Spending your BitcoinSpending your Bitcoin
*Bitcoin is peer-to-peer digital cash.*Bitcoin is peer-to-peer digital cash.
It's not a stock. It's not property (you can't build a house on it). Hell you can't even technically "own" it in a legal sense. As one can only ever demonstrate ability to spend, not actual ownership... But that's a bit in the weeds. Some people are fully content to save in bitcoin without ever spending it. To which I ask, why? What is bitcoin actually? Merely a savings vehicle? Sure it CAN be that. But if it's ONLY that, it would seem we've missed the point. Besides, if you're able to NEVER spend your bitcoin, then you have WAAAAY too much fiat. Anyone who is ALL in on Bitcoin is having to either directly spend their bitcoin, or swap it for fiat with a local friend or a peer on Bisq, Peach, RoboSats or Hodl Hodl.
Every year we celebrate Pizza Day.Every year we celebrate Pizza Day.
A bitcoiner named Laszlo offered 10,000 bitcoins on a forum for someone to buy him 2 pizzas and send them to his address in Jacksonville, Florida. May 22, Jercos became the first person to be awarded bitcoins for providing economic value. Moral of the story? Be a Laszlo or a Jercos... USE YOUR BITCOINS!!! Because in doing so, you prove day-to-day the economic value that a bitcoin has. Before this day bitcoins were a collectible. An oddity. An idea. On May 22, they became money.
Avoiding the KYC trapAvoiding the KYC trap
There are a few key components to one's interaction with Bitcoin. One of those is how one acquires it. When I first entered the space in 2017, I interacted with Bitcoin exclusively through a centralized exchange called *Coinbase, which required me to complete a thorough KYC and essentially gave me a numbered account with paper bitcoin. They were no different from a bank, except that banks actually have more safeguards for protecting one's assets in the case of misadventure or fraud. Exchanges like this prey on the ignorance of newcomers and make the cost to withdraw incredibly frictioned. They do this by using legacy type addresses rather than SegWit, and they (along with other exchanges like KuCoin and IndoDax) made me believe that a Bitcoin transaction actually cost $5-25, which, I found out much later, just isn't the case. A transaction MAY cost that much, but often is much cheaper.
Recap of Bitcoin basics from my recent blog postsRecap of Bitcoin basics from my recent blog posts
As a bitcoin spender, you need to have a few things in order. You need an onchain or lightning mobile wallet of course. You need a way of getting the bitcoin. Usually by buying it or earning it. Earn it by providing value for people such that they want to part with their bitcoin. If you DO buy it, you'll want to use a peer to peer method such as buying it in person for cash, or using an online escrow service such as Bisq or RoboSats... By this time, you've probably realized that being your own bank means you should be as secure as possible. So you may be tempted to increase your operational security (OpSec) with a better operating system than vanilla Android or iOS. If you don't have a Pixel phone you could opt for LineageOS which is very minimalistic and clean, or for the those wanting to use the most hardened OS, there is GrapheneOS, which is only for use with Pixel phones.
Today I want to focus on a few circular economy ways to spend your satsToday I want to focus on a few circular economy ways to spend your sats
- Here's a great episode to listen to along that vein by the Ungovernable Misfits Media Network. A registered member of PodConf.
- Here are a few people providing value so that they can earn your valuable sats. Consider giving them your business rather than getting these things at Walmart, Target or your local grocery store conglomerate.
This is the first in a series of posts I hope to do about spending bitcoin. Each post will be about a specific company that allows you to spend your bitcoin.
- A few notable examples are:
- Bitrefill - There are many more in this genre, but so far, I've had the most success with Bitrefill, as it's list of countries supported seems the most thorough. My Chinese coworker @bxu can even buy gas or top up his phone data using the bitcoin the Nostr and Stacker.News community donated to him.
- Proxysto.re - just like the name says, helps you purchase things more anonymously
- Silent.Link - Based company that DOES NOT ACCEPT FIAT. Have used them in many countries. Uses roaming data and COMPLETELY circumvents the Great Firewall of China sans VPN. Although I still run a VPN just for better obfuscation from the e-SIM operator/company who will view my traffic.
- Mullvad (and now Obscura which I haven't tested) - VPN company that doesn't require an email to sign up and gives a discount for using bitcoin. BTW, "Mullvad" is Swedish for "mole". It took me far to long to realize that... You're welcome.
* Note about usage of capitalization. I will use Bitcoin when referencing the protocol and bitcoin(s) or sats (Base unit of a bitcoin in the Bitcoin code. Always an integer. Smallest economic unit of Bitcoin and equal to 1/100,000,000th of a bitcoin) when referencing the underlying object being transmitted within the protocol.
** Note on the word coinbase. The "coinbase transaction" is the transaction inside a block that pays the miner his block reward. Inside the coinbase transaction is a field that is called the "coinbase". It's the generation transaction's equivalent of a scriptsig. Since it doesn't claim any existing outputs, it needs no normal scriptsig. It's basically just a random value that the miner can use as an additional nonce. BIP 34 changes this a bit. https://bitcoin.stackexchange.com/questions/4571/what-is-the-coinbase
Bitcoin is money it is for both spending and saving.
Yes. Agreed. But it only becomes money if it is accepted for goods, AKA spent. If 100% of people saved and never spent, it would have zero economic value.
I don't totally agree with that. It could be used as collateral/reserve asset to underpin the debt based fiat system for quite a long time before being used as a medium of exchange and that would still carry much economic value.
Even then, it's only accepted as collateral or a reserve asset because it can be exchanged (expected to be exchangeable) for other things later, right?
This.
We use the word spend. But it only has fiat value because it's being exchanged ALL THE TIME. If one were to imagine a counterfactual where it was never swapped for fiat (which is crazy because then you'd only have miners owning it), then one would agree it's valueless economically, and you'd just have insane miners losing money for nothing.
Fiat is (usually) our current unit of account, even for things being sold for bitcoin. Read the book "Debt" to learn more about how something can be a unit of account EVEN AFTER IT ISN'T IN USE. So one could envisage a hyperbitcoinization world where people still price in dollars.
But I digress perhaps
One would imagine that would be the case.
People don't have a 'spending' problem. There are more ways than ever of 'spending money'... even if they're a bit of a scam ie based on paper-currency.
Ask the common person, is it hard to "spend money".... and they'll probably just laugh or look at you funny. "No of course not it's easy to spend"
What's hard for many people is 'saving' money or purchasing power.... especially in a way that's inflation resistant or over long time periods or distances.
That combined with the extremely limited education around Bitcoin among the general public, and that's why Bitcoin isn't used "for spending" even though it can be.
The idea that people don't have a "spending problem" with Bitcoin is spot on. The challenge isn't spending - it's that most people are conditioned to view money primarily as a savings vehicle rather than a medium of exchange.
What's happening is a classic chicken-and-egg situation. Merchants hesitate to adopt Bitcoin because few people spend it, while users hold rather than spend because of limited merchant acceptance. This creates a self-reinforcing cycle.
The education gap you mentioned is crucial. Most people still don't understand Bitcoin's basic mechanics, let alone its value proposition. When someone's primary exposure to Bitcoin is through price speculation rather than its utility as sovereign money, they naturally treat it as an investment rather than a currency.
This is why we see the strange contradiction of Bitcoin being simultaneously praised as "digital gold" while criticized for not being used in daily commerce. The narrative has shifted from Satoshi's original "peer-to-peer electronic cash" vision to a store of value proposition, which further reinforces the holding behavior.
What's interesting is that this pattern repeats throughout monetary history - new forms of money typically establish themselves as stores of value before gaining widespread adoption as mediums of exchange.
This is an interesting take, thank you for it. I don't completely understand the store of value vs MoE arguments that people have, especially in the light that using Bitcoin even in small qualities is likely to make it that much better accepted and that much better valuable.
If people really wanted Bitcoin to go up in value, they would look for coffee shops to start accepting it and educate small businesses to accept it - then when people are more comfortable around it they will want it too and the whole process can be self-reinforcing.
Right now 'nobody spends it' I suppose because they think it's 'going up'... but at the same time people are obviously selling it? To an exchange I suppose?
So If they're going to 'sell it' anyway they might as well buy something with it after all encouraging its use as money - real world capital.
I personally believe the 'digital cash' description doesn't mean 'money' like 'paper money' we have all around us. It's not a 'paper money' that's on the blockchain nor a currency. Bitcoin is "digital capital" not a "currency" because currencies have issuers... like governments.
"Capital" is defined as ( https://onlinemba.ku.edu/experience-ku/mba-blog/what-is-capital-in-business )...
Bitcoin is 'digital capital' NOT necessarily a currency like that issued by a government because it has no issuer and I think this makes a lot more sense.
In other words, peer to peer "Digital Cash" means "digital settlement" of digital capital.
"The education gap you mentioned is crucial. Most people still don't understand Bitcoin's basic mechanics, let alone its value proposition. When someone's primary exposure to Bitcoin is through price speculation rather than its utility as sovereign money, they naturally treat it as an investment rather than a currency."
There is an enormous education-gap with regards to Bitcoin... which I don't understand. Even places that are supposed to be 'pro-Bitcoin' or 'Bitcoin-educational' like Reddit r/Bitcoin are failing in this regard. Stacker News is the highest 'signal' place I've found and the use of Lightning is great that's why I'm here.
The capital definition you cited from KU's MBA program perfectly captures what Bitcoin actually does - it functions as financial capital that can fund operations, purchase assets, and enable investments. This is distinct from government-issued currency, which primarily serves as a medium of exchange with decreasing purchasing power over time.
Your point about the self-reinforcing cycle is spot on. If people want Bitcoin's value to increase, encouraging merchant adoption creates the network effects that drive both utility and value. The irony is that many holders won't spend because they expect appreciation, yet that very appreciation depends on expanding the network of users and use cases.
The distinction between "selling" to an exchange versus spending directly with merchants is crucial. When you sell to an exchange, you're converting to fiat and reinforcing the legacy system. When you spend directly with a merchant who holds Bitcoin, you're strengthening the Bitcoin economy.
Regarding education, the signal-to-noise ratio on most Bitcoin forums is abysmal. Places like r/Bitcoin have become echo chambers focused on price action rather than fundamental education about Bitcoin's mechanics and value proposition. Stacker News uses bitcoin as an incentive to help distill signal from noise.
I was really into r/Bitcoin back in... early 2023. And the signal to noise was way, way higher than it is today. Today it's like a really shallow wallstreetbets except it's an asset or tradable good with no 'cash flow'... so much of the commentary on r/bitcoin is currently really low-level almost worthless.
Many of the commenters of old have left or gone elsewhere that's how I found Stacker News.
And I've stuck around at Stacker News because the incentives are so good and it's real-world use of Bitcoin. It's not speculation, it's not 'trading' it's actually spending Bitcoin on a better forum experience, a better "customer experience" where we all can learn and are incentivized to 'post well'. Pay to post and all that.
One day, maybe in many years I think the whole internet with have the 'stacker news' model and Lightning-esque micropayments will make the whole internet better... but if that ever happens it will take a while.
I don't know why people haven't figured out the 'merchant' trick yet... like you said the more people spend it, rather than 'selling it' the stronger the network effects and better the education and better the "long-term" price if that's what they are so interested in.
The only other person I've heard call it "digital capital" is, well Mike Saylor. I think the name 'crypto-currency' is a little misleading if for no other reason than currencies are so bad...
It's a global neutral internet-native capital not a "currency" like the Peso or many others. That's a compliment
It can only be spent as a medium of exchange if the counterparty believes that it is a sound store of value and will be worth something in the future.
That seems inverted. People use shit fiat currencies all the time who have no faith in their future value. Medium of exchange is a pragmatic thing.
If you accept fiat currency, it's because you believe that it will have value until you spend it.
Shit, I've been eating mine...
Best answer
Agreed. I think we as humans have a hard time accepting that two different things can be true at the same time. Perhaps embracing bitcoin as both at the same time to varying degrees represents our evolution as a species from “this or that” dualistic thinking to “nondual” thinking where we are able to hold the paradox.
Both.
...but ultimately, spend!
What, you dont dilligently save all of your SN sats?
meh. Money is fungible; it all just goes into the same pile
Some money is better than other money. You are an economist, you should know that!
tsss.... yes yes, some monetary systems are better; but within any given one, I have no reason to prefer a specific unit of bitcoin/dollar/euros to any other.
Bitcoin isnt a monetary system. Tsssk tsssk, time to read more articles.
Iz both, silly.
Right nowBitcoin is in the phase of gaining acceptance and it can long stay till it becomes universal money for spending. People are not spending it right now because there's a possibility of short term rise in it's PP (don't get me wrong for fiat). But until or unless we have acceptance for fiat, people aren't gonna use it for buying goods. Somehow, this narrative might be changed in coming times. Still bitcoin can be worth as store of value.
I think it is important to save and spend bitcoin. And educate as many others as you can. Circular ecosystem?
Beautiful. Circular economy indeed.
spending. You can't take them to the grave anyway 😇
We need to circulate our BTC to more people who want them as they are—money. Create a real, 100% Bitcoin circular economy.
We are nowhere near having a circular Bitcoin economy. The level of education, and scams (among the altcoiners) has a long way to go.
With Satoshi it was for cash, after leaving the narrative changed to "store of value"
Good answer
Recommend this article from @roy on bitcoin's false dichotomy between SoV and MoE: #726256
And at Breez, we just released this report that dives into this subject too: https://x.com/Breez_Tech/status/1887518233432822182
https://xcancel.com/Breez_Tech/status/1887518233432822182
Anything that is used as a store of value, medium of exchange, and unit of account is, by default, money.
This can be glass beads, wampum shells, whales teeth, Pokémon cards, gold, silver, and of course, Bitcoin.
Both, and yet, neither.
Bitcoin is Numéraire
My initial thought: Oh snap!! A fellow Tolkien fan. Then I clicked your link. Ohhhhhhh he said Numéraire not Númenor.... sigh
yea no tokens for me just bitcoin
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I think we should save our Bitcoin. Because the world leaders won't end with money system just yet. And Bitcoin beats inflation year after year so it's better than money in a way. So definitely I save mine for what the future will bring. Have a great day
Bitcoins are meant for BURNING.
Literally the last thing any UTXO can do: become unspendable via a provable burn.
Anything that happens with UTXOs/sats before provably burning them is just a temporary state transition on the path to becoming forever unspendable.
What are your thoughts on demurrage?
Demurrage is good for miners. Inflationary for non-miners. Overall, not necessary IMO.
Degens can already speculate on individual sats such that their perceived value of a sat exceeds one satoshi. Its a roundabout and "opt-in" way to "recover" extra value from the BTC tokens already in circulation.
Degeneracy on BTC is good/neutral for the degens. Bad for those who get scammed by degens. Not inflationary for non-degens who don't respect the recovered value.
Degens will degen whether demurrage exists or not.
How can demurrage be inflationary for non miners if the total supply stays the same?
the same reason if satoshi or saylor sold his coins would be inflationary. total supply !== circulating supply
Bitcoin is many things at the same time. All depends on your needs.
If you need a saving vehicle, you can use Bitcoin. If you need a payment method, you can use Bitcoin. If you need a store of value, you can use Bitcoin. If you need to send money across borders, you can use Bitcoin. If you need permission less money, you can use Bitcoin.
Just spend your bitcoin so you can have your bitcoin pizza moment and use that was fuel to hodl to get back to black in satoshi terms lol
I think Bitcoin os for saving. Like a retirement plan or something you leave for your kids because times are looking tough for them. Just don't lose your keys :)
Bitcoin is money so both
Both! Store of value, medium of exchange. To each their own!
Taking your idea as a game I can only think of something. Balance ☯️ Savings & Expenditure.
A principle of Tao's teachings to seek harmony in life, talks about the balance between both forces within us. (Mind and spirit) and as seeking balance between these two we can then find this balance in ourselves and our environment.
Seen from this Bitcoin perspective, it is the Tao of Finance for us the people 👥 common and currents (plebeians par excellence) offering that great balance necessary so that we can prosper through our money achieving (savings & expense) two merely essential aspects for the life of a person.
Free to choose
It's both I suppose
in different combinations along space-time
Whatever you want to do with them...
Beautiful
This topic makes me crazy. Don't worry about what other people do with their bitcoin. Bitcoin doesn't care.
And it's BITCOIN... not BITCOINS.
That's recency bias. The portion where I used "bitcoins" was in the context of a story from >10 years ago when the common nomenclature (due to the low value of a single bitcoin) was "bitcoins" as most purchase dealt with the plural.
How much is that steak? "Oh, it's 5 dollars or 5,000 bitcoins, whichever you prefer to receive."
I hate to be a dick, but your ignorance is showing.
For modern context, I typically opt for the singular use of "bitcoin" or the plural "sats". Due to the increase in the value of a single bitcoin and the rarity that it's being used in a plural sense.
#433828
Interesting that this post was 364 days ago. Apropos. Maybe February is the month to contemplate these things.
Guess what: My purchasing power has greatly increase since then, and I still don't really know what to do.
Yea, too fucking cold to do anything else.
This article discusses the concept of spending Bitcoin and its role in the economy. It emphasizes that Bitcoin is a peer-to-peer digital cash system and should be used as such, rather than simply being hoarded as a savings vehicle. The piece encourages Bitcoin holders to spend or exchange their Bitcoin to demonstrate its economic value and to prove its legitimacy as money, referencing the famous "Pizza Day" where Bitcoin was used to buy pizza, marking the first real-world transaction using Bitcoin.
The article also critiques centralized exchanges like Coinbase that impose high fees and KYC (Know Your Customer) requirements, making it harder for users to use Bitcoin freely. It advocates for peer-to-peer methods like Bisq and RoboSats for acquiring Bitcoin without going through exchanges that require personal information.
The writer also touches on the importance of security when using Bitcoin and suggests using more secure operating systems like LineageOS or GrapheneOS for better operational security.
Finally, the article highlights a few circular economy options for spending Bitcoin, recommending various businesses that accept Bitcoin for goods and services, such as handmade soap, low-sugar beef jerky, and premium coffee. It suggests that using Bitcoin to support such businesses contributes to the growth of the Bitcoin economy and helps demonstrate its practical use in everyday life.
In summary, the article encourages readers to embrace the practical use of Bitcoin, avoid centralized exchanges, prioritize security, and support businesses that accept Bitcoin, thus strengthening the circular Bitcoin economy.
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