Thank you for the reply. I was more alluding to your second paragraph where you described the rational self interest of using CC instead of BTC. To me this is a complete deal breaker for widespread adoption of BTC as a currency. Not only is there not an upfront dollars and cents reason for a consumer to use these coins in transactions, but there is a small PENALTY in doing so, in the range of 2-2.5% (1% coinbase fee and 1-1.5% opportunity cost of not using a CC.

The reasons for a merchant to embrace BTC as a currency are there, but they aren't there for the consumer. All of your points in favor of BTC as a currency are overarching principles which, sound as they are, do not resonate with your average consumer who mainly looks at the face-value and immediate cost of doing business. I can see it working if merchants largely reward those using BTC, but not until then. Think about it, Credit cards generally charge 2-3% to merchants for doing business. Coinbase on the other hand charges 1% to the consumer and 1% to the merchant for a total of 2%. It doesn't really lessen transaction fees that much, it merely shifts it onto the consumer. This is a recipe for failure in my opinion.

To me, it is only when BTC is used as a currency that it will stabilize in price. It needs a stream of transactions constantly to stabilize. This won't happen until the consumer has reason to use BTC as a currency. Right now there isn't a reason.

I'd be interested to hear what you or anyone else thinks of this. I would love to be wrong, so let me know if you see a problem in my line of thinking.