Post
Topic
Board Economics
Re: Keeping Bitcoin Price High
by
halfawake
on 02/07/2013, 07:49:31 UTC
It is not just about you earning income in bitcoins and then spending bitcoins, if the person you pay bitcoin to converts them to Fiat currency that is exactly the same as if you do it yourself, it creates the same sell order on MTgox or equivalent. The value of a bitcoin is a simple supply/demand equation, more buyers than sellers price goes up, more sellers than buyers price goes down. <- its obviously more complex than this - but this is the core.

For bitcoin to continue to advance in value we have to eliminate the selling of bitcoin to buy fiat from the cycle, this means getting people like utility companies and supermarkets and farmers to accept bitcoin in payment. We need retailers and the suppliers of goods that ordinary people use to be prepared to accept bitcoin as payment - and for them to be able to pay their suppliers in bitcoin. If you can buy food and energy with bitcoin you can meet your basic needs from bitcoin alone, if you can do that you can be paid in bitcoin, and from there bitcoin becomes an alternative to Fiat and we can stop worrying about how many USD 1BTC is worth because it will not matter.

There's already a website that handles billpay in bitcoin: https://www.billpayforcoins.com/index.php, which should take care of the utility companies part of the equation, they aren't even charging any fees for it (for now).  Getting supermarkets to accept bitcoin would be much harder though because intermediaries like this wouldn't work like this unless you're one of the rare people who buys all your food online.  It's also harder because unlike utilities which there are relatively few of, there are a lot of different supermarkets.  Not an impossible task, but definitely difficult, I would imagine.