Bitcoin Forum

Wordpress (Nov 2012 to July 2013) (https://pay.reddit.com/r/IAmA/comments/1jg781/i_am_matt_mullenweg_cofounder_of_wordpress_18_of/cbeev5a):
Humble Bundle (https://pay.reddit.com/r/IAmA/comments/1fex7h/were_humble_indie_bundle_8_creators_of_thomas_was/ca9lex2):
There was also bitcoinstore.com which repeatedly failed to achieve its goals to maintain their low prices.

Do you guys know of any other stats?

Update 1st October: Silk Road is dead, and we now know how much business  (http://techcrunch.com/2013/10/02/fbi-seize-deep-web-marketplace-silk-road-arrest-owner/)it had:


Today, is there anything Bitcoin is actually used for in meaningful transactional volumes besides drugs (SR), gambling (SD), speculation and mining equipment?

I'm guessing there's not. Call me pessimist.

What are the incentives to spend Bitcoin rather than selling them and spending the Fiat anyway?

I've bought plenty of stuff "with Bitcoin" but besides the #1 issue of the Bitcoin magazine and the Bitcoin Keychain I've never done so directly.

Yes, until we get more suppliers that take bitcoin, the end result will typically be a conversion to fiat for merchants. This isn't a bad thing, it's just a way to conduct business logically. They'll likely fully switch over when more and more suppliers of what they need do take bitcoin so they no longer have to convert to USD, in addition to saving lost profits from fiat inflation, but til then, won't. The important thing is, it's this circulation that will increase bitcoin worth. The increasing tendency is to hold coins, it just will be done by more hands. This seems to definitely be a trend.

Also, the cool thing is, when they sell, someone's buying the coin who typically will intend to buy low and sell high, keeping prices stable.

Right the almighty supposed B2B killer usage.
Keep telling yourself that it will happen, the Banks are literally at our doorsteps.

LOL
PS: Do not forget to bring Max Kaiser, Bruce Wagner and the Winklevoss Bros, perhaps rpietila will host another conference just for you!

It is of my opinion that we are getting closer to B2B (bitcoin-to-bitcoin?). At least closer than we were before. These things take time, as I understand it...
and I think he's referring to Bitcoin's economic role as a constant float in a sea of inflation etc.

That was supposed to be Bank to Bank or (more conservatively) Business to Business. I think you've read the tales of how Bitcoins are supposed to become the financial backbone of the new world order. (sorry for the pun)

i have read those tales. Perhaps not NWO as we come to know it from conspiracists, but a form of a new world order regardless? Especially if the pyramid of fiat collapses. there would be a new order to the world, no?

Agree with chodpaba that it's not necessarily correct to view bitcoin primarily as a consumer-driver every-day transactions currency. Even relatively small usage along those lines is enough to enable/unlock bitcoin's myriad other value props.

That said, in response to the OP, do BitPay and Bips publish their transaction numbers?

Yeah, I guess calling it "a new world order" is more accurate. It doesn't refer to that specific conspiracy one, and there would be a new order to the world, given more freedom. I think ElectricMucus was referring to that kind, seeing as the lower case was used.

It is my hope that at that point, as time progresses and the things you can do with each bitcoin increases, its value becomes inextricably mated to the ecosystem that underlies it. A year ago, I doubt I could've found an illustrator without having to convince him to take bitcoins. Now, I have a commission, and an illustrator seeked me out and offers to do my request for 0.5BTC.  I think that's pretty cool. This goes back to the 2 pizzas, 10000BTC idea

I am one of those types that got into BTC as an investment but ended up enjoying spending them more than saving them. I've purchased a straight razor, sold some shaving soap to a guy in Poland, payed my hosting bill in BTC and LTC, and bought silver. I like the ease of use and lack of fees compared to PayPal.

Only about 10% of the money I spend online is in BTC, but I forsee that changing. I think cryptocurrencies will be the de facto way the world spends money on the internet within a few years.

About bitcoinstore.com failing: I checked them out with BTC to burn, but their prices did not bowl me over.

I thought the prices were good, but finding what I wanted was painful.

I gave up trying to find an SSD I wanted

Buying drinks at bars.

In Munich/Germany/EU there is a bar called "Niederlassung" (http://niederlassung.org). In the last five month they have made approximately 3.7BTC, ~$370 in Bitcoin. I am sure, they made an additional turnover of at least $700 in € from Bitcoin regulars that payed in €. This does not yet include free advertising. So they made a turnover of more than $1000 at what cost? Virtually nothing. They are running a laptop for other purposes anyway and simply installed Multibit. They printed a QR code on a piece of paper and put it up on the wall.

If you have a computer at the counter accepting Bitcoin comes at such a small effort it will always pay off.

I've been quite impressed with the bitcoin sales we get at www.digital-tunes.net, some months approaching 1% of sales. To be honest I didn't think there would be that much usage, so I'm happy. And best of all no fraud worries to deal with.

370$ in 5 months.How much is a beer there?
On their price list it comes at 3euros ... make that 4$.

So you're telling me that they sold 90 of the cheapest beers in 5 months via bitcoin ?
Just to cash out those bitcoins it will cost them more than giving a free beer a day :))))))

Ps. Bitcoin regulars that payed in euros are more like Euro Regulars.

It's probably worse. That 370Euro would come from a single regular who recently has become a Bitcoin zealot and the owner plays along to keep him.
So it's not an actual increase in turnover.

To abuse your own sig:

There's a tendency for every discussion about evidence of btc commerce to turn into a metaphysical investigation of what exactly constitutes "evidence" and "commerce".

Blitz originally asked about "meaningful transaction volume". Fair enough, the Munich situation is hardly evidence for this.  But phelix' point was: "If you have a computer at the counter accepting Bitcoin comes at such a small effort it will always pay off." That's not challenged by the claim that it's only 1 guy paying in btc.

It is if the guy would have bought the same stuff anyway.

The whole thing is besides the point though. 3.7 Bitcoins hardly qualify as meaningful transaction value, by any measure,  given the time period.

It will never "catch up" and that is fine.


Gross World Product*: $71 trillion
Global Annual Forex Volume: $1,423 trillion
Ratio of currency speculation to actual goods/services: ~20:1

Non-speculators trade because they HAVE to. As an example, a compnay receives 100 BTC and needs USD to pay for materials, they aren't trading to make an exchange rate profit, they are trading because they need to.  Likewise someone buying an Avalon (is/was? only sold for BTC) who only has USD is trading because they need BTC.   If there are no speculators (or low speculative volume) the market is going to have huge spreads and low liquidity.  In order for non-speculators to have deep liquid markets generally requires a multiple of speculative volume.  This applies to currencies and commodities, Bitcoin will be no different. 

In summary, all markets need speculators in order to be efficient and speculation will ALWAYS be a magnitude higher than "real economy".


* GWP is the the sum of all the gross national product for all nations.  Gross national product excludes imports and exports, since all imports are another countries exports they aren't useful in looking at global production.

Agreed that it's likely Gold 2.0 first. It's fairly weak-minded to look at current everyday consumer-oriented transaction volume and conclude that it's problematically low. That completely misses both the likely growth paths, and the various possible ultimate success domains.

Bitcoin has the same properties as gold, but minus gold's huge modern-day weakness: tangibility. As bitcoin therefore naturally eats into gold's use-cases, it gets spread to more hands, and transaction volume for greater variety of uses follows. In addition, layered non-strictly-monetary uses of the blockchain will develop, etc...

I don't think the entire issue of speculation vs. commercial transactions vs. gold-like store of value is quite as black and white as many here seem to paint it.

One, those who, like a mantra, keep repeating: there's no real transaction volume, therefore the price is unsustainable, are ignoring the store of value function as motivation for current price levels. This has been pointed out above of course.

Two, on the other hand, those who fail to see any problem with the lackluster commercial adoption, seem to be ignorant of the fundamental trust problem bitcoin faces, and likely, will continue to face in the near future. Everyone on this forum will gladly trade 1 btc for the current market price, but with near certainty a majority of the world's population sees the value of a bitcoin substantially below that value, if not at zero.

Three, this is were two points above should be combined: commercial transactions are not per se necessary for bitcoin to hold value, but each commercial transaction represents at least two people that agree that bitcoin actually *does* hold the value that mtgox says it does. Which ultimately is necessary for bitcoin to fully unfold its 'store of value' function.

One, actually. The seller doesn't have to believe that the stuff he sells holds any value :)

here https://bitcointalk.org/index.php?topic=170826.msg2706332#msg2706332
they claim a 30% income boost
they are a physical computer store and are the first in france to accept bitcoin.

*snort* Funny. But... not entirely true: he must have believed he at least could make the trade I described when he got that bitcoin. So at some point in time, he believed it held some value.

Granted. But there is a fundamental difference between "restrictions in region 1 lead to price x, while in region 2 price is y, and arbitrage cannot fully resolve the gap between the two" and "9/10 of earth's population thinks bitcoin is silly make believe money".

Note, I'm not saying that that is the case right now, or will forever be the case. Just that each (commercial) transaction represents a pair of agents that beliebe in bibcoins. Which is good.

Not entirely true, if you get them only because you think somebody else holds them at valuable. Granted it's only a marginal difference between the two, but I do think it matters.
There were people who knew very well what they were doing when they got into the pirate ponzi early. I'm not saying that Bitcoin has to suffer the same fate, but it could. The risk of that happening is directly proportional to the spread between valuation due to economic activity and valuation due to speculative demand.

I beliebe in bibcoins!

xpost to the altcoin board: Biebercoin ("bibcoin"), discerning feature: unlike other financial instruments, maturity is optional.

(*groan*)

I'm not, and I disagree.
There are only certain mechanism which have the same basis as a ponzi but even so they aren't entirely based on that. These are for example compounding interest and deflation. They are neither necessary nor a inherent property and I don't see any reason why these mechanisms can't be minimized or even eliminated.
Look at regional currencies, which only failed because the bureaucracy did shut them down.

i said many time bitcoin dont have a economy is a lolconomy and i also said many time that my personal bitcoin velocity is near 0
when you ppl can figure the bitcoin GDP you can calculate the velocity=GDP/M2 ofc for bitcoin M2=M1= 1229787404 USD(atm using http://bitcoincharts.com/bitcoin/)

lol will be generated since there is no fucking way bitcoin GDP to be even close to M2
please go on whit the price talk

I would say that is pretty much consistent through the userbase.
chodpaba: Forex volume is actual moving money.

If bitcoin days destroyed shoots through the roof one day I would think about discarding the possibility of a sudden high velocity crash, but until that happens it's always on the horizon, just like those mad upside rallies you guys are so fond about.

The amount of people using the buy and hold strategy are in a prisoners dilemma, once one of the major players decides to defect for whatever reason there won't be anything to stop the others from defecting. Individuals act irrational.

If so, I kinda like being in this prison! but not alone....

I can't see why the upper end of the Bitcoin wealth distribution should be excluded from the dilemma. I think it's even more pronounced for them.

the thing is, if they get out, they are distributing the coins to many more hands ie bringing more "prisoners" in ;)

This situation is like what I saw in Vietnam: Some business man accept USD payment, but their actual sale in USD is very small. For them USD is a type of money only rich people have, and those rich foreigners seldom appear

Same for bitcoin, only IT and financial aliens from cyberspace have this high credit currency  ;)

Satoshi could change the name to aliencoin to further improve this impression ;D

You'd be surprised how many of them would join the defectors, which brings me back to my thesis that Bitcoins will remain super-volatile over extended periods of time. (Longer than the overall bull market can last)

That just made me cringe. ;D

That's cute a trailer drives into the parking lot of the big casino parks in front of the employee rest room next to the ash tray and invites the ones out for a smoke for a spin of roulette.
"It's burned down!" 
:D

That sums it up.

I'll take the small orange one and the glass house at the bottom. ;)

I use Bitcoin daily to buy myself food via foodler, I use Bitcoin at a local shop around here, I bought the Humble Bundle via Bitcoin, I buy electronics via bitcoinstore. and every chance I can I pay with Bitcoin instead of fiat. For me, it's been a very meaningful way to conduct transactions.

Imagine doing that a year ago! Now, imagine a year or two later!

A year ago the only thing on that list I could have done was use it for the local shop.

At least until it gets to the point where the orderbooks are bigger than any group of people working together to bring the price down too drastically . either way, you'd have a rush of panic buying as S/D sets in and people buy the cheaper coins up.

Yeah, that's the nature of falling knifes, there is always a floor underneath them. But if the air is thin the terminal velocity is quite high.

Don't worry.

I saw with my own eyes that is not the case but it is like I described.

Accepting Bitcoin is still a very cheap and riskless way to make a tiny additional profit and get a small to medium publicity plus. Because it is so easy, cheap and riskless more and more real life places will accept it. The more I use it myself the more I am convinced.

+1

Sounds awful. I would not like my money to require conviction.

well on paper the dollar sucks but I use it everyday

Unless you have a hoard of coins that you mined yourself or got at an earlier date and are thus benefiting from a valuation increase, you would be buying thouse BTC's with the very same Fiat currency you claim to be avoiding and are effectively paying Gox or other exchanges several percent for the privilege of transmitting your fiat payments.

I've noticed some fun things going on here.


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To be fair:

Me
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what does this say about me!
 but i don't even speak chinese? or, am, for that matter
I do like supporting the community by buying cool things with bitcoin that are worth it

Time to bump this thread.

We now know how much business Silk Road had. Is there any Bitcoin business we know of that is comparable?

Illicit or legit? Nothing but bodega shops int he latter category.

Even illicit would interest me.

Store of value. People will spend inflative fiat and store value in deflative bitcoin

Everytime I bump this thread, it's the same thing.

Noone can answer the question. Yet people deny Silk Road was Bitcoin's biggest business.

I buy about 0.5BTC a month  at bitcoin-cigarettes.com

I buy and sell stocks priced in BTC

I bought many many other smaller things like a Diablo 3 Beta testing account, so i could try diablo 3 b4 it came out

dont worry guys, I am supporting the bitcoin economy!  ;D

It's painfull to see it go, there were genuine people buying btc to get stuff. Although sellers later sold that btc back, but maybe someone kept it.

The store of value function is ultimately dependant on the acceptance and convertibility of BTC by merchants into other means of value like Gold or Fiat. It is linked to BTC acceptance so value will go down with dwindling acceptance due to lack of business (velocity) for merchants. Its sad but so far only the SD clones seem to generate any business. The rest is speculation.

considering that bitcoin's money supply is inflating, and will be for a very long time, i don't think these arguments make any sense.

Give it 10 years and bitcoin is inflating more slowly than above-ground gold reserves have historically.  And it will only get better with time.
People still seem to think gold is a decent store of value (me too, except if cryptos completely take over, which I could see happening) despite low but constant inflation.

On topic: bitcoinstore.com ?  Probably a lot less action, but still a decent business, no?

Any numbers on that?

I mentioned them in my post, they failed to meet their transactional goal to keep their prices multiple times in succession even though they kept BTC and let them appreciate to skew the statistics (the requirement was in USD per timeframe). I'm not sure how much it was anymore, but it's certainly no match for Silk Road.

The key to bitcoin's attractiveness as a store of value is not that it has a low inflation rate. The key is, that its inflation rate is perfectly predictable. This certainty has a huge psychological impact.


ya.ya.yo!