Why Spending Your Bitcoin Is Absolutely Essential

Added: 2026-05-26

[00:00:00]This is Matthew Crowder's Bitcoin University. Today I want to talk about why spending your Bitcoin is absolutely absolutely essential. And this is in the context of Bitcoin pizza day when Llo spent 10,000 Bitcoin for two Papa John's pizzas back in 2010. I made a video about it a few days ago about why you should spend your Bitcoin. I got a lot of push back, so I wanted to review some of the questions people had. In that video, I basically gave a number of reasons why you should spend your Bitcoin. Number one, it's the only money that you have left because you don't want to hold any fiat because fiat is money for slaves and it funds forever wars and pedophile networks. If you truly hate your overlords, you shouldn't use their money. Instead, you should opt out and help to strengthen a competing network like the Bitcoin network and help it to succeed. Reason number two to spend your Bitcoin because Bitcoin adoption begins with you. So, if you want to see more Bitcoin being used as a medium of exchange, then you should take the lead and practice what you preach.

[00:00:58]If you spend Bitcoin, it enables other people to earn Bitcoin. If you'd like to be paid in Bitcoin, then it's incumbent upon you to pay other people using Bitcoin. This is the argument I was making. Reason number three, when you spend and receive Bitcoin on chain using your own node, you're actively helping to enforce the network's consensus rules, which is good for everyone and not just good for you, though it's obviously good for you because you can verify that incoming transactions that you're receiving are in fact taking place and that it's real Bitcoin that you're being sent. The final reason to try to accelerate Bitcoin as a medium of exchange is if we treat Bitcoin as a savings account that we convert to fiat for all spending, then we're basically recreating what the gold standard looked like before it collapsed into the fiat standard. Now, not surprisingly, I did get some push back. Pots Machina writes here, I don't think your conclusion is correct that if you don't spend your Bitcoin, you can't expect others to do so either. That would be like telling a German in the period before the VHimar hyperinflation the Reichs mark will soon be worthless or the Papers mark the Reichs mark will still be worthless. If you want others to start using cigarettes as black market currency soon then you have to start doing that right now. What I'm trying to say is the time when people will want to use Bitcoin as a means of exchange because they have to will come one way or another and that moment won't be affected by whether or not non-NPCs are playing their little payment games with their valuable Bitcoin. My response: cigarettes and gold are not assets that are secured by a network that runs software. It's easy to start using them as money. Easy to start using cigarettes and gold as money if your local money starts to hyperinflate. By contrast, Bitcoin requires lots of people running nodes and paying transaction fees to keep the network running and healthy so that it is there so that the network is there when the world really needs it. There's no guarantee that merchants and normies will be able to quickly switch to using Bitcoin once hyperinflation hits.

[00:02:46]spinning up a node, connecting a wallet, learning how to use Bitcoin in ways that governments or banks cannot stop you.

[00:02:52]These all take time. Takes time to learn how to become self- sovereign. And so, we need to get as many people on the ark as possible before the flood hits. I'll just pause really briefly here to ask you, if you're enjoying this video so far, please hit that subscribe button and help me to spread the word about Bitcoin to more people. ATC576 writes, "I don't think you thought this one through, Matt. You have to spend fiat right now to pay for things like food, rent, etc. If you, like myself, believe Bitcoin will go to $10 million a coin, then why on earth would I use it now for things like pizza? Do you think we all have a large stash of BTC? What's wrong with borrowing against it if the ARR is 30% plus a year? Then when it does blow up, I'll have some help to support families in the crappy times ahead. My response, definitely not assume that anyone has a large stash of Bitcoin. My point is that you're spending money every single day. So why not make it Bitcoin that you're spending since that is what you would like the whole world to move to. If we want the whole world to move to Bitcoin as a global reserve currency, then we should be using it as a medium of exchange. If everyone just borrows against their Bitcoin and spends fiat that keeps propping up the fiat system. This is why gold failed. Also, and this is a really important point, Bitcoin will never go to $10 million a coin. We can't just assume the conclusion. Bitcoin will never go to $10 million a coin unless millions of Bitcoiners start using it as money every day. Problem with borrowing against your Bitcoin, talking about Bitcoin loans, is that a single flash crash can wipe all of it away from you? Imagine Bitcoin goes to $3,000 a coin, stays there for a day before bouncing back to 75,000. What will happen to your loan? How big will your margin call be? This will be one way that Wall Street steals a lot of people's Bitcoin. Thanks for asking some really good questions. Finally, Dean Stevenson 1649 has some very strong words for me. Matthew, I think you should take the sacred cow of Bitcoin being a medium of exchange behind the shed and shoot it. I have to say here, getting comments like this really breaks my heart that I actually have to argue this this hard for Bitcoin as a medium of exchange. I feel like we've really lost the plot. Um, but nevertheless, this is a good question from Dean. Uh, take the sacred cow. Bitcoin is a medium of exchange behind the shed and shoot it. It doesn't make sense. I agree with 99% of your videos, but this one, nope.

[00:05:02]Bitcoin is a store of value in the end and premium collateral. This is too much. This is people who've been listening to Michael Sailor too much. I think uh Dean goes on to write that means it can't be a medium of exchange.

[00:05:13]You can't have both. That's just ridiculous. You can absolutely have both. And the amazing thing, the very important thing about Bitcoin is it's simultaneously a store of value and a medium of exchange. And there's no point storing something for your life savings if you can't easily send it to people.

[00:05:29]if you can be censored, if you can be stopped in sending or spending it. So, it's actually very important that Bitcoin is a good medium of exchange in addition to being a good store of value.

[00:05:39]But Dean says you can't have both. He says being a medium of exchange is not special. Let the crap currencies do that. They're going to do it anyway.

[00:05:46]Gresham's law is real. Actually, it's not real. We'll talk about that in a moment. Your idea of being altruistic and spending Bitcoin to help others adopt is silly. Nothing that doesn't make economic sense is sustainable or scalable. Follow the incentives and don't don't try to swim upstream. My response, this is exactly how gold was treated and why it failed. Bitcoin is money. It's not collateral or it's not just collateral for b for borrowing fiat against. Bitcoin loans will be one way that Wall Street steals a lot of Bitcoiners Bitcoin through a flash crash and margin calls. This has nothing to do with altruism. If you keep using US dollars, how do you think it goes away?

[00:06:23]what is going to motivate merchants to start accepting it if no one wants to pay in Bitcoin? And Dean responds, "Thanks for the reply. If you want to win this argument, you need to take on Gresham's law. Don't make me defend gold. It clearly did fail. Not yet. I just think your capable passions are misplaced with the Bitcoin as a mainstream currency thing. You're a Kelly's heel." And my response, "That's easy. Gresham's law is economic pseudocience and fiat propaganda that's meant to persuade you that you cannot win." And Gresham's law, to be clear, is this idea that bad money drives out good. That people will spend all the bad money and hoard the good money. But I I think that Gresham's law is actually economic pseudocience. It's fiat propaganda that's meant to persuade you that you cannot win. For example, the US dollar is better money than most fiat and it drives out worse fiat all the time. happened all over Latin America for example where the market chose US dollars over the local currency and then the country eventually moved to US dollars or de facto US dollar peg for example the US dollar drove out the Salvadoran cologne for example and I'll put a link to this article that discusses this I'll put a link in the description notes below I've taken a lot of these ideas I've learned a lot from Parker Lewis and his idea of pay me in Bitcoin so here's the imaginary theory on the left here's in practice what you can actually control what you can do.

[00:07:42]You can ask to be paid in Bitcoin. As Parker writes here, why would anyone spend a finitely scarce asset like Bitcoin? His answer is for the same reason that someone delivering a good or service would demand the best form of money in return for value delivered in the present. So why would you be forced to spend your Bitcoin? Because you really want to buy something from a merchant and that merchant only accepts Bitcoin. So you have to end up spending some Bitcoin. Jack Spurko responds to Parker Lewis here saying, "This is tired and old. The market for now is spoken.

[00:08:14]People who want to spend Bitcoin do.

[00:08:15]Those who don't won't. The end. No amount of pleading will changes. I don't care what Satoshi Lot wanted. It's Gresham's law, not Gresham's theory."

[00:08:24]Parker responds, "Bitcoin is invalidating Gresham's law." I believe this is true as well. Good money will and does drive out bad money out of circulation. Don't be so upset that merchants are creating incentives to be paid in Bitcoin as the dollar hyperinflates. No one is pleading for anyone to buy uh for anyone to pay in Bitcoin. Parker has a great essay you can check out if you want to go further down this rabbit hole. It's of course called Pay Me in Bitcoin theory and he summarizes the pay me in Bitcoin theory as such. These are the premises. Number one, someone must understand why Bitcoin stores value to want to be paid in it.

[00:08:57]Receiving Bitcoin payments is a balance sheet decision at the end of the day.

[00:09:01]Merchants will drive the shift to Bitcoin payments for this reason because they want to be paid directly in Bitcoin. put it on their balance sheet and not have to spend all the time and spread and hassle of converting it from fiat to Bitcoin. So merchants will drive the shift to Bitcoin payments, specifically merchants who understand why Bitcoin stores value. Bitcoin uh business owners are ultimately in control of what currency to accept.

[00:09:23]Spending Bitcoin can be both rational and irrational for consumers. Spending Bitcoin is rational if the merchant is valued and saves in Bitcoin. In other words, if they only accept Bitcoin.

[00:09:33]Accepting Bitcoin payments does not mean not accepting fiat payments. The transition to payments will be gradual, similar to saving in Bitcoin. So, it's a great essay. I'd encourage everyone practice spending your Bitcoin. You can spend and replace or if you're completely living on a Bitcoin standard.

[00:09:50]You're going to have to spend your Bitcoin because you don't have anything left to spend. If you enjoyed this video, be sure to hit the subscribe and like buttons. Hit the notification bell if you want to be notified when I publish my next video. And let me know your questions and comments in the comment section below.