Topic: The Next Step for Bitcoin: From Mining to Transaction Economy - page 3. (Read 4655 times)

Thanks! Bitcoin Classifieds is nice but it could be better. The issue is still security, and indirectly related convenience. Bitcoin Classifieds is basically Craigslist; on the security point, unless you do the transaction physically, there is no direct form of security. And on the convenience side, to have that security you have to go to a third party escrow.

For example:

If there was say, "Amazon like site", where you can set up e-shops and sell products through the site. People deposit Bitcoins into the site, similar to an exchange and they use that credit to buy things that people are selling. This gives effectively just as much security as Ebay or Amazon does, although you still have to have trust in the website. It could be free to deposit and withdraw Bitcoins from the site and just charge maybe "X"% or a flat rate for when a purchase is done just for the security. For example, I can say for most people trust large, easy to use exchanges rather than attempting to sell Bitcoins individually. If you don't it at least should be an option just how Craigslist is an alternative option to Amazon and Ebay.

Some requirements:
-It is easy to navigate, i.e., good categories (looks nice also)
-Escrow similar protection integrated, i.e., depositing money before being able to buy, seller review system
-Well advertised
-Developers would have to be reliable members of the community

Extremely well put, I could not agree more - We discuss this at length during todays episode of BitTalk with Atlas & Atom, and the flat reality is more and more goods and services are being offered for BTC, but there seem to be few takers.   If you've got thousands of bitcoins, help out the movement and go drop 10BTC at www.bitcoinclassifieds.net or one of the auction sites.

Some inferences made:

Miners control the majority of Bitcoins and the large majority of people involved in the Bitcoin community are strictly Miners looking to exchange Bitcoins into $

As it is now, the infrastructural growth of Bitcoin is a lot slower than the growth based on the number of people attracted to Bitcoin through mining. In this case, the value of the Bitcoin is substantially inflated since it isn't backed by stability or businesses but instead by the mining community size. As mining difficulty increases and the speculation inflated prices which only temporarily keeps mining attractive decreases, the increase in difficulty exceeds profitability and miners cash-out, the value of Bitcoin is going to substantially drop to meet the infrastructural value, which is considerably less.

A further issue that I see occurring is *if* this miner cash-out does occur, the high number, low value of Bitcoins congregate towards smaller groups of people, i.e., optimistic speculators, thereby further reducing the usability and value of Bitcoins. This makes rebounding considerably harder since the influx of new users will end up with a disproportionately less amount of currency compared to the people left from previous crashes.

Right now there are way too many people and not enough businesses to justify 6.6 million Bitcoins being at an exchange rate $16-17 per. Right now the great majority of value in Bitcoin resides in the ability to exchange it for $s and speculation.

We obviously need entrepreneurs, i.e., the people with lots of Bitcoins/Money/Connections/Programming ability to start up more Bitcoin related businesses so that infrastructural growth somewhat keeps up with popular exchange inflation. If the disparity between the two reaches some critical point where the people start moving away from Bitcoin, i.e. mining costs exceed profits, we will see more large crashes, such as the $30->$10 which occurred in just a few days, to come. If the parity increases to such a point where the difference in growth is in orders of magnitude, the proceeding crash may just set the entire market back.

"The Important Things to Take Away"
What we need right now is developers to make some very very user friendly sites, i.e. something in the likeness of Ebay in combination with escrow service that provides both buyer and seller protection (since Bitcoin makes punishing scammers considerably harder). Once people have a concrete and reasonably safe place to sell and exchange individual goods, we will see more large legitimate businesses spring up, where escrows will not be necessary for them and quality control and reputation will prevent the majority of scamming.

I'd like too but I neither have the money nor the programming experience or connections to pursue such an endeavor. Although I would greatly enjoy providing a developer with ideas.

People pay for convenience and safety! Right now Bitcoin is heading towards being a transaction based currency with no reasonable means of transacting.