Bitcoin Forum

I see that people are not using bitcoin as money anymone. Nobody really buys things with them, most of trades are MtGox trades. Sad, because bitcoin, as well as gold, is intended to be money, not an object for speculation. Because almost everyone has some bitcoins used as a mean to store value.

Anyway, look at this example. A chicken grower sells a chicken for $5. A bitcoin is also equal to $5. This means a chicken = 1 bitcoin. But since USD/BTC ratio is less constant than chicken/USD ratio, nobody will use that coin to buy chicken. They'll sell the coin for dollars, hoping for more than $5. If they'll get $6 for the coin, they can buy the chicken with 5 and also a coke for 1. So what do we do about that?

Evidence for this? I see more trades for real goods on this forum than ever.

Reminds me of the "deflationary spiral" argument – people won’t spend their money because it’ll be worth more. Nonsense imo, as there is a negative feedback response when people stop spending their Bitcoins: the economy shrinks and therefore demand shrinks too.

where do you see that?

i spent more bitcoins for services recently, than i did before,
but i guess you haven't seen me doing it.

In the last week I've paid 3 different people for services using Bitcoins: One for advertising, and two for tech projects. Already I find Bitcoins quicker and more convenient than PayPal.

Disagree. My site has become much more active with the BTC/USD growth.

The key is getting interest and demand from new users. Yes, that drives mtgox price up, but also provides a bigger universe for products/services.

I have bought Coriander Seeds, Posters & Cards-
and donated to at least 3 organizations-

The coffee was just too much for shipping at 22 coins though...

It is just getting started in my opinion, payments are just so efficient and I get all giddy when purchasing in bitcoins;

I recently went to the Wiki and had my mind blown, bitcoin is accepted as money more than ever.

I have bought and sold physical goods using bitcoins more times in the last week than I have in the past 2 months.

One hosting service, one donation-accepting activist website and one btc lottery added to the wiki in the 24 hours. Day before that four new services/businesses listed. Also check out Silk Road, last time I took a look there were 1200 members, tough to gauge how many are active but assuredly some are, and they don't mess with anything other than bitcoin.

To answer your question "what do we do about that?" just start up a business that accepts btc for goods or services. It's a smarter move than buying bitcoin, that's for sure - you reinforce the overall economy and obtain coins with a safety margin, your profit.

I kind of agree with wobber. Even though I don't either have any actual evidence to support this claim. It's more like a feeling. I have bought a lot of things and services using bitcoin and I'm happy with every single one of those transactions. But since coinpal died it's a bit troublesome for me to buy new bitcoin.  Well, it's not hard but it's a longer process.
But in my case I think it's a combination of the jumpy price, the fact that I still think of bitcoin in terms of USD (and then SEK) and the inconvenient and troublesome process of buying new coins.

The auctions on Biddingpond is a pretty good example IMO. Let's say that I find an auction I'm interested in and I place a reasonable bid and let's say that it goes out 3 weeks later. If you win that auction it can result in that you actually are paying twice the price you were willing to pay in the first place becuase of the jumpy market. This is of course only a problem if you think about the price in USD, 1 btc is always = 1 btc but I think it's hard not to think about it that way to. I ended up paying a small fortune (relatively to my total amount of btc and income) for a stupid torrent invite and sure it's not a bid deal in the long run but at least I feel kind of discouraged buying stuff becuase of these kind of things. But on the other hand. What could you do about this? You can't really "force" the market stabilize? But I guess it would perhaps benefit the bitcoin community in the perspective of traders and buyers if the market were a bit more stable.
One alternative could be to have a function when setting prices to convert the price from USD -> btc but kind of the thing with bitcoin is to get away from using dollar so it maybe doesn't make any sense.

I think I'll remove my mtgox script from conky and ignore the rallys in order to stop thinking about bitcoin in terms of any other currency.

Who intended that for either thing, and why should we care?

I expect that vendors will start selling at a floating average. If they do so with enough bitcoins, we'll see more stability in the price of bitcoins with respect to other currencies.

The marketplace had to be split up into buy and sell because there were so much economic activities.

When I read my post I see now that it sounds very pessimistic. That was not my intention. I don't want to rain on the parade, I love bitcoin. But I think the great fluctuations of the market is kind of a little (meta?)-problem.

That little (meta?)-problem has given me much pause.  I am actually surprised by the number of people willing to let go of their bitcoins.  It is certainly attractive to hold them.  On the other hand, I think that Blitzboom is correct.


Before launch, I expected bitmunchies to do very low volume of transactions.  Because of the interest, I've been able to lower prices and offer more products.

Greater offerings are really, in my opinion, the best measure of the direction and stability of the bitcoin market.  If more people set up shop every day and offer new services/goods, it is clear that the customers are there.  If existing bitcoin businesses expand, we may draw the same conclusion.  It seems that every day a half dozen new sites are announced on this forum.

I am working on another project this month, which should be a great boon in signing on new companies.  The goal is to bring new products to the bitcoin community at prices lower than USD.  If products are cheaper in BTC, confidence and circulation will both improve.  Hopefully, this creates a feedback loop with increasing economies of scale.

It may seem profitable to just speculate and hoard as many coins as possible, but the only way that Bitcoins gain lasting value is when people start actually using them as a currency, so it may be worth it to part with a few to get the ball rolling.

Most of the volume is MTG trades :/ I've done thousands of dollars on MTG, but none to buy something

That's just you then, I've bought a bunch of stuff.

Thing is, most of the things you can buy with BTC is overpriced unless you are in the US

The problem is that there are a minuscule number of merchants compared to potential customers right now. And, since physical goods can't be sent over the internet, consumers must pay shipping costs if they want to buy a product from someone outside their area. As the number of bitcoin businesses grows, however, we'll see more who are able to tap into their local market.

yes thats my point though, BTC is very US oriented, especially when it comes to goods... There should be more European based commerces IMO

i second that, i've bought a bunch of stuff, but didn't do a single trade on MtGox in the last couple of weeks.
again, that's just you,
all depends on how convenient, or unconvenient it is.

i don't care, if i don't get the current MtGox exchange rate, when i buy a domain, or stuff for bitcoins,
because i didn't pay the current MtGox exchange rates for those coins that i buy stuff with.

you might think, that buying stuff for 1BTC costs you $5.75,
i think, is it worth to pay 1BTC, or not? i don't care about the dollar, nor the MtGox rate.

there's stuff i want to have and i want to have it now, can i pay in bitcoins? deal.

different case would be, if you need to buy BTC to buy stuff with them,
that obviously doesn't make much sense right now, you'll have to get dollars online, have to get them into MtGox somehow, have to buy and get BTC out, 'til you finally can buy stuff, that probably would have been cheaper if just bought with USD.

I bet to differ.  I have been selling stuff for BitCoin more and more each day.  Now sales are starting to be more then mining!  I did need to make my store auto-price for changes in BitCoin value but now my life is much easier.

Imagine you are living in country that is on the gold standard, like USA in 1800's and Switzerland until recently were for example, it is difficult to export anything because your prices relative to the fiat-based neighbours is going up everyday. However, your input costs (imports) are also decreasing at the same rate, so you need to be sharp about passing on decreased costs or else you become un-competitive with the fiat-cousins.

To foreigners visiting Bitcoinland everything seems so damned expensive, although the hookers are really, really attractive ... Also, when you travel outside Bitcoinland and go on a shopping spree in the fiat cousins bazaars your money goes a long way. The economic growth in your country may be steady, even appear slow, but the net wealth of the economy is appreciating mightily on the back of the monetary strength.

Welcome to Bitcoinland.

"Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tost to me,

I lift my lamp beside the golden door!"

That's a good point, I'm in that position right now as a seller. I don't think I will list anymore month long auctions because it is hard to set postage fees. I do feel somewhat justified in accepting the 8.0BTC postage because it was fair when I listed, and I had downside exposure at listing time.  If bitcoins dropped to .01 then I would be paying the shipping.

the reason its not used as currency to its full potential is because the value varies day to day so greatly. even having a feature that keeps its value even with a national currency wouldnt account for value changes that come afterwards. the real obvious market advantages of using bitcoin were also recently discarded on the forum(things that would benefit from anonymity, and untaxable nature) which is currently working as the hub for all bitcoin use.

basicly until the markets more stable theres not enough incentive for merchants and large stores to pick up on it. no one can really say what a bitcoin is worth. as for mtgox trades, bitcoin is amazing from an investment point of view. the fluctuating market and drastic dips and spikes. low cost fees of transfers and trading, unlike other markets.

it will catch on merchant wise and the market will stabilize. just give it time.

The bitcoin economy will not remain stable if its full potential is to dominate the global economy.

With the bitcoin price rallying like crazy it is am economically bad decision to give it out of hand.

Nobody pays with gold either (because it is too difficult) but it still is worth a lot - bitcoin will be just like that until it stabilizes.

I think there always be markets where people will trade in bitcoin just because it has numerous advantages over other currencies. High volatility is just a minor inconvenience. If you look at the SilkRoad, they already found a way around this

The value of the BTC is rapidly changing over the past months, as extreme market growth and adoption have skyrocketed price. Venture Capitalists are coming from big name places after hearing about BTC from Forbes, CNN, etc etc. When prices stabilize more, it will naturally start to trade again. People can't keep adjusting prices when the BTC value is so incredibly volatile.

They don't have to. This thread is one example of that https://www.bitcoin.org/smf/index.php?topic=6128.0


I just bought a 5870 for bitcoins  :) This keeps getting better

Of course, this is the overall market -- there are still transactions made that are a bit more face to face, such as on #bitcoin-otc

Bitcoin price fluctuations are NOT ideal for everyday transactions. That's why I suggested we need to create contracts that allow for the "StableCoin". Read about it here (http://bitcointalk.org/index.php?topic=7945.msg119375#msg119375).

According to BitcoinWatch.com there are 468,824.68 BTC changed hands in the past 24hr as of this moment.   Largest exchange, MtGox is around 10% of that volume.

ive sent thousands of bitcoins to different wallets and different other things with making a purchase.... Big BTC owners may be 200~300K of that volume for all we know....

According to http://bitcoinwatch.com/: Over 1.2 million BTC transfers in the last 24 hours.

~9 blocks per hour generated, ~2/3 of miners are in huge pools (and probably there are more, smaller pools) --> 7200 BTC of pool payout transactions.
MtGox has a volume of ~60k BTC daily, so still the majority of transactions must be something else... only question is what...!

1.2 million? ~15% of the total supply supply of BTC? 

How does that compare to the percentage of USD changing hands?

I'm sure Wachovia knows all about the amount of USD cash changing hands :-)…  But is there an independent source I can look up?