Mission Accomplished -- Bitcoin Dead as a Payment Method
All it took was for Wall St. to create a 'Heads-I-Win / Tails-You-Lose" scenario to kneecap Bitcoin's growth.
The New York Agreement never should have been an 'all-or-nothing' arrangement. Bitcoin is pretty much DOA as a payment system now.
Zerohedge has the article from Coin Telegraph that details just how quickly the payment situation is changing.
The picture it paints isn't pretty.
Now, there is a host of companies either turning away from Bitcoin or doing a full U-turn. Microsoft recently announced that after almost three years it would stop accepting Bitcoin. However, it did reserve that position after taking its own steps to: “ensure lower Bitcoin amounts would be redeemable by customers.”
Steam, the gaming platform, also canceled its use of Bitcoin as a payment system in early December last year. Their reasons resonated with the general consensus, citing high fees and incredible volatility as the main issues.
It is not only those outside of the crypto market though; The North American Bitcoin Conference set to be held in Miami next week, is no longer taking Bitcoin for last-minute tickets.
It should have been allowed to fork the Bitcoin blockchain with Segwit 2x. If that had occurred then the situation wouldn't have gotten so out of hand, wouldn't have stunted development on Bitcoin and would have left it in a better position to handle the explosive growth of the cryptocurrency market.
So, why was this a victory for Wall St.?
Because now Bitcoin is unusable except for very large transactions needing the ultimate in security. That pushes off the day when cryptos can be used for settling micropayments, per the original design. It's worse than that. It kills the momentum that was building for cryptos right at its 'tipping point,' to invoke Malcolm Gladwell.
It has also locked a lot of real money out of the transactional economy because the fees are astronomical. And that was the plan all along. Either Bitcoin accepted the New York Agreement and control from outside forces behind it OR it stayed the way it was and became unusable.
Heads Wall St. wins, tails real people lose.
I had a few hundred bucks in BTC in my wallet which I got rid of because if I didn't there was a good possibility it would become unusable very soon. I felt better throwing that money at a promising ICO than letting it rot in a wallet. I can only imagine how people who had been living their lives using Bitcoin, like those in Vietnam, for example, that now have to switch to something else and rebuild that infrastructure from scratch.
Changing what currency you accept at your business or that you hold in your wallet is a big deal.
Bitcoin will become a kind of reserve asset as I've described in other articles (here and here) which is something the market truly needs. But, at the same time the adjustment period will be hard and there will be loss due to attrition.
The goal of the current insecurity and ambiguity about government tax policy and legality is a feature not a bug. It's designed to allow them to change the rules at any moment, keep the market on edge to do maximum damage to the momentum behind the movement.
You don't stop a revolution by confronting it. You kill it by subverting it, inch by inch. Obviously this represents a great market opportunity for Bitcoin Cash, Litecoin, DASH, Zcash, etc. But, the early adopters of using cryptos for payments are heading the wrong way now.
Because what's to say the same thing won't happen with them. Businesses need certainty. You don't just spin up a new payment method overnight.
Right now, Wall St. is winning and the industry better get up to speed on just how much they are quick or it'll be over before it began.
No mention of how Lightning Network wallets are now on mainnet? No mention of how Coinbase should already be using an LN wallet system if they were even a halfway decent company? No mention of how Coinbase and others like Bitpay who pushed for Segwit 2X arent even using Segwit nor batching transactions to this day? No mention of how all blockchains suffer from problems when they become popular? Otherwise they become centralized with large node requirements. Terrible post, sorry, but you are not loking deeply enough into these issues to be spouting off and saying Bitcoin is dead. Bitcoin has barely just begun, but most people are far too short sighted to see it.
I know about all of those things. And lightning network isn't going to solve anything except be another level of control over blockchain by ensuring that external pools of liquidity are controlled by the deepest pockets.
Moreover, not all blockchains suffer from Bitcoin's staggering issues at the moment. Many can and will scale far better if they want to. dPOS doesn't not scale. PoW doesn't have to NOT SCALE.
But, that said, I fully expect there will be a minimum of 20 coins to carry out the world's financial transactions, if not more... if we even get there. The question is what Wall st. is trying to do to retain control over where and how capital flows.
So, terrible comment because you didn't even bother to mention that or what any of that means. Bitcoin isn't dead, but it is dying as a medium of exchange which it was becoming.
Nice upvoting yourself to be at the top of the comment chain. Do you always do that?
In 8 months of being on Steemit yours is the first comment I've wanted to downvote because you paid yourself nearly $10 to be a jackass.
Interesting article. I own several types of cryto currencies and noticed that most of them have been beaten down in the past week or so after huge run ups. I think that sell offs are natural after large rises and just part of the cyclical nature of cryptos at this time. They are volatile because there is alot of greed coupled with fear in this market .
While I don't disagree with some of your points, I do not believe that bitcoin was ever intended to be a transactional currency., but instead a store of value (like gold) as a hedge against fiat currency devaluation. It is still as viable a currency for this purpose as it ever was. The very slow transfer speeds coupled with the high fees took bitcoin out of the running as a every day currency.
As far as other cryptos, at this time, they tend to follow the trend line of bitcoin because there are many ignorant investors who are throwing money into the crypto market as if it were a slot machine. Many do not understand the underlying value of the coins they invest in, invest more than they can afford to lose, and then panick when they see bitcoin value go down, which results in a cascading sell off of other cryptos.
I still see an upside for bitcoin as a store of value, and several other currencies like ripple and lumans as transactional coins, as well as ether.
I don't disagree that Bitcoin can and will be a good store of value. That, however, is not on the table for right now. Right now we are dealing with an establishment trying to dampen enthusiasm for it. And from that perspective it is setting itself up as a money, like gold, but not a currency.
Those are different things.
Read this if you want me thoughts on where and why I think Bitcoin's only role now is in this role as digital gold. And, by the way, that's exactly how the monetary overlords want it. Gold is easy to control investment into for long stretches of time.
https://tomluongo.me/2017/11/16/the-foundation-of-the-next-cryptocurrency-bull-market/
I've written extensively on this subject here on steemit beyond this article
Do you know of a good/silver gold backed crypto? I see by your username you're also into pm's. To me (and at least some others), that would be the ultimate: a crypto, backed by precious metals. I know Venezuela is talking about something like that with the petro, and there is onegram. Know of any others?
You can trade bit.gold on bitshares.org. There are some cryptos coming for the PM space but I don't have a lot of faith in that... you still have the problem of trusting the guy running the vault and guess what? I don't. Been in this business too long to trust that industry.
If you don't hold it, you don't own it. that goes for gold as well as private keys.
I one hundred percent agree, can't be overstated. The fundamental position in pm's should be physical. My interest in crypto's and pm crypto's is for speculation only (like say, mining shares.)
There is one in the pipeline that I believe has been ratified by the SEC. I need to do a bit more research and reading but I will probably post an article on it tomorrow. If you follow me you'll see it in your feed.
Thanks, I'll do that.
Its weird i hear all this noise about how transfers are slow and cost alot but i havent had that problem yet.
Every buy i have made in the last 3 weeks has been super fast (under 10min for 4 confromations) and the price hasent been anyhigher then they were 3 months ago.
I havent noticed any change in the speed of transfers in the last 3 months but i do see alot of people claiming that its true and wanting insane fees to make transfers.
Bitpay wants 200 bucks for any transfer for "mining fees" yet i send bitcoin from wallet to wallet in 20min for les then 10 bucks.
i Seriously dont get it. Am i the only person in the world that the problems of bitcoin avoid or something?
$10 is still ridiculously high if you are talking about using Bitcoin as a payment method as the article is talking about. You can't buy a $5 cup of coffee at starbucks if the transaction cost is $10 on top of that.
i get that, that is what the other cryptos are for imo. Just like gold and silver you wouldnt buy a cup of coffee with gold as the micro percentage of gold you would get for 5 bucks is a hastle so it would make more sense to buy a 5 dollar cup of coffee with a quater oz silver coin.
Also, 5dollar cup of coffee? If that isnt proof that the dollar is dying then i dont know what is.
lol
Gold and silver are divisible. Money was gold and silver not very long ago and in my view it is desirable that it become so again. Bitcoin is even more divisible than gold but what's the point of a Satoshi if you can't spend one? The whole equating Bitcoin to gold isn't really a good analogy. It never cost a fee to spend gold. The comparison would make more sense if the smallest unit of a Bitcoin was much larger than it is. I agree that other cryptos can serve that purpose but then what's the reason those cryptos couldn't completely displace Bitcoin? Seems like if they are easier to spend it would make them more desirable.
As far as the $5 cup of coffee, yes, inflation play a big role (because money is no longer gold and silver) but in this particular case it's mostly just Starbucks ridiculous prices. Back when gold was money, you could spend it on a cup of coffee if you wanted. You would just get back some smaller units of gold and or silver in return.
the number of coins, supply and demand. just like silver, its easier to spend but that does not mean its more valuable then gold because there is less gold in the world. Because bitcoin has the cap on 21million coins, not 100billion. because the cost to mine one bitcoin is so high it keeps the price high.
If bitcoins and gold were falling from the sky and we had to sweep the streets clean of it, it would be worthless. alot of the new coins coming out that is what they are doing, creating more supply then demand could ever asorb. supply and demand.
I think you are confusing money and currency with this statement. money holds value and does not suffer from inflation like currencys do.
O.o
Gold and silver are still money and you can still trade it for a cup of coffee. there is nothing that says you cant, its just that most people would prefer to barter with worthless paper money then actual physical assets because paper is easier to cary around then chunks of gold. does not mean the paper is worth more. You wouldnt buy a cup of coffee with a 500dollar bill when you have 5's just like you wouldnt bust out your 10oz gold bar and ask for change when you have silver coins. i feel the same way about bitcoin, i wouldnt be trying to buy stuff for a single sat when i have an alt coin that serves a better puropse for small transactions. With the speed of transactions in exchanges right now i dont see changing my 300 bitcoin sat to whatever in litecoin so i can buy a cup of coffee a problem. but ease of use does not dictate value to me when the number of supply makes it something not rare and easily mined with minimal money and effort put in to get the prize and there for is worth nothing to me. Hell i still turn bitcoins into usd if thats all someone will take and they have something i want to buy, does not mean i would invest long term in the dollar or that the currency has more of a value then the bitcoins im exchanging at that point of time because im transfering an amount of value to someone and when done instantly (or in short amount of time) the markets have not changed and the value is the same when they get it regardless the form of currency they take it in. what happens to the value of the currency they want to be paid in has no effect on me or my money as the value at the time was transfered. if they want to be paid in monopoly money insted of gold who am i to say gold isnt valuble because some dumbass prefers monopoly money?
Just my warpped opinion though, till i got into crypto i would have said only gold and silver are money and the rest is currency at best, most fiat.
:D
But Bitcoin is hardly the only limited supply cryptocurrency. There are others that have much lower transaction costs and speeds. It would seem to me that they are more usable and demand for them will ultimately be higher. Why use Bitcoin when you could use something exactly like Bitcoin except for lower transaction costs and higher transaction speed?
Yes, you can still trade gold or silver for coffee but it is impractical in most cases. The reason it is impractical has nothing to do with the value of gold and silver (and you would typically use coins, not carry around bars), it has more to do with legal tender laws. I don't know why you are using ridiculous sized gold amounts in you example. 1/10 ounce gold coins were once common and that's more like using a $100 bill than a $500 bill and that is plenty common to use in grocery stores and other places if not just to buy a cup of coffee. This would not be a practical use for Bitcoin as things stand today. This is why comparing bitcoin to gold and another cryptocurrency to silver really isn't a good analogy. It doesn't cost you anything to spend either gold or silver or dollars for that matter. And rarity alone doesn't make something valuable. It helps but the demand has to be there as well and there are plenty of reasons demand may move from Bitcoin to other cryptocurrencies over time. Not saying it will happen, just that it could.
Not sure what your point regarding currency vs. money is. I thought we were talking about the dollar and why a cup of coffee costs $5. The reason is partially inflation. Also, money can increase or decrease in value relative to other things just as currency can. Currency can be 100% backed by gold or silver (and used to be) or be completely fiat. And as for an even easier way to spend gold than 1/10 oz coins, you could deposit it in a bank and write a check for whatever fractional amount you wanted. Or use a card or phone or whatever and do it electronically.
Bitcoin become a gold! High value but hard to accept
Yes but there is a tsunami of different cryptos coming to take over, most will not survive. Just interesting if steem is one of the successful ones
To me, Steem seems to have more value associated with it than most other crypto's. What IS a bitcoin? Other than a distributed means of exchange, it is nothing .. a buried token that someone has mined. What does it DO? Nothing. Steem is intellectual property, ideas, writing, a community, a news distribution network. I admit I have a hard time wrapping my head around the monetization/dollar model .. but there is something REAL associated with Steem.
I agree @xwalkran but I also see bitcoin having and continuing a big role in getting cyrptos main stream.
When I finally got onto steemit (delayed about 6 months), I immediately saw the vast potential on the platform.
No question bitcoin is the big one, right or wrong. Steem might surge if people ever demand their crypto be backed by something. Right now, no one is demanding that. Seems like a logical next step, when the newness of crypto wears off and people wake up to the idea that their digital tokens really should be backed by something (even if that something is more ethereal, like Steem, vs. say a PM-backed crypto.)
I don't believe bitcoin or any of the other cryptocurrencies were ever going to get much mainstream adoption. The regulations are being put in place to prevent huge speculative losses, which will no doubt occur if and when bitcoin crashes back to it's intrinsic value. Zero. The problem with bitcoin is that it's a technology, and only a technology. Therefore when another better technology comes along (1400 other coins?) it becomes obsolete, so it can't possibly protect against inflation. The underlying blockchain is a fantastic technology, but not as a currency. The surviving crypto's will be those that have some utility other than currency.
As for replacing money, the solution is the same as it has been for thousands of years. Gold. Albeit crypto-gold, where gold provides a store of value and the crypto element provides a transparent digital transactional capability.
It's already in the pipeline. Watch out for my post tomorrow.
network
coming in march
same for bitcoin
Hoping Hash Graph will offer us some sort of salvation when it starts getting implemented... claims to solve all of the problems that lightning network will inevitably fail at.