Bitcoin was the means for Satoshi Nakamoto to reward participants to play his game. It was never meant to be standalone currency. That idea was conjured up by the players of the game. Every game community would like their in-game currency to have real world value. Play a game for money? Where do I sign up?
What is being lost in this push to have corporations and governments grant Bitcoin as the holy grail of value storage, is a payment processing system has been created that trumps all predecessors. We now have a system of payment that can accept a percentage fee for even the most micro transaction. Before Bitcoin, we had Paypal and Western Union. The fixed costs in protecting and running those systems created a floor on transaction size. It was never worth it to send your buddy $2 when Paypal charged a minimum of $5 to act as agent on the transaction. Imagine further sending a wire for $2. The cost alone is $20 so this never made sense. We are headed down one of two paths. Either a group of wealthy people, organizations, governments rally around these coins and honor transactions among themselves (our present fiat currency system) or the coins start paying their bounties in the fiat currency of the miners choosing. So when a block is broken the miner gets Dollars/ Euros/ Pounds/Yen instead of Bitcoin. Or simply create a new coin that does this from the beginning. The payment processing system remains (and all of the value that it will create) and we can remain on the same currency systems that we are presently. In essence replacing cash with this new paradigm of the Bitcoin Payment System. This system was never created to solve large transactions. It was simply developed to allow for the most micro transaction to happen anywhere in the world, comfortably from your present location.
The Bitcoin Payment System incorporates all of the benefits of cash and a credit card in one. Close to immediate clearance of cash and the safety of carrying a credit card. Would you ever walk up to the owner of a house and say, I will buy your house in cash and get out now? Never. Would you walk up to the counter at a deli and attempt to pay for your coffee with a check?
There is a payment system for every size transaction. This sell off is because Baidu isn’t accepting Bitcoin. As a community we can not hope that the major players will accept Bitcoin. We need to rally around the payment system that Satoshi created. Pay the miners in dollars and let the market do it’s job.
-The Crypto Analyst
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This post was last modified on (Eastern Time): 19/12/2013 19:43