Hypothesis around bitcoin adoption \ stacker news ~bitcoin

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3350 sats \ 16 comments \ @Voldemort 20 Mar bitcoin

A lot of people think bitcoin won't be used as a currency while it is still volatile. I partially agree with this view. However, I don't think that is the full picture.

The bigger picture is that the costs of using bitcoin (costs such as learning how to use it, taking time to buy it, learning how to store it, and etc.) outweigh the benefits. There are no incentives to use bitcoin over fiat nor are there costs of not using it.

So if bitcoin was still volatile and all those costs still existed, people would start to adopt it if they were required to adopt it to receive some benefit or avoid other greater costs of not using it.

e.g., Suppose over Christmas Stanley kept a set of limited edition water bottles that you could only buy with bitcoin (or list it for $100,000 or 100,00 sats). Or that they did this for all water bottles. I'd be willing to bet a lot of parents would have been willing to go through the steps of acquiring bitcoin for their kids.

So this is my hypothesis:

Bitcoin won't become widely adopted as a currency until people have an incentive to use it for a product. To be clear - it won't be just that you can use it for a product. It will be that you basically _have to use it_for a product or that product will be effectively unattainable.

I think this process will begin ahead of the halving in 2028 when someone realizes they can get bitcoin ahead of a reduction in supply.

Here is how I would do it:

First, establish a partnership with a company that will facilitate the process of buying and storing bitcoin (need not be used but can be used).

Then I would create a limited edition good (like a pair of sneakers) and have an early release for people willing to buy it with bitcoin.

Lastly, release a statement that says there will be unannounced drops of other limited edition goods with pre-release sales for people who pay in bitcoin (this ensures its not a one off) and eventually all goods will be available to buy in bitcoin.

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181 sats \ 2 replies \ @Undisciplined 20 Mar

I agree with the overarching point you're making, but on a few particulars I don't think you're right. I'll grant that you're talking specifically about medium of exchange, since obviously the cost of not choosing bitcoin as a store of value has been enormous.

I think the issue is that the cases where there is a cost of not using bitcoin do not come up frequently enough for most people to make learning how to use bitcoin worth it. However, there's a related knowledge problem that we presumably can overcome, which is informing people of the cases where bitcoin has lower transactions costs.

My impression is that people discover bitcoin and become super impatient for everyone else to discover it, too. For now, the use cases are somewhat limited and that's going to mean we have a fairly gradual adoption rate.

One of the things that's so exciting about Stacker News is that it is the type of thing you're talking about. This is the best social media environment I'm aware of and anyone who wants to take part has to use bitcoin to do so.

21 sats \ 1 reply \ @Voldemort OP 20 Mar

since obviously the cost of not choosing bitcoin as a store of value has been enormous

Yes, that is a good point. I think most people are still in disbelief in this regard, however. In their eyes, this is not a cost.

I also said a few things with too little specificity. E.g., the costs outweigh the benefits. I should have said the costs outweigh the perceived benefits. People don't know the benefits so their perception of them is small.

0 sats \ 0 replies \ @Undisciplined 20 Mar

Right on both counts.

Also, now ETF's and MSTR stock will usurp holding bitcoin's function as store of value for most people.

110 sats \ 2 replies \ @Scoresby 20 Mar

Have you seen Parker Lewis's article Pay Me in Bitcoin?

17 sats \ 0 replies \ @Voldemort OP 20 Mar

I have not, will take a look at it.

0 sats \ 0 replies \ @DarthCoin 20 Mar

Excellent one!

224 sats \ 0 replies \ @k00b 20 Mar

There are no incentives to use bitcoin over fiat nor are there costs of not using it.

I know all these statements are only intended to be generally true, but fiat does not make sense in many places where bitcoin works very well - already. SN is one example where no one wants to input and store a credit card with a fledgling social media website, nor pay the fees associated with transferring pennies, and many minds don't have access to banks anyway. Our open source contribution awards are another example.

I believe bitcoin MoE adoption will continue to grow primarily on the internet, and in other niches, before it supersedes cash and credit where those products already have market fit. A lot of people are focused on having bitcoin compete with credit and cash, but I think they'd do better ignoring those use cases entirely and focus their attention on credit/cash's blindspots.

100 sats \ 0 replies \ @Theorygon 20 Mar

"The bigger picture is that the costs of using bitcoin (costs such as learning how to use it, taking time to buy it, learning how to store it, and etc.) outweigh the benefits. There are no incentives to use bitcoin over fiat nor are there costs of not using it."

I wouldn't have had articulated that better. Just how long it took me to "understand" it and how it still doesn't truly profits me, as people accepting around me are rare and that I "got it late".

Yet isn't it mostly be the wreckage of most fiat currencies that will incentivize most people to finally decide to opt for btc? Even if it stays marginal or even banned, the economic necessity will probably prevail and outweigh the "complexity".

Then there's also the generational gap, many people still struggle with the idea of bitcoin not being tangible but our kids won't care at all.

And then I believe (or speculate) there'll be endorsement from various large entities, the way it'll become a political issue plus a bunch of secondary layers that'll made it easier, whether that's a good thing or not.

The idea that it'll be needed to obtain specific services or goods and that that could lead to further adoption is interesting to dive in, though I personally really can't relate, can't really chime in on that.

For now the "outcome" stays extremely foggy to me, as I see the current times as the peak of various very strong forces battling and not willing to give up now.

So curious how it'll develop, as so far it was pretty surprising.

Anyhow, exciting (and sometimes scary) times!

1 sat \ 0 replies \ @Bitcoinisawesome 20 Mar

You may find it difficult to come up with an incentive to spend bitcoin however merchants everywhere are already incentivized to accept bitcoin. It's pretty cool that you can accept bitcoin for free and with no knowledge at all. additionally the cost of transaction is the burden of the sender, another win for the merchant.

This is what will allow Gresham's law to play out in the end. The inceptives to accept bitcoin outweigh the incentives to spend it, forsure. As more and more merchants try to desperately preserve value for the future in a ehicle that cannot be debased we will eventually reach a point where you simply cannot buy unless you have sats!

gradually then suddenly.

0 sats \ 0 replies \ @DarthCoin 20 Mar

https://i.postimg.cc/2yHJ6qDx/vader-thinking-start-now.jpg

0 sats \ 0 replies \ @DiedOnTitan 20 Mar

Simple: get Taylor Swift to sell tickets for her next tour purchasable exclusively with Bitcoin.

Fantasy aside, selling something only for Bitcoin that can more easily be bought with fiat is basically a novelty or a gimmick, at least currently. We have to think of entirely new business models where Bitcoin is simply a better technology that cannot be done with fiat.

Sat streaming
Micro-transactions (Layer 2)
Immutable record keeping
Tokenization

Business models where payment with Bitcoin massively disrupts fiat rent seeking operations.

Global remittances - already a notable success.

What about:

PayDay loans
Bail Bonds
Reverse mortgages

My 2 sats

0 sats \ 0 replies \ @PlebeiusG 20 Mar

I see your point. i just build an AI site that accepted bitcoin. Similar to unleashed.chat. Its easy to charge sats for AI inference. I think many web services can easily flip the btc switch... and others should go bitcoin only.

The more we demand payment in bitcoin, the more normies will be forced to start learning

0 sats \ 0 replies \ @oliverweiss 20 Mar

The bigger picture is that the costs of using bitcoin (costs such as learning how to use it, taking time to buy it, learning how to store it, and etc.) outweigh the benefits. There are no incentives to use bitcoin over fiat nor are there costs of not using it.

Exactly! That’s why we see the ETF mania. ETFs bring the “transaction” costs, as you name them, to zero.

0 sats \ 0 replies \ @Coinsreporter 20 Mar

A ver good suggestion indeed. People become mad whenever there's a new product or anew version of anything is getting ready to hit the markets, a.k.a. the pre sales. We have seen this with iPhones. If any company starts offering an exclusive pre sale based on Bitcoin, indeed that would fill the gap.

10 sats \ 1 reply \ @carlosfandango 20 Mar

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0 sats \ 0 replies \ @Voldemort OP 20 Mar

Not in regard to accepting new kinds of money, but there are examples of pre-release sales for people who use a thing. Concert tickets are the first thing that comes to mind. I know a few people who hold a specific credit card just to have the ability to try and buy concert tickets before the general public.

But in general, I was just thinking about how how MSTR is buying up bitcoin and how others might deploy different strategies at the next halving. MSTR is effectively asking for fiat to convert to bitcoin. If E.g., Nike wanted to start accumulating bitcoin, they could skip the step of acquiring fiat and just allow/incentivize people to pay for things in bitcoin.

The reason why I think this could be the tipping point is because it does not require a CEO to actually care about the philosophy of bitcoin. If someone had done this in 2023 (Stanley, for example), any revenue they generated over christmas would be 1.5x higher if they sold today. So even if someone thinks bitcoin is stupid, they could still use this strategy to increase profits.