Topic: State of the Real Bitcoin Economy - page 7. (Read 14576 times)

go on everyone continue...

Interesting link - thank you for posting that (well worth reading).


As the link you provided does point out if "no-one wants to pay" then worthlessness could indeed be the result - but I think the point of such contracts makes perfect sense and so I do also think that such creative solutions will probably address the issue that I raised (so point taken).

IMO, we should not care too much about real economy, the future is in virtural economy and its size will bypass real economy later

Look at my nephews who are about 13-14 years old, most of their interest is in the internet, not real world. For this generation, the real world is only a support for the physical body, at least half of their enjoyment comes from the virtual world, since many things in virtual world are more perfect than real world and they have much more fun there. The only draw back is that today's virtual reality realisation is still far away from comfortable, 3D TV is a joke and very uncomfortable to use

Another fact is that merchant can handle the bitcoin sales seperately, not like fiat money sales, you can put those bitcoins at a saving account and hold it for a longer time. Because anyway people will not be totally dependant on bitcoin, the fiat sales could be enough to make back their cost, and bitcoin sales will become their capital reserve

Currently there are not so many people spend bitcoins, but that will improve over time, when more exchanges and more miners are willing to sell/spend their coins. Actually miners are the only provider of new coins to the economy, and if the coins they mined worth enough, they will start to spend them. Now daily new spending is maximum 3600 coins. Comparing with FED's daily spending of 2.8 billion new USD, it is obvious not so many people can receive bitcoin as a payment, if its price stayed at current level

Tx fees aren't the only way to buy network security.  For example, Mike Hearn talked about using assurance contracts to do it here: https://bitcointalksearch.org/topic/funding-of-network-security-with-infinite-block-sizes-157141.  It's pretty silly IMO to assume that people with a whole bunch of stored value at risk of becoming worthless wouldn't find ways to collectively ensure it doesn't.  Plus that's decades away, and not really worth thinking about now, as things will likely look so much different at that point.

True - but when most of the coins have been mined the tx fees are the *only* thing that will keep the network secure so if bitcoins aren't being used for many transactions then it could spell doom for the current implementation (so best to be used both as a store of value and as a currency rather than just the former).

Bitcoin competes (very well) with gold, silver, and art, which are all very valuable, but garner little interest from the average person: https://www.youtube.com/watch?v=ndshbH3qZ6Y.  Though it would be nice if Bitcoin were to become widely used for payments, it doesn't need to in order to be valuable.

Of course you realize you're making my point for me. Android is sold as a part of a phone so big business is backing it not good will and dreams. The first sign I've seen that we are going in the right direction to make me rich from holding my 2011-12 mined coins was the Winklevoss money. That's what we need more of to make Bitcoin businesses successful but that takes a special kind of dumbass gambling investor. The risk is too high and the legal ground under Bitcoin is shaky at best. Bitcoin just needs more time to smooth out all the bumps in the road first. It's just looney to say, Bitcoin is a whole four years old, has no corporate backing, a main exchange that trades less volume than the old Chicago Pork Bellies contracts used to why aren't we accepted and recognized everywhere yet?

Concerning (a) from a newb perspective, google searches led me to try first installing the bitcoin-qt client, which yea, was a big turn off for me. I bought some BTC on gox then sent it to my bqt wallet address and was a bit shocked to not be able to see it for many days while the blockchain was being updated - 'where is my money??'. Also, the client sucked up all my cpu leaving me wondering what the heck was happening - software shouldn't be designed to 'go crazy' and burn up my laptop while hiding my money, so something must be wrong (I know why this happening now) - I imaging non-technical new users especially may have discouraging thoughts like this.

This is the first link to a 'bitcoin' search: http://bitcoin.org/ - the entrance to the rabbit hole for me. The 'choose-your-wallet' page, IMO, understates the time and resource issue. I recommend the bitcoin foundation to be a bit more explicit about these drawbacks and put a link to lightweight columns first in the list of wallets, stating clearly to start here if you are non-technical or want the 'quick start' option, instead of hiding this information in a popup that is accessed by hovering over an icon at the bottom of the page. It is a simple thing, but I think it will help to carry curious people further down the rabbit hole.

jd

I think this basically hits the nail in the head. I think the success of bitcoin will be a large part depend on what will hopefully become a hindsight 15-20 years from now, just like the internet itself was in 1992.

The fact is crowdsourced content generation and social media, the main new internet trends in the past 10 years, have propelled many new companies formed recently to be smaller and more agile. What's more important is that these organizations can operate anywhere in the world, and many don't even physically need to be in the same place. Adding to this are the globalization trends led by developing economies such as China, India, those in South America, and many more. Having lived in several countries the past few years of various economic developments and political stability, I found it amazing that more and more people are speaking the same language by ways of the internet, regardless of religious, political, or economic backgrounds.

Furthermore, trades between smaller merchants and consumers that made the likes of eBay, Paypal, Alibaba, and to some extent Amazon so popular today are seeing great demands for internationalization. We are even seeing the interesting reverse trends of manufacturing heading back to fully developed countries like the US, perhaps because latest technologies have enabled manufacturing costs to go down, and also we are seeing the trends of greater international demands for US/European produced goods, because people internationally now can afford higher quality goods or even vanity products.

In summary, there is an ever-increasing demand for a platform that can be used to conduct trades globally at a smaller scale, basically in a c2c fashion. A decentralized currency like bitcoin is a great foundation to the payment facilitation piece of this puzzle, and it can build upon the foundation laid by c2c eCommerce platforms like eBay and the rising crowd-based brand advocacy made possible by social media.

That said, It's not an easy road though and require a lot of effort by the community to continue to pour significant energy and investment in strengthening the infrastructure and integration points, and perhaps a few "killer apps" along the way to speed up adoption. But from that standpoint, it does look like it's heading towards the right directions.

Does that 1.26% include the tablet / smartphone market (Android is Linux), the router market (your wifi router is probably Linux), the server market, etc.?

This is an excellent discussion, but I think luv2drnkbr hit the nail on the head here.  If we're comparing bitcoin to the internet, it's like the internet when it was 1992 and most people were scratching their heads and wondering, "The internet?  What would people ever use that for?"  Needless to say, no one asks that now.

Also, I have to take issue with the assertion that the confirmation time is a true deal breaker for bitcoin.  If you're comparing confirmations to the credit card world, it's a false comparison to call credit card confirmations instant.  Really, what's instant with credit cards is not confirmation, but authorization.  When you run your card, all that's happening is it checks to see if it's a valid card and not above the credit limit.  It's not confirmed.  I bought a domain name earlier this year with a credit card and this is exactly what happened - I bought it with my credit card, the authorization went through, but my bank called the next morning and thought there was fraud so they cancelled the transaction.  (The reason was because the domain registrar I use is in Germany and I'm not.)  I had to redo the transaction after saying, yes, it was legit, to actually buy the domain name.

So it's a false comparison because the "confirmation time" with bitcoin, if you compare to the actual confirmation with credit cards rather than the authorization, is actually much shorter.  In basically ten minutes, for small transactions anyway, you can be pretty sure that the transaction won't be reversed with bitcoin.  Whereas with credit cards it can be reversed 12 hours later if the Bank feels like it.

Well... not sure when you guys setup your paypal account... but I have mine now for about 10 years... the only reason I started with it initially... because my Gaming Clan was kinda requiring it to pay for our clan server.... I remember it taking a freaking week... to setup... I am not US based... and back then I was very lucky my country was one of the 10 first, to have debit cards being able to be linked to your paypal account... else I would've even needed to get a credit card... just to get paypal and pay for the clan server. Even though being lucky, it took 3 days for the paypal txn (where they take some cents from your account) to show up... and even then my bank wouldn't tell me the amount (which I had to tell paypal) over the phone... I actually had to schedule a bank appointment... to get those figures, before my end of month bill would come in...

Back then... PayPal was more of a hassle than bitcoin is now...

The biggest hurdle imo Bitcoin is seeing now, is there is no one company behind it, depending on its existence, being backed by banks / other big companies. (aka the trust factor that pulls people in easily) Because this is mainly what had paypal take off, they needed it to work, (so they could survive) so they put every effort in getting as many people as possible to accept it. The fact that there was no alternative, and that it basically worked like a credit card... helped a lot too.

Beyond that, the biggest problem is getting bitcoins for the regular person... for me as an IT guy... the easiest way... is just to mine myself / trade other crypto currencies for bitcoin... and even that is sloooooooooow....

The other thing that I'm hearing in my circle a lot is... why do I need bitcoins... which results into a discussion... that they don't even know how money works... most people use it on a day to day basis... but don't understand the concept of money... and / or fully realize that their FIAT is getting worth less every single day...

Last but not least... and this might be me... but people don't trust a system run by computers. The fact that bitcoin isn't controlled / run by a person... scares them... while bankers over and over again proved that they are not worthy of your trust...

The main thing we should want now, is a "first world" government, to outspokenly be for bitcoin, and start converting their local currency into bitcoin. This would give the trust in Bitcoin the boost it needs, for loads of major merchants to add it to their possible payment methods.

Last but not least, the ease of use... and the chances of being hacked... or not helping...

While I could learn my grandma easily how to use bitcoin online... I know that her PC is so infected with all kinds of junk...(yes I clean it up from time to time... still impressed with how much junk she manages to gather) that it barely keeps running... and her coins would just get hacked / stolen away... (while I currently don't see a real way to fix this... we need this fixed somehow...)

Then you get the physical aspect... while I love what Mike Caldwell is doing... We need a mint that mass-produces physical (milli)bitcoins, to get physical bitcoins out there for the masses. (trading a 10 USD bill, for a 10 mbtc bill, would give the physical part a major boost)

As mentioned before in this thread, the last part that would majorly help bitcoin, is loads of small game companies, starting to use bitcoin(satoshi's) as their ingame currency. (imo this would be beneficial for all parties involved as bitcoin by nature has been build secure / near impossible to duplicate coins) I think it would even convince some game companies to use in game currencies, as it would be so easy to implement. (I don't see any big company implementing this... they would see it as a big risk factor, redesigning their economy etc etc)

OP you're looking at this like it's mature.  you need to see it like the internet was before the internet.  people who thought it would revolutionize things were laughed at.  people doubted anybody would want to purchase things "on line" instead of in person.  but those who saw it for it's potential weren't worried-- they knew the world would inevitably catch up.  they looked at the system and they could plainly see that it was too useful not to catch on.  so too it is with bitcoin.  come back in 30 or 50 years and you'll laugh at your post.  it might not be bitcoin itself, but it'll be something like bitcoin.

PayPal is 15 years old. Amazon is 18 years old. It's not a level playing field comparing Bitcoin to a system that's three times older and more established. Bitcoin is also an open source system supported by good will and dreams not corporate backing. If you want to compare it with anything compare it to Linux. How old is Linux maybe 20+ years. In that time Linux has captured a whopping 1.26% market share. Sorry but corporate backing can push things a lot faster than good will and dreams.

Over time it is likely that the price will become more stable, however, in the meantime it is easy enough to quote prices in a local currency and provide a BTC conversion based upon the "current" rate (based upon Mt. Gox or some other source). The VPN I use does exactly this (i.e. the invoice is in USD for which a BTC value is calculated based upon the current rate when I decide to pay).

Assuming that you change your BTC back into fiat on a daily basis as a merchant (and you can always use a service such as Bitpay to do this automatically for you) then you will be insulated from these fluctuations.

The problem is related to price

For example, a lunch cost 10 euro in some europe country, then most of the time it cost 10 euro, even the exchange rate between euro and USD changed a lot

But for bitcoin it is not like this, the exchange rate decided how much the lunch will cost in bitcoin, it maybe cost 0.1 bitcoin this month and 0.2 bitcoin next month

The reason for this: There is no organization controlling the money supply to stablize the local price.

So, bitcoin is not really suitable to be used as a daily payment medium, it just stores value in long term and later when you need to spend it, you have the possibility to directly spend it at merchant sites. And I guess you would still mortgage bitcoin and get fiat loan to spend due to wider acceptance

Saw their post on the forum - so not sure how to answer that - but I guess you could say it took me a month or so to notice the post.


Not confusing at all  - got some mBTC from Gavin's faucet to play with and within a week or so after that I had bought around 10 BTC from a BTC purchasing service (not particular good rates but very easy).


No research at all (beyond an internet search for Bitcoin) - just downloaded and installed the software and then ran it (or did you mean something else?).


Apart from the issues of using an exchange to get BTC I really don't think my mother (my grandparents have been dead for many, many years sorry) would stuggle as much as she did learning how to use Word.

As for Suzy in accounting my wife (who studied accounting at uni) has no troubles with Bitcoin at all and waiting for the blockchain to download (when using the Satoshi client) is the only reason she wouldn't be up and running in 10 minutes.

If you mean the way they disable access to your own money in fast and easy way, then yeah I agree.

Bitcoin is not difficult to use if all you want to do is send and receive bitcoins. My goodness, how hard is it to
a) install the client (gasp),
b) get a wallet id to send bitcoins to (horrors), and
c) hit the send button (on a scale of 1-10, impossible)

That's harder than setting up a paypal account? Get outa here.

Bitcoin economy? Who cares? Bitcoin has its backstop as a medium of exchange because it is popular for certain types of transactions that would otherwise be impractical. It only needs a small backstop. With that, it comes into its own as a store of value. Volatility is more than made up for by massive, consistent yearly gains. It is a superhero store of value, because it is immune to scrutiny and control by third parties, like no other asset out there.

It isn't written in the stars that Bitcoin's first best use will be as a medium of exchange. That is something people have projected onto it due to their preconceptions. The Bitcoin doesn't care. It's its own thing. Network effects and inertia are a huge botteneck to rapid adoption in most types of commerce for now anyway.

It's as if people are stuck in the old paradigm, where the original vexing problem was how to get people to value bitcoins at all. Lazlo and some others solved that problem, then SR and some others provided permanent deep backing - not gigantic but deep enough that "you can always eventually find someone who needs bitcoins."

Let's stop living in the past with the vestigial obsession with commerce driven by the lurking fear that maybe bitcoins aren't really going to be valued. We're past that. More commerce helps, everything helps, but we're past the point where Bitcoin's utility as a store of value was dependent on getting trade for actual goods and services kickstarted.

This dependence mindset needs to die. It is a relic of problems that Bitcoin hasn't had for years. Bitcoin has arrived. It's here to stay, barring major technical catastrophe or obsolescence due to something better (and the latter is no cause for concern, since we'll all have plenty of advance warning because anything new needs time to develop reputation and infrastructure). The actual use of Bitcoin for trade is never going to die out, even if it remains small for a while. It's too useful as a store of value, and that utility will inevitably drive it into more people's hands, driving up the price, stabilizing the price with larger volume, boosting mining incentive to make the system more secure, and increasing development and infrastructural investment in a virtuous cycle. When more people have it and the price is stabler and the infrastructure sounder and the apps more user-friendly, trade will develop naturally.

Commerce will take its turn at prominence when it's ready. For now I see no reason to fret about slow progress on that front given how amazingly successful Bitcoin continues to be as a store of value. It is only natural that these two functionalities will take turns leapfrogging each other in importance over the years as Bitcoin (or another cryptocurrency) zigs and zags its way onto the world stage.