It’s been a rough year for bitcoin to say the least. Coming off a year when the price of the cryptocurrency notched a 5,317 percent return, the coin’s value has decreased slowly yet surely, coming in at Sept 16 at $470 BTC, representing a loss of nearly 40 percent on the year. To stave this off an even further plunge, a trend has developed in the bitcoin community, specifically in their attitude towards businesses that they feel should accept bitcoin as payment. The pressure is on companies to not just accept bitcoin, but to show loyalty to the concept itself.
The relationship between loyalty to the ideology of bitcoin and its price point is a complicated one. The price of BTC is the main concern to non-ideological investors, or those who got into the currency hoping to realize a repeat of the returns the coin had realized consistently since its inception in 2009.
But bitcoin isn’t just another commodity to many holders, ones who frequent popular forums like r/bitcoin. They are committed to the larger socio-economic implications of what makes bitcoin different from the yuan or the baht or even the almighty US dollar. They are ideologically invested in seeing bitcoin succeed not just as an investment, but as the currency of the future.
This is first exemplified in how they push for more and more businesses to accept the currency as payment for services. Overstock (OSTK) , Virgin, NewEgg, music site Grooveshark to name a few. Each new business that accepts bitcoin is another link the chain that supports its usefulness, which is a necessity for a functioning currency that doesn’t exist solely as a wealth storage vehicle or as a speculative instrument. That is, getting companies to accept bitcoin helps construct a functional economy that is not measured in terms of bitcoin-to-dollar, but bitcoin-to-bitcoin.
Of course, this means that businesses that accept bitcoin cannot convert that bitcoin immediately to dollars on the sly. This act slowly yet surely impact the overall price negatively.
Businesses now can’t just take bitcoin. They have to promise they won’t convert. Like when Overstock's CEO claimed they do not convert 10 percent of the BTC they receive. Or when an audit revealed Bitstamp kept 100 percent of their bitcoin as bitcoin. Or more recently when nascent web biz Baron Fig told r/bitcoin they were accepting BTC, the title addressed it right off the bat: “We’re a small business, we hold our coins.”
It’s not enough for companies to just say they’re catering to the bitcoin aficionados. They now have to promise that they too are in it for the long haul, just like them.
Because if they’re not, bitcoin will continue to slide in value. This means little to companies that convert to USD immediately. But it means much to those who need to see a return on their ideological and financial investment in bitcoin.
What does this mean going forward? Expect to see businesses have to somehow prove they’re holding their coins. That they’re doing their part to prop up the currency’s price for those with the most at stake. If bitcoin’s price keeps dropping, its adherents will get more panicked. And they will insist more and more that when companies accept bitcoin, they’re accepting it for good.