Topic: State of the Real Bitcoin Economy (Read 14575 times)

Try Inputs.io for that.

This is the way! It has to start from the bottom because after all I think it's too hard to wait for someone like Amazon accepting. We all have to stat convincing small businesses accepting Bitcoin.

If there is anyone from Berlin here come join us for the Bitcoin Exchange Berlin on July 27. http://www.bitcoin-exchange-berlin.com/

I don't see the problem. Until bitcoin use is widespread enough for BTC prices to be stable, goods and services will continue to be priced in fiat currencies. So you'll pay based on a fiat price, converted to BTC, and when you get a refund you'll receive the fiat value, converted to BTC.

There's no other way it can work right now, but again, I don't really think it presents a real problem. If you don't want to risk losing your bitcoins, then every purchase made with bitcoins needs to be matched by buying more bitcoins to cover it, that's all.

The key is development. The software engineers out there need to be working with entrepreneurs with capital so we can get more mobile apps, more interface. Interface is the reason btc is moving like it is, but it is spreading. I would love to drive around from business to business installing software from one store to customer. This is what we need. It will be a visa, mastercard, amex, and a BTC that is when the btc becomes more of a currency in the eyes of the public. Right now it is still taboo. Not known well enough.

Go forth, hold meetups. Ask every retailer/business if they accept bitcoin. Yes you may have been in on bitcoin since the beginning and want to see your btc increase so you make more money but if we do not spread this technology it will fail for not a lack of legitimacy but because a lack of movement.

I think there is problem for using BTC as a medium of payment in daily life.

If I used 5 BTC to purchase a chair weeks ago,
and BTC rise from 100 USD to 200 USD,
now I want to refund for some reasons,
how many BTC could I get back?   

I'm not sure whether volatility is the problem. When you peg the BTC price to the USD or EUR so that it actually resembles your fiat currency the issue is manageable. You would need to exchange very frequently to fiat (like daily or so) in order not to be exposed to a massive FX risk but still I think a shop like Amazon could handle that.

I wonder whether it would be possible for Amazon and other large shops from an infrastructure point of view. Probably it would require quite a lot of work and resources to integrate Bitcoin into such a large business.

In general I agree with you: it is possible to integrate the official Bitcoin client with the  typical financial software. But:

1) the level of effort is tremendous

2) as of 0.8.3 the required effort is higher than it was at 0.3.23 when I looked at such integration for the first time. Then it was just BerkeleyDB which by itself is compliant with http://en.wikipedia.org/wiki/X/Open_XA . Now it added LevelDB which isn't compliant and in my estimation it won't ever be.

So the practical integration efforts will be limited to being in-effect manual processing and reconcillation. That will be acceptable probably only in businesses like e.g. mail order where the shipping is done at most once daily. Doing the accounting books "by hand" is essentially acceptable only to very small businesses and pretty much unheard of in a public company listed on an exchange.

Lots of the compliance can be faked without much effort, but such fakes sooner or later will be uncovered by the forensic accountants in a civil or criminal litigation. The chief distinction would be "is the non-compliant business big enough to be a profitable target for litigation" or to put in different way "will the possible damages, forfeitures, settlements, etc. cover the cost of billable hours for the lawyers and forensic accountants".

The problem with calling this acceptance is most people won't go to the trouble of jumping through the hoops of buying a gift card just so that they can spend money on Amazon, unless they already own bitcoins and are looking for a way to spend it without cashing them out on an exchange.  It's not really true acceptance if you have to jump through these kinds of hoops.  I really think that the best thing that could happen to bitcoin would be for Amazon to start accepting it directly, but I doubt they'll go to the trouble with all the volatility that bitcoin has right now.

some bitcoin traders business etc have lost alot of money because they didn't follow through on the strategy,

any bitcoin or cyrptocurrency strategy should be atleast 5 years to see any kind of fruition and so far

everyone would have been a major success if they adopted this policy

I'd put it more optimistically. Nobody is really "pushing" Bitcoin to be used in less regulated markets. It's just that in economies where the financial infrastructure is very limited or rudimentary Bitcoin might be a good opportunity to give more people access to financial services. When it happens, it will rather be a "pull" than a "push".

Regarding the compatibility with accounting standards, this might be the case today. But it is certainly possible to build more infrastructure around Bitcoin to actually make it compliant. Today already it is possible to build a sufficient accounting system around the Bitcoin client. To make it compliant with accounting standards would be the next step. The great thing is that everybody has access to a payment infrastructure that can have many more services built around it.

State of Bitcoin is flourishing

The push for smaller markets is basically a search for a cannon fodder that is willing to use a software that is non-compliant with any sort of accounting software guidelines, be it GAAP, IFRS or whoever else's.

"bitcoind" is well-nigh impossible to integrate with any existing transactional finance package that is using 3-phase commit protocol or any other customary reliability and accountability protocols.

My current best guess is that the adoption of Bitcoin will somewhat parallel the (non-)adoption of http://en.wikipedia.org/wiki/Secure_Electronic_Transaction . Technically it was remarkably similar, e.g. use of dual-signatures instead of multi-signatures. It was also remarkably similar in the human-factor realm, that is the core cryptographic developers of SET displayed disdain and openly denigrated the needs of accountants and other operations personnel.

Thus SET was "adopted" by organizations that were already running into red ink as a way of spreading the responsibility for the failure and further muddying the accounts.

Obviously there can be no direct analogy for every aspect of SET and Bitcoin. Primarily because SET had high-level commercial sponsors from the outset and the whole budget of e.g. The Bitcoin Foundation is smaller than the fuel budget for a single private jet of any of the SET-sponsoring executives.

True, the amount of retailers which accept BTC is pretty big that way, but what it probably still lacks is transaction volume. However, the door is open. Now we all have to get going by using it and spreading the word.

Regulatory friction is mostly smaller outside the US. And probably the demand for more/improved financial services is probably larger outside the US. That's why I believe emerging markets are among the best opportunities to get BTC started on a larger scale. It might come to developed economies through the backdoor.

Letters of credit are also definitely worth a thought, good hint!

Bitcoin being under the radar for a while isn't a bad thing because the more the real bitcoin economy grows, the greater the countervailing force from regulators, banks and governments will be. Today bitcoin is a curiosity but when it hurts the profits of the existing establishment they will attack it and we need to be prepared for this.

I think one of the easiest things to do grow the real bitcoin economy is to use bitcoin in exchange. Even if you are a speculator you could toss a website a couple of coins or something. Growing the economy also means growing the community: preaching.

It will be for naught if we are not prepared for the inevitable government backlash though.

Credit cards became adopted by finding the consumers, and offering them discounts.  Stores accepted the cards, and the hidden fees, because this meant high-income people would be more likely to buy from them.

In Bitcoin, most of the consumers are either dead, in hiding, or under arrest/investigation.

It's becoming a long thread, but it's very important and enlighting
I think looking back at how other paymet systems mad it work might be beneficial, like how credit cards became adopted?
Since bitcoin is open source might rethink the concept of an open source marketing department

And re "women are the answer":

Perhaps brothels in NV etc can accept bitcoin?

 

Dear Friend.

Hope all is great on your end.

Venezuela is currently (since 2002) under a very tight and restrictive currency exchange control. Thats why you hear little or nothing from us. The amount of foreign currency is limited by law. There is a 400 USD online limit (YEARLY) and a cap of 400 USD withdrawals of foreign currency in cash (only abroad) per month. All deals in foreign currency must be (indirectly, via the banks) approved by CADIVI (organism which controls the currency)

Its a tough nut to crack, yet, if venezuelans get more openminded and progressive (specially programmers) the growth of bitcoin in Venezuela promises to be spectacular. Lets hope this lid is opened soon and the ball gets rolling there soon. What bitcoin needs is the first country that massively and openly adopts it, and then the cycle re-ignite in a way more sustainable fashion.

Not directly.

But gift e-cards are one way to bridge between bitcoins and the fiat methods retailers and e-commerce already support.
 - http://bitcoinmoney.com/post/52164422060

Add up the 12,000 restaurants from Foodler, the retail locations from Gyft (including Burger King, Marriott, CVS, Sears, Lowes, and a ton more), Amazon gift cards from GiftCardBTC.com, and then all the merchants where Dwolla can be used (which includes all the merchants with Lyoness, which accepts transfers from Dwolla) then you will have covered most every category with at least one merchant.    [Lyoness merchants include Best Buy, Priceline, American AIrlines, Chevron, Exxon, Home Depot, Peet's Coffee, and many more]  

   
High Risk Merchant Accounts
 - https://bitcointalksearch.org/topic/high-risk-merchant-accounts-73694


That's where the regulatory friction exists.  That's why BitSpend.net is currently offline.  That's why BillPayForCoins.com accepts bitcoins for only rent payments or for payments to your supplier (which they will manually verify to be true).  That's why GLBSE does not exist today.

But you are correct in that there are huge opportunities in finacial services for a Bitcoin.  Western Union should no longer need to exist.  A thousand bitcoin-powered M-PESAs should bloom.  Bitcoin-accepting ATMs could bring fees down to a fraction of current levels.     Bitcoins should be able to secure grams of gold held in a vault somewhere else.   Letters of credit for int'l commerce become trivial to obtain and use.

Thank you for this thread! I think the topic is crucially important!

I was at a peer to peer lending conference in NYC a couple weeks ago and tried to explain Bitcion to an institutional investor who had massive funds under management. He's heard of it before and really liked the concept after I told him some more details. The only questions he kept asking was if any major retailer is already accepting it. Even though Bitcoin requires some degree of explenation, everybody who can use a smartphone has sufficient technical abilities. So my view is, that's not the real problem.

If we want Bitcion not just to survive, but to become really succesfull (i.e. lots of transactions for goods and services) at least one of the major retailers or e-commerce businesses need to accept it. That will motivate an average non-tech person to use it as a means of payment. For this to happen, the big merchant which starts accepting Bitcoin must be one that suffers deeply under the current payment methods in financial terms. Can anyone here think of such a merchant? Ideally it would be one with international transactions because those have the highest fees longest durations. Such a merchant can also deal with services, it doesn't only have to be physical goods.

This brings me to financial services. Fees are generally high for all sorts of transactions and many people don't trust financial services firms and banks anymore. Currently many of the early Bitcoin adopters seem to regard it as an asset class. But if we can build a new type of financial services industry around it that leaves behind the mistakes of the current system it could also be a starting point to a larger adoption of Bitcoin.