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Hoarding BTC: is this an issue?

 

Jordan Kelley, CEO at RoboCoin, visited Bloomberg Television’s “Bloomberg Surveillance” on Jan. 17th which you can view here. He is confronted with a quote from the Financial Times by Jean-Pierre Landau, the quote reads:

“The rapid increase in the value of bitcoin makes it unsuitable as a means of exchange. Someone who expects it to be worth more tomorrow, won’t spend it today. They are the tulips of modern times. The mania is not over.”

Jean-Pierre Landau. Fmr. Dep. Governor Banque de France

 

When more merchants worldwide start accepting BTC in exchange for their services, volatility will not be such an issue making ‘hoarders’ more willing to spend their accumulated coin. More and more services like Robo Coin are appearing all over the world. BTC miners and investors have had no choice but to hoard their coin because the digital side of our financial market is currently evolving. Low liquidity forces the BTC worth to fluctuate rapidly. Just in the first month of 2014 we have seen hundreds of companies and corporations adapt. Overstock.com being the biggest headliner, has put a great amount of pressure on other large companies like Amazon, who can’t afford to lose customers who enjoy using BTC as a form of payment. The Overstock CEO Patrick M. Byrne tweeted:

#Bitcoin‘s first full day on@overstock.com was a huge success: 840 orders, $130,000 in sales. Almost all new customers.#stunned

— Patrick M. Byrne (@OverstockCEO)January 10, 2014

Mainstream adoption , a user experience my grandparents can navigate, and  large investments by venture capitalists is what’s going to give bitcoin a HUGE boost. That being said, we have seen evidence of all three just in the first month of 2014.

Liquidity is an interesting concept within the new flourishing currency. In the Economics of Bitcoin Panel – Bitcoin 2013 Conference which you can find here, Peter Surda and Yoni assia both make great points starting at 16:50. Yoni adds that BTC being used as a payment method, almost by definition increases it value. He explains that anyone who wishes for the price to go up and volatility to go down, simply needs to do their part and buy/sell BTC to increase the amount of BTC in circulation. Peter Surda later chimed in explaining an analysis he did in 2012 (approximately between February and May). He further explained that price volatility was very low, and that coincided with very high liquidity. We haven’t continued to maintain that level of liquidity. However, a company called Bitcoinica operated executing liquidity arbitrage, and even though the price was around $5, the increase in liquidity resulted in the price becoming more stable during that period.

 

People who pick apart BTC looking for ways to debunk it’s utility (and anyone who knows BTC knows there’s plenty of ammo for naysayers), need to understand this new cryptocurrency is still integrating itself into the way we purchase goods on a daily basis. It’s still very young and needs time to evolve. Once liquidity within our world economy increases the hoarders will start spending, and the naysayers will start hoarding. BTC has a long way to go but is improving very fast, and our economy is adapting even faster. Here is a rough list of business all over the world where you can spend your coin. (didn’t have time to hyper-link all of them)

What Can I Buy With Bitcoin?

 

  • Subway (some locations)
  • Overstock.com
  • Advance Disposal inc.
  • Virgin Galactic (travel)
  • BitcoinShop.US (air conditioners to watches)
  • Bitvapors (vaporizers)
  • SomethingGeeky.com
  • Bitcoinstore viagra rezeptfrei bestellen.com (electronics)
  • Memorydealers.com (computer hardware)
  • Keystonepetplace.com
  • JavaNomad.com (coffee beans)
  • Coinmap.com
  • Aspire Auctions (antique auction)
  • Haircuts
  • Legal Representation
  • Flights on Cheapair.com
  • E-Cigarettes (Australia)
  • Hotel Rooms
  • GrassHillAlpacas.com
  • Dominos Pizza (pizzaforcoins.com)
  • PocketArtillery.com
  • Coinabul.com (precious metals)
  • Tesla (Southern California)
  • Apartments in France
  • Firehouse BBQ grill (Salt Lake City)
  • Framethetv.com
  • Apartments in Lithuania
  • Porn
  • Wetsuits (point break)
  • Dental services (UK)
  • Windshield Replacement (Utah)
  • Wal-Mart Gift cards
  • Gyft.com(gift cards that can be used at Target, Wal Mart, Nike)
  • Bitcoin.Travel
  • Pembury Tavern (UK)
  • Old Fitzroy Pub (Australia)
  • Foodler.com (order delivery and take out across the globe 13,000 restaurants)
  • Bitmarket.com
  • Bitcoincodes.com (credits for steam, Spotify, XboxLive,  and PLaystation)
  • Namecheap.com (domain names)
  • MixedTees.com
  • Accountable Moving & Storage (Seattle)
  • Jeeps (Overland Park)
  • Fords (Carrolton Tx)
  • Car maintenance (Las Vegas)
  • Coffee (Palo Alto, Portland Oregon, Miami)
  • Tax Services (California)
  • Chiropractic Services (New Jersey, California)
  • Groceries (San Fran)
  • Roofing (Colorado)
  • Bitcoin ATM’s (Vancouver, NY)
  • Political Contributions?

 

 

 

 

Top 6 Bitcoin Exchanges:

 

  1. Mt. Gox
  2. BTC-E.com
  3. Crypstsy.com
  4. BTer.com
  5. Bitstamp.com