Reporter experienced 'nightmare' life with Bitcoin. Is it true that digital currency cannot be used for daily payments?

CNBC reporter Seema Moody recently published a report detailing the trials and tribulations of living solely on Bitcoin for a week. This report, like other related reports, does not show the convenience of using Bitcoin as a monetary commodity, but rather shows that the cryptocurrency is impractical as a medium of exchange.

Seema Moody details her difficult experience of living on Bitcoin for a week. Moody begins the article by asking several stores if they can buy products with Bitcoin, and ends up with retailers looking confused. She then complains that no bar in New York accepts Bitcoin payments. She later bought food at several snack bars and said that the fees paid with Bitcoin were 30% to 70% higher than ordinary payment methods. Traveling is a challenge, but fortunately Uber points can be purchased with Bitcoin through third-party companies.

After a few days, Seema Moody began to use Bitcoin to buy gift cards online to meet basic shopping needs. She also met some people online who were willing to exchange their transportation cards for her Bitcoin. At the end of the article, Moody concluded that Bitcoin is a cumbersome and challenging medium of exchange, requiring constant search and reliance on third parties for basic payments. She is convinced that her week-long experiment proves that Bitcoin payments require an additional 40% fee compared to cash.

Moody is not the only journalist who thinks that living solely on Bitcoin is a torment. Kashmir Hill published a similar story in Forbes in May 2013 and came to the same conclusion: using Bitcoin to buy basic items such as food is a hassle. CNN's Morgan Spurlock also felt deeply touched. In 2015, he filmed a documentary "Living with Bitcoin" about a honeymoon couple who relied on Bitcoin to travel and live.

Misleading reporting

While it’s amusing to see bewildered journalists stuttering around the city talking to shopkeepers about things they’ve never heard of, these kinds of scenes only serve to create the illusion that Bitcoin is difficult to use in everyday life.

These “experiments” usually fail to mention the existence of debit card providers such as Xapo, which can spend your bitcoin deposits just like traditional magnetic cards and 3D authentication technology.

If someone decides to use a product like Xapo (Coinbase also has a similar debit card service), the only obstacle to their ability to make purchases with Bitcoin becomes the lack of an eftpos (electronic funds transfer at point of sale) device (which is found in most modern stores and is used by Visa and MasterCard for payment). The above report also ignores the purpose of Bitcoin ATMs, which allow users to convert Bitcoin into cash and can be used in stores that do not accept Bitcoin.

Using the above services would have significantly reduced the fees Moody's pays. They chose to ignore these services, most likely because the sight of a journalist walking down the street with an eftpos card using it in shops and ATMs didn't seem very appealing.

The report also ignores the difficulty that many unbanked people around the world face in making basic purchases. Even food and transportation are difficult to come by, a reality that the world’s 2 billion unbanked people face every day, many of whom are locked out of the global economy because of corruption or a lack of financial institutions. Moody’s scenario of being locked out of a Bitcoin ATM for not using it is a daily experience for them, simply because they were born into an underdeveloped banking system.

Moody's also cited bitcoin's volatility as a major barrier to adoption as a medium of exchange. While recent price action for the digital currency has certainly demonstrated volatility, ultimately as bitcoin becomes more popular, its price will stabilize over time. The larger the user base, the greater the buying and selling pressure, which drives the price. If bitcoin is accepted by major merchants, merchants will trade bitcoin for profit, which will ultimately narrow the range of bitcoin's price fluctuations. The stability in question won't happen tomorrow, but will happen over time as cryptocurrencies become integrated into society, just as the internet has gradually and steadily become part of everyday life.

Journalists questioning the value of Bitcoin ignore the millions of people who are living in dire circumstances, as their national currencies lose basic purchasing power due to hyperinflation. These currencies, including the Argentine Peso, the Venezuelan Bolivar and the Zimbabwean Dollar, are experiencing huge losses every day, and the volatility of Bitcoin's price is nothing in comparison.

Bitcoin has begun to attract more and more attention from the mainstream media, and unfortunately, we may see more reporters on the road using their phones to search for retailers that accept Bitcoin payments, just to prove that Bitcoin is not efficient enough to achieve monetary commodity efficiency.