Bitcoin Forum

Just wondering what everyone's opinions are.  If you want to be super specific, the question is "Do you think that the percent of bitcoin transactions (based on the SUM of values, not number of trades) that are made by people who use bitcoins but have never generated any will ever exceed 50%?"  In other words, do you think that there will be more people using bitcoins than generating them someday?  The other option is the system crashes and burns :P



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Okay, so my opinion is it will catch on and have more non-miner usage than miner usage one day.  You don't have to be over 18.  You don't have to get your credit checked.  There's no transaction fees.  You don't need some big bank operating in your country.  Those 4 things could literally make it the only option for currency transactions online for millions of people.  Plus, if some country pulls a Russia and their currency collapses, it's kinda hard and a lot of paperwork and expenses to switch to USD or Euros.  They'd be likely to hop on bitcoins, especially if everyone donated bitcoins to them in a sufficiently high volume.  I think there's no way popularity would just fall off simply because of that.

Everyone says if energy prices go to 5x higher all of a sudden, that's the end of it.  Well there goes 95% of the miners so it's 20x more lucritive for the people still mining and me and my $1000 high tech solar rig that I'll set up and operate for free would be doing just fine, thanks :P So I don't think that's a legitimate concern.  A world war would only help promote its use because "bulletproof" established currencies would topple all over the place.  Something better coming out?  That's almost mathematically and logically impossible but if it did come true, it would be so similar that it would be basically the same exact thing and we'd all just switch to that and call it something else....like bitclams lol.  I think that hits every disaster scenario in the wiki so yay, it's gonna suceed :P

Btw, I'm no economist but I was forced to take it in college and play MMORPGs so I'm pretty darn sure that if more people trade their currency for bitcoins than people trading bitcoins for currency, that makes the value go up.  So if it does take off, the bitcoins you have right now will be worth many many many times more money :D  So if someone says it's stupid, stuff that in their stocking lol  ;D

lol apparently more people than I thought "dunno" :P

(Iunno is "I dunno" conjoined and thus missing the necessary apostophe :P but you already knew that)

My crystal ball dysfunctioned, and reading the guts of a fish also didn't come up with a satisfactory answer, so I had to vote "dunno".

I believe bitcoins will keep going as long as people believe in it and can trade goods & services for it.

Ditto.  Even as it currently drops slowly in value, I'm able to mine at a rate that offsets my losses and still pays for the electricity, and I have a fairly modest mining setup.


Lou Minati Elite
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The only thing that will keep it going is if goods and services are traded in bitcoins. Mining alone is worthless without people willing to purchase bitcoins.

In the long term, the aim is for those who maintain the network to make money from confirming transactions rather from mining.  It's difficult to project now whether that will be profitable enough in the future for people to contribute their resources to that process or how high the fees will need to be in order for remaining part of the network to be attractive to current miners.

I'll vote for yes :)
In that vote I got somewhere 50% of hope that it really will going to catch on, and 50% of trust that everything will be fine seeing the success it had so far.

You're right.  What most people don't get is that we have more than enough people to maintain the system at the moment.  What we need is to stop telling people to start mining or we all make less money.  If we tell people that there's an awesome new currency with no fees and no stupid legal BS to jump through that anyone in any country can use with no overhead fees and they should try using it instead of paypal in their next purchase if applicable, then we'd all make money cuz there would be a higher volume of people buying into the currency.

As long as people actually buy and exchange Bitcoins instead of hoarding them I see it being a decent online currency. Right now though I voted I don't know.

My worry is that the perceived value of Bitcoin will not exceed the "known" value of current currency transaction methods.

At this point it is very hard to conduct trade in a trusting manner.  You don't have to look very far to see scams and no protection for the consumer.

If you think about the "Granny" model you will see this.  The question is "Could your granny use this?  How easy would it be for someone to rip her off?  What would she do about it? Could she do anything?"

This example can be spread to 85% of the public.  Most people just want to be able to make sure they can buy and sell without worry.

In the early days of eBay this was a major problem.  You would sell, someone would not send a payment.  You had to fight with eBay over the fees.

Also, you would buy something and pay -- no item every shows up.

The use of a escrow system for payments and transactions is the first thing people did back in the late 1990's on the Internet.  What we are seeing with bitcoins is history repeating itself.

I disemboweled myself and decided based on how the entrails landed.

I think the price will dip to a more stable value first before being adopted. It's too risky for businesses to deal with the lack of stability.

I think it'll keep rising for now, then settle as the difficulty gets to the point that almost all cpu mining is worthless.

It will take time, but after volatility is over.. and if we can go through some long patches (years) of security it should be no problem.

I see the 21 million limit on coins to be ultimately stifling to the economy. If more people get interested in bitcoin there will be more demand and exchange rates will rise. As rates rise people start to look at bitcoin as an investment. There is a strong motivation to hold onto whatever bitcoins you get, because of the "buy low, sell high" investment mentality.

The problem is, bitcoin will never be widely used if there is not a growing base of people using it actively for commerce. People will hold their bitcoins and spend their deflationary dollars instead. Dollars are always slowly losing value. There's no motivation to hoard.

What bitcoin needs is a parallel currency that slowly deflates so people will be motivated to get rid of it. Let's call it Newcoin for the sake of argument. Newcoin would be identical to bitcoin but with a slowly increasing yield from mining instead of a decrease. When people want to buy something they spend Newcoins. When they want to set aside money for the future they'll trade newcoin for bitcoin and hold it in an offline wallet.

Bitcoin is the virtual equivalent of gold. People don't spend gold. We need the virtual equivalent of cash.

I would agree that the success of bitcoin in both value and as a currency depends on its acceptance by vendors and then producers. If it continues as it does now, with the vast majority of transactions being only mining and speculation, then there will be a horrible crash.

As it stands I believe that the acceptance of the currency by business as a form of payment will be outpaced by the mining and speculation process, meaning the currency is and will be over valued.

Oh by the way, here's how to know if you are speculating with either mining or buying of bitcoins:  Is the potential for profit a function of the rise in price of bitcoins? If yes, then you are a speculator.

Some miners may be able to profit at current prices, but if prices fall then they will become less profitable, or even operate at a loss.

Until bitcoin becomes more accepted as a form of payment, and people can invest in it and expect a return without a rise in price, then I would say we are off to the races!

At the moment though I would say we are all speculating :D

This statement nicely summarizes your post, and also the complete error of it. Remember gold WAS the currency of the United States of America up until gold confiscation in 1933. However US dollars were still technically redeemable (if you were a foreigner) and thereby backed by gold up until 1971.

A perfect example of the exact opposite of your argument happens everyday. Technology continues to improve everyday and become cheaper as it does so.  The deflationary pricing of technology does not cause anyone to shy away from purchasing today what they know will be obsolete or even useless in a mere couple of years. It could be argued hi-tech is the only industry that has done well in the last few decades (edit: besides the financial services industry).

The hoarding argument is a fallacy, an illogical argument disputed by the facts. However this argument has been ingrained into the social subconscious by inflationists, as I'm sure you can find video evidence of Ben Bernake supporting your view.

In order for bitcoin to catch on as a currency, the general public needs to see value in the communities/businesses build around bitcoin, not in the bitcoin itself. Essentially, bitcoin must first become the de facto currency within its own economy before it can be considered a viable competitor to the fiat currencies, which today support the activities of numerous multimillion-dollar businesses.

Unfortunately, the developer/miner crowd does not seem to be realizing that just yet, otherwise they'd be spending bitcoin.

I see the part about people hoarding could be a problem, but I think they will realize that the community needs to grow, and will do what they can to encourage it.
The comparison to gold breaks down when we talk about breaking gold down.  If gold were as convenient as bitcoins it wouldn't be a problem, and people would use it and invest it.  You are right that there are 21 million, but not JUST 21 million.  Being able to divide them infinitely with no cost is an amazing benefit.  Currently the true cap is 21,000,000.00000000
That's 2.1E15 possible bitcoins.  That could be expanded if needed.

Just because we used to have a gold standard doesn't mean there were no problems with that system. It was abandoned in 1933 to counteract severe deflation in the US economy.

http://en.wikipedia.org/wiki/History_of_the_United_States_dollar#The_Gold_Reserve_Act

 Severe deflation? Sounds familiar...

As for your counter-argument technology example, you're right, technology has been getting cheaper. Unfortunately it's a bad example because it's just about the only thing that's getting cheaper over time. It's also mostly a luxury category. People have to buy staples such as food, housing, fuel, medicine, etc. before they buy electronics. And the price of staples has been steadily rising.

Lastly, if the hoarding argument is a fallacy feel free to offer some facts to support that position. It's ironic that you cite Bernake's hypothetical agreement (with me) as evidence to support your own position. You assume that "everyone" knows that whatever Bernake thinks must be automatically wrong. I hear Ben Bernake goes to church every Sunday... OMG, you've just proven that God doesn't exist!

Gold can be subdivided just as easily. You just use notes that are redeemable for gold rather than actual gold. Here's a list of 7 providers doing this already.

http://en.wikipedia.org/wiki/Digital_gold_currency#Providers

I think only legal or technical problems can stop it, that are real risks though.

The bubble is going to burst, the real question is if there's anything left afterwards.

I’m unable to predict the future so I pass that task onto fortunetellers and meteorologists. 
 
As a 20+ year veteran business consultant, IMHO, if the use of bitcoins grows to the point that Paypal or large players in financial sector experience a substantial revenue reduction, conflict will begin.  Financial leaders maintain lavish lifestyles though collecting their vig (e.g., transaction fees, interest, penalties). Currently, bitcoins are flying under the radar.  Exponential growth will require lots of political and business savvy maneuvers.  There are plenty of sharks with deep pockets and huge business & political networks that can easily sabotage and kill the bitcoin revolution if it cuts into their pocketbooks. 

Greed or mismanagement from within can also cause an early demise.

Most great ideas can’t be brought to fruition.  If you can’t run with the big dogs, stay on the porch.

On the other hand, what if some big hitter decides that bitcoin is a very worthwhile investment and plays *with* bitcoin instead of *against* bitcoin?

Both could happen. A big player could decide to get involved, but start by trashing bitcoin with scandal/legal issues to buy a lot of cheap coin, then start working with the community under another name to drive the price back up.

That would actually make a great story. Powerful businessman assaults the new decentralized currency under the guise of big business protecting its interests, then appears under another name to buy coin and reinvigorate the community in the name of freedom and power to the people. But it's the same guy all along. I call book rights!

Bravo, BitMole!

Agreed.  That's why it requires lots of political and business savvy maneuvers.  If you don't jump on the steamroller you become part of the pavement.

The #1 thing that needs to happen is a less sketchy way to get bitcoins.  Using unpopular, basically unheard-of paypal alternatives and giving them your bank account info doesn't sound like a real good idea to most people and right now that's all there is.  MTGox's ridiculous list of ridiculosity that is the "buy bitcoins" page and overly-complicated cash or check systems are just stupid.  It's a huge disincentive for non-miners to use bitcoins.  Even I refuse to fund it with bank transfers through a 3rd party for security and privacy reasons and I support the system heavily.  Someone needs to form a company big enough to basically be a paypal of bitcoins so people can instantly buy them up front and pay later when a bank transfer goes through like Paypal lets you do.  Make it a one way street of USD to BTC and you don't have to deal with non-delivered item and chargeback BS like Paypal does.

I think it's totally going to catch on. It may never see huge mainstream acceptance until alot of the things that have already been mentioned are addressed, but I certainly don't think you are going to see it go away any time soon.

It must suck trying to accept payment in BTC as a retailer though with the fluctuation in BTC price on the exchanges...I'm only saying that because I make the assumption that just about anyone who uses them wants to convert them into some form of other paper currency.