“I don’t want to spend my Bitcoin because I believe it will become worth more in the future.” This sounds sensible to many Bitcoin holders, but one of the founders of Arnhem Bitcoin City proved that this is impractical, and that using Bitcoin for everyday expenses will even give you earnings.
Bob vs. Alice
Assume that there are two Bitcoin holders, Bob and Alice, both believing that Bitcoin will have more value in the future. They have one Bitcoin each in cold storage and both of them have around $1,234.57 or (1 Euro). Add the fact that they live in Arnhem, a city with more than 100 merchants that accept Bitcoin.
Bob just uses his euros for payments, while Alice pays half of her expenses through Bitcoin at shops that accept Bitcoin. Because of this she buys 500 Euros of Bitcoin and loads it to her mobile wallet every month after she receives her payback check.
Bitcoin is variable. Alice noticed that when Bitcoin increases in value, she doesn’t have to refill her mobile wallet for a long time, but at times Bitcoin drops in value she has to frequently refill her mobile wallet.
If Bitcoin will have more value in the future, Alice has gained more compared to Bob. Because while Bob’s expenses costs 1,000 Euros each month, Alice saves euros on her everyday expenses, having the same amount of Bitcoin in the cold storage with Bob.
Bitcoin Usage Means More Savings
This simply means that you can save money by using Bitcoin for payments. Actually, a person who was able to finish all his payments and owns Bitcoin alone gains the most if Bitcoin increases in value. However, a person who uses Bitcoin is also in great risk in case Bitcoin collapses. The more you believe in it, the smaller amount of money you will keep, and it is better if you do not have to keep fiat money for your expenses every day.
Here’s the best part, with every Bitcoin payment, you give people a demonstration that merely works and can be used for everyday payments. You will be surprised how often customers ask questions from someone who pays Bitcoin in a shop. They see it working and that makes them curious about it.
The December 2017 Problem
In December 2017, sadly, the situation temporarily changed and the extremely high fees even forced some Bitcoin users to go back to using fiat money. BitKassa, a payment processor, which is being used by majority of the merchants in Arnhem, was not yet ready to support altcoins, and the Lightning Network was not available during that time. Some people even used Bitcoin for paying for groceries even though they had to pay around 15 euros fee. For each payment BitKassa processed, BitKassa is also responsible to transfer the received Bitcoin to an exchange or to the merchant’s wallet, which obliged BitKassa to pay those high network fees. This led to temporary halt of BitKassa’s payment service.
Despite of this, let’s not forget our goal: getting people familiar with Bitcoin and educating them why Bitcoin is better than fiat money. Although for now, fiat money is more accessible. Hopefully, this setup will likely change in the future, especially because for some tourists, paying with Bitcoin is easier than getting cash in the local currency. With more positive news about Bitcoin, we hope that there would be more public acceptance and practical applications, which would consequently be great improvements for the cryptomarket as a whole.