Bitcoin's Use in Commerce Keeps Falling Even as Volatility Eases

DooKey

DooKey

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Bloomberg News had startup Chainalysis Inc. research the use of Bitcoin in commerce and what they found is interesting. According to Chainalysis Inc. people aren't using Bitcoin in commerce as much as they did this time last year. In June of last year $270M was spent in commercial transactions and this year that number has dropped to $69M. This is a significant drop and if this continues it really knocks a hole in one of the prime arguments for crypto that advocates harp on...crypto as currency. Others believe reasons for the drop are the variance in transaction fees and lack of fraud protection. Regardless, crypto still has a long ways to go if it's ever going to replace fiat currency.

"I assume many people are like me, where you won’t be doing your everyday transactions in it," said Tonkin, who is chief growth officer at crypto finance research company Mosaic. “I don’t believe [it] fits the characteristics of money very well."
 
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There's not a very compelling reason to use crypto for commercial/retail transactions. Credit cards collect points, have some fraud protections, and let you spend money you don't currently have (float you for a month). Same reasons I don't use debit cards for retail purchases.

And crypto takes longer to 'settle', up to 10 minutes or so to get enough blockchain confirmations, so it'll never work for in person purchases. More likely there will be a future where a Mastercard uses crypto as the backing currency or accepts payments in crypto. But that would be years away I think.
 
andrewaggb said:
There's not a very compelling reason to use crypto for commercial/retail transactions. Credit cards collect points, have some fraud protections, and let you spend money you don't currently have (float you for a month). Same reasons I don't use debit cards for retail purchases.

And crypto takes longer to 'settle', up to 10 minutes or so to get enough blockchain confirmations, so it'll never work for in person purchases. More likely there will be a future where a Mastercard uses crypto as the backing currency or accepts payments in crypto. But that would be years away I think.
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Does this apply to Venezuela? I think they want crypto if they can get it.

People in Yemen, Saudi Arabia, etc. also might need crypto instead of relying on financial institutions.
 
And the falling prices of used video cards on eBay prompted me to buy a 1070ti yesterday for $342 shipped.

Slickdeals also had a deal for a 1080 mini itx card yesterday for $430.

Prices are finally coming down. If they come down a bunch more, I'll probably buy another card.
 
Bowman15 said:
People need the basic necessity's more than anything crypto in Venezuela.
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I think the point was that a stable currency that the government isn't manipulating is the first step toward getting those necessities.
 
Does anyone use gold for currency anymore? Bitcoin is more of a precious metal analog than a currency, investors are hoarding. This bodes well for the future pricing as BTC gets mined out.
 
Yes, they barter and have lost weight, health deteriorated, nutrition suffered, and there is a food crisis. They don't put all their eggs in one basket because they might need to pay someone with them.

"As the Venezuelan bolívar becomes increasingly irrelevant, citizens are transforming the country into one run by a barter economy. A new Bloomberg report tells of parking lot attendants accepting a baguette as payment and street vendors accepting sugar for flour as citizens struggle to make it through the country’s ongoing financial crisis. Facebook pages and chat rooms (fb, +0.92%) focused on swaps have popped up. And just about everywhere you go, there are cash alternatives. One barber, notes Bloomberg, will exchange a haircut for yuccas, bananas, or eggs. A carton of cigarettes will get you a cab ride. And one restaurant is offering burritos, enchiladas, and tacos in exchange for paper napkin packages." http://fortune.com/2018/05/07/venezuela-bolivar-currency-bartering/

But the trucks transporting food, farmers with equipment, etc. eventually can't just barter.
 
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When things get bad enough people want to barter physical goods with physical goods not some crypto file on a thumb drive or in a cloud program.
 
Smart people are hoarding right now.

This time last year people thought we were peaking.

There are reasons for the drop in use right now.
 
It's not all about Venezuela.

The soccer coach in Thailand in that cave is stateless. Neither a Thai citizen, nor anywhere else. I don't know if they can get bank accounts. Someone might take cash and give them a wallet of cryptocurrency. Though Thailand is going to grant citizenship but there are millions of people like that.

Atheist in Bangladesh. Rohingya people. Opting out of the Chinese social credit system. Maybe in cases of domestic violence you can save up some funds to get out of a city.
 
Crypto can do one things banks can't. Move money in less than an hour instead of 3 days.
 
Mega6 said:
I was mining btc when it was less than 100 apiece. Already way ahead, so apparently you are the btc visionary?
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I would hold it. I've heard that unregulated, unprotected currency is a smart investing move (/s if it wasn't obvious). If you are not lying then sell immediately. Take your small fortune and enjoy it. As another said above, otherwise you will be sitting with a roomful of Beanie Babies worth a few pennies each.
 
Apparently you didn't get the memo. The new reason to justify the high price of Bitcoin has nothing to do with utility. No, it's a "store of value", or "digital gold". Yep, that's right. For some reason, lines of code labelled "Bitcoin" represent a safe place to put your money, compared to other lines of code labelled, say, "Dogecoin". This is apparently suppose to make financial sense, hence why Bitcoin will be worth some absurd amount of money down the road, according to investors who currently own a whole lot of it.
 
Nebell said:
You have to understand that crypto is volatile because it doesn't have trillions and trillions of market cap and it can be easily affected by big investors selling or buying.
In other words, crypto is CHEAP.
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Probably the most unique way I've ever seen someone measure the value of what's increasingly being treated as a commodity asset.
 
bugleyman said:
I think the point was that a stable currency that the government isn't manipulating is the first step toward getting those necessities.
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Because crypto is just so stable right?

And crytpos are subject to manipulation all the time with many of them being outright scams to steal money.
 
mesyn191 said:
Because crypto is just so stable right?

And crytpos are subject to manipulation all the time with many of them being outright scams to steal money.
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Slow your roll, chief. I didn't say crypto was stable. I said I think that was the argument.
 
bugleyman said:
Slow your roll, chief. I didn't say crypto was stable. I said I think that was the argument.
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I'd say my comments still stand as relevant though even if you weren't the one trying to make those points and only trying to clarify them for the thread's sake.
 
Cryptos future is in the late 2020s or 2030s, for now.. personally i expect it to collapse completely, and disappear for a while.
 
i hope it bursts, like electric cars 1.0 in the 90's.

maybe crypto 2.0 will succeed.
 
the Federal Reserve won't allow such so-called currencies to upset the cart. Crypot os backed by NOTHING ... what part of NOTHING do you not understand? Crypto can fold up the tent and disappear withing thew next 5 minutes ... because it's based LITERALLY ON NOTHING.

How will you safe guard your crypro coins? If someone steals them are you gonna call the crypto police? :ROFLMAO:

Uvaman2 said:
Cryptos future is in the late 2020s or 2030s, for now.. personally i expect it to collapse completely, and disappear for a while.
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"i expect it to collapse completely, and disappear for a while." That's called living in denial
 
Bought ASIC for around $2000 but had to use Bitcoin for transaction (Taiwan). Coinbase no longer accepts Credit cards so had to do bank transfer to get enough Bitcoin to purchase. BA took 3 days to take it out of the account, Coinbase took 6 days before releasing the bitcoin. Luckily Bitcoin I paid at $7100 price point and by the time I was able to purchase the ASIC it was at $8400. Now it could have been the other way but I lucked out, ASIC ended up costing me less money in the long run (that is if I sold back the unused Bitcoin, which I didn't and now it is going down). Should have the ASIC by DHL on Monday (hope it works).

You see how easy and simple that was. NOT!

If I had enough BTC at Coinbase then it would have been rather quick, transferring from one currency to another can take some time. If I converted my other coins I've mined into BTC would have been an option but they would also be at a lost, transaction fees etc.

You can use BTC at Newegg for all Newegg sold items (not non-Newegg vendors). Also BTC for Microsoft software at Microsoft Store. Fluctuating prices makes it harder to know when to use BTC, when going up you want to hold to it reaches the top which you never know when, when it dips it buys less. Can be frustrating. In addition once you purchase a product you are now liable to inform the IRS of capital gains on the purchase. Just another factor making it less desirable. For example - I have to claim capital gains on the above purchase. Fun.
 
_l_ said:
the Federal Reserve won't allow such so-called currencies to upset the cart. Crypot os backed by NOTHING ... what part of NOTHING do you not understand? Crypto can fold up the tent and disappear withing thew next 5 minutes ... because it's based LITERALLY ON NOTHING.

How will you safe guard your crypro coins? If someone steals them are you gonna call the crypto police? :ROFLMAO:



"i expect it to collapse completely, and disappear for a while." That's called living in denial
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Its not denial, im just thinking crypto has its place in history... But this first experiment, i think will fail completely.
 
Less used in commerce now because more people are holding it, vs spending it than this time last year, or ever before.

Why would I spend $1000 worth of bitcoin now (@7500 a coin) when in six months it might be worth $2800? (@20k per coin) My $1000 I have invested is potentially of less consequence than the higher price I might miss out on is the line of thinking.
 
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