alleged 'illusion of bitcoin liquidity'? Citation requested.

alleged 'illusion of bitcoin liquidity'? Citation requested.

To be exact, that was tens of dollars when Bitcoin was around $1000. Make that hundreds of dollars now – it may be insignificant for you, but many people don't like that sort of volatility a whole lot. Anyway, it doesn't detract from the fact that converting larger amounts of Bitcoin into real money is difficult because it tends to mess with the exchange rate more than it ought to for a purported “currency”.

The fact of the matter is that Bitcoin, for all the hype, is mostly uninteresting for people who want to buy or sell legitimate stuff in the real world. Why would anyone want all the hassle, the delays, and the volatility when one could just as easily use actual money (or for that matter PayPal or a credit card) and be done? Even vocal Bitcoin supporters apparently prefer to hang on to their Bitcoin over using their Bitcoin to buy goods. OTOH, those companies that do offer Bitcoin payment usually arrange it such that Bitcoins go through an exchange and they receive their money in a real currency, like US dollars – they never want to touch actual Bitcoins.

Many companies which dipped their toe into the water accepting payment in Bitcoin have stopped again simply because the actual (very low) number of customers who want to pay in Bitcoin doesn't justify the complications. For example, the soap manufacturer WhollyHemp introduced Bitcoin payment and found that, after an initial burst, only around 0.2% of their total sales were paid for via Bitcoin. In fact they conducted A/B testing on their site and noticed that when customers were advised that payment in Bitcoin was possible, gross sales went down by nearly 6%. Not a great incentive. (The Mozilla Foundation ran similar tests in 2014 and found that adding a “Donate in Bitcoin” button to the main campaign form would have cost them $140,000 over the course of their campaign, simply because the added complexity tended to turn away potential contributors.)

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