Ahh, how I remember the good ole' days:
Today, 85 bitcoins buys you $50K worth of server kit.
I remember long, long ago when it would buy you a bag of sweets and an icecream.
You remember, way back about 5 years ago?
Big Mike Dell, CEO at the eponymous Texan tech biz, was telling anyone that would listen over the weekend that his company had flogged some old world stuff via a new world digital currency. The privately held maker of PCs and other gear for enterprises and consumers last month began a trial to allow US customers to use Bitcoin …
This article has misunderstood what DELL is doing. DELL uses coinbase as their payment provider when you choose to pay with bitcoin. This means that DELL tells coinbase it wants a payment worth X USD. Coinbase will then create a bitcoin address, determine how many bitcoins will need to be paid for that amount.
Customer proceeds to transfer bitcoins from his wallet (which *could* be coinbase, but need not be). Coinbase sees an incoming payment and tells DELL the payment was complete. DELL will then get the given X USD on their bank account.
For now, yes. But when when Dell's suppliers start accepting bitcoin too? Someone at Dell will realise that sending the coins straight on means no need to give coinbase a cut. After all, one of the points often cited in Bitcoin's favor is eliminating the need for financial service providers and their fees.
Yes, DELL could do that when suppliers start accepting bitcoin too. That is why accepting bitcoin is such a big deal for a company like DELL. One of the reasons people are afraid to get bitcoins is the high volatility of the exchange rate. DELL does not necessarily improve that: they immediately sell the bitcoins they receive, but as the network of accepting providers becomes bigger the need for that will diminish.
People still would not need to sign up with coinbase though, which was my original point.
I realise somebody has to get it going, but I'd regard paying in Bitcoin as a poor way of doing business at the moment. After a few recent knocks pushing the price down, I suspect the next Bitcoin movement will be substantially upwards over the next year, so those servers cost you substantially more than $50k
It's been gradually falling ever since the $1000 bubble period ended. What makes you think the trend will reverse?
It's possible that the price will rise as the flow of new coins from miners slows. The free money is over. I just got a new miner myself, and calculate it'll take a year to pay for itsself.
$50K of Bitcoin is $50K of Bitcoin - it makes no difference whether it a year's time, a Bitcoin is worth $1million or 1p.
It would only matter if you made the choice to spend $50K rather than keeping it invested in Bitcoin, but then that would still be true whether you paid in Dollars or Bitcoin - if I buy a new Dell in Dollars, that's still money I could have invested in Bitcoin. If someone pays in Bitcoin, they can still buy more Bitcoin to replace it.
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