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Elon Musk is taking bitcoin for payment for Teslas, retailers are slowly starting to take it, ATMs popping up- and with Morgan Stanley starting to advise some investment (Musk invested $1.5 billion)--and Visa and Paypal apparently on board, I was wondering about any saxophone dealers-
 

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I don’t understand why they would
 

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With the caveat that I'm a crypto skeptic, I can't see any compelling reason for sax dealers to take bitcoin (and, frankly, buying with bitcoin is a remarkably inefficient way to buy).

I'm not in the music business but I imagine that selling musical instruments doesn't have the largest margins and that dealers largely need their cash to pay bills (light, rent, employees). By contrast, on Dec. 31, 2020, Tesla was sitting on about $19 billion of cash. So even if everybody this year pays with bitcoin (and they won't), it has the cash to pay its bills.

And spending bitcoin is tremendously expensive. bitcoin's transaction fees right now look to be about $20 (though they vary). So it'll cost $20 for a person to buy a sax with bitcoin then it will cost $20 when the dealer wants to convert the bitcoin to cash (or use it to buy inventory or whatever.)

And it's critical to keep in mind that using bitcoin is a taxable transaction for the buyer (at least in the U.S.). If I have a bitcoin that I bought for $500 and I eventually use it to buy a $2,000 saxophone, I not only have a new saxophone, I also have $1,500 of income that I'm going to have to pay taxes on. Same for the dealer: if the dealer sells a saxophone for $2,000 of bitcoin, the bitcoin appreciates to $2,500, and the dealer converts the bitcoin to cash or buys inventory with the bitcoin or pays an employee with the bitcoin, the dealer will have $500 of income.

So the easiest way to buy a saxophone with bitcoin is to sell the bitcoin and use the cash to buy a saxophone. That way there's only a single level of transaction costs, the buyer has the same tax consequences they would otherwise have had, and the seller doesn't have to deal with the inefficiencies of bitcoin.
 

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JS Crescent, JS NOS, Selmer SBA, Couf Superba I, Conn, Buescher, King
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I'd take it. Because I like to bet sports, and that's the only way to put money in offshore accounts without having to sacrifice a credit card to do it (if you don't know what I'm talking about, you should not bet sports offshore). But I'd need a primer in how to send and receive it. Actually if bitcoin could be deposited straight to my 5dimes account, I'd take that as payment, streamlining everything. I'm not joking at all (it might seem like I am).
 

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I'd take it. Because I like to bet sports, and that's the only way to put money in offshore accounts without having to sacrifice a credit card to do it .... But I'd need a primer in how to send and receive it. Actually if bitcoin could be deposited straight to my 5dimes account, I'd take that as payment, streamlining everything. ...
I cannot overemphasize the importance of talking to a tax attorney or accountant before deciding to take bitcoin. (My day job--and, for that matter, night job--is teaching tax law.) The recordkeeping requirements and tax consequences are entirely unintuitive and the IRS is absolutely following bitcoin transactions closely. (This may be the most important thing I will ever say on this forum!)
 

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I doubt bitcoin will be used in the near future, but most likely stable coins will be in use instead. There are hundreds of cryptocurrencies, so don't dwell too much just on bitcoin.

Also, tax wise, it varies wildly from country to country, some countries don't tax cryptocurrencies income/ commercial transactions.

The problem right now with bitcoin and other such coins, is the price fluctuations, that make it a bet when dealing commercially with them. Tesla is more signalling to the world that they believe in it and are early adopters, but Tesla's history is fulled with decisions that go against the current.

Stablecoins on the other hand will always be pegged to fiat currency (normal country currency) and fluctuate accordingly, and are always backed by the same amount in physical money.

With the caveat that I'm a crypto skeptic, I can't see any compelling reason for sax dealers to take bitcoin (and, frankly, buying with bitcoin is a remarkably inefficient way to buy).
It's faster, decentralized and you don't pay exchange fees between coins when dealing with companies from other countries.

And spending bitcoin is tremendously expensive. bitcoin's transaction fees right now look to be about $20 (though they vary). So it'll cost $20 for a person to buy a sax with bitcoin then it will cost $20 when the dealer wants to convert the bitcoin to cash (or use it to buy inventory or whatever.)
This is not exactly true. The average price may be 20$ currently, but it will tend to be better and that is the price if you want to make instant or quasi instant transactions. But you can pay 10$ or less and be in a queue until a miner accepts and makes your transaction in a block. It may take a day or slightly more, but it's cheaper. Again, this changes a lot with other coins.
 

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Absolutely true that this may all be different in other countries; my expertise is particularly in US tax law. I suspect, though, that the treatment of crypto is in flux in most countries, given that they are a relatively new phenomenon. Irrespective of the country, I'd want to know the underlying regulation of crypto before I decided to accept it.
 

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Discussion Starter #12
For dealers needing to take that extra step to turn it into cash it doesn't seem to make sense at this stage. Maybe it would be more applicable as a way that two individuals, one sellling a horn to another, could do a transaction (if both parties wanted the trade in BTC). That way there wouldn't be fees/tax implications, and each person could keep it in BTC or exchange it for Etherium or some other coin. I guess it would be incumbent on the seller to offer it as an option if the seller preferred it and because it might be attractive to some buyers who would rather avoid fiat/stable coin tied to fiat. Failing that, a buyer can always ask I suppose. Always good to know the options!
 

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Im no expert but Sam seems tonsay otherwise.
There would be no tax implications unless/until you were caught.

id be more inclined to accept other stocks of choice from the NYSE...but of course that isnt really a mode of exchange.

Additionally, when I oook at the vslue graph of Bitcoin it screams,”Correction time!”

and on that point of trading a supposed investment item: The wise customer will want to pay crypto when it is high. Then the vendor buys into potential loss. Generally a buck is worrh a buck unless you are dealing internationally. Crypto can vary by 30 percent. Those kinds of violent swings can literally erase your profit margin. Ptung is the only person so far who woukd and he admits he likes to gamble. Many of us do not and most of us are not good at gambling.
 

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Im no expert (...)

Additionally, when I oook at the vslue graph of Bitcoin it screams,”Correction time!"
Just because you think that, doesn't make it true. It already had a major correction of around 20% less than two weeks ago and it bounced back to the price it was before.
People tend to be afraid because of what happened in 2017 when the bubble burst, but we are not in 2017 and things change.

Will the price plunge? Maybe, it is possible for sure, but institutional investment signals otherwise. Still a gamble of course.
 

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cryptocoins are , for now, the terrein of professional speculators, occasional amateur stock exchange traders and a lot of launderers.

THOSE are very interested in this.

Let’s not forget that a lot of money which is not accountable can become legit trough the process.

I don’t see why this would interest the saxophone shop or other company, unless they have tons of money waiting to be come legal.
 

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Yeah, it's volatile, and so far a lucrative bet especially for early adopters. That doesn't really invalidate it, it's just the nature of things. A very stable currency it's not, of course.

If the currency is assumed to be doomed, it would make sense for a customer to convert it to $ or saxophones as soon as possible.
If the currency is assumed to be solid or even a guaranteed ROI, it would make sense for anyone with saxophones or $ to convert that into bitcoin. (Even considering tax if things keep on growing the way they have been.)

It's anyone's bet.

With 20/20 hindsight, the guy who sold a couple of pizza pies for 10,000 BTC back in 2010 (when someone wanted to make a point about the viability of Bitcoin transactions) is probably not unhappy with the trade.
 

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We would all be rich with 20/20 hindsight

im not saying its doomed. Im just not getting involved with it.
I gave it serious thought and dismissed it.
Hindsight may prove me wrong but its enough energy to make money.
I dont want to also be concerned that it may evaporate overnight.
Obviously others think its worth the energy...more power to them
 

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Discussion Starter #18
The pizza example is an interesting one. If you would have sold a saxophone last year at this time and got $3K worth of bitcoin from the buyer (or from converting dollars from buyer after the sale), that bitcoin is now worth over $90K.
 

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The pizza example is an interesting one. If you would have sold a saxophone last year at this time and got $3K worth of bitcoin from the buyer (or from converting dollars from buyer after the sale), that bitcoin is now worth over $90K.
Well now, playing with guesses knowing the present is not valid in this type of things. What if it had dropped in price?
FOMO (fear of missing out) is real, but dwelling in what might have beens doesn't do anyone good either.
 

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FOMO is why most people who consider themselves "Investors", buy high and sell low.

You can play woulda, coulda shoulda all day but it doesnt change anything.
 
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