It is hard to be a merchant [NOT a rant].

[TeslaUa]

Yeah, it is hard to sell things for bitcoins.

I run a small shop selling only for bitcoins. Just a way to wet my toes. I buy low and sell high. That is how I get value difference for myself. There are two ways to get this added value:

1) On buy-to-me move when I get the thing I am going to sell. I am no one in "real business" world, so getting things cheaper than you normally get them (like cellphone refills) is tough for me. Truth is I get them the same way You do 

2) On sell-from-me move when I sell to the client. Well... that is where most thinking goes: it must be beneficial both for us - I get some value while you get your share of it too. Basically why should you buy with bitcoins after all? I mean they make kinda good value storage. In a long term but not really yet. So spending them now is in conflict with idea of spending 'bad' inflatable fiat you have now. Should I make it cheaper then somehow? Hmm... Perhaps I know how:

You see... I cant have all my value in bitcoins too just like you. I want to have some savings just like you but practically I need most of my value in 'useful' currency. Like to buy goods for you in the fist place and sustain the business. Bitcoin economy is not self-sustainable yet from where I see so we all eventually reside to inflatable fiat. And that is where a 3rd player come in to view - exchange services. This post is in fact all about them.

They charge percent and they have certain 'easy to use' threshold. So theoretically I could gain some value by transacting with less fee on bitcoin-fiat move. Meaning selling my bitcoins slightly more expensive than on exchanges. The only way I see doing it morally good is by adding to my customer's value (remember?) by offering them more conveniently than on exchanges. Like in person. In cash. With an android smartphone app. Nothing is more convenient than that. And that is where I hit the profitability ceiling set by exchanges fees. Luckily some exchanges have some bad fee*usability rates but that is quickly disappearing as progress evolves.

So to wrap up I'd ask exchange services to think about providing some thoughts on improving trade in bitcoin. Not a typical thing to think of for them I guess.

Exchanges in business world are like governments. They control borders. I can have good governments? 

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[benjamindees]

I agree with you that Bitcoin needs a real economy.  Unfortunately we are in sort of a tragedy-of-the-commons type situation right now where making that happen is extremely difficult, and the majority of early adopters don't even see it as being in their best interests.

[shtylman]

So to wrap up I'd ask exchange services to think about providing some thoughts on improving trade in bitcoin. Not a typical thing to think of for them I guess.

Exchanges in business world are like governments. They control borders. I can have good governments? 

Do you have some specific improvements in mind? I try to make bitfloor as customer focused as possible to make it easy for all client types to buy and sell bitcoins on an open and simple to understand marketplace.

[Hunterbunter]

Yeah, it is hard to sell things for bitcoins.

I run a small shop selling only for bitcoins.

You're facing a business problem, not a bitcoin problem. The trick of every single successful business is discovering what people want, that they're not already getting. Bitcoin has it's advantages (what are they?), and successful bitcoins businesses will be playing to those strengths.

Why would someone buy a phone card through you if they have to pay you the USD price + bitcoin conversion (or creation price) + your profit margin?

One of the advantages of bitcoins is that it's amazingly easy and relatively fast to transfer across the planet. In what kinds of businesses would this be useful?

[scribe]

Posting here more as a way of thinking out loud, as I think this *is* an important issue. I say that having various items for sale, and having sold some of them through other platforms, and none of them for Bitcoins.

Right now, challenges selling stuff for Bitcoins are (in no particular order):

• price fluctuations mean people either hold on to BTC when they're going up (to sell at a higher price), or hold on to BTC when they're going down (to wait until they go back up)
• the pool of people willing to use BTC *instead* of normal cash (read Paypal) is relatively low, compared to the people using it as speculation - that is, Paypal is actually "good enough"
• handling Bitcoins and converting from/to "normal" currency is getting better all the time, but still requires some learning curve

The trade-off on other services (such as Paypal, Ebay, Etsy, Apple) for higher transaction costs is not simply the technical infrastructure, but the *available audience*. In other words, it's more effective for me to sell stuff on ebay but say that I'm accepting Bitcoins (as well as Paypal), than it is to sell on, say, BitMit. As a seller, why would I cut my potential audience? This is why exchanges and services like bitpay are more important. People care about selling *something* - a lower transaction cost for no transactions is still zero profit.

I agree that people (including myself) need to sell stuff that is wanted. But that doesn't answer the question "wanted by whom?" - at the end of the day, if I can make more profit selling to a larger audience than the Bitcoin audience, who will I focus my efforts on?

Hunterbunter's point is interesting:

Bitcoin has it's advantages (what are they?), and successful bitcoins businesses will be playing to those strengths.

...

One of the advantages of bitcoins is that it's amazingly easy and relatively fast to transfer across the planet. In what kinds of businesses would this be useful?

I tend to agree, but at the same time this means that the marketplace for Bitcoin is based on it as a technology, not a currency. This is exciting and infuriating at the same time. It means there's a whole bunch of "traditional" useful shit (like food, clothing, etc) which are still subject to the GBP or the USD or whatever, and the economic whimsies associated with them.

That's kind of not why Bitcoin excites me, but maybe I need to re-assess my expectations.

[Hunterbunter]

Hunterbunter's point is interesting:

Bitcoin has it's advantages (what are they?), and successful bitcoins businesses will be playing to those strengths.

...

One of the advantages of bitcoins is that it's amazingly easy and relatively fast to transfer across the planet. In what kinds of businesses would this be useful?

I tend to agree, but at the same time this means that the marketplace for Bitcoin is based on it as a technology, not a currency. This is exciting and infuriating at the same time. It means there's a whole bunch of "traditional" useful shit (like food, clothing, etc) which are still subject to the GBP or the USD or whatever, and the economic whimsies associated with them.

That's kind of not why Bitcoin excites me, but maybe I need to re-assess my expectations.

Yes, you're right - bitcoins are not a very good currency in their current form. They're too valuable for people to get rid of, so they would still rather get rid of their USD/GBP/etc first, then if those run out, trade the more valuable btc. Keynes economics works on the idea that if you make currency worthless enough, people will get rid of them like the plague and economies will thrive, which mostly happened. People don't really want to get rid of bitcoins, which poses a problem for people who want them...they have to offer much greater value to sell something in BTC than they do in $, and market economics just lols at that.

Is there a solution to this? I don't know. Even backing things with bitcoins face the same problems...a cheaper currency exists so I'd rather use my 1% to borrow USD instead of 50% to borrow btc-backed currency like the MTGOX Code. Perhaps there is no solution, and we need a second p2p currency that is basically worthless .

[Sant001]

So to wrap up I'd ask exchange services to think about providing some thoughts on improving trade in bitcoin. Not a typical thing to think of for them I guess.

Exchanges in business world are like governments. They control borders. I can have good governments? 

Do you have some specific improvements in mind? I try to make bitfloor as customer focused as possible to make it easy for all client types to buy and sell bitcoins on an open and simple to understand marketplace.

Please give more information on how international buyers could participate in your exchange. Are you able to wire money outside the USA?

What's the limit on deposits for international wires?

[TeslaUa]

They're too valuable for people to get rid of, so they would still rather get rid of their USD/GBP/etc first, then if those run out, trade the more valuable btc. Keynes economics works on the idea that if you make currency worthless enough, people will get rid of them like the plague and economies will thrive, which mostly happened. People don't really want to get rid of bitcoins, which poses a problem for people who want them...they have to offer much greater value to sell something in BTC than they do in $, and market economics just lols at that.

I'm coming to the same conclusion. Seem inventing fiat was a progressive thing after all. Still bitcoin offer great technical opportunities. And perhaps some predictably and steadily inflatable *coin could work better for trading. Too bad bitcoin got nearly all attention to itself and most of the *coins we saw poping up are essentially dead.

[bb113]

They're too valuable for people to get rid of, so they would still rather get rid of their USD/GBP/etc first, then if those run out, trade the more valuable btc. Keynes economics works on the idea that if you make currency worthless enough, people will get rid of them like the plague and economies will thrive, which mostly happened. People don't really want to get rid of bitcoins, which poses a problem for people who want them...they have to offer much greater value to sell something in BTC than they do in $, and market economics just lols at that.

I'm coming to the same conclusion. Seem inventing fiat was a progressive thing after all. Still bitcoin offer great technical opportunities. And perhaps some predictably and steadily inflatable *coin could work better for trading. Too bad bitcoin got nearly all attention to itself and most of the *coins we saw poping up are essentially dead.

How is encouraging wasteful economic activity "progressive"?

[Hunterbunter]

They're too valuable for people to get rid of, so they would still rather get rid of their USD/GBP/etc first, then if those run out, trade the more valuable btc. Keynes economics works on the idea that if you make currency worthless enough, people will get rid of them like the plague and economies will thrive, which mostly happened. People don't really want to get rid of bitcoins, which poses a problem for people who want them...they have to offer much greater value to sell something in BTC than they do in $, and market economics just lols at that.

I'm coming to the same conclusion. Seem inventing fiat was a progressive thing after all. Still bitcoin offer great technical opportunities. And perhaps some predictably and steadily inflatable *coin could work better for trading. Too bad bitcoin got nearly all attention to itself and most of the *coins we saw poping up are essentially dead.

How is encouraging wasteful economic activity "progressive"?

How is the % of wasteful activity in an economy related to what people trade in exchange for said wasteful activity?

It's progressive because it encourages people not to hoard debt...just because they don't buy assets isn't the fault of the system.

[bb113]

They're too valuable for people to get rid of, so they would still rather get rid of their USD/GBP/etc first, then if those run out, trade the more valuable btc. Keynes economics works on the idea that if you make currency worthless enough, people will get rid of them like the plague and economies will thrive, which mostly happened. People don't really want to get rid of bitcoins, which poses a problem for people who want them...they have to offer much greater value to sell something in BTC than they do in $, and market economics just lols at that.

I'm coming to the same conclusion. Seem inventing fiat was a progressive thing after all. Still bitcoin offer great technical opportunities. And perhaps some predictably and steadily inflatable *coin could work better for trading. Too bad bitcoin got nearly all attention to itself and most of the *coins we saw poping up are essentially dead.

How is encouraging wasteful economic activity "progressive"?

How is the % of wasteful activity in an economy related to what people trade in exchange for said wasteful activity?

It's progressive because it encourages people not to hoard debt...just because they don't buy assets isn't the fault of the system.

If the primary item people trade is constantly losing value it encourages people to make riskier investments than they otherwise would have.

[Cranky4u]

As a technology consultant whom operates an independent buinsess that accepts bitcoins, I find that our analytical services are very well suited to direct exchanges of funds without 3rd parties trying to take a slice *wink* which results in the advantage of being able to charge less.

For interested parties, please look at www.twsconsulting.webs.com

******************

Who are we?

TWS consulting is a technology focused business that seeks to reduce risk for our customers through the logical examination of functionally based assessments and solution derivation using Systems Engineering methodologies.

What do we offer?

TWS consulting provides specific solutions for specific problems. We work with our customers to define the scope of their issue then develop and recommend a particular course of action or solution.

Products/Services
TWS consulting offers the following services;

•Systems Engineering
◦Impact analysis
◦Project scope definition
◦Requirements development
•Process mapping
◦Current processes documented
◦Development of new processes
•Technology
◦Analysis reports
◦Road-mapping
◦Watching briefs
•Bitcoin mining
◦Economic evaluation
◦Rig configuration (Hardware)


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[Hunterbunter]

If the primary item people trade is constantly losing value it encourages people to make riskier investments than they otherwise would have.

So isn't that just balancing the risk between primary and secondary items?

[bb113]

If the primary item people trade is constantly losing value it encourages people to make riskier investments than they otherwise would have.

So isn't that just balancing the risk between primary and secondary items?

I'm not quite sure what you are getting at. I am thinking along the lines of spending your money on a new car now rather than buying used and saving the rest in case of a medical emergency that may occur in the next 10 years. Or rather than letting the money sit in a bank account people are more willing to invest in various bubbles.

[Hunterbunter]

If the primary item people trade is constantly losing value it encourages people to make riskier investments than they otherwise would have.

So isn't that just balancing the risk between primary and secondary items?

I'm not quite sure what you are getting at. I am thinking along the lines of spending your money on a new car now rather than buying used and saving the rest in case of a medical emergency that may occur in the next 10 years. Or rather than letting the money sit in a bank account people are more willing to invest in various bubbles.

But making the choice to spend on a new car vs used car and bonds or shares or insurance has nothing to do with how little you want dollars.

People do still leave money in their bank accounts...or in negative yield bonds, because they don't want higher risk investments. The overwhelmingly vast majority of the world's population don't invest in any bubbles, and instead are the ones that pay them out through changes in living expenses.

My risk balancing comment was that: Buying things are risky. If money is riskier, those become less risky...perhaps to a point where there is equal risk and you go for what you want instead of hold onto debt. Remember, money is debt - someone owes that to a bank somewhere, and unless they can figure out a way to get it off you, they will default.

[bb113]

If the primary item people trade is constantly losing value it encourages people to make riskier investments than they otherwise would have.

So isn't that just balancing the risk between primary and secondary items?

I'm not quite sure what you are getting at. I am thinking along the lines of spending your money on a new car now rather than buying used and saving the rest in case of a medical emergency that may occur in the next 10 years. Or rather than letting the money sit in a bank account people are more willing to invest in various bubbles.

But making the choice to spend on a new car vs used car and bonds or shares or insurance has nothing to do with how little you want dollars.

People do still leave money in their bank accounts...or in negative yield bonds, because they don't want higher risk investments. The overwhelmingly vast majority of the world's population don't invest in any bubbles, and instead are the ones that pay them out through changes in living expenses.

My risk balancing comment was that: Buying things are risky. If money is riskier, those become less risky...perhaps to a point where there is equal risk and you go for what you want instead of hold onto debt. Remember, money is debt - someone owes that to a bank somewhere, and unless they can figure out a way to get it off you, they will default.

I agree with this bolded part 100%. I also agree that for the current batch of currencies to exist people must continually spend and create more debt. I think that by slowly devaluing the currency people do "go for what they want" more often than they would otherwise. It is the backbone of consumerism. This misuses resources and is at the expense of peoples own future-selves as well as future generations.

Another thing is that most people (in the US at least) do indirectly invest in bubbles via their taxes, health insurance, etc. Then of course there are the actual investors who choose to fund crappy companies that will fail rather than simply wait for a good investment to come by. A deflationary currency does the opposite, it encourages people to only invest into projects likely to yield greater benefits than refraining from doing anything (conserving resources).

[Hunterbunter]

My risk balancing comment was that: Buying things are risky. If money is riskier, those become less risky...perhaps to a point where there is equal risk and you go for what you want instead of hold onto debt. Remember, money is debt - someone owes that to a bank somewhere, and unless they can figure out a way to get it off you, they will default.

I agree with this bolded part 100%. I also agree that for the current batch of currencies to exist people must continually spend and create more debt. I think that by slowly devaluing the currency people do "go for what they want" more often than they would otherwise. It is the backbone of consumerism. This misuses resources and is at the expense of peoples own future-selves as well as future generations.

Another thing is that most people (in the US at least) do indirectly invest in bubbles via their taxes, health insurance, etc. Then of course there are the actual investors who choose to fund crappy companies that will fail rather than simply wait for a good investment to come by. A deflationary currency does the opposite, it encourages people to only invest into projects likely to yield greater benefits than refraining from doing anything (conserving resources).

At the risk of turning this into a inflation vs deflation debate (although it has probably already was one ), it might be fair to say it boils down to what you want for your society:

Deflationary currency has a risk of high unemployment, but little wastage.
Inflationary currency has low unemployment, but a risk of high wastage.

They are mutually exclusive, and it all depends on what your appetite for the destructive forces of hunger as to which you'd find more appealing I suppose.

People will, however, still fund crappy companies even if money was really expensive...look how many people gave the original ponzi money, and back then money was backed by precious metals afaik. Bitcoins are long term deflationary...look how many people have given BS&T coins and may lose them all. I'm just saying that you can't blame people's risk appetite on the underlying trade tools. Gamblers gotta Gamble.

You're right about it all consuming resources faster, though. If people don't want money they will spend on things - yay for gdp! boo for the environment! God help this planet.

[TeslaUa]

Whatever way you look - money is a tool to waste value. Regardless of inflatory or deflatory. Perhaps something like Ripple serves interests or the planet and consequently all humanity. I do not know. What I do know is that it is hard to sell things for bitcoin

[bb113]

Whatever way you look - money is a tool to waste value. Regardless of inflatory or deflatory. Perhaps something like Ripple serves interests or the planet and consequently all humanity. I do not know. What I do know is that it is hard to sell things for bitcoin

From OP:

I run a small shop selling only for bitcoins.

Why do you try to sell only for bitcoins? This may be limiting your revenue.

[TeslaUa]

I am basically reselling everything I should not carry in my hands from A to B. Like cellphone refills, skype credit, online games credits and on case-by-case basis things that can be bough in any online shop (paying fiat for my customers). I think of myself as a kind of gateway. And yes, I do recognize that far from every business model is viable. So maybe it is just me

Just trying to operate the facts:
1) Bitcoin if deflatory in long term, inflatory at the moment. I mean look at the graph
2) People prefer doing risky things like speculating, gambling and ponzi with bitcoin. The rate volatility, satoshidice and pirate are the examples.

How can these be comprehended? Theretically bitcoin is great for savings. But not if you want to tap into your stash now. Why people a going to such crazy risks with gambling and ponzi? Hm... it is hard for me to tell since I am no that sort of guy. Overall doing mundane things like buying things for consumption is not that appealing. And I wonder why?