Yea--some Harvard MBA making a name for themselves? I wish
I wasn't so cynical. I sincerely hope crypto currencies annihilate the credit card industry. I guess any publicity
is good publicity?
Yea--some Harvard MBA making a name for themselves? I wish I wasn't so cynical.
It's not cynical. Accepting bitcoin as payment isn't beneficial right now. There's no benefit for merchants, because it's instantly converted back to traditional currency. There's no benefit for consumers, because consumers have to buy bitcoin in order to spend bitcoin, and buying bitcoin means consumers have to manage their own wallet or store their money in a third party service that can fail or steal their money at any time.
The singular benefit is the publicity your business gets by accepting bitcoin. In other words, bitcoin is trendy.
This isn't a dismissal of bitcoin. History has shown that trends are a powerful force. If it achieves a kind of critical mass, then that will open up other avenues for bitcoin to become useful. But in the meantime, be assured that your gut instinct of "there doesn't seem to be any reason to accept bitcoin except publicity" is spot on.
As an aside, I think these announcements won't affect the fundamental price of bitcoin. They'll cause fluctuations, but not any long-term rise or fall. The price of bitcoin is driven by speculation. It always has been, and always will be. The fundamental price at any given time is due to speculators with large amounts of bitcoin who place large buy orders in hopes of getting other speculators to place large buy orders, then they sell. From a game theory point of view, if a bunch of gamblers all place large buy orders, the first gambler to sell stands to profit, and the other gamblers will lose out. You can see the evidence of this at any time: http://i.imgur.com/SYHhSCv.png ... A gambler buys a bunch of bitcoin, which causes other gamblers to buy a bunch of bitcoin, which lets the first gambler sell off their position and make out handsomely.
There's no long-term speculation going on. Or, if there is, then the long-term speculation is being done by a few dozen people with massive bitcoin holdings. No one else's speculation is a significant price mover.
It's true that the market responds to announcements, but it's not true that the market price is driven by announcements. They just serve as a trigger for gamblers to initiate gambles. Hence, I don't think the fundamental price will shift very much; what shifts the price is when large players enter or exit the market, which happens much more rarely than announcements do.
> Accepting bitcoin as payment isn't beneficial right now. There's no benefit for merchants, because it's instantly converted back to traditional currency.
I see two advantages: 1) They get their name in the news (and in consumers minds), and 2) they get the bitcoin spenders that they may not have otherwise (an admittedly small bump at the moment, but a bump nonetheless and at virtually no cost).
2) they get the bitcoin spenders that they may not have otherwise (an admittedly small bump at the moment, but a bump nonetheless and at virtually no cost).
I hear from merchants who start taking bitcoin that after an initial spike they see almost no volume.
The above quote fits with my experience as well, though my sample size was a single merchant. I noticed they were accepting bitcoin, so I sent a congratulatory email and got a response along the lines of, "Surprisingly, no one at all has bought my product using bitcoin! Maybe that will change in the future..."
> Accepting bitcoin as payment isn't beneficial right now. There's no benefit for merchants, because it's instantly converted back to traditional currency.
I see another benefit. Merchants benefit from lower transaction fee vs credit card.
