Is it easier to spend bitcoin than to cash in gold?

Source: for wealthy bitcoin investors who want to cash out, Vegas auto Gallery, a luxury car dealer in Las Vegas, has become a place for them to achieve this goal. According to Nick Dossa, owner of Vegas auto Gallery, the company recently sold two high-end sports cars to a customer who paid more than $6 million in bitcoin, a 2017 model year Pagani huayra roadster and a 2019 year Bugatti Chiron. Dossa, the owner of Vegas auto Gallery, said about 3% to 5% of its revenue came from bitcoin transactions. The price of bitcoin has more than tripled this year and now hovers around $26600. A large number of investors have flocked to the bitcoin market to take advantage of the booming momentum trading. Many of them have become millionaires. Professional investors such as Stanley Druckenmiller and massacuses Mutual Life Insurance Co. )Companies like bitcoin are starting to invest in bitcoin this year. Robinhood Markets Inc。 、PayPal Holdings Inc。 Wait for companies to allow their customers to buy and sell bitcoin. Despite these advances, industry observers say bitcoin needs to be popular as a form of payment if it is to become more popular. At present, it is not easy to pay in bitcoin. Few businesses accept bitcoin, and many people are not familiar with it. The use of bitcoin is usually limited to the purchase of high-end goods, such as a car in Dossa. Bitcoin was launched in 2008 and was designed to operate as an e-cash. By using bitcoin, users can exchange value in a fast and low-cost way like sending e-mail. However, in practice, the application of bitcoin is hindered by some factors. In the early stage, it is difficult for ordinary users to operate the digital wallet storing bitcoin. Many companies, including Expedia Group Inc., tried to accept bitcoin in 2014 and 2015. And Dell technologies, but then quietly gave up. People who look at special currency say that the situation may begin to change next year. Two months ago, PayPal opened its platform to bitcoin, allowing its 361 million users worldwide to buy and sell bitcoin. In early 2021, the company will expand the service option to allow users to pay in bitcoin to 28 million merchants using paypal. This attempt has the potential to bring bitcoin into the mainstream. However, there are still some obstacles to the development of bitcoin as a widely accepted payment method. First, bitcoin is notoriously unstable. In 2017, bitcoin peaked at more than $19000, and nearly half its value fell about a month later. For some businesses, this could mean charging customers who pay in bitcoin a premium to cover the risk of sharp fluctuations in bitcoin prices before they convert those payments into dollars. In the case of Dossa’s car dealers, they charge buyers who pay in bitcoin 1% of the purchase price, which is comparable to the transaction fees charged by bitpay, a payment software start-up. Bitpay converts bitcoin into U.S. dollars and remits the money to Dossa. The car bank accepts payment in bitcoin without any additional risk, as bitpay will convert bitcoin into U.S. dollars before the transaction is completed. Dossa said he received payment for the sports car less than a day after the customer sent $6 million in bitcoin to bitpay. ‘it’s a very simple deal,’ he said. But historically, currencies constrained by resource constraints such as gold or gold linked currencies also face a problem: hoarding. With limited supply, rising demand will push up the price of bitcoin. When this happens, investors tend to cover their pockets rather than spend the currency. This could lead to a deflationary spiral for currencies that are common across the country. People who have recently been attracted to bitcoin by rising prices may not want to spend any of their holdings. However, for those who buy at low prices, the rise in bitcoin prices has greatly increased their purchasing power. Kit jurkes, a foreign exchange strategist at Societe Generale, said it was reasonable for them to spend some bitcoin. “If I bought bitcoin for $5000, and today it’s $23000, and paypal lets me buy something cool, I might think it’s a pretty good way to diversify.” He said. “This path has to start with people who have made money in the rise of bitcoin.” One obstacle that only US users face has to do with the Internal Revenue Service’s classification of special currency. In 2014, the agency announced that it would treat bitcoin as property rather than money, meaning that users who sell bitcoin for whatever reason will be subject to capital gains tax. Organizations like bitpay can provide services to help users solve tax related problems. Another stumbling block is the cost. Bitcoin is not suitable for small transactions at the moment, because every transaction on the network includes fees. According to bitinfocharts, the median transaction cost is currently around $5, but the average is more than $9, and the cost varies greatly depending on the state of network traffic. When the traffic is large, the cost will rise. The average cost this year was 29 cents at its lowest and $13 at its peak. This makes bitcoin an unattractive payment option for users who may want to buy something small, such as a $4 coffee at Starbucks. But for big deals, fees are less of a problem, and big deals paid in bitcoin are common. According to bitinfocharts, the average transaction volume was $127000. On this scale, the cost of $9 is negligible. For all these reasons, says jurkes, bitcoin is a good choice for the rich, because it is easier to spend than to cash in gold or stocks. “It’s a high-end form of money,” he said

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