Why Doesn’t Bitcoin’s Success Speak For Itself?

Bitcoin has an image problem! Everyone thinks Bitcoin is for drug dealers, hackers, and anarchists. It’s used to gamble and buy porn. People think it’s a Ponzi scheme! Bitcoin needs to grow up and repudiate its youthful indiscretions. Its services must be run by professionals, not amateurs!₁ Soccer moms will never use Bitcoin if they think it’s used for drugs and porn. Bitcoin will never be acceptable and gain widespread adoption otherwise!

In this article, I will show why the above paragraph is totally misguided.

Bitcoin is far too useful to expect that prejudice will stand in its way. Almost everyone who has ever bought bitcoins had to overcome an initial skepticism, and this will continue to be the case right until Bitcoin takes over. To want bitcoins requires a person who can see ahead a little bit better than everyone else. The only way to convince most of them that Bitcoin is in their future is to build that future and show it to them. Those with a less entrepreneurial mindset will simply have to be in much worse financial straights without it before they will be ready to adopt.

The data on Bitcoin’s adoption rate show no evidence of an image problem. First look at this log chart of Bitcoin’s market cap.


_{Bitcoin’s image is so bad that it’s been growing exponentially since its inception.}

Now take a look at the number of MyWallet users over the past two years. This is also a log chart.


_{That’s an increase of like 500 times in two years. Ooo, I’m so terrified Bitcoin’s image will stop people from wanting it.}

And what about BitPay, Bitcoin’s premier payment processor? In September of 2013, they signed up their 10,000th merchant. By December, they had over 14,000. On Black Friday of 2012, they processed 99 payments. That same day of 2013, they processed 6,296.

Are you kidding me? I’ve never seen anyone want anything this badly. People can’t get enough bitcoins. Every indication of Bitcoin’s adoption shows a rapid exponential growth. The idea that Bitcoin has an image problem is empirically ridiculous.

You could run an ad campaign for Bitcoin that tells people it’s the stupidest idea ever and punch people in the face when they bought in and they would still flock to Bitcoin. You know how I know that? Because that’s basically what has been happening since the beginning of the Bitcoin economy. N00bs enter the bitcoin world to find scams and sophmoric retards that give them terrible advice. They lose their investment from simple mistakes and they get raped by the markets. These are serious problems that need to be ameliorated, but the point is that Bitcoin can beat the shit out of people and they sill want it. This is how we know we don’t have to worry about Bitcoin’s image.

Bitcoin’s Image is Actually Great

I think Bitcoin has a great image and that Bitcoin’s association with illicit activity should not be seen as a problem for it. I can’t think of any better way to generate interest in Bitcoin than drug-dealing, hackers, and anarchy. When was the last time you heard someone say, “Oh, Bitcoin! I’ve heard of that. That’s that new currency that’s great for remittances, right?” Never, that’s when. Drug dealing, hackers, and anarchy are great lead-ins to a conversation.

I remember the days when Bitcoin was so unknown that I was not even recognized as a dork for talking about them. In those days, nobody wanted to hear about Bitcoin, not even libertarians. If I tried to talk about them, it was like people didn’t even hear me. Now everyone wants to hear about it and I wouldn’t have it another way.

Furthermore, Bitcoin’s improvements to the illegal drug industry and to practical anarchism have been one of its greatest successes, so why shouldn’t people associate Bitcoin with drug dealers and anarchists? Not only is that just honest, but it is a very strong endorsement. If Bitcoin is good for illicit activity, that means it empowers people. If people think that Bitcoin can help them to evade contraband laws, to taste the forbidden fruit, to satisfy needs that society would rather have them suppress, then that is a fantastic advertisement.

Bitcoin is subversive as more than just a payment-processing technology. It is not just a cool new gadget that ordinary people can use without fearing that it will lead them unexpected new directions that test their ability to grow as a person. It has the potential to change their lives irrevocably. It has the potential to drastically change the balance of power in society. It is perfectly reasonable for people to be suspicious. People should feel a real twinge of danger when they first get bitcoins. It can usher them into realms which their society has long told them were off-limits. If we got people to believe that Bitcoin was only good for revolutionizing e-commerce, then Bitcoin would have an image problem because that would not be honest.

The Disconnect

These “image problem” people are like if the Clampetts discovered that they were sitting on a swamp made out of crude oil and worrying that people won’t accept it because it’s too ugly and gross, so they try to convince people that it’s a pretty shiny pink and tastes like cherries.
narcissism


_{Oh Narcissus, you’ll never understand Bitcoin.}

The only way to think Bitcoin has a bad image is by marketing it to the wrong people. Yes, just about everyone could benefit from Bitcoin right now, but for most people, the immediate benefit would be relatively small, and it is too much to ask them to understand both the economics and the cryptography that would be required to convince them that Bitcoin has a vastly greater potential than it has yet achieved. Instead of marketing Bitcoin to the people creative enough to see its potential, or to those who so desperately need it now that its benefits are obvious, entrepreneurs like Jeremy Allaire are attempting to market Bitcoin to the average American as a payment-processing system. This is premature because Bitcoin’s benefit as a payment system is only significant after lots of people already have it—therefore the benefit is marginal to most people. As Bitcoin improves, and particularly when it begins to weaken the fiat money system, more and more people will find it prudent to adopt it.

Bitcoin inspires suspicion among bankers and regulators. Bitcoin has a bad image with them, but that’s their problem, not Bitcoin’s problem. Those who are worried about banks boycotting Bitcoin or the government regulating it out of existence should not plan to start a Bitcoin business under such regieme uncertainty. Eventually, Bitcoin will have become so widespread that it will have drastically reduced the scope of both banks and government. Then that will be a good time for payment-processing companies.

This is all a bunch of narcisism. It’s an emphasis on appearance without substance and respectability among people who don’t matter. Bankers aren’t Bitcoin owners yet, and until they are, their opinions are not important. If Jeremy Allaire thinks that Bitcoin has an image problem, he should try smuggling it into Argentina instead of marketing to Americans and bothering with American banks.

How to Improve Bitcoin’s Image

The best way to improve Bitcoin’s image is simply to improve the Bitcoin economy. With every new service, the incentives for more people to join us grows. We should feel lucky that we are in on such a wonderful secret as Bitcoin. If people mistrust and misunderstand it now, then we should be happy if it gives us a little extra time—however brief—to buy more. Every time someone figures out how great Bitcoin really is, he makes Bitcoin even more great by joining in.


_{When you’re an immortal distributed system that can’t be controlled, you don’t have to care what other people think.}

Bitcoin is stronger than all its enemies put together. It is so strong that its image does not matter one bit. It is the 800-pound gorilla that can sleep where it pleases. It is only through timidity, and by failing to see its own strength, that it will bow to outside forces.

1. I wrote this before Mt Gox crashed. I’m very glad it’s gone. Bitcoin still doesn’t need “help” from regulators and bankers.

Nuclear is fine, uranium isn't
http://en.wikipedia.org/wiki/Thorium-based_nuclear_power

Wasn't there a post in which (Roger Ver?) supposedly examined Mt. Gox's books only a couple of months ago and even he wanted to buy insider Mt. Gox bitcoin at a slight discount? Please correct me if I'm wrong, but he is very well respected so perhaps he was shown fake balance records?

The problem with relying on this methodology is let's say an exchange doesn't actually have your funds.  What are you going to do now?  You are still going to get Goxed.

OMG how can people get this wrong collectively. The suggestion would only require to confirm ownership every some years, not to spend them. This would be anonymous and will come anyway in a sense as soon as the current algos become unsafe.

Anyone who can't see facts and logic by now is beyond help.

In the meantime, management huddles together in a darkened room whispering, "Shit!  What do we do now?"

Good luck. As soon as you transfer BTC to the exchange, you are at their mercy.

Actually, you want Heavy Regulations for exchanges. The types of regulations you want are:

1) Segregation of Customer Assets from Company Assets
2) Rules to ensure solvency of counterparties (margin requirements for trading)
3) Rules for timely crediting of deposits and processing of withdrawals
4) Rules to prevent insider trading and self dealing (manipulating the order book)
5) Regular audits to ensure safe keeping of Customer Assets

If there were an SEC regulated exchange for BTC, BTC Futures, and BTC options, I would be the first to sign up and trade there. As they say, "Return of my principal is more important than return on my principal". Right now, how do you know which exchange you can trust? You don't, and that is a transaction barrier. Drop the barriers, and more people would be willing to participate.

Wait, is the Bitcoin forum?  

Well, shit, and here I thought I was posting this discussion about bitcoin leadership on a cooking forum.

that's how the public is going to think.  it's going to be even worse when (if) the gox customers are officially cheated out of their fiat or btc.  the comment i read that hurt the most:

"krugman called this months ago"

for the sake and life of bitcoin, gox cannot go under.  Whales need to step up now.

If I lose the keys to my house, it's still my house.

You have two scenarios:
A team which has only one job, being the middle man in transaction and securing the funds to be blind for several years while money was being stolen by a hack.
or
Mark took stole all the coins and ran away.

This title is correct, and I'll support it anytime.

What is being done legally about Gox?  Something has to be done, otherwise all exchanges are just going to do the same thing again and again.

This really takes the price for EPIC FAIL followed by tone deaf attack on your own customers.

Wow, just wow!

Since you decided anyone calling your bullshit with you doesn't know how hard it is on your end of the keyboard, I'll offer you this:



That's me on the left. I'll give you three guesses as to the location and why I was invited to this by the CEO.

So as someone who does know what they're talking about, SCREW YOU Alex and your company. First you fail, then you insult your customers for having the audacity to call you on your BS.

Everyone reading this: Open an account on bitfloor, campbx, btc-e or any (ALL) of the other exchanges. Close your MTGOX account.

The general idea behind what the op is saying is correct. It's just that he doesn't understand the details. This is my opinion:

- No new users are buying bitcoins to spend on these merchants. It is too hard and costs too much to do that. CCs and paypal are much more convenient.

- Instead it is long time bitcoin holders that are bringing coins out of cold storage and spending them. Previously they had no outlet to spend their coins. Now they do.

- This increases the supply of bitcoins in circulation pushing down the price.

Also as far as the details goes it is bitpay and coinbase that are selling these coins not the merchants themselves. The merchants only take USD.