Well, there is this 2009 law that would seem to apply to bitcoin:
http://news.xinhuanet.com/english/2009-06/27/content_11610478.htm

I would think at least a few governments would be interested to actually invest in bitcoin as a diversification of their reserves.  For a relatively small amount today, they could establish a decent position in bitcoin and setup a mining operation to help secure the network.  Maybe bitcoin doesn't end up succeeding, on the other hand...

So, here's some more fun with the numbers...one post asked whether it's simply the amount of gold that determines its value...the answer is no, it's the amount of gold (the supply) as well as the demand.  Another post mentioned that the dollar would have a very different value in 10 years, but when we talk about a bitcoin being worth $200,000 in 10 years, we are talking about its purchasing power as measured in today's dollars.  So, that statement means that in 10 years you would be able to purchase with 1 bitcoin what can be purchased today for $200,000.

So, let's suppose that people did eventually come to value bitcoin similarly to gold (there are plenty of reasons one could argue that bitcoin is a pretty good gold substitute, but I won't here).  Based on the OP's numbers and assuming a worldwide population of 7 billion, the amount of gold held on average by each individual is ~0.76 ounces.  At $1500 that's a value of $1140.  If everyone we're to take half of that gold wealth and put it into bitcoin, that's $570 of gold and $570 of bitcoin on average for everyone on the planet.  $570 * 7,000,000,000 / 21,000,000 = $190,000.

So, yeah, I guess you're right, it probably won't be worth $200,000 in 10 years.

This calculation implies bitcoin completely replacing gold.  I think that's unlikely.  However, bitcoin will take market share from gold and other forms of money.  And it will eventually be valued higher than gold due to its utility for commerce, it's decentralized nature, and its secure design (assuming we don't find any fatal technical flaws).  So, I like to think in terms of bitcoin reaching parity with gold, which would put its value at half the figure you came up with (or ~$200,000/btc).  But I think it will take at least 10 years to get there.

I don't think giving bitcoins away is that effective.  The most likely outcome is the person will simply forget about it and lose it.  I also don't think it's a very good idea to try and push people into bitcoin in general (people generally don't like stuff shoved in their face).  I think there are generally three things to do to make bitcoins a success:

- buy stuff with bitcoin
- sell stuff for bitcoin
- make bitcoin more user friendly

Very nice!

It reminds me of the early days of email, when everyone like AOL, CompuServe, etc all had their own email systems.  To send an email to someone, they had to be on the same service.  With these payment systems, if you're on dwolla, the person you're sending money too also needs to use dwolla...same with paypal and probably this ebay acquisition too.

Clipse, are you certain that's a wise thing to do?  I would never use an account based service to hold large amounts of bitcoin savings.  For savings, I would suggest that you need to have control over the ability to spend those bitcoins.  Otherwise, you don't have any bitcoin savings, what you actually have is a contract with a company to deliver you bitcoins on demand.  A small amount of spending money isn't bad, but >1000 BTC?  Seems nuts to me.

I believe people are working (Stefan Thomas, justmoon) is working on a hosted wallet solution that would enable you to retain control of your coins while at the same time providing encrypted backup.  Until then, I think the best option for savings is the regular client and great care over the handling, encryption and backup of wallet.dat.

That's a nice video...too bad the quality isn't a bit better.

It might be a good idea to go with a less alarmist title.  This is a situation that might warrant asking miners switching to a different pool, but to say the security of bitcoin was nearly breached is an extreme over reaction and false.  The pool operator does not control the hardware of the members of the pool.  If the operator started monkeying with the transactions in the blocks it created...or tried to withhold some blocks in order to effect a double spend, I think it would get noticed in short order and the pool operator would find themselves swimming alone very quickly.  In fact, if the pool participants would simply announce any blocks they find directly on the network, it would eliminate the attack where the operator could withhold blocks in order to double spend.  There was also a proposal a while back for a way to operate a pool, but still allow the decision regarding which transactions go into a block to be controlled by the mining participants, not the operator.  And that would completely eliminate any issue with a powerful miner.

Still, it is good to encourage people to switch pools.

This is a very good point...it is hard to sell using traditional payment methods to people in some countries due to the level of fraud.

In other news, the price of squatter names on .co just quadrupled. 

http://www.theinquirer.net/inquirer/news/2083906/claims-com-net-websites-jurisdiction

Could be a good opportunity for some press about namecoin (or using a block chain like system for domain name resolution in general).

I've upgraded the SSL cert...so this shouldn't be a problem now.

Yes, it is really working, but it's in beta and we're only working with a few merchant's in our beta program, one of which (staremagazine.com) has gone live with accept payments.  So, new merchant registration is not available at the moment.  We expect to be ready to expand the beta program in a couple weeks.  For those that are interested in participating in the beta, send an email to beta@bit-pay.com.

Yes, I agree...we are initially offering either BTC or USD payout, but merchants will want more flexibility than that.  The hard part is doing it in a way that doesn't thoroughly confuse people.  That's a great point you make about it enabling merchants to dip their toes in the bitcoin pool so to speak.

We've not yet opened merchant registration (guess we should make that more clear on the site).  We're beta testing with a few merchants at the moment.  It will be a couple weeks before we open registration.

It's probably that your browser doesn't recognize the certificate authority.  Supposedly that CA is recognized by 99% of all internet users, but maybe not.  We plan on upgrading to a higher level of SSL certificate soon.

If you saw the post about STARE yesterday, you’ll see that we have a pretty serious merchant now accepting bitcoins side-by-side with Visa and Mastercard.  STARE is using the bit-pay merchant tools that we've created.  We believe bitcoin is a technological and social innovation that is rarely seen in human history and want to see bitcoin succeed.  We are excited to be a part of it and hope to contribute to its success.
 
Our goal at bit-pay is to enable online merchants to accept bitcoins just as easily as they accept payments from Paypal, Visa, or Mastercard.  That is a tall order given where the bitcoin technology is today, relative to the others, but we hope to be a major part of the innovation that moves bitcoin forward.
 
Tony at STARE had a lot of input into the design and layout of bit-pay, so it is designed from a merchants perspective.  We hope that helps us achieve our objective of making it easy for merchants.
 
One of the big benefits is that we allow merchants to set their prices, or their shopping cart total, in their local currency (USD, EUR, etc).  This can insulate the merchants from the volatile bitcoin exchange rates.  After the buyer pays with the appropriate amount of bitcoins, the merchant has a choice.  They can either accept the bitcoins, or have us convert this for them and pay them in USD.  There’s a little delay and additional fee for USD payouts, but we think that’s probably ok.
 
So actually, if a merchant sets their prices in US Dollars, and wants to receive US Dollars, the merchant doesn’t have to know anything about bitcoins at all.  It is invisible to them.  They get paid with bit-pay just like they get paid from Paypal, Visa, or Mastercard.  We think this is the real breakthrough that can take bitcoins out of the “bitcoin economy” and bust into the ‘real economy”.
 
We put together a video on our site, check it out and let us know your feedback.  There is also a newsletter you can sign up to that will keep you informed of our progress.
 
https://bit-pay.com
 
If you want to try bit-pay for yourself, head to STARE and make a purchase.  The July issue is $9.95, or about 0.65 BTC.
 
http://www.staremagazine.com/Issue.asp?IssueID=115

We allow merchants to decide whether to accept payments immediately, after 1 confirmation, or after the traditional 6 confirmations.  If we detect a double spend, the merchant won't get credited.  A product such as website access, where that access can be revoked easy enough, the merchant may choose to just grant access immediately and then revoke it later in the event of a double spend.  If you're actually shipping something, you might want to wait for a full 6 confirmations.  We also plan to implement detection of double spends that occur within a few seconds (by monitoring the network, we could very likely detect most attempted double spend transactions within a few seconds...since clients won't forward an invalid transaction, the network would very quickly settle on a transaction and simply not propagate later double spend attempts).

I think the flip side of this arguments (Gresham's law btw) is that maybe some people will simply decide to convert whatever other undesirable currencies they receive into bitcoin (or other assets they consider valuable) as soon as they receive them.  In that circumstance, they won't have any undesirable currency to spend unless they go to the hassle of converting it back (and if merchants accept bitcoin, why would they do that?).