

A Bitcoin IPO such as Coinbase could trigger mainstream merchant adoption - bernardlunn
http://bernardlunn.com/2015/03/18/a-bitcoin-ipo-such-as-coinbase-could-trigger-mainstream-merchant-adoption/

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phodo
I agree with OP's point. To add to it, I would like to point out that as it
stands - in the world of the "banked" (as opposed to the "unbanked") -
bitcoin, the currency, is a nice to have for consumers. And you need the
consumer side to work... not just merchants. Bitcoin is more advantageous to
merchants, in the form of transaction fee savings. An IPO will generate
interest and adoption across merchants, but beyond the novelty of buying
something in bitcoin, consumers want to "show me da money". They need to be
shown the savings [ Hopefully, by that time, we will also have ease-of-use
addressed, either via coinbase /startups/ mobile apps / hardware wallets (e.g.
case). Hopefully we will also have less volatility yielding more consumers to
think of btc as a short-medium term store of value ]

For the "banked", the single digit percentage transaction fee savings need to
be passed on, en masse, from merchant to consumer at the point of sale in the
form of bitcoin discounts. So if I want to buy a flat screen tv from best buy,
it would cost me $699 using credit, but cost me $679 equivalent for btc, and
in a manner that does not make the merchant lose money. If the merchant
chooses to convert to credit on the back end then naturally those savings
cannot occur since the transaction fees need to be paid to the credit card
guys.

What about cash/fiat? Cash/fiat payments be priced at 699 or 679. For the
short run, they should stay at 699, so there is an easy, quantifiable net
benefit to consumers when using bitcoin. In the long run, once btc is diffused
in society, the price of the flat screen tv via cash/fiat will either stay at
the 699 price, or cash/fiat pricing will move down to the 679 price to match
btc. Probably the former. There might be other "externalities" at play here
that make the value prop to consumers beyond price more compelling:
convenience, controlled spending (via smart contracts parent to child), etc.

For the "unbanked" there is a broader set of value props for the average
consumer in those societies, e.g. zero-low% remittence, access, making them
"banked", etc.

tl;dr: to really boost adoption with consumers, consumer-side savings need to
be considered when buying with bitcoin.

