You’d Be Crazy To Actually Spend Bitcoin

A little more than four years ago, Coupa Café, a caramel-macchiato joint in Palo Alto, began accepting Bitcoin. This was shortly before the first big Bitcoin rush briefly pushed the cryptocurrency’s price from about $100 to more than $1,000. At the time, two or three Coupa customers a week would pay their bills with Bitcoin, says co-owner Camelia Coupal. Today, the number is…still two or three people a week. “It’s a really minimal part of our sales,” she says. “It’s really just a quirky thing for our customers.”

That’s the story of Bitcoin this past year: The cryptocurrency has made fortunes for speculators, but – for that reason and others – it hasn’t been much use as a medium of exchange. Except in countries such as Venezuela, where inflation makes the local money even more volatile than Bitcoin prices, its use by online merchants is virtually zero and shrinking, according to Morgan Stanley. When businesses like Coupal’s started accepting Bitcoin, advocates predicted it would eventually replace money. Those voices have grown quiet. “The value of Bitcoin is really predicated on its being a useful means of transactions,” says Jacob Leshno, an assistant professor at Columbia Business School. “If you take that away, all you are left with is a bubble asset.”

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