CNBC journalist Seema Moody recently published a report detailing the trials and tribulations of her attempt to live for a week solely using bitcoin as currency. This report, and others like it, fail to represent the actual ease with which one can exclusively use bitcoin as a money commodity, and spreads myths about the impracticality of cryptocurrency as a mean of exchange.
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Seema Moody’s report details her apparently arduous experience of attempting to live for a week solely using bitcoin as currency. The report opens with the Moody complaining that are no bars in New York that accept bitcoin, before moving to a montage of her dangling various items at several confused retailers whilst asking if she can purchase their products using bitcoin. Seema then purchases food from a couple of eateries, declaring the fees involved to add an additional 30 and 70 percent on top of the regular price. Transportation is presented as a challenge, but it is conceded that Uber credits can be purchased via a third party company using bitcoin.
As the week progresses Seema Moody starts to purchase gift cards online via bitcoin in order to make basic purchases, and finds someone on the internet who is willing to sell her a public transportation card in exchange for bitcoin. Moody ultimately concludes that bitcoin is a cumbersome and challenging medium of exchange that requires the constant seeking and interaction with third parties in order to facilitate basic purchases. It is determined that her week-long experiment incurred an additional expense of 40% percent when compared to cash.
Seema is not the first journalist to document the supposed struggle of attempting to live exclusively using bitcoin as currency. Kashmir Hill produced a similar story for Forbes in May 2013, making the same conclusions pertaining to the hassles of obtaining basic staples such as food using bitcoin. The concept was again dredged up by CNN’s Morgan Spurlock in 2015, the year after the release of ‘Life on Bitcoin‘ – a documentary made by a honeymooning couple seeking to travel and live solely on bitcoin.
Reports Like Moody’s Cultivate a Fallacy Pertaining to Bitcoin’s Ease of Use
Although seeing bewildered journalists stumbling through a city, accosting shop owners about technology they have not heard of may make for entertaining viewing, such creates an absurd myth pertaining to the challenges of using bitcoin in day-to-day life.
Said ‘experiments’ conveniently forget to mention the existence of debit card providers such as Xapo, that allow you to pay for items from your bitcoin holdings using conventional card swipe and 3D Secure technology.
If one chooses to use a product such as Xapo’s (or Coinbase’s similar debit card) the only barrier to them making purchases would be a business failing to provide eftpos facilities (the typical Visa/Mastercard point-of-sale solutions most modern stores host). The reporting in question also ignores the sole purpose of bitcoin ATM machines, which allow users to convert bitcoin holdings into cash in the absence of businesses that accept bitcoins.
The use of services like those mentioned above would dramatically reduce the fees that Moody experienced. Reports like Moody’s choose to ignore these services, likely because watching a journalist walk around using an eftpos card at businesses and ATMs machines would not make for compelling viewing.
The report also fails to make mention of the hardship that many of the world’s underbanked struggle through in attempting to conduct basic purchases. The challenges of being able to access food and transport is a daily reality for the world’s 2 billion un- or underbanked citizens, with many being completely locked out of the global economy due to the corruption or absence of financial institutions. For many, the challenges of being unable to access services that Moody imposed on herself through not visiting bitcoin ATMs are an everyday consequence of being born into a society with a poorly developed banking system.
The price volatility of bitcoin is also cited by Moody as a major barrier to widespread adoption as a means of exchange. Although recent price action shows an inarguable volatility, greater bitcoin adoption will over time have a stabilizing effect upon its price. The larger bitcoin user-base the more selling or buying pressure is required to move the price, and if bitcoin were to begin to see significant retail uptake, the constant trading of bitcoin created by merchants seeking to realize profit would increasingly tighten the range of bitcoin’s price swings. This type of stabilization will not occur tomorrow, but over a long period as cryptocurrency becomes increasingly embedded in society, just as the internet became increasingly embedded into the fabric of everyday life in a slow yet sustained fashion.
The argument regarding bitcoin’s value ignores the millions of citizens who struggle to make basic purchases due to their national currencies suffering from hellish hyperinflation. The drastic and often daily losses of value seen by currencies such as Argentina’s, Venezuela’s and Zimbabwe’s in recent years make bitcoin’s price volatility appear tame by comparison
With bitcoin continuing to generate attention from mainstream media outlets, it is unfortunately likely we will see more journalists bumbling through malls with a smartphone in hand, searching for bitcoin-accepting retailers in a bid to comically disprove the efficiency of bitcoin as a money commodity.
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