Bitcoin seems caught in a catch 22. While there is the idea that it will increase in value, few want to use it to buy goods and services, which means it has a very constrained market dominated by whales.
Thank you for replying Michael. What do you mean by “seems”? “Few” compared to what? The number of people using it last year? This is exactly the objection people made about email, “very few people use it, so its not interesting for our company”. Clearly this is not a serious objection at all, as if history started last year.
Bitcoin is not a “constrained market” it is unbounded. Anyone can use it without permission; it is credit cards, PayPal and banks that are constrained from any angle you look a them. They are full of friction, are permissioned, are slow, are expensive, are exclusive, and as we've just seen with the Cloud Flare, if the owner literally gets up in a bad mood, they can cut your service and absility to transact off. Bitcoin doesn't suffer from any of this.
As the same time, the extreme price rises and falls of BTC make it unsuitable for use as money for normal businesses and employees that need certainty to account profit and income over time.
This is a common and old objection, that we don’t tend to hear very often any more. It comes from a fundamental misunderastanding of what Bitcoin is. People who make this mistake, conflate the utility of Bitcoin with the business models of exchanges. The price of Bitcoin is not set at exchanges you can set any price you like for it. When you own Bitcoin and control it yourself, you are the same as an exchange; you are a PEER.
Even so, if we accept that exchanges set the price for Bitcoin that two parties will accept, all that is required to use that signal is to build a business model that runs correctly under that constraint. That means services that allow you to buy and use Bitcoin quickly so that the fluctuations dont matter. There are services that do this right know, and I am betting that you've never heard of them…amirite?
Even companies like BitPay give you 15 minutes to make a purchase with Bitcoin, giving you an idea of how this works. They have calculated that if the transaction is made within 15 minutes, they can protect themselves from Bitcoin volatility. None of these are real or original objections to Bitcoin. We’ve heard it all before and its all worthless, I’m sorry to say.
When eFiat is created that allows a person to hold their fiat on a blockchain and exchange it seamlessly for any other eFiat (to buy goods and services anywhere in the world, or to simply hedge against price changes in their own currency); who will want to hold Bitcoin?
This shows you dont understand what Bitcoin is or what it is for. You cant “hold your fiat on a block chain” and fiat is bad money, that loses it value because central banks control the supply. Bitcoin was designed to destroy fiat, and it is going so suceed. Fiat is not good money; it steals from the people who use it and save in it. Of course, we do not expect you to object to the negative aspects of fiat, because to you, fiat is money.
Even taking your example on face value, you talk of eFiat; when this mythical money is held in an even more mythical and mysterious “blockchain” that cannot exist, which fiat are you taliking about? If you are in Germany, your US eFiat will not be accepted, becaus they only accept Euro eFiat? Where then, is your global ability to buy goods and services anywhere in the world? And why do you put forward the ability to hedge against price changes in your own currency, when Bitcoin price changes are said by you to be a deal breaker? You cant have it both ways; you cant say that eFiat as a tool to hedge is beneficial, but using Bitcoin to hedge (this is by ordinary people in your example) is not beneficial?
By your own logic, it is much better to use Bitcoin as a hedge against price changes, because Bitcoin is actually global, and it actually exists, unlike your eFiat which is a fantasy that can never work technically, based on a total misunderstanding of how Bitcoin works; that you can have Blockchain separate from Bitcoin:
If few people want to spend their money to buy and hold a bit of code, what will the value of BTC be?
Bitcoin isn't “a bit of code” and if you claim that they would want to use eFiat, which will be made up of EXACTLY THE SAME THING, why would they not want a fixed supply, global standard, universal, permissionless, absolutely reliable, incorruptible, “value transfer network” that is Bitcoin?
That is the question you have to answer, and…you can’t!
