That is irrelevant as I have explained. What it does is reduce the network effects (merchants accepting and holding Bitcoin thus being nodes in the Metcalf law valuation) within the Bitcoin ecosystem that those holding fiat must buy BTC to attain. If everything they can buy with BTC they can also buy with fiat, then there is no great need to buy BTC with their fiat.
That was precisely my point about why lose 3-5% on double exchange, when one can just buy with their credit card for 0%.
Many people prefer to use BTC rather than credit cards, even though they can use either, because BTC is faster and more convenient for online payments. They buy, wait for the price to increase, then spend when needed. It's that simple. I do not think this 3-5% double exchange loss you are talking is a significant factor in whether or not people choose to use or accept Bitcoin.
The 3 - 5% is an ancillary argument and not the core one. If they wish to be irrational and waste 3-5%, it doesn't mean they are part of a trend of new adopters who love to waste money. Whether Bitcoin holders continue to be interested in Bitcoin is irrelevant to the point I was making. I was making the point that if we don't create more merchants that accept only BTC, i.e. hold BTC and not just a useless facade for fiat, then there is no compelling need for non-Bitcoin owners to decide to acquire Bitcoin (if we are speaking about its demand as a currency and not as an investment).
On the investment demand side, the adoption is slowing and thus due to Metcalf's Law's correlation P = 1.5 x n^2, the rate of price growth (increase) has and will continue to slow. There is no linear growth on the log 10 chart "to the moon". Price growth will moderate and we won't exceed $10,000 before 2016. (note that is still a very nice gain, just not as "to the moon").
Bitcoin's price increase after 2015 will further slow, will not exceed gold. (assuming gold bottoms around $1000 in 2015 as I expect) Remember Risto was the guy calling for $300,000 by now (I've seen others write this, I wasn't around when he purportedly made that projection). How did that work out for him?
Buffet is correct, Bitcoin is just a facade for fiat. Bitpay and Peter Thiel have just put that future in concrete.
Now I sit back and watch my observations wreck havok on Risto's net worth expectations and confidence.
Add: slowing rate adoption can still be very large nominally, e.g. if going from 1 million to 100 million takes 3X longer it still happens. You see as Peter Thiel helps to convert Bitcoin to the government coin, the masses will come in as it will become essentially be a form of fiat with offchain services that Peter Thiel creates. Everything is running exactly to plan as how I expected it to go when I wrote
Bitcoin : The Digital Kill Switch in March 2013 and first joined this community.
P.S. Mining is now concentrated in one pool with greater then 51% attack hash power. And there are individual miners with 7 - 10% of the entire hash power. Everything is going exactly how I predicted. Yet people still think I am wrong.