However, reality is quite different. Using Bitcoin is not convenient. To buy a product in Bitcoin, we first have to buy Bitcoin in an exchange. Instead of buying a product directly, we have to add this extra step.
The merchant selling products in Bitcoin must constantly adjust prices due to its wild price fluctuations. The products on offer are bough using fiat, so even if they are listed in Bitcoin, the price is actually set in fiat. To minimize risk, the merchant has to exchange any incoming Bitcoins for fiat as soon as possible.
A Bitcoin transaction includes in other words both a purchase of Bitcoin and a sale of Bitcoin. The price spread between offer and supply must therefore be added to the transaction cost. That makes Bitcoin easily one of the most expensive ways to buy anything. It is also one of the slowest ways to perform an electronic transaction. It takes about 20 minutes to complete a transaction at current volumes. With higher volumes, completing a transaction will take even longer.
Furthermore, the perception that Bitcoin transactions can be made in complete privacy is false. Personal details are revealed whenever Bitcoins are bought or sold, and any product bought will have to be sent to an address. There's nothing private about this.
Nor is Bitcoin particularly safe. Mt. Gox is a vivid example of this. But even without the kind of fraud that happened at Mt. Gox, using Bitcoin is unsafe. With hardly any price stability there is a very real risk that the price of Bitcoin will change dramatically during the hour or so that it takes to complete the full fiat-Bitcoin-fiat cycle.
Clearly, there is a great disconnect between perception and reality when it comes to cryptocurrencies like Bitcoin.
A piece of brass pretending to be a store of value
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