It's more interesting to imagine the secondary effects here.

What do people do when they travel? Bring local currency. Tourism driven businesses may begin to realise they have an opportunity in accepting bitcoin from travellers who are already using it to pay for the trip. Touristic businesses are probably used to dealing with people using stolen credit cards or doing chargebacks more than alot of businesses, so they'll see bitcoin like a form of universal cash.

The more that tourist areas accept bitcoin, the more people will bring bitcoin to spend when travelling, and vice versa. Very nice positive feedback loop. Why change to dozens of different currencies for all the places you visit when you could keep one that's accepted almost everywhere? And when you get home with a little left over, it turns out they accept it back home too...

Now working for me too 

I think it will work soon, obviously in "beta" stage at the moment

Gavin Andreesen should obviously be mentioned here.   Roger Ver as well..

http://news.insidebitcoins.com/bitcoin-price-prediction-2014


Correlation between number of bitcoin addresses in use and BTC price



Bitcoin Price Prediction for 2014



This is an exploration of the possible future price of BTC with the assumption that historical price charts are an indication of future valuation of bitcoin. Short version: Buy now for $500, sell in August for $2,500.

First, let's discuss whether the assumption of history repeating itself is realistic in the first place.

On the first chart we can see that the exponential adoption growth rate chart is correlated to BTC price charts. We can also assume that adoption of Bitcoin will only grow in the foreseeable future because related services are growing rapidly making Bitcoin more convenient and beneficial to use every month. As long as governments do not impose draconian rules against Bitcoin the huge number of investments made in startups in the last few months will show results in the next 24-48 months.

The question is whether there is still room to grow for Bitcoin or have we reached market penetration? We currently have about 150,000 bitcoin addresses used daily. It is estimated there are about 3-5 million Bitcoin users worldwide. That's appr. 0.05% of the world population. If we assume that in the next 12 month only 10% of population is technically capable of using Bitcoin it leaves us with 700M people. If we assume that only 10% of that potential pool of people will be ideologically open to use Bitcoin, that still leaves 70 million (1%) people in the world. Let's further reduce the number of people by 70% to account for kids and people who have no savings of any kind at all. That still leaves appr. 20,000,000 people who will may start using Bitcoin in the near future. That's a 5 fold increase in adoption rate compared to where we stand Today. Therefore we're still looking at possible further exponential growth of adoption in the near future.

This is logarithmic growth which is unsustainable on the long term as we would run out of adults in the world in less than 10 years. But it is sustainable and even expected of a new technology at its initial stages of adoption until market saturation is reached at which point the growth will slow down, level out and finally give in to another new technology that makes the initial technology obsolete in some way.

We've seen at least 3 steps in the increase of BTC price. At each step after a relative calm period of about 6-8 month the price went up several fold drastically within 1-3 months and later dropped to about half of the peak and about double of the original calm period.

After this for the next step we would require another 100+ million new people which will still be feasible as I argued in my previous post thanks to developments in the next 2 years that will open up Bitcoin for the developing world. Speculating farther than the next 2 steps becomes impossible for me because the number of new unknown variables increase drastically at each step. By 2016 we will probably have several serious competitors to Bitcoin not just in the open source world, but also cryptos created by governments and large banks.

Now that we established that further exponential adoption growth and subsequent matching price increase is possible let's look at how that affects the price. On the second graph I fitted the price charts from two (purple) and one cycle (blue) steps before on Today's prices. This gives us a possible future band for BTC price. The light orange area between and around the two historical scenarios is where the price will likely end up in the future.

If this prediction chart holds up by June 2014 we will see BTC to crawl back to the $600-700 range and we will see a price rally around July with the price going up all the way to over $2,500 by August or September. This may seem unreal Today, but Today's $500 seemed unreal a year ago too. The chart also suggests that prices can go up to the $8,000 range but that would require at least 50+M new people joining Bitcoin, which may be too early. I think the price will not go beyond $3,000 this year but I could be too conservative. Next, around October the prices will start to drop all the way down to somewhere around $1,500.

So, is it time to invest into bitcoins? I certainly think so, but Bitcoin is still in early stages of its development. It's technically in Beta at version 0.9. If you buy bitcoins only spend as much as you can afford to lose. A few percents of your savings is reasonable if not for speculation but just to learn and experience Bitcoin in action. Taking out a loan or putting all your eggs in one basket however is most certainly not.

We will see how far off I was with this analysis this coming Christmas.

Thanks for the charts to: Blockchain.info, Bitcoin Average and Bitcoin Charts.

Does anyone have advice as to which Uk bank to use?

If Steve Jobs were here ...it would have taken place earlier. To identify and embrace an innovation, a visionary is required.

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