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How will Bitcoin scale as a medium of exchange? If it’s so good, won’t everyone just save it and spend their dollars instead? That’s the classic argument. This is absolutely happening and will continue for a while. That view only sees one side of the transaction: the consumer. image At the beginning, just as only the most committed Bitcoiners will spend it, only the best businesses will be able to demand Bitcoin. As those two ends of the spectrum grow, people who want to spend dollars and save Bitcoin will start to run out of options. Especially for quality goods. This transition starts with shop owners upcharging for fiat. At first, it will look like today’s cash vs credit pricing, simply covering card fees. As Bitcoin becomes more obvious, that spread will grow. Adoption will take time. Not every producer will switch quickly. The ones who do will outcompete. They will escape margin decay from fiat debasement. They will not need to cut corners. Good money chases quality goods, and these businesses will be positioned to thrive. High-quality producers steer the next marginal transaction. Over time, they will steer it toward Bitcoin. If a business wants to earn the hardest money, they will have to produce a top-quality good. Just like if a consumer wants a top-quality good, they will increasingly have to pay with Bitcoin. Orange pilling the world begins at the margins. There are two sides to every transaction. The margins are on both ends.

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My only issue is how to price in bitcoin. When Bitcoin continues to rise in value you’ll have to continually adjust your prices, unless you just price in dollars and they pay the Bitcoin equivalent that day. But if you price in dollars you are reinforcing the fiat system.
↩ replying to npub14ale...v3tn
I price in fiat still as I am in an area where there is very little knowledge or use. My underlying preference for bitcoin lies less in angling for personal future wealth and more in creating a fair and stable market unlike our current chaos. Decisions about pricing therefore are based on incentivising Bitcoin use, building local knowledge and trust. But, as you say that will change. If we continue using it as a store of value and not for exchange, so much is lost. Its function as a better tool of exchange is lost and it becomes about the political manoeuvres of the whales and not the bottom up, intentional shift it offers us.
↩ replying to npub14ale...v3tn
A merchant could price the product at the fiat price of the product. Example, a bag of potatoes is priced at $5.99 in fiat at the grocery store, so simply convert the satoshi price to its equivalent. Only adjust the satoshi price when the grocer adjusts the fiat price such as before or after a sale discount that week. No need for constant price fluctuations by the minute.
So, I developed a super high-quality product about a decade ago. We accept bitcoin for it (by private arrangement; no shopping cart automation yet) but I've been perpetually frustrated by my lack of skill and ability to promote/market it adequately. It's not remotely as widely appealing as wine😜--at least in part because of unethical negative propaganda promulgated by the medical/industrial complex--but it ought to be as or more popular.
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Ben Justman🍷's avatar Ben Justman🍷
How will Bitcoin scale as a medium of exchange? If it’s so good, won’t everyone just save it and spend their dollars instead? That’s the classic argument. This is absolutely happening and will continue for a while. That view only sees one side of the transaction: the consumer. image At the beginning, just as only the most committed Bitcoiners will spend it, only the best businesses will be able to demand Bitcoin. As those two ends of the spectrum grow, people who want to spend dollars and save Bitcoin will start to run out of options. Especially for quality goods. This transition starts with shop owners upcharging for fiat. At first, it will look like today’s cash vs credit pricing, simply covering card fees. As Bitcoin becomes more obvious, that spread will grow. Adoption will take time. Not every producer will switch quickly. The ones who do will outcompete. They will escape margin decay from fiat debasement. They will not need to cut corners. Good money chases quality goods, and these businesses will be positioned to thrive. High-quality producers steer the next marginal transaction. Over time, they will steer it toward Bitcoin. If a business wants to earn the hardest money, they will have to produce a top-quality good. Just like if a consumer wants a top-quality good, they will increasingly have to pay with Bitcoin. Orange pilling the world begins at the margins. There are two sides to every transaction. The margins are on both ends.
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somebody please explain to me what the market force is that enables producers to upcharge for fiat. fiat, with a larger payment network and lower barrier to entry, is going to be MORE expensive to use? why? "because Bitcoiners want Bitcoin" is not a compelling market reason.
I think a good hook at the beginning is saving small local business the exorbitant credit card processing fee. the only way I've thought of so far is a little clunky: a local tap-to-pay "gift card" that you can top up with fiat at any participating merchant, and using it in stores gets you a 2% (a bit lower than credit card fee) discount. no-brainer for locals who shop a lot. behind the scenes it's cashu with a mint run by a local maxi. he would likely have to take a bit of a risk - he'd want to fiat-back every dollar deposited so if the price drops customers don't lose. on the upside... if the price zooms he might be able to kick back a reward to the merchants that month.
If I want to buy something and satoshi payment is an option, I will sometimes choose it. However, when satoshi payment is the only option, I have only the choice of buy or not buy much as the way it is in the fiat system. In both scenarios, if I decide to make a purchase, I buy fresh satoshis deposited directly into my Lightning Network wallet to then be spent. I won't touch my long-term satoshis as long as fiat exists to fund my short-term satoshi holdings.