The state of bitcoin from a Merchant/Consumer perspective

Hello folks, today I wanted to step slightly outside of my realm of comfort and take a moment to talk about Bitcoin and it's current state.

Raise your hand if you've used bitcoins before.

If you're a steemit user, chances are you have most likely used Bitcoins before.

Today, I wanted to talk about Bitcoins. And no, I won't be doing a price forecast, or speculation for trading much.

What I want to talk about is, Bitcoin, and what it is today. How it's affecting day to day users and businesses.

Back in time

Well, this is back in time, in my perspective. History of bitcoin is not really my area of expertise. No, what I want to share, is how things were back in 2011 as someone who accepted bitcoin was.

Back then in 2011, I was encouraged to create a service thread on the bitcointalk forums by @someguy123. This was when I was exposed to bitcoins.

At first, I was extremely skeptical about bitcoins. I pretty much thought that the community behind bitcoins was toxic and always looking to scheme malicious ways to grab people's money.

As I got more and more commissions, I started to understand what bitcoins were, and why they were so amazing. I got commissioned from all over the world. Russia, China, Poland, Swedan, UK, France.

Bitcoin allowed me to receive funds, fast and from anywhere in the world.

Decentralized, Low-Fee solution for accepting money anywhere in the world for my services. I received a lot of support for the Bitcoin Talk community. More so, in the Bitcoin OTC (Over the counter). I guess there was a respect for what I was doing, and constantly being a living example of how Cryptocurrency could work just like real money.

Of course, I wasn't able to pay my bills directly with bitcoin. Or purchase food from my local grocery store with the bitcoins. Instead I had to receive payment in bitcoins. Then exchange out my bitcoins for paypal transfers, and then there I could withdraw my funds into my bank account.

I used the Local Bitcoins to do these transfers.

Here's my public profile from local bitcoin. As you can see, 3 years ago it was created. Around 20-50 BTC traded, and a relatively high feedback score, which was actually scuffed because of my first trade. I didn't know how to work things and ended up holding funds for too long. But after that, relatively clean history.

Present Day Bitcoin

As of writing this, bitcoin is at 7,000. There has definetly been a rally, and many people are predicting a 10,000 Bitcoin climb by 2018. This is exciting for investors and traders. But what does today's Bitcoin mean for E-commerce that uses bitcoin technology or consumers who actually use bitcoin to pay for things day to day?

"The ugly truth is that bitcoin is bloated." @someguy123

If you tried to send a transaction to someone, say 10.00 in bitcoin, and you wanted to send those bitcoins in the same day, the transaction fee would be equal if not greater than the actual amount then what you're trying to send.

The reason why that transaction would cost so much or take so long to actually confirm is because of 1mb. Yes, the actual code of bitcoin is why things are this way. See there is a hard limit to how many transactions can actually be processed at a time. In this case, it's 1MB per 10M.

Now, consider How many people are actually using bitcoins. 1MB per 10M is actually really small compared to the grand scheme of things. Now, people actually have an option to bid for a faster transfer. The problem is, well. Everyone bids. Anyone. From people struggling to pays bills, to wealthy princes looking to cash out bitcoin. The result is either a high transaction fee, or a high confirmation time.

What does this mean for businesses and consumers that use bitcoin?

Ultimately, what you're asking is what are consumers and businesses going to do with a currency that has high transaction fees and 24+hr confirmation times?

Businesses will either stop accepting BTC, or accept bitcoin but push the fees towards customers.

Consumers will resort to other ways for paying, as bitcoin as a currency will slowly become even less practical over time.

As a result we're seeing this change in many businesses already.

Bitpay's change in policy

In short, Bitpay is going to increase the minimum you can transfer, and also just slap on all fees onto of your transactions. Making it extremely costly to use the payment processing service.

@privex invoices have an option to pay with bitcoin with a $10.00 Surcharge.

This is an example of a business trying to adapt to the state of bitcoins without cutting it out as a payment method. Now while I cannot speak for privex, this in my opinion is privex saying. "Look, we can accept your bitcoin payments but because transaction fees are so high, we're going to charge a 10.00 fee to process this. But there are other ways to pay". This may be slightly controversial but I think it's a good move by the company, especially if the company is doing everything it can to keep operating.

I myself as a merchant would in fact charge an additional 10.00 for accepting bitcoin payments at this current time. And I doubt many people would criticise me for doing so. Especially if I offer many more payment methods outside of bitcoin.

Here's Nitroflare, a popular cloud file service opting out of bitcoins altogether.

As you can see, all types of different reactions are happening to bitcoin, none of it is positive to consumers or businesses.

Segwit has literally done nothing to actually help remedy this. Though it was promised to be a solution, it's been about 2 months since it's been integrated. I won't pretend to know the inner workings of what Segwit is and how it was supposed to work, but I do know, as a day to day user, someone who is using bitcoins, nothing has changed, and somehow the transaction costs seem higher, and confirmation times longer.

It's hard to speculate what will happen with SegWit2x, Legacy bitcoin and bitcoin. Time will tell there

My conclusions on the state of bitcoin

I believe over time, Bitcoin will continue to rise in value. There may be some crashes here and now, but bitcoin will continue to do what it's always done. And that's rise in value.

For consumers and businesses like you and me, bitcoin will slowly over time become more unwieldy and costly to use as a currency as a whole. More and more businesses will be taking a step back from bitcoin. Consumers will switch over to logical alternatives.

Some users will always value bitcoin. And thusly will always deal in bitcoins, but for the majority, switching to other Alt coins seems to be the real solution.

With another hardfork looming in the future, there is little to be said on what is expected to happen. But I believe, it's going to just be Segwit all over again. Another Split in bitcoins, A new Alt Coin as well as free coins for anyone who is holding bitcoin. But I suspect the heart of the issue will never truly be solved.

That's my take on this all, I hope you folks enjoyed reading it and learned a few things.

Tell me what you guys think about all of this, share some experiences with us! I always love hearing back from you all.

Also, if you guys are interested I am running a special limited time promotion on steemit identity logos. Click link to check it out.

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Sources:
https://cointelegraph.com/news/bitcoins-upcoming-segwit2x-hard-fork-put-in-laymans-terms
https://www.privex.io/
https://medium.com/@jonaldfyookball/why-does-bitcoin-have-ridiculously-high-fees-and-slow-confirmations-e3fd58258a6d
https://en.wikipedia.org/wiki/Bitcoin
https://en.bitcoin.it/wiki/Main_Page
https://www.reddit.com/r/btc/comments/7awpft/the_state_of_bitcoin_in_one_image/
http://nitroflare.com/
https://blog.bitpay.com/network-costs/