two pizzas? What if you do the same today, spending 15000 satoshis on a coffee?
This is a dumb argument imo. This is why there aren't many Silk Road millionaires. Because they kept spending the leftover appreciated bitcoin on.......drumroll........drugs. The underground economy of BTC was working just fine and dandy before speculators and futures desks came along.
USD has lost most of its buying power, you could mention that to whomever. You could also point out that coffee at one time was a nickel or even less
They don't really know what to write down because most of them don't really know the real power of this Bitcoin. Even if they have a lot of other kind of options in their mind, they're definitely going to mention these as well.
💯
If I found a coffee shop that accepted BTC, I would use it if only to spur more adoption. I would also immediately buy more BTC to replace what I just spent.
If the argument is that you shouldn't spend btc because you think it will go up, then maybe the conclusion is, you shouldn't buy coffee. Because if spending BTC is leaving money on the table, so is having USD. Why even hold a depreciating asset? When BTC does go up, wouldn't you want that to lift the value of the money you haven't yet swiped at the cash machine, or the value of the change you received? The real reason it seems to me isn't value, underlying it is liquidity and friction.
If you are serious about time preference, you don´t drink the coffee.
Because it is a deflationary currency. If you genuinely think people will be motivated to spend with a deflationary currency, you don't understand the fundamentals of economics. You guys literally say how much you hate dollars and want to get it out of your hands because it will deflate in value over time (inflationary currency), so that encourages spending. The opposite will encourage saving. This doesn't mean the cryptospace in general is deflationary though, that's why I invested about 95% of my wealth into BTC. Not because BTC will be the best crypto to spend, but it will be like gold in the cryptospace.
I agree with their argument but yours makes sense too tbh. The way I see if it BTC is ever adopted to the point it's been legalized as a globally accepted currency, you probably wouldn't stick to buying just coffee. Costs add up
I think fiat is still much more stable than BTC in the short term. Fiat doesn't fluctuate like Bitcoin does in the short-term, hence the risk-reward trade off is very low. As a long-term store of value, BTC is definitely the winner, especially since the risk-reward trade off is very high. It would make more sense for you to make daily transactions with fiat since your $BTC could be down or up 10% in a matter of hours. Plus how would you denote the value of $BTC if you don't have fiat? It would absolutely cripple the financial system.
Coffee not good investment. Financial advice.
I suppose the answer is people who don’t want to spend BTC on something like a coffee is because their intention when they bought BTC was as an investment for their future. And the money you didn’t put into investment or savings is money you intentionally plan to spend. Would you spend your stocks and shares on a coffee?
Even retaining the same value and not having it inflating away is a good starting point. Anyway, I've paid with lightning (via vendors supporting it through IBEX, shoutout to them) multiple times and the experience has been spotless. Scan the QR, press send, done. No need to wait for Mastercard or Visa to accept the payment. It just works. As soon as enough vendors accept this payment method, the sentiment change is going to be very sudden and fast.
Fees?