{"id":245277,"date":"2021-05-08T16:34:00","date_gmt":"2021-05-08T13:34:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate\/"},"modified":"2021-05-08T16:34:00","modified_gmt":"2021-05-08T13:34:00","slug":"as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate\/","title":{"rendered":"# As Bitcoin\u2019s payment options grow, BTC true future role up for debate"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a33bdb4a8ec8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a33bdb4a8ec8\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate\/#Still_too_volatile\" >Still too volatile?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate\/#BTC_may_be_good_enough\" >BTC may be good enough<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate\/#A_need_for_greater_stability\" >A need for greater stability<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate\/#Do_people_want_a_uniform_currency\" >Do people want a uniform currency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/as-bitcoins-payment-options-grow-btc-true-future-role-up-for-debate\/#If_BTC_cant_make_it_could_stablecoins_prevail\" >If BTC can\u2019t make it, could stablecoins prevail?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># As Bitcoin\u2019s payment options grow, BTC true future role up for debate <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDUvYzQwNjQzODYtZTRiZC00MDY1LWIxOGEtNzczOTU5ZDY1ZTQ0LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>In an August 2020 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ideas.repec.org\/a\/eee\/quaeco\/v77y2020icp144-149.html\">paper<\/a> \u201cIs bitcoin money?\u201d Peter Hazlett and William Luther wrote that there exists only \u201ca small corner of the internet where transactions are routinely conducted with Bitcoin serving as the medium of exchange.\u201d But that corner may be growing into a room, or even a house now.\u00a0<\/p>\n<p>\u201cDemand for Bitcoin has certainly grown over the last year,\u201d co-author Luther, assistant professor of economics at Florida Atlantic University, told Cointelegraph in a recent conversation. \u201cAs new users find themselves with Bitcoin, and existing users find themselves with more Bitcoin, it\u2019s only natural that more people will consider using it to make payments.\u201d <\/p>\n<p>Others see a recent rise in crypto payment options. \u201cDefinitely,\u201d Joanna Wasick, a partner at law firm BakerHostetler, told Cointelegraph, adding: \u201cMore people are owning cryptocurrencies, and more companies are accepting them \u2014 sometimes even at an incentive over fiat. There\u2019s also an influx of exchanges and payment platforms facilitating these kinds of transactions. I don\u2019t think that h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ens without a demand.\u201d<\/p>\n<p>This past week, eBay was reported to be exploring crypto payment options, including NFT auctions, while PayPal was said to be <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nasdaq.com\/articles\/paypal-reportedly-considering-its-own-stablecoin-2021-05-04\">discussing<\/a> the development of its own stablecoin. Elsewhere, Switzerland\u2019s Canton of Zug began recently <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/BitcoinSuisseAG\/status\/1361984379988377600\">accepting<\/a> tax payments in Bitcoin (BTC) and Ether (ETH). <\/p>\n<p>\u201cThere have certainly been some major announcements from mainstream financial services companies in the past several months that point to the momentum of viewing crypto as a payment option,\u201d Kristin Smith, executive director at the Blockchain Association, told Cointelegraph, citing Visa, PayPal \u2014 and from the crypto world \u2014 BlockFi. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Still_too_volatile\"><\/span>Still too volatile?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Not all believe that Bitcoin is viable as a medium of exchange, though. Aswath Damodaran, professor of finance at New York University\u2019s Stern School of Business, told Cointelegraph: \u201cI don\u2019t see it, and the reasons are simple: It is an incredibly inefficient currency, with transaction costs overwhelming the benefits.\u201d <\/p>\n<p>These inefficiencies are likely to multiply, too, as BTC moves closer to its 21-million limit. \u201cIt is also far too volatile for people to trust it,\u201d he added \u2014 though he doesn\u2019t rule out other cryptocurrencies as potential payments options. <\/p>\n<p>St. Louis Federal Reserve president James Bullard <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2021\/02\/16\/bitcoin-no-threat-to-dollar-as-worlds-reserve-currency-feds-james-bullard.html\" data-amp=\"https:\/\/www-cnbc-com.cdn.ampproject.org\/c\/s\/www.cnbc.com\/amp\/2021\/02\/16\/bitcoin-no-threat-to-dollar-as-worlds-reserve-currency-feds-james-bullard.html\">noted<\/a> that in the 19th century \u2013\u2013 before the American Civil War \u2013\u2013 it was common for private United States banks to issue their own notes, a practice analogous to today\u2019s cryptocurrencies, in his view. \u201cThey were all trading around [i.e., the banknotes], and they traded at different discounts to each other, and people did not like it at all.\u201d People want a uniform currency like the U.S. dollar, said Bullard. <\/p>\n<p>Because Bitcoin has yet to find widespread use as a means of exchange, growing numbers have suggested that its proper role might really be as an alternate store of value, like gold. But Luther, for one, doesn\u2019t think this makes much sense, telling Cointelegraph:<\/p>\n<blockquote><p>\u201cI don\u2019t understand those who say Bitcoin is better suited as a store of value than as a medium of exchange. An asset can only function as a store of value if it is expected to have a positive price in the future. And it will only have a positive price in the future if it has some use in the future.\u201d<\/p><\/blockquote>\n<p>To say that Bitcoin can be a store of value today, and possibly a medium of exchange one day \u2014 though maybe not \u2014 could be putting the cart before the horse. In Luther\u2019s view: \u201cBitcoin is expected to function as a medium of exchange in the future \u2014 that its price fluctuates today as people expect it to be more or less useful as a medium of exchange in the future.\u201d Moreover, he believes that \u201cconditional on its usefulness as a medium of exchange in the future, it might serve as a store of value as well.\u201d<\/p>\n<p>Meanwhile, Bitcoin remains the most used crypto payment platform, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/bitpay.com\/stats\/\">according<\/a> to BitPay, which processes some $1 billion annually in crypto payments. In March, Bitcoin accounted for 72% of BitPay\u2019s crypto payments (by number), far ahead of Bitcoin Cash (BCH) (14%) and ETH (10%), which ranked second and third, respectively.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"BTC_may_be_good_enough\"><\/span>BTC may be good enough<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are indeed valid reasons why crypto partisans continue to use BTC for transactions \u2014 even while other crypto platforms may be faster with lower fees. \u201cI don\u2019t like spending my Bitcoin, but I know that as soon as I say those words \u2018just send me your Bitcoin address\u2019 the transfer will get done quickly and cheaply,\u201d said Quantum Economics founder Mati Greenspan in a recent <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>letter, further adding:<\/p>\n<blockquote><p>\u201cI know for a fact that my analyst will be happy to receive Bitcoin, and that I have a Bitcoin stash that I can feasibly use to pay with. However, if I tell him, \u2018Hey, let me send you some XLM,\u2019 the response probably won\u2019t be enthusiastic because it would probably require him to spend time and energy researching wallets and exchanges.\u201d<\/p><\/blockquote>\n<p>Bitcoin today occupies a somewhat unusual role as a \u201cniche medium of exchange,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cato.org\/blog\/has-bitcoin-succeeded\">according<\/a> to the Cato Institute\u2019s Lawrence White in a blog post. \u201cIt is better than other <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a> for making some payments that, even if for legitimate purposes, might be censored if routed through payment systems controlled by national governments and central banks.\u201d A grassroots human rights organization in Belarus, for instance, has used the BTC network to transfer money to striking workers \u2014 in a way that the government cannot stop. <\/p>\n<p>Others expect that BTC will achieve mainstream acceptance as a payments option. Bill Zielke, chief marketing officer of BitPay, told Cointelegraph that \u201ccrypto is already a significant payment method, as more than a billion in volume occurs annually.\u201d Firms such as Newegg and Apmex, both top 100 merchants, already \u201csee a meaningful percentage of their sales in Bitcoin and other cryptocurrencies.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_need_for_greater_stability\"><\/span>A need for greater stability<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>However, more still needs to happen before Bitcoin and\/or other cryptocurrencies achieve widespread adoption as payments options. \u201cMost importantly, cryptocurrency needs to become more stable and stop being a speculative vehicle,\u201d said Wasick, adding: \u201cIf I think the value of my Bitcoin is going to go up, I\u2019m not going to use it to buy a car. I\u2019m going to sit on it so I can realize more gains.\u201d<\/p>\n<p>Damodaran agreed, as individuals who think about using Bitcoin to purchase items worry that their BTC will be worth 30% more in a day or two. Sellers \u2014 e.g., merchants \u2014 \u201cdon\u2019t want to receive it since they are worried about the exact opposite.\u201d Damodaran added: \u201cFor a good crypto to make it, it has to get governments to buy in, some version of a trusted authority to reduce transaction costs and [become] less of a speculative <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>.\u201d <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Bitcoin\u2019s upcoming Taproot upgrade and why it matters for the network<\/em><\/strong><\/p>\n<p>\u201cThe two biggest obstacles, in my view, are the volatility of its purchasing power and the relatively small number of transactions it can handle,\u201d Luther told Cointelegraph while going on to add: \u201cSecond-layer solutions have gone a long way toward eliminating the second problem \u2014 and will no doubt go further. Of course, that means most on-chain Bitcoin transactions would merely be for settlement.\u201d<\/p>\n<p>\u201cThere are regulatory issues that we believe would encourage broader adoption, such as adopting a <em>de minimis <\/em>exemption for cryptocurrency transactions,\u201d added Smith. For example, cryptocurrency transactions of less than $200 might be exempt from taxation.<\/p>\n<p>\u201cThe regulatory regime needs to change or at least become clearer to people,\u201d said Wasick, in addition to raising a question: \u201cHow many people using crypto for payments know exactly what the tax implications are of their payment transactions?\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Do_people_want_a_uniform_currency\"><\/span>Do people want a uniform currency?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>But what about Bullard\u2019s contention that people aren\u2019t keen to deal with all these private forms of money. What they really want is a uniform currency, like the U.S. dollar. <\/p>\n<p>\u201cBullard has a point \u2014 people <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly want a uniform currency,\u201d answered Wasick, but Bullard overlooks some key aspects of cryptocurrencies, she added. They are \u201cdecentralized and deflationary \u2014 or, at least, non-inflationary \u2014 by design.\u201d Fiat, by comparison, created and managed by governments, \u201cis by design inflationary. [&#8230;] Dollars lose value over time.\u201d<\/p>\n<p>Bullard, in Luther\u2019s view, also glosses over some important historical details. Most pre-Civil War banknotes were not discounted, he said \u2014 \u201cthey typically traded at par.\u201d Only when they circulated far away from the issuing bank were they discounted. Banknotes issued in Chicago, for example, might trade at a discount in New York \u2014 but only because it was costly to redeem them. Luther further explained:<\/p>\n<blockquote><p>\u201cBanknote collectors had to bundle them up and ship them back to the issuing bank in order to redeem them for gold. Then, they had to haul that gold back home. And, of course, they risked theft both ways.\u201d <\/p><\/blockquote>\n<p>Banks would have liked to provide closer redemption options, but regulatory restrictions on branch banking didn\u2019t allow it. According to Luther: \u201cFar from demonstrating an uncompromising desire for a uniform redeemable currency, as Bullard claims, the historical evidence suggests that many redeemable currencies might prevail, even under a poor regulatory regime that makes them perform far worse than they otherwise would.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"If_BTC_cant_make_it_could_stablecoins_prevail\"><\/span>If BTC can\u2019t make it, could stablecoins prevail?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Still, the volatility problem with crypto persists, which is why some believe the solution for crypto as a payment mechanism starts with stablecoins. \u201cWe do see use of stablecoins growing,\u201d answered Zielke, adding: \u201cAccepting or paying with stablecoins opens up new possibilities for global businesses that require the stability of the dollar but the security, speed and efficiency of blockchain payments.\u201d<\/p>\n<p>\u201cI like the idea of stablecoins,\u201d said Luther. But as is the case with traditional cryptocurrencies, they still need some improvements. \u201cFor one, they tend to be stable relative to the dollar, which by definition means they will never be managed better than the dollar.\u201d A second concern is \u201cthey typically require one to trust the issuer to manage the supply appropriately \u2014 a risky proposition,\u201d said Luther.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The way of the stablecoin: A journey toward stability, trust and decentralization<\/em><\/strong><\/p>\n<p>Damodaran was skeptical about the utility of stablecoins, which he described as \u201csolutions in search of problems,\u201d further adding: \u201cOf all the problems in the world, not having a currency that works is not in the top 100 in much of the world.\u201d<\/p>\n<p>But it is a problem in some locales, which is why Smith, for one, believes that crypto as a payment option may first catch on widely \u201cin other, non-U.S. jurisdictions,\u201d especially countries that \u201cdo not have the same access to payment systems that make internal transactions simple.\u201d<\/p>\n<p>Meanwhile, White listed some other current BTC use cases, including \u201cfundraising by activists in Nigeria, Hong Kong and Russia, savings expatriation by people fleeing Venezuela, remittances into Iran, and peer-to-peer transfers within China among people seeking to avoid state financial surveillance.\u201d He concluded: \u201cSuch uses \u2014 together with forecasts of wider future use \u2014 are enough to sustain Bitcoin\u2019s positive market value.\u201d<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/as-bitcoin-s-payment-options-grow-btc-true-future-role-up-for-debate\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# As Bitcoin\u2019s payment options grow, BTC true future role up for debate &#8221; In an August 2020 paper \u201cIs bitcoin money?\u201d Peter Hazlett and William Luther wrote that there exists only \u201ca small corner of the internet where transactions are routinely conducted with Bitcoin serving as the medium of exchange.\u201d But that corner may&#8230;<\/p>\n","protected":false},"author":1,"featured_media":245278,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDUvYzQwNjQzODYtZTRiZC00MDY1LWIxOGEtNzczOTU5ZDY1ZTQ0LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74889,75493,74355,117,72351],"class_list":["post-245277","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-payments","tag-stablecoin","tag-adoption","tag-business","tag-ebay"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/245277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=245277"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/245277\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/245278"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=245277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=245277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=245277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}