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October 06, 2012, 06:43:17 PM |
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I'm not quite sure if $1M USD would "fit" easily into the current BTC economy, but perhaps over time.
While mining can be quite the investment (or, now can be with the supposed ASICs coming out), I don't believe it adds much value to the Bitcoin economy, but feel free to correct me if it does. A strong economy is built off of products/services offered at a greater efficiency than they would be, else-wise. Mining Bitcoins does not feed people, transport them, or does little else other than churn out SHA256SUMs at high rates. I have nothing against people that mine, I just don't feel it's investing into the economy, as much as it is in your own wallet.
There will always be a demand for currency exchange. I would offer a healthy, marginally competitive rate on exchange between fiat, bullion, and BTC currencies. This makes Bitcoin more available, though usually does not directly benefit people much.
The biggest economic strengthening for Bitcoin is competitively priced products that people need. Sure, Bitcoin paraphenilia are cool, but they aren't life changing. I'd like to see more groceries and general goods available for Bitcoin. What about a supermarket that accepts Bitcoin and silver? Would really be something to me. Car parts for Bitcoin? What if all items on eBay could be purchased with Bitcoin?
The economy would be hugely strengethened if Bitcoin replaced high-fee brokers such as Paypal. Broker fees are like taxes. Let's say I have a dollar. Every time it passes through Paypal, something like 3.3% is taken off. And for what? Just the mere transfering of money.
So, let's say I buy an Apple over Paypal. $1 is sent, and the receiver pays the fees.
Bob the apple grower needs more water to grow another apple. He sends his 97 cents to the local water boy.
The local water boy is down to 95/94ish cents. The water boy buys a few pieces of gum with his 94 cents.
The gum man buys vegetable gum from a vegetable gum producer, for 92 cents.
The vegetable gum producer now has 90~ cents after fees. He wants to feed his child an apple. But how much does an apple cost? $1. He can't afford it.
All of these services and goods were worth about a dollar. The passing back and forth of the dollar encouraged useful product and service at each transfer. However, the same dollar became worth less and less, eventually not enough to buy an apple. This raises the cost of goods, for little benefit. Now, I'm sure the people at Paypal will eventually purchase gum, or an apple, and not be a "pure" economic waste, but it's still not nearly as efficient, in my opinion, as a broker fee-less market.
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