Topic: The motivations to purchase bitcoin - page 2. (Read 4098 times)

I'll freely admit my motivation for buying bitcoins was reason #1.  Even at ~$100, it still has a lot of room to appreciate if it catches on.  But I also use it as an investment since I am investing my bitcoins rather than just leaving them in cold storage.

Cryproenviroment and bitcoin needs as much as possible honest and serious people who are searching for some value deposit instead of gold.
Unfortunately everybody sees just the 1% of drug dealers and similar users what could shed some shadow over btc but hopefully in long term it will change to good.

Pretty good take on things.  A lot of the gambling, however, comes from bored speculators IMO.  I don't know of many people buying Bitcoins to play Satoshi dice, but plenty of hoarders will play since there is nothing better to do.  This isn't to say there isn't some gambling going on where people are acquiring to gamble.

You'll notice the areas where Bitcoin thrives is where it can vastly outperform the other options.  Things like online retail just aren't that useful compared to the options.  A lot of people complain about the credit card fees that exist, but that gives you a lot of protection as a consumer and the cost of acquiring Bitcoins quickly makes it not useful for the non-Bitcoin hoarder.

For Bitcoin to succeed, it will first be in places where it vastly is superior.  Drugs and gambling it currently is vastly superior.  I'm surprised we haven't seen more on the porn side as well.  Once you have more widespread usage in these areas, expect the cost of acquiring Bitcoins to drop, thus making general economic activity more common.  It's a bit of a chicken and egg problem - you don't really use Bitcoin as a currency if there is nowhere to spend it, and you don't accept it because not many people are spending it with you.  If it starts becoming more widespread (say 10% of people use it for something, even if its just some niche use), then they will be much more willing to accept it.  Then small edges become more useful (sending money with Bitcoin to a friend would be easier than PayPal, etc..., but not if your friend has to go through an exchange to spend it or find some small site to spend it).

Find areas where people cannot buy things with traditional means (gambling, drugs of course, but what else?), and that's where you'll see it take off.

To understand the motivations to purchase bitcoins, I would simply take a look at where people spend theit bitcoins. Which bitcoin-only businesses are currently booming?

1. The gambling industry
2. The drug marketplaces

This probably changes in the future when bitcoins start replacing Paypal. However, currently those are the two industries driving bitcoin adoption.

I agree , but now the problem is many ppl dont get what btc is . Btc is really hard for them to understand .
prikey & pubkey concepts like a conundrum to them
BTC price would pump to 1000USD If more ppl really understand btc

As discussed before, money's value is not directly affected by supply and demand, it is mostly a consensus established among people. Even many merchants accept bitcoin payment, its exchange value may still stay low for some time, because people don't have a constant motivation to purchase bitcoin (why exchange to another currency and pay when you can pay directly with a local currency? Lower transaction fee is not a good reason, especially the consumer seldom pay for it)

So the value of bitcoin will be lying around the mining cost, where mining is the lowest possible cost to acquire bitcoin, and miners are those who are willing to put risk capitcal into bitcoin. This is a consensus that many people would agree upon


For average person, I can think of the following main motivations to purchase bitcoin:

1. To benefit from its price appreciation

2. To transfer capital worldwide

3. To store value in it to hedge the inflation risk


No.1 is just speculation, it will not affect the long term performance of bitcoin, when the exchange price do not rise, speculators will cash out and cause the price to fall

No.2 also will not affect bitcoin value, when the transfer is done, bitcoins will be converted back to fiat at another location

No.3 could be the most fundamental support for bitcoin long term wise. People believe in supply and demand curve, especially those graduated from economy schools where marginal utility is their bible. Given such a belief, they will forecast that bitcoin's exchange value will rise constantly due to its limited supply and ever-increasing demand (there is no upper limit for how much you can save)

If more people are educated and believe in such forecast, they will buy bitcoin, their buying action will push the price higher, further strengthen their belief

There are also some other motivations like tax evasion, buying drugs, hedge the risk of money being confiscated in a bank, or preparing for a total collapse of fiat money system. These are not very popular and might not be supported by government