Bitcoin will be stronger if it can’t be traded for fiat currency



I’m a bitcoin user: I sell t-shirts for bitcoin, I offer my consulting services for bitcoin, and I generally will use bitcoin as a form of local barter. I have never sold bitcoin for fiat currency (dollars, for example), and I tend to avoid buying from others who will convert my bitcoin amount into their own currency.

Bitcoin users versus speculators

When I buy a product or service from a seller who accepts bitcoin, my first question is: “Do you hold your bitcoin, or do you convert it to fiat currency right away?” People who dump bitcoin after accepting the payment aren’t helping the value of bitcoin. These “instant bitcoin sellers” are liquidating for fiat currency, which depreciates the value of the bitcoin the rest of us holders and users have. If they convert to fiat cash, I don’t transact with them in bitcoin — I’d rather just transact via Paypal or other means.

Those who actually hold on to bitcoin — or use their bitcoin to transact with other sellers who accept it — are creating the true value of the digital currency. The value of it is irrelevant versus the dollar or the euro or any other fiat currency. What matters to me is what is the value compared to what I want to spend it on, ignoring the speculation and forex trading values. Bitcoin should be completely untied to fiat currencies.

Government regulations spoil value

The moment government regulates a market, the value of a good or service falls. Putting up with the filing of government paperwork, the tax headaches, the tax loopholes for the rich, and the subsidization of government entitlements and warfare are all priced into any currency that is regulated, any market or industry that is regulated. If I want to get a haircut from a black market barber who doesn’t have a state license to cut hair, I will get a better deal because he doesn’t have to deal with government regulations, paperwork, taxes, etc. He also won’t be subsidizing government’s welfare recipients (usually meaning the ultra-wealthy cronies).

When currency exchangers trade bitcoin for fiat currency, they have to abide by these regulations. They’re supporting the massive entitlement state, and pandering to the warfare mindset of all governments. There’s no purpose to support these exchangers, because the long game of bitcoin is to desubsidize the state, and all of its crony entitlements.

Withdraw bitcoin from having fiat currency value (on the white market), and you’ll decouple bitcoin from the dangers of government and tyranny.

Let bitcoin become illegal to trade for fiat currency

I would have zero problems if bitcoin was illegal to convert to fiat currency, and vice versa. The value of bitcoin is in what it can purchase from those who will spend those bitcoins for other goods or services, or save them for a future need. The value of bitcoin is decoupled from government fiat currencies because of its power to walk completely around the insanity of the entitled classes.

If MtGox or BitStamps or whatever other bitcoin<->fiat exchangers would go out of business, I would be a happy person. I don’t see the purpose of trading my bitcoin for anything but goods and services. It is a stand alone bartering agent, and the faster we get to bitcoin having no value in fiat currencies, the faster we’ll be able to really get around tyranny, war, welfare, entitlement, unions and the regulated economy that prevents peaceful humans from doing what they are best at doing. Minimum wage, taxation, savings destruction through currency inflation — these are all things of the past, and things that are best suited for the crybabies who want more nanny state and less freedom.

Resist worrying about speculation value

I don’t care about how much my bitcoin is worth versus other currencies. I sell my t-shirts, sell my consulting services, and I never look at how much my bitcoin wallet is worth in dollars or euros. I know that the value, for me, is avoiding subsidizing the murderers and thieves and indoctrinators of governments all over the world. I do pay my taxes on the goods and services I sell, but some day, that will no longer be necessary. It will end when bitcoin is illegal to transact for fiat currency.

That day can not come too soon. I hope it comes like a flash of lightning without a cloud overhead.

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About A.B. Dada

A.B. Dada resides in Chicago, Illinois and manages a multitude of businesses involved across a wide range of industries.

Comments

  1. bitcoinfly says:

    Excellent article! I would like to translate it on bitcoiner.sk

  2. krautz says:

    Haven’t nation states dealt with these kinds of things before? They tax it like they tax capital gains, barter or farmers, then they give you tax bill denominated in fiat dollars, and jail you if you don’t pay.

    • A.B. Dada says:

      They’ve never dealt with a barter exchange unit that can be anonymized if the users decide to keep it that way.

      • krautz says:

        That’s called working under the table for cash. It’s not cash exactly, but it’s similar. Or a business that doesn’t keep books. You’ll soon run into the entire money laundering detection system. Governments are ramping up to deal with bitcoin and they’re ilk.

        Bitcoin is not anonymous, every transaction is recorded on the blockchain forever and the only way to make it anonymous is to use a mixer that destroys mixer records. That would basically be considered money laundering. Something like a combination of chauminan e-cash & bitcoin for bank reserves would work better, but you’ll still deal with the entire money laundering detection system above.

  3. Anonymous says:

    There must be a way to convert bitcoin and fiat currency.
    My employer doesn’t pay me in bitcoin so, to buy your stuff, I need to have a way to get bitcoin in the first place. I have nothing to sell and don’t want to spend resources mining so my only choice is to convert currency.
    OTOH, there are plenty of things you can’t do with bitcoin such as paying your taxes. As a results people with a bitcoin-only income need to convert too.

    • A.B. Dada says:

      I have no issue converting person-to-person. In fact, I don’t see why over time a retailer who accepts BTC wouldn’t be willing to do some sort of currency swap, off the records, under the table.

  4. Southern Man says:

    You rightfully point out that government regulations spoil value. But you propose to strengthen bitcoin through…regulation.

    • A.B. Dada says:

      Oh, I agree — but it’s more about seeing the fun in watching the nannies put their own noose around their own necks.

      I want more regulations strictly for comedy value.

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