Topic: What are the current Forces/Factors driving Demand for Bitcoins (Read 1388 times)

Why not use a VPN?

I too am a professional poker player living in the US (although I did move to Costa Rica and Macau for some time after Black Friday).  The withdrawal/deposit speeds made possible by Bitcoin are exciting for poker players, however sites allowing US based players are no more legally allowed to operate in the US then PokerStars or Full Tilt.  SealsWithClubs could be shut down tomorrow in the US if the DOJ wanted to do so.  The fact that you are playing with Bitcoin rather than USD does not matter, it is still a real money game.   

People hoping to get rich seems to generate a lot of demand. Of course, not everyone buying into bitcoin is doing it to get rich quick.

Bitcoin is currency, gold and paypal rolled into one. It is a sad thing that none of those are in demand.

I can really only speak to my very small corner of the world and leave it to you to extrapolate from there.

In the fingerlakes region of NYS, there are plenty of Latin American migrant workers who do vineyard work for the wineries.
These workers send money back to their home countries.
They are excited because there is a bitcoin exchange coming online in Mexico.
In one specific example I was told that USD $120 was remitted to Mexico regularly to the gentlemans mother.
I wouldn't discount this phenomenon or write it off. I think it's just getting started.

Secondly, I grew up in the internet age. I want a stable store of value. If I want the store of value to also be spendable then I'm limited to 3 options. Gold, Silver, and Bitcoin. As we move forward into the future, will people want a store of value? Or will they remain happy with their toilet paper currencies?

2 factors, remittances and stable store of value.
I don't care if BTC isn't stable, at long as it's price in other currencies keeps going up!!  

Fiat systems are failing, so there will be constant demand for BTC.
Venture capital is flooding in.
A little over a year ago BTC was breaking above $7, so we are living through something amazing.

In short, bitcoin is a very promising type of wealth storage.

I beg to differ. Up to now, bitcoin adoption has been driven by tech nerds first and then speculators currently. As early adopters, techies and nerds have large amount of btc; the speculators came onboard during and after the bubbles in 2013, creating the current market condition. This is why you are seeing such uncertainty. The newbies and speculators, having bought at around $1000/btc, are hugely disappointed and dismayed at the current $600/btc price. They can hardly wait until it is at or above their buy price. Some of the weaker hands have already cashed out, mostly at loss. Techies and nerds, on the other hand, have sat on their cache of bitcoins, knowing that HODL strategy will result in huge profit later this year or next year. Some of them spent a bit of their btc to buy stuff on overstock and tigerdirect, but I bet they are still holding onto the majority of their coins. I suspect most of them bought mining rigs to generate more bitcoins and I have heard that some these techies and nerds spent a good chunk of their coins for their mining hardware.

I wish I could tell you what percentages are spent to buy on overstock, tigerdirect and other online/brick-and-mortar businesses who take bitcoins as payment. I am sure someone will do the calculations and chime in.

Thanks for the response

Like the Poker example...

I think what will drive long-term demand for bitcoins/cryptos is not bitcoin itself, but the problems with fiat and gold. Gold is great, but it's just not practical in today's society. Bitcoin (cryptos) has flaws, no doubt. But, I think some believe it "will be" preferred to both gold and fiat. This is, in part, driving speculation. I don't believe speculation is inherently bad. To me, its more of a symptom.

Honestly, I think the core of the answer involves the theory that people are waking up to the fact that they are "losing" money by saving in fiat. In real terms, your money is worth less saving in a savings account year after year. Seriously, look it the stats. Then after, look up median real income and think about all that again. Yet, people are still purchasing more and more, as inflation adds to those prices. Debt mounts. No one is cutting (including governments) because we have been duped into Keynesian theory. I think people in slow amounts are beginning to wake-up to the reality of all of this and looking any straw to grab. So, saying The Fed, QE, fiat printing press issues have not surfaced yet on the real world timeline is a little naive. It has surfaced, look around. Even with the deceptional statistics, like our current measure of CPI, the answer is obvious. The Fed, and central banking (maybe even govt) manipulation in general, is a huge culprit.

Bitcoin and crypto provide a speculative "chance " to get around the upcoming deleveraging that NEEDS to and WILL occur. Will Bitcoin or cryptos be the savior? I hope so, but I dont know. But, what I do know is with a fixed supply or even a slight growing supply, its value will grow because the QEs will need to grow much faster. Basically, what I do know is fiat is f'd. And gold isn't practical in today's environment. Call all this speculative, if you will, I call it economics.

once the economic shit storm begins, (which it is brewing), it will be a no brainier why the demand (and even now, to some extent). the fiat paper empire is dying and people want something of value and will maintain its value, ie gold, silver, land, etc. today, fiat currencies are backed by nothing but fear and propaganda and ignorance. as a lot of people have put it; btc is gold 2.0.

this is just a nutshell reply but personally i have stopped saving in USD and putting my eggs into BTC (amongst other things like silver, commodities, seeds, etc). i know i'll get a few naysayers but the party is coming to an end for the current state of the world and change is in the air. it'll be an interesting year nonetheless.

Bitcoin is liberating the online poker world. I'm a poker player, live and online. Because I live in the United States I can't play on a big named site like PokerStars. Bitcoin and poker are match made in heaven because you can deposit and withdrawal faster than ever before. Passionate poker players who have in the past Waited weeks/months for a payout via check/western union/money laundered bank transfer know the true power of a bitcoin poker site is that the government can't tell me no. They can't tell me Im not allowed to deposit fiat currency to play. They can't tell me I can't withdraw my money into my bank. They can't force me to play in a state/government run poker system.

Miners have bitcoins, and want something to spend them on. We got that.
Tech nerds (like me) have mined a few and bought a few, and spent a few.
Speculators have bought a few (and lost a few) and probably spent a few.

But the real question that I don't see addresses very often is: What forces and or factors, outside of speculation, are and or will drive long-term demand for bitcoins and or other cypto's

Are people using it to send money across borders? If they are, great, This is transaction demand, and while good, recognize that it is somewhat fleeting.
Are there other drivers of demand? Again excluding speculation because in the very long-run, it is difficult to believe speculation alone will stand the test of time. Historically it hasn't, which is why people say tulip.
The Fed, QE, fiat printing presses.... These too are good arguments. However, we must recognize the very long real world time line as to when such pressures would genuinely surface.

Note: I am not trying to make an argument against Bitcoin.
I would like to broaden my arguments for Bitcoin. To do this successfully, I need better answers than I currently have.


Thank you for your thoughts?