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More Ways to Spend at Coinbase Supports Bitcoin Value

September 17, 2013 at 22:46 by BitcoinNews

The popular wallet service Coinbase reported today a new relationship with eGifter, which allows Bitcoin users easy access to many more real world goods with Bitcoin via gift cards (in dollars) to use at some of the most popular locations for the retail spending in the U.S. These include many retail stores, mall and department stores, drug stores, entertainment and dining establishments, but notable examples are CVS, Gamestop, Banana Republic, and Barnes and Noble.

Recognizing how the usability of Bitcoin relates to its liquidity in everyday products in the real world, Coinbase noted in their blog, this move reflects the company’s continuous drive to make Bitcoin more usable.

In my last post, I noted Bitpay had onboarded 10,000 merchants to using Bitcoin this year alone. Coinbase’s new merchant, eGifter allows spending via bitcoin with just a click or two. Even without prior planning, a consumer using eGifter’s iOS and Android apps can spend bitcoin in store, by converting bitcoin on the spot into store credit.

Another theme in prior posts is that the value of bitcoin is ultimately tied to it real world usage. Perhaps this is quantifiable in the value of real world goods and services which can be bought with bitcoin, but I know of no attempt yet to estimate that. However, this trend is clearly growing exponentially, and it bolsters the value of bitcoin in a number of ways.

During the crash this past April, for example, many comparisons were made between bitcoin and the great crash of the dotcom stocks at some time in the year 2000.  The comparison was flawed for a number of reasons. Primarily, when speculators panicked and sold dotcom shares, it was self-sustaining because other investors realized that value for their shares could only come from other speculators.

However, a Bitcoin user could immediately justify a purchase of bitcoin with the value one could receive immediately in real world goods. This is one aspect which bolsters bitcoin, as merchants would tend to be much slower in withdrawing their acceptance of bitcoin than panicky speculators.

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