The Sacrament Kings will begin accepting bitcoins, processed by BitPay, in the Kings Team Store through a simple checkout process, and will offer fans the ability to pay online for team merchandise and tickets.
This follows news that Overstock.com is accepting bitcoins.
What is going on here? It is a shrewd marketing move.
You have a bunch of geeks sitting on the non-money, Bitcoin, who would like to prove to the world that Bitcoin is money, so they just love to spend this stuff.
Here's USA Today explaining the dynamics:
"One thing that people haven't focused on with bitcoin is that its users are a very attractive advertising demographic," said Nicholas Colas, chief market strategist at ConvergEx Group.
The typical user has been profiled as a tech-savvy male, 25 to 40, with above-average income, commonly residing on one of the U.S. coasts, according to Colas.So as these geeks spend bitcoins to "prove" it is money, the retailers, generally through Bitpay, immediately liquidate the bitcoins for real money, dollars. Thus, as more and more retailers recognize the marketing gimmick in accepting bitcoins, there will be more and more spending of bitcoins and more and more pressure on the Bitcoin price as the retailers liquidate the e-coins.
You assume that this increased publicity will not bring in higher demand (more buyers/holders) for bitcoin. You are sounding desperate.
ReplyDeleteYeah, he is sounding desperate. Wenzel knows better, but he's in such a blind rage over bitcoins threat to a return of the gold standard that he's throwing all his normally rational economics knowledge out the window.
DeleteBob, just answer me one question. Under a gold standard, what prevents fractional reserve banking or the altering of account balances? Because under Bitcoin, it is IMPOSSIBLE to alter an account balance. The cryptography and structure of the distributed ledger prohibits it.
(not Bob but to take a stab at this)
Delete> Under a gold standard, what prevents fractional reserve banking or the altering of account balances?
To state the obvious, physical gold itself cannot give rise to fractional reserve banking because the bank cannot lend out physical forms that it does not have. Gold *coupons* can give rise to FRB so, I think the apt comparison is, does Bitcoin have an equivalent of coupons? It's possible that btc has such beneficial transaction qualities that it doesn't need something like coupons although I can imagine the need for things like anonymity which might lead to enough slippage between the anonymized coupons and the underlying bitcoins which could yield a fractional reserve system.
This line of thinking entirely misses the point, though. As I understand him, Bob's arguments against bitcoin are not about its potential benefits. Nor are they about the relative advantages of gold over btc. His arguments are about its ability to achieve those benefits in the face of gov't violence. I don't think any libertarian would be against a tool that can bring down the fraction reserve system. The only theoretical argument I can see against btc is that it fails the regression theorem and, as far as I know, very few people are advancing that idea and I've never read Bob taking a position on that point.
BTC proponents in these comments consistently fail to address the main argument: The US gov't will find a way to squash it before it goes mainstream and without convertibility to the US$, btc will never become a wildly accepted currency.
Personally, I think there's plenty of historical precedent (eg Diocletian and French Revolution) to doubt that line of reasoning but nobody seems to want to talk about that.
No retailer is transacting in BC to hold them. They will immediately convert to dollars. They are not stupid to risk the value fluctuations. This will always require more buyers to have to step in that want to buy BC. The more retailers, the more BC will drop in price as they immediately sell. Until the dollar is actually displaced, BC is nothing more than a fad and novelty. Wenzel is spot on here.
DeleteOK Bob...we get it. Bitcoin is stupid and will never work as well as gold. Now, let's see what happens as bitcoin "jumps the chasm" in the coming years.
ReplyDeleteYour takes on Bitcoin, IP and your interview with Stefan Molyneaux were oddly annoying and childish. But, we still love this blog anyway! Keep it up.
I second this comment.
DeleteFirst they ignore you, then they laugh at you, then they fight you, then you win.
ReplyDeleteMahatma Gandhi
If one spends a little time over at the Bitcoin Reddit Forum they will discover that bitcoin users are pro-actively re-buying bitcoin to replenish what they spend.
ReplyDeleteIf bitcoin users really wanted to unload their bitcoins they would easily sell them for cash on the exchanges versus trading them for illiquid consumables.
This is the nuttiest comment you have made so far. If they want to maintain their Bitcoin levels, why are they spending bitcoins instead of dollars at Overstock, in the first place, only to replenish bitcoins? It makes zero sense.
DeleteBecause bitcoin is better. Try using them. This way, you get the convenience of bitcoin more often the occasional need to deal with dollars to replenish.
Delete@ Robert Wenzel January 16, 2014 at 5:00 PM
DeleteAre you serious? Have you not been listening to the message of freedom coming from bitcoiners since day 1?
Our motive is to promote the free market benefits of a decentralized, limited supply, currency that can shield people from the ravages of inflation, central banking, and the endless wars financed by the printing press. Putting bitcoins in circulation helps to increase awareness and rewards those who help us in our goals to help bring about a better world.
Like I said, putting bitcoins in circulation, for whatever reason, will drive the price down. Overstock, the Sacramento Kings and politicians are dumping bitcoins as quickly as you guys, lol, circulate them "to promote the free market benefits." What are the benefits again of a jumping jack travelers check?
Delete@ Robert Wenzel January 17, 2014 at 11:47 AM
DeleteMost of us buy back the bitcoins with any extra fiat we have left over. The beauty and benefit is that our conscious is clear in that we're not supporting the war machine by holding dollars any longer than we have to. Equally as important is that we're showing support for free market alternatives as opposed to being defeatist while trashing it from the safety of our blogs.
@HB. As hard as you wish it or want it, BC is NOT money. The reality is that every retailer that takes BC is immediately converting them to the fiat dollar. Another reality is the last saps to hold BC will be the ultimate losers. It is a fad with zero substance, value, physicality.....nothing but etheral vapors!!!! Have your fun now....but there will be many other BC variations before they all end and 'hard' money returns. Give me something ultimately physical and of actual value or peddle your whimsical fantasy to some other dupe!
DeleteJust use cash. Save yourself time, effort, and "transaction fees."
ReplyDeleteYes, and continue to finance drone strike assassinations on innocent children.
Delete"real money, dollars"
ReplyDeleteAhahaha. You didn't REALLY say that, did you?
Really.....show me what a 'real' BC looks like....no, better yet......place one in my hand so I can actually feel its existence and take a 'wild' guess of what it is made of. Talking about calling the kettle black.....LOL! Explain the difference between BC and fiat, and in the attempt your head would more likely explode before you would come close to being successful.
DeleteMaybe it's a generation thing. One week after trying one bit coin I lost it on a site shutdown. At age 61 give me good old fashion gold coins to sleep at night.
ReplyDelete@ bruce rappaport January 17, 2014 at 9:18 AM
DeleteSo you treated bitcoin like banker money and left it on deposit with a third party? Therein lies the problem. You should have taken possession.
Take possession? How's that? LOL! Site security is ALWAYS a risk.....just to how determined one is to crack it and only a matter of time....plus a good amount of smarts. BC wallets......good luck! Something never being able to be possessed can just as easily DISAPPEAR altogether!
Delete