5 reasons to accept Bitcoin
1 – Bitcoin is a currency.
So what is acceptance really? To start with, it means acknowledging the value that Bitcoin intrinsically has. A currency is something that can be used to exchange the value of work between two parties. Historically, this has been able to be represented by anything from bags of salt, to rum, to shells, to gold and other precious metals.
The concept of Barter is not new, however bitcoin introduces a new way to barter, digitally. The blockchain, and the work (aka energy) required to mine bitcoin, provide a foundation for valuing that work, valuing that energy. Indeed, much of the valuation of bitcoin is based in the amount of work and investment in hardware required to mine it. As “The Halving” approaches, the work required to earn each bitcoin will be doubled. The value therefore is more than likely to increase.
So, the first acknowledgement or acceptance which we need to make is that if we have a way of representing work which can be exchanged freely between parties, then we have the basis for a currency. This may seem self evident to some, and indeed with the government of Japan now officially recognising bitcoin as a currency, there are still pockets of resistance.
Australia is an interesting case in point.
The Australian government has recognised that there is value in bitcoin, however the government has chosen here to see it as a commodity rather than a currency. In an effort therefore to try and regulate, the government deemed bitcoin to also have GST applied to it. When this happened in mid 2015, it saw an exodus of technology companies and bitcoin startups relocate overseas to more reasoned jurisdictions. Bitcoin users have in the main thus far been geeks, speculators and libertarians. This userbase is changing however.
2 – Bitcoin is Global
Fiat currency, and it’s vagaries are generally local. Many people wish to recognise that the US dollar is a global currency, however of any of the international work-value exchange mechanisms, this is possibly one of the most flawed. Quantitative easing has seen the US Federal reserve create Trillions of dollars out of thin air in order to support their economy. Absorb that for a moment – out of thin air. No basis of work exchange, just “because they wanted to” and because they needed a way to fool the rest of the world into believing that the was still value in their economy.
Largely, they were successful unfortunately, and most of these funds now sit overseas with the likes of the Chinese government or in IOUs to other third parties…
Bitcoin, whilst it needs to have a Fiat currency equivalency in order to have that work value equivalence, is something that can be independently exchanged between parties wih ease, and speed.
The global nature of the bitcoin network and the blockchain more generally make bitcoin in fact the best way to exchange work value – more so even than fiat currency transfers. There is minimal cost to exchange data between 2 nodes. Where these nodes are physically located is irrelevant – they could be physically adjacent, or at the North and South poles respectively. It just doesn’t matter.
Some would say there problem therefore is that bitcoin doesn’t respect borders. I take this one step further and say that it doesn’t recognise borders because there are, in reality no such things as borders. Any border is an artificial construct of human intervention based on political or historical conquest based actions. Bitcoin doesn’t have any borders. There is a lot society on general could learn from this concept…
3 – bitcoin is transparent
Many bitcoin naysayers (and there are quite a few of them) say that bitcoin is the realm of villains and scoundrels because of the anonymity it provides. To an extent, whilst bitcoin addresses can provide discrete anonymity by refusing to link identifiable personal information pertaining to a party with that address, fundamentally bitcoin is valuable because of its openness and transparency.
Every single bitcoin transaction which has taken place, and which ever will take place, is open and visible to everyone. There is no hiding a bitcoin transaction – no cash under the table so to speak – it is out there.
Like all things technical, it is possible to obfuscate, but it is possible to track as well.
4 – bitcoin is not able to be controlled
This is where some of the real intrinsic value of bitcoin resides. It has a work equivalence value, but it is not able to be physically controlled by old money or big money. This is the very capital – L Libertarian point of view, and it should be said that this has an attraction tom many.
If we take a broader picture look at the concept of “wealth” and “power”, all it really means is that somewhere along the line you have been able to control something or someone and exchange a larger value for that than the individual puts on it themselves. Exploitation is what some would call this, and it has been going on for as long as sentient humans have existed.
We have been convinced that there is value in certain things and that it is desirous to control those things. But what is that value? Really, the value which exists and which we have is based in our health, our ability to work (either physically or mentally, or both), in energy (which enables the former) and in our ability to transfer that energy, and in food and crops, again energy transfer.
Big Money (banks and moneylenders) seeks to control the flow of money and the transfer of fiat currency, playing with the value of work of others and scraping, scraping, scraping to generate their profits. Little if any work or value is really generated by Big Money. They have however found a way to control the mechanism by which the rest of society exchanges work value.
Bitcoin can’t be controlled by them and they can’t scrape scrape scrape, so it is a threat to their existence. I see that as a good thing… it’s the main reason Big Money is trying to suppress Bitcoin.
5 – bitcoin is here for the long haul
But is it really all going to keep working? The answer is yes.
The technology on which the platform has been built is robust, and the deflationary mechanisms which have been built into it will ensure that over time as work value is decreased, Bitcoin value will be increased. We are unlikely to see a complete failure of the planetary network infrastructure any time soon – parts of it perhaps, due to EMP, solar flares or some other catastrophic global disaster, but somewhere the blockchain will survive. It can be rebuilt, and it could even be built into all future computing devices so it exists in and of itself. Perhaps a network of geostationary satellites can be deployed to cover off any planetary disasters – this would indeed perhaps make sense.
As we come to accept that there is a value in having a global, transparent, currency which is independent of greedy vested interests this will indeed become more important. It is only a matter of time before we see this.
So, welcome to the emergence of the fourth type of bitcoin user, the general populace. The geeks, the speculators and the libertarians have had it to themselves thus far – it’s about time we all saw the value in bitcoin and accepted that it is here to stay.
Coinjar Swipe Hands On
Well it finally arrived in the mail tonight – my Coinjar Swipe card. The first impression os a positive one. Standard EFTPOS card and a nice graphic on the front. (Although no pretty hologram…)
Before you ask – yes, I have changed the name etc – feel free to use the image though.
What you need to know
Ok – you need to have a Coinjar account. Once you have this and have the Swipe card account then you can move forward. If you want to know how to get one, go to their website…
There is some “nitty gritty” though.
The Coinjar Swipe is a “traditional” EFTPOS card. Same as the basic cards you get from a bank – no tap-and-go facilities, just a magnetic stripe on the back of the card and a PIN with which to operate it. I am certain that future generations of the card will have the now accepted NFC capabilities, but version 1 of the SWIPE card is about as simple as it gets.
But that’s all it needs to be…
You now have in your hand a card which can convert your Bitcoins to Cash. The card can be used at any ATM within Australia as well to get access to real cash. Not sure about using the card overseas, but time will tell I am certain.
To use the card, simply “Swipe” the card through the standard magnetic reader at your favourite EFTPOS accepting establishment, key in your PIN and voila, you have paid for your goods.
The card can also be used at ATMs throughout the land to get CASH straight from your Coinjar account. Nothing comes for free though…
For full terms and conditions for the Coinjar Swipe card visit https://swipe.coinjar.com/pds.
So what are the catches? There are a few that need to be mentioned.
1 – Transfers
Transfers to your card from your BTC account are limited to $500 per day. For most people this is not an issue, but be aware of it as obviously if you intend to use the card far and wide, this could be an issue…
2 – ATM FEEs
Ah yes – the bane of the fiat currency network: ATM fees… there are some.
When you use the card, fees do apply. Watch these.
The PDS “Part B” which you receive with your card states that the following fees apply:
ATM Cash Withdrawal
- When using ATM not part of radiate network: ATM Owners Fees
- When using a rediATM: $2.00 rediATM Usage Fee
For “Other” transactions (e.g. declined or balance inquiry transaction)
- When using ATM not part of radiate network: ATM Owners Fees
- When using a rediATM: $2.00 rediATM Usage Fee
3 – Time time time.
It can take up to 15 minutes for a transaction from your bitcoin account to appear on your Swipe Card balance. but again, in the grand scheme of things, perhaps this should sit in the “good” section.
4 – Third party involvement.
Coinjar had to engage the assistance of a third party to get the cards up and going. The party here is Emerchants. The company is a holder of your funds. Once the transfer between Coinjar and Emerchants takes place, your funds reside with Emerchants. Whilst this I don’t think is an issue, it is something of which you need to be aware.
Account keeping fees are somewhat concerning as well. There is an “inactivity fee” which essentially is a fee levied against the card account charged on the first day of each month after 180 days of inactivity. This is $4 per month, and so is designed to drain your card account over time if you do not use it. If you do however use the card, it’s not going to be an issue. It’s unclear as to whether there is a “negative” position where if you exhaust the cards funds and then leave it idle for 6 months you will start to be charged fees and this will take the card negative…
Be also aware that if you want to dispute a transaction on the card, then there is a $10 fee involved. Not a deal breaker by any means, but there just the same.
That being said, given that most banks charge $5 per month for the same thing, perhaps it isn’t that bad after all, and of course you will use it.
Beware also that once you transfer from your Bitcoin to your Swipe card you CAN’T GET IT BACK!
There is no provision to transfer from your Swipe Card back to Bitcoin so remember that it is a one way transaction. No going back. Nada. Niet. Nein. Non. Iie. Bù.
Overall impression: thumbs up!
So – how will this work? The same as a standard bank EFTPOS card, but it will leverage your BITCOIN balance.
The best way to think about it is that you now have in your hand a “prepaid EFTPOS card” which can link directly to your Bitcoin account, and pay in up to $500 per day.
Yes there are some limitations, but you just have to live with those, and they are a hell of a lot better than the alternatives.
For anyone wanting to really see the power of Bitcoins and to leverage accessibility and liquidity, then the Coinjar Swipe system is for you. It may eventually also do away with the need for individuals to act as Bitcoin conversion agents, but that seems to be a little way off.
If you can’t access it though, then hey, you can always resort to selling bitcoins for cash…
Want to know more about Bitcoin?
The best way to learn about Bitcoin is to use it. Bitcoin however is not an investment per se, (although it could be) it is a way to transfer work value from one place to another.
It’s an interesting concept to some. Those who understand the current fiat currency system understand the real value of work. I think most people do.
The issue with bitcoin is that it does not have the active liquidity that people need to have in order to use it.
So that needs to change.
The best way to start this therefore is to look at ways to give Bitcoin the liquidity it deserves. One such service which is helping deliver this is Localbitcoin.com.
Localbitcoin.com is an exchange matching service for people who either:
A: Have cash and want to convert it to Bitcoin (for transfer or whatever reason) or
B: Have Bitcoin and want to convert it to cash.
There are also online payment options as well. Bank transfer for Bitcoin / Bitcoin for bank transfer.
Sounds simple enough, but the regulations surrounding money transfer etc are a little tedious to say the least and the ATO is certain to want their cut along the way. No way I say.
If you limit transfers to less than $1000, then there’s no GST implications, as the location of the bitcoin wallet is overseas when the BTC are transferred to you. It’s an import when you buy BTC, or if you want to sell your BTC and get cash, well that’s easy to do too…
So I’ve joined this little experiment to see how we go. You can now Buy Bitcoins with cash in Eltham – just ask me and I’ll help you get organised. If you would like some help setting up a wallet etc then no problems. (My rate is 0.5BTC/h) but I’m happy to look to provide more information. Bitcoin is coming of age and it is worth getting on board.
Set yourself up with a wallet such as a Coinbase wallet (which has a mobile client and many more features!!!) or a computer based wallet such as Electrum. If you can set up a mobile wallet that is most useful for cash transactions… You can even set up a proper full wallet and download all the Bitcoin blocks as well… if you really want to!
Then, once you have a Bitcoin wallet you can put some Bitcoins into it.
Woohoo – now what!?!?
Well – Bitcoin’s greatest current use is for funds transfer. Quick, easy and comparatively cheap, especially for smaller amounts of money. This could be used for an online purchase where you don’t have a credit card or don’t want to pay $25 for an international bank transfer plus the 5% clip they take when they provide the exchange rate… Yes it’s a service but you also have to wait 24-48 hours to get the funds to their destination. Meanwhile, “they” are making interest on the funds transferred around or taking all the <1 cents portions and stockpiling them… Remember Superman 3?
On the other side of the world, a friend in need, a child or really anyone can have those funds available within around 10 minutes (on average). They can then use their wallet at a local Bitcoin ATM or use localbitcoin.com again and find a local exchange agent.
Many online merchants are now also starting to accept bitcoin, and you don’t need a credit check in order to use it – you just use it.
It’s all going to change though – services like Coinbase also now are trialling a directly linked POS card which allows you to transfer your bitcoin directly into a fiat currency equivalent, then use that as you would any other tap and go card. This is real liquidity. Indeed, in the end, these guys may be the death of the localbitcoin exchange system, however until then, it is worth considering getting involved with local bitcoin exchangers.
Do you want to know more? Just ask!
No Bitcoins here please, we’re Australian
If you’ve been following the ups and downs of Bitcoin and you’re in Australia then you probably know that Australia is lagging behind many of the world’s leading economies in recognising that Bitcoin is what it actually is – a currency. Furthermore, it should be treated as such.
The Australian Tax Office last August released a paper on how to treat crypto currencies. Essentially, when you buy bitcoin from and Australian party, it is a taxable supply, so you will be charged GST. When you sell it, unless you are a business or individual registered for GST, then you will not have GST applied.
This has meant that for individuals, buying bitcoin in Australia from and Australian company incurs a 10% tax. Way to go Mr Taxman. We know that the country is drowning under the pressure of the end of the commodities boom and government spending largesse, however smacking the currency of the future with a 10% premium will just drive the business out of Australia. And that’s what it is doing.
Australian company CoinJar is Australian no longer, having been forced to endure the crapulous regulations enforced by the ATO, CoinJar has moved. Left the country. Is Australian no more.
The company has now moved to the sunnier shores of mother England where the powers that be have recognised that digital currencies should not be subject to VAT transactional taxes. From there, they can grow, develop and be all that they can.
Meanwhile, back in the colonies, we’re bound to lose more companies in due course. A sad state of affairs indeed.
There are many benefits to a digital currency, the biggest hurdle is acceptance and integration with the more traditional fiat money system. Yes, there are transactional hurdles as well within the technology, however again, transactional processing power problems can be solved creatively through technology. The fear that government’s have of cryptocurrencies is probably well founded in that it is something over which they have no control. Then again, that, in and of itself is all the more reason to support Bitcoin isn’t it?
Whilst the Australian government is looking at digital currencies and
Australian UK companies like CoinJar have made submissions, until such time as the ATO takes it’s blinkers off and lifts its head to look at the future, Australia will continue to see businesses think twice about utilising digital currencies, or will, like our friends CoinJar, move overseas where there is a little bit more of a view that digital currencies are a part of our future.
One can only hope that the boffins in Canberra will indeed eventually work it out.