Square Market Accepts Bitcoin

2. Yes, as I said, if you know what's going on, it won't be weird to you. That said, cart abandonment is a big problem, as is keeping checkout pages as simple as possible.

3. Again, this is where we'll have to disagree. You say "people are using Bitcoin to get away from the credit card paradigm", but I say "people are not using Bitcoin because it's too far away from the credit card paradigm." If the Bitcoin community wants to grow outside of the fringe libertarian set, they'll need to understand people's needs more and their dreams less. I myself stayed away from BTC for years simply because of the rhetoric. People that aren't inherently interested in cryptocurrencies aren't going to use them unless they solve a problem they actually have.

Allowing your payment provider to handle currency conversion for you does not mean that you have eliminated FX risk. You have simply outsourced it, and you (and in many cases your buyer) almost always pay for this.

> I don't think the tax issues will be prohibitively complicated for consumers. Whichever exchange someone uses to buy Bitcoin and whatever app they use the spend it can easily generate the necessary paperwork.

I suspect you've never had to file a tax return with a significant number of transactions involving capital gains and losses. There are often associated matters, such as carryovers, that the average person will need the services of a tax professional to address.

As for the notion that somebody is going to do the paperwork for you: the nature of Bitcoin makes the generation of the paperwork you refer to incredibly difficult.

Currently, when dealing with securities like stock, brokers must provide you with a 1099-B which reports information about the transaction, including the cost basis and sale proceeds. If you transfer securities between brokers, the broker transferring your securities is required to report the cost basis data to the receiving broker.

To the best of my knowledge, Bitcoin is not a covered security for which institutions must provide a 1099-B, so no third party is obligated to provide you with accurate records. More importantly, it may be impossible for third parties to do this for you. For instance, consider this hypothetical yet almost certainly common transaction scenario:

1. I buy 1 BTC using Provider A.

2. I transfer .5 BTC from my account at Provider A to a local wallet housed on my computer.

3. I later transfer that .5 BTC to Provider B.

4. Using Provider B, I send the .5 BTC to a merchant.

In Step 2, Provider A will be faced with the challenge of determining whether my transfer of .5 BTC represented a sale for tax purposes. It should not, as I was transferring the BTC to myself. But how does Provider A know who I transferred the BTC to?

In Step 3, Provider B has no way of obtaining my cost basis and in Step 4, it is faced with the challenge of determining whether or not the transfer of .5 BTC represented a sale for tax purposes. How does it know that I wasn't transferring the .5 BTC to myself?

Now imagine this across n wallets, including desktop wallets, and with lots of fractions of BTC. You're going to be investing a lot of USD in bookkeeping/accounting.

Bottom line: I can't for the life of me imagine why anybody who actually understands the implications of this would ever use Bitcoin as a currency going forward. As far as I'm concerned, it makes absolutely no sense except as a vehicle for investment or speculation.

Kind of the equivalent of NYT becoming a major website for news, rather than something organic to the Internet becoming the main news site of record.