paulvigna21 karma2015-01-29 15:22:24 UTC
The answer to that question really depends upon who you are, and where you are. If you're a typical American, there really isn't much advantage to using bitcoin, unless you're motivated by the politics of it or are a techie who's taken with it. To the consumer, the difference between a bitcoin transaction and a fiat transaction is negligible.
If you work for a company, if you're a retailer, the advantages start to pile up. It's faster, and cheaper. I've heard from and heard of retailers who are sold just on the cost savings versus credit cards.
If you're in the developing world, if you're somewhere where you can't access banking services, then the advantage is even more pronounced. In places where banking services are scant, but cellphone penetration is high, people can use bitcoin to bootstrap themselves into the 21st century. This is the promise of bitcoin for the "unbanked" and while it remains a very nascent thing, it's also a very exciting prospect.
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paulvigna13 karma2015-01-29 16:29:34 UTC
Again, the answer to that question depends upon who you are, and where you are. If you're a typical American consumer, bitcoin doesn't solve any problem for you (because, well, let's face it, Americans don't actually have a lot of problems on this front).
If you're in a developing market, if you live somewhere where banks won't go because the costs are simply too high, bitcoin solves a huge problem.
On the second part, the currency's fluctuation doesn't change the actual transaction costs. The currency's fluctuation will change your exchange rate if and when you cash out.
But, the thing about the price, yes, it's volatile. It's extremely volatile. It's far too volatile. But this is not a mature, developed market, like the markets we have for stocks, bonds, and currencies. It's so volatile because it's very thin (few traders), and it doesn't have any of the sophisticated tools other markets have to manage that volatility. I believe eventually those tools and more liquidity will come, and the price will cool down. But, like I said in response to another question, most of this is just a matter of time. It's going to take time to build this up as a truly functioning, valuable system.
paulvigna9 karma2015-01-29 15:13:23 UTC
I think digital currencies are the future, though I think existing institutions will end up adopting the currency rather than fighting it. I think bitcoin will continue on as its own thing out there, but it won't itself take over the world
paulvigna8 karma2015-01-29 16:41:32 UTC
If Amazon were to start accepting bitcoin, Silicon Valley sailors would be grabbing nurses on the streets and kissing them. It would be a huge victory.
And I see something like that with more potential to represent the "big break" than a new, easier-to-use platform. If Amazon were to take, or if say Wal-Mart were to start using it in its supply chain. Something like that.
But I also think the Coinbase story, where they had banks investing in the businesses, is very significant as well. We've been hearing anecdotally for a long time that Wall Street is intensely interested. That was the first time you saw real evidence of that interest, and the potential of cryptocurrencies in the world of Wall Street and finance is going to be a big story.
paulvigna7 karma2015-01-29 16:50:45 UTC
It was a blast. Thanks everybody.
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