I think the analogy is the Internet and pornography.  People try desperately to lower transaction costs.  The internet did that for porn and in the early years porn traffic dominated net usage. Anecdotally I've heard there is around a 20% haircut for black market transactions (drugs, money laundering, etc).  So we should expect the majority usage early on for bitcoins will be for black market transactions.  I don't think that's a bug, it's a feature.  It's hard to get people to change behavior.  There is big motivated market that like it or not is very incented to adopt new solutions. Bitcion is what it is.  What better beta testers than the black market. ; )

I’m also a late comer to Bitcoin.  He’s my perspective.  I think the project is fantastic and vitally important for a lot of reasons.  The “equilibrium” price for Bitcoins is very hard to estimate.  Could be 10 could be 500,000.  Right now I consider my participation to be like giving to one of the best “charities” around.  I’m telling everyone I know about it.  And over time I hope to purchase and sell many things with Bitcions.  If the early adopters make tons of money (see Ponzi scheme critique) I will be happy cause they deserve it, especially the original code writers.   I plan to stay involved and hope for the best.

Reason TV  nice short clip

http://www.youtube.com/watch?v=yYTqvYqXRbY

Its long but classic Bastiat.  might be worth sending to friends having trouble with the concept of money and trade.

First published in 1849, this essay is included in The Bastiat Collection (2011). An MP3 audio file of this article, narrated by Holly Hinton and Joel Sams


http://media.mises.org/mp3/audioarticles/5213_Bastiat.mp3?utm_source=mp3&utm_medium=web&utm_campaign=Direct_MP3

Nels