Bitcoin Forum

You guys (and girls) are going to want to cultivate some industry if you plan for Bitcoin to become a viable currency in the long run.  Right now I see lots of resellers, lots of spices and web services, and a few people making tchotchkes.  But on the whole this doesn't look capable of supporting a 5 million dollar economy, let alone a larger one.  The web services in particular are easy to write-off, since they are naturally complementary to the production of Bitcoins themselves.

But where is the energy production?  Where are the agricultural products?  Where is the machinery?  Where are the raw materials?  Web services require electricity.  People require food.  Tchotchkes require raw materials to produce.

Given a few strategic additions, it wouldn't be too difficult to foster a self-sustaining economy capable of supporting an actual person, without resorting to currency conversion.  Add some wind turbines, some vegetable seeds, metal recycling and machining services, and generate velocity and a real economy.  Fail to do so, and it's likely the value of Bitcoins dwindles, the Bitcoin economy stagnates and remains dependent upon external sources, or the first embargo or resource crunch grinds it all to a screeching halt.

Don't get me wrong, I like what I see so far.  But once I've bought my alpaca socks and a grow-light bulb and organic coffee beans, there's not much else here that can be considered actual capital, or that can't be gotten more easily without the need for Bitcoins at all.

If you compare it to humanity bitcoin is at the stage where the fish just came out of the water and walked on to land .

Bitcoin is new, and growing fast.  Atm we are developing the tools to allow a proper economy. :)

For the time being, Bitcoin is a "top-level" currency, only dealing with finished goods. Give it time, it will filter down to the producers.

Being very much an "Internet only" currency at the moment, it makes sense that most goods traded are those that can be traded on the Internet. If my local electricity supplier (if I had to pay them anyway) accepted bitcoin, that would be a different matter. If I produced electricity (presumably as a small time supplier, perhaps via solar panels), who in my local area would want to pay with bitcoins?

Meh.

You could build energy generation kit.

/me is back.

I willingly offer food in "Parque Unidido", Mexico City, for Bitcoins. I will give you some sandwich and Horchata (https://secure.wikimedia.org/wikipedia/en/wiki/Horchata).(Really good beverage, send me 1 BTC to the donation address on the bottom and I give you a recipe!) Which of course I will prepare. ;)

Only weekends! I need to attend school! :P

You're right, we do need to get some real commodities backing this economy before we can claim any degree of maturity for it. There are two ways we can go about this:

1) Become producers ourselves and offer our products for bitcoins.
2) Work on growing the popularity of bitcoins so that we can then try to get currently established producers on board.

 The bitcoin economy is tiny.


+1

Edit: I am personally in favor of #2 as #1 would be impractical for me at the moment. In case that wasn't exactly clear.

People don't realize there are 5.XX MILLION bitcoins in the economy... NEW OR NOT WE NEED TO SUPPORT IT SOON! and if the $/BTC doesn't shoot up before the next 2096 blocks, miners will start quitting and bitcoins will fail as no businesses will want to do anything with bitcoins either

What's up with the hyperbole? You guys just can't sense the growth of the bitcoin economy because it is that *small*.

I have relatives who grow grain. So I could probably offer grain (wheat, oats, barley, safflower) for bitcoin in the US. However shipping would be expensive relative to the grain price.

Someone should do packages of non perishable foods that can be shipped around.


I contacted efoods direct to see if they would accept bitcoins.

http://www.efoodsdirect.com/default.aspx (http://www.efoodsdirect.com/default.aspx)

Try and contact producers like this who have online sales as that is half the battle.

Ask if they have a dropshipping program or affiliates then offer that as a service to bitcoiners.

In agreement with you 100% there.


I'm not quite sure the relationship there.  Bitcoin needs enough miners to protect bitcoin's integrity. How many, I've not a clue.  But I might be satisfied that that the 50 btc per-block reward (and then the 25 btc per-block reward after block 210,000) will keep a sufficient number of miners around.

Falling and rising number of miners is just self-balancement of the Bitcoin economy.

If there are too many miners, their number should decrease.
If there are not enough miners, their number should increase.

Nothing but simple market mechanics to see here, moving on.

I don't know if I agree with the premise of the original post...that bitcoin cannot survive without a lot of vendors accepting it for goods and services.  It's rare to find vendors willing to accept gold or silver coins for goods and services and yet there is a well established market for both gold and silver.  Bitcoins offer a great many benefits when used as a medium of exchange, but bitcoins also offer a great many benefits as a unit of account and (hopefully) as a store of value.  I think their value as a unit of account and store of value must be well proven before they'll be widely used as a medium of exchange for goods and services.  And, it's possible that they may never be widely used for your average day to day transactions, just as gold and silver aren't widely used for that purpose.

Don't get me wrong, I think lots of vendors offering goods and services in exchange for bitcoins would be a great thing.  I just don't think that necessarily has to happen for bitcoins to be successful.  I think the most important aspect of the bitcoin experiment is that you can create a p2p digital money system without any central governing authority and which isn't vulnerable to plundering by such central authority.  No one needs to accept anything other than other forms of money for that experiment to be successful.

Now, one thing that I've thought would be cool is if some of the checkout services (Amazon, Google, etc) would start enabling third party currency exchangers.  This would let someone like me offer a service that allows people to pay with bitcoins and I would perform the currency exchange into dollars or whatever else the vendor accepted.  The vendor would only need to deal with the checkout services and get paid in their favorite currency.  The purchaser would be able to pay via the checkout service with their favorite currency (including bitcoin).  And I would handle the currency exchange.  That would open up a whole world of goods and services available for purchase using bitcoins.

Not quite. It's not like those 5 million Bitcoins are gonna disappear if the miners leave. Actually, that's the beauty of the system.

I never said it would INSTANTLY fail, but over time, yes... and if there is no demand, technically bitcoin can go for like 1$/BTC to <0.1$/BTC very very quickly. Then you gotta restart from 0, but people will not want to join because of the recent failure of BTC.

Great ! Can't wait until that happens. I will be able to buy 100k of bitcoins for almost nothing ! Can you imagine that ?

no

I actually contacted eFoods too w/r/t accepting Bitcoins. They have a promo where you can pay $10 shipping for twelve servings of free food; they also use a referral system, so you can help me eat along my roadtrip by going through my referral link - http://bankonfood.myefoods.com/?pcid=58792

BTC would have crashed and be worth nothing. Furthermore, it wouldn't be able to come back to where it was before ether because the confidence level would be too low.

I disagree. If the price of Bitcoins relative to USD falls dramatically, it will quickly be brought back up in price by people buying the now cheap Bitcoins. I don't think the word "crash" is really applicable to a currency, unless you're talking about a fiat one.

S3052 also talked about this. If there were a crash in value, many merchants would leave, many miners would not come back as they do not trust BTC anymore etc etc.

Have you heard Gavin's thing on the talkshow econotalk or wtv? I heard it today and MAN is that interesting. Notice the emphasis on TRUST. Only the "geeks" as he says, would trust BTC and it couldn't get a lift off again by geeks if no non-geek wants to gonear BTC

If the exchange rate of USD to BTC drops dramatically, unless there if an insurmountable security flaw with or attack on the network, it makes no sense for vendors to flee.

I sell gallons of milk for $2. Yesterday, the exchange rate was 1 BTC = $1. This morning, someone started selling hundreds of thousands of coins, causing the rate to fall to 1 BTC = $0.02. Today, I can sell gallons of milk for 200 BTC, 50 times as many coins.

I have more of an incentive today to sell for BTC, as the potential for future value is inversely proportional to the size of the "crash".

Technically correct. Unless you have a 100,000 gallons of milk from yesterday that you bought with 2 BTC each. You now reprice them at  200 BTC to maintain there value. However, your customers don't get to take their BTC and conveniently take the 2 BTC in their wallets and change it into 200 BTC.  So now, no one can afford your milk and you make no money.  You have just described Hyper-Inflation. And it hurts vendors and companies hard and fast.  Your best defense is to lower prices to a point they can afford, to offload your product. The best think to do would to keep the Milk at 2 BTC maybe 3 or 4 BTC. And then bail on your next purchase of milk. Basically pass it on to your vendor.

or sell in $$ and drop BTC