Topic: The Bitcoin Establishment Plan: How to talk about Bitcoins properly (Read 6177 times)

If bitcoin gets popular, the blockchain will be several terrabytes in length... gg

But isn't that only true because the person you'll be speaking to in that circumstance has a vested interest in making themselves the best deal possible?  With a good white sheet intended to explain the concept and advantages cleanly and simply, you could make exactly the same arguement for bitcoin acceptance, right down to the premium for better service

Every once in a while someone makes a video where they go to a fast food place, grocery store, etc. and try to buy $20 worth of groceries with a $20 gold piece, and are laughed out of the store. 

FWIW, I guarantee I can buy groceries with Gold.

Maybe not at a super-chain, but most definitely at a corner grocery store, where the owner actually waits on customers.  I'll probably pay a premium for those groceries too, as he/she will charge me a "fee" for taking an "alternative currency", but maybe not.

I used to think like that. Now I am not so sure. Consider gold: You can't really buy groceries with it, and everybody I know has already heard of it.

We need some channels were people dont need to get out of the Bitcoin economy. That is why I think its so important to get food business to accept bitcoins. If I earn bitcoins and can use them to buy food, there really is no need to change them back to a government currency. And as the business that accept bitcoins grow the food business can use them to buy computers, etc... Once we create some "circular flow" there will be no need to use the government currency.

In order to be able to buy and sell things with a currency it has to have a high trading volume. Otherwise, the first merchant to cash out will drop the price to near zero and then the rest will panic. Buying BitCoins to hold helps increase the trading volume and it helps hold the value up against cash outs.

I don't think it makes sense to try to change your behavior to make the currency work. Use the currency in the way that makes the most sense to you so that it's the most useful to you.

I just don't think that that will be enough. For the currency to succeed, there needs to be a real economy, where you can buy real things.

When/if that other guy who wanted to donate 0.01 BTC to me figures out how to do so I'll just forward it to you.

This topic is about how to make sure that bitcoin ends up being a usable currency instead of just a pyramid scheme.

SHORT VERSION
1. Don't tell your friends "Buy Bitcoins and sell them later to make money!
2. Make people accept Bitcoins as donations/payments

LONG VERSION

Original Bitcoin Vision
Bitcoin COULD become a reliable way to transfer money to anybody. We can all agree, that Bitcoins that keep their value and can be used to buy  just about anything online would be a good thing.

Bitcoin value explosion "Bootstraping the Currency"
What we see at the moment is a rise in value that is caused by new people who hear about Bitcoin. Basically, there are these types of people:

(A) People who already have Bitcoins
(B) People who hate Bitcoins and won't buy any as long as it's not established as a currency
(C) People who would buy Bitcoins, if they knew they existed
(D) People who don't know, but wouldn't buy any if they did.

The only type of people who are relevant here are A and C. Let me explain:
At the moment, most type A people probably act like this: Make money by buying some Bitcoins, wait some time, sell them to type C people, who then become type A people. The interesting question is what will happen when we run out of type C people.

The Clock is Ticking
The rise in Bitcoin value is probably mainly caused by type C people turning into type A people. The number of type C people left is the countdown on the End Game Clock and it ticks faster the more press coverage / word of mouth Bitcoin gets.

End Game Scenario 1: Destruction
Assuming that you can't buy anything useful with bitcoins when there are no type C people left, nobody wants to buy any more Bitcoins. This means hyperinflation and the value will drop to zero almost instantly. A lot of people will have made a lot of money, even more will have lost some, but the important thing is that we won't have a nice, established online currency.

End Game Scenario 2: Useful Bitcoins
Lets say that a lot of retails and service providers accept Bitcoin. You can order everything you like using bitcoins, donate to your favourite youtube artist, book a vacation etc. When we run out of type C people, the value explosion stops, but Bitcoin should remain stable. You can just spend them to buy stuff and your local Bitcoin2Legacy-Money converter trades them at the stable rate to USD or whatever.

Now, in both scenarios you will have made a lot of money with bitcoins if you ran the "buy, wait, sell" tactic. But in the second scenario we get a useful crypto currency as a bonus on top of that!

Don't talk about Bitcoins!
Sure, telling your friends "Hey, invest 10 bucks into bitcoins and you'll have 100 in 2 months" is fun, but this isn't helping. All it does is make the End Game Clock run faster. It might not even help you make more money, since Bitcoin might not peak higher, just sooner. So you would only be making money faster, but not more.

Create a market instead!
So what we need for Bitcoin to stay is an actual Bitcoin market. Here's how to do that.

1. Start with people that you don't actually have to pay because you can get their stuff for free. This could be your favourite blogger or a youtube artist, who constantly asks for money at the end of his actually good videos http://www.youtube.com/watch?v=i6sdpc8stqI&feature=channel_video_title Be creative and make it sound like donating in bitcoin is a totally normal thing "Hey, I tried to donate to you but I couldn't find your bitcoin address anywhere on the site. Could you just mail it to me so I can donate?". Starting with these people is best, since they don't risk ANYTHING by using bitcoins: If it works out, they get extra donation, if it doesn't and Bitcoin fails, they haven't lost anything compared to not accepting Bitcoins in the first place.

2. If you can, sell your products/services accepting Bitcoins as payment.

3. Be bold towards sellers of stuff that you don't really need, but would be nice to have. Say you find something for sale somewhere (product, service...) and then tell the guy "I would buy it if you accepted Bitcoins". You have to be honest here, buy it if he accepts Bitcoins, don't buy it if he doesn't. It is very important that people don't start to think "Yeah, those crazy Bitcoin guys want me to pay with that, but I refused to accept it so they still bought it in USD!".

4. The hardest case is paying for stuff that you definitely will buy. Hopefully, convincing (1) and (2) will cause somebody of (3) to accept Bitcoins. If two shops offer the same thing for the same price, buy the thing paying with Bitcoins.

If you behave like this, you help establishing Bitcoin. Creating a market still takes time and the End Game Clock is running. Please don't speed up the clock by hyping Bitcoin! Telling your friends about Bitcoin, spamming forums etc. only cuts the time we have to get a real market going. You won't lose money if the Bitcoin value rises slower since it will still peak at the same level, only later.

Thanks for reading.

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P.S.: I would appreciate it if this topic became sticky. I think it is very important that every Bitcoin user understands the consequences of their actions.