The vast majority of people will adopt Bitcoin spontaneously as a payment method… because they need to eat.

The food merchant will only accept Bitcoin. For a while, before this occurs, the merchant will offer a significant discount (or better products) if the payment is in Bitcoin. And people invariably prefer more food than less for the same amount of money.

The merchant prefers Bitcoin simply because he is getting rekt by alternatives, and his competitors operating on the Bitcoin Standard are not.

Accepting Bitcoin payments will become the path of least resistance for his business. There are two major drawbacks to accepting Bitcoin: Price volatility and Saleability. The penalty of accepting inferior currencies will eventually become greater than these two drawbacks. Inferior currencies will become equally volatile (and trend downward). Other payment accounts will become less saleable (e.g. paypal or bank withdrawal restrictions, cash hard to liquidate, worthless currencies, CBDC spend restrictions).

On a long enough timeline, given enough consistent transactional volume, the Bitcoin-friendly merchant will also be rewarded with increased purchasing power by the Bitcoin held in his treasury.

Refusing all other forms of payment other than Bitcoin has a significant drawback for the merchant: diminished sales, because you are eliminating from your potential customer base all people who are not able or willing to pay with Bitcoin. However, the drawbacks of accepting inferior currencies will become so massive that the merchant will actually be making a loss on these transactions. In this scenario, he does not lose any revenue from refusing these inferior currencies, and he may even be cutting some losses. Doing business for fiat payments? Simply not worth it.

In combination to this, the merchant may become unable to find suppliers that will accept currencies other than Bitcoin (or, which offer significant discounts for Bitcoin payments).

One or many of his suppliers will be operating under the same logic: accepting payments in inferior currencies for goods and services just isn’t worth the trouble of doing business anymore. The merchant’s suppliers will either increase their prices if the payment is not made in Bitcoin or they will simply refuse payments other than Bitcoin, knowing full well that there are other merchants accepting Bitcoin payments are willing and able to pay in Bitcoin. 

The merchant’s competitors gain an advantage over him because they have started operating partly or fully on a Bitcoin standard.

Ultimately, a critical and irreplaceable participant in the supply chain of goods and services (or a significant cluster of participants) will refuse to be paid in a currency other than Bitcoin, and will force other participants downstream in the chain to adapt to his needs. An intolerant minority will emerge and dictate its preferences. If this minority is of high enough quality and importance, its preferences will become the standard terms of business adopted by all.

The merchant which does not accept Bitcoin payments will be compelled by economic reality to convert some of his fiat currency (or shitcoins) into Bitcoin in order to benefit from the supply chain arrangements that make him a competitive business, or to protect the purchasing power of his treasury. This conversion will come with financial and operational costs. It is much easier to acquire Bitcoin by placing a strong preference on accepting Bitcoin payments. 

In addition, it is quite possible that in a hyperbitcoinization scenario (rapid and dramatic devaluation of fiat currencies against Bitcoin), accepting Bitcoin for payments and services becomes the only method to acquire Bitcoin, because of restrictions and costs associated to buying Bitcoin with fiat currency either via regulation, or because of increasingly high exchange spreads. Liquidity on exchanges will start to become thinner, because Bitcoin holders no longer want to cash out for fiat. But hodlers will always be hungry, and they cannot avoid spending Bitcoin on food.

In this case, participants in the supply chain will have an even stronger inventive to refuse payments in currencies other than Bitcoin, because for each payment received in other currencies, they are suffering the opportunity cost of not owning Bitcoin as a treasury management vehicle (or a personal investment), a cost which may prove ultimately greater than all the net revenues made from payments received in alternative currencies combined. If they are not able to acquire Bitcoin, they may be unable acquire the goods and services necessary for them to run their business, or at least remain competitive (because of certain parts of the supply chain, which only accept Bitcoin, will be inaccessible to them).

On a long enough timeline, the merchant that refuses to accept Bitcoin will gradually be eliminated from the marketplace. Via negativa. Adoption by natural selection. 

People will adopt Bitcoin because an intolerant minority of merchants and/or their suppliers will start refusing to be paid in currencies other than Bitcoin. It is not the desire to spend Bitcoin that will drive Bitcoin adoption, it is the desire to be paid in Bitcoin that will be the catalyst. Spending Bitcoin will become a requirement, reluctantly. 

Further reading:

Speculative Attack, by @BitcoinPierre nakamotoinstitute.org/mempool/specul…

Hyperbitcoinization, by @DanielKrawisz 

nakamotoinstitute.org/mempool/hyperb…