Exports and imports in the Bitcoin economy.

[blueadept]

When I buy bitcoins, I export a portion of my labor from the Bitcoin economy to the local fiat economy, adding to Bitcoin's trade surplus and raising the Bitcoin economy's currency value.

When I buy something with bitcoins and the merchant accepts them as dollars through BitPay, I've imported from the fiat economy into the Bitcoin economy, reducing Bitcoin's trade surplus and lowering the Bitcoin economy's currency value.

In order to grow the Bitcoin economy, it needs to be easier to acquire bitcoins by exporting labor. Some ways to do so:

• Get payment processors, ad networks, affiliate networks, etc. to PAY OUT using Bitcoin.
• Write payout plugins for open source and COTS affiliate program, affiliate network, ad server software to handle Bitcoin payments.
• Start an affiliate program or network which accepts fiat and pays out in Bitcoin; this would require good fraud prevention via waiting period before payout or other measures.
• Start an ad network which sells traffic to an ad exchange like Yahoo! APT for fiat, buys bitcoins and uses them for payout; this would require tracking which publishers' traffic is judged by the ad exchange to be fraudulent.

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[Stephen Gornick]

• Get payment processors, ad networks, affiliate networks, etc. to PAY OUT using Bitcoin.

Exactly.  All those freelancers working for oDesk, eLance, Freelancer.com, etc, should be banging the drum and insisting on being paid with bitcoin.

What would cause that trend of bitcoin as a settlement method to happen faster is a competing service that starts to take share of the talent pool by using bitcoins as a competitive advantage over the alternatives.

[notme]

• Get payment processors, ad networks, affiliate networks, etc. to PAY OUT using Bitcoin.

Exactly.  All those freelancers working for oDesk, eLance, Freelancer.com, etc, should be beating the drum for bitcoin.

What would cause that to happen faster is a competing service that starts to take share of the talent pool by using bitcoins as a competitive advantage over the alternatives.

The rates are so ridiculous I only ever go through the official payment method the first time I work for a client.  After that, they have all been happy to pay me directly.  I'm not sure bitcoin being officially supported would make much difference, although it might simplify things in the case of international payments.

[marcus_of_augustus]

Interesting concepts, I've been musing over similar thing also for some time to do with the Bitcoin 'nation', like macro-economy measures that might be interesting.

Just waiting for a well-researched estimate for the GDP of the bitcoin economy to make an appearance ... any budding economists around? We could have net import/exports, trade surplus/deficits, per capita GDP  ... the whole enchillada.


Someone mentioned that monetary base put Bitcoin somewhere near Burundi(?) on the ladder in that respect?

[BitcoinAshley]

Get payment processors, ad networks, affiliate networks, etc. to PAY OUT using Bitcoin.

This is interesting. Payment processors could advertise to their clients the benefits of receiving payment in BTC rather than having it converted to Fiat. For instance, the rates would be lower, the BTC would most likely gain value, diversifying currency, etc. And of course merchants can still peg prices to the USD or EUR.

The only issue is it is kind of a short-term/long-term gain/risk debate for the payment processors. In the short term they would lose out since they can make more money charging higher fees to convert to fiat and then ACH transfer to bank account.
In the long term, they are taking the chance that increased transactions that are end-to-end BTC will strengthen the BTC economy a great deal, which would result in a great deal more business. Also, that volume of business is needed to really make BTC last.
I think in the end the payment processors will realize it's in their best interest to "convince" merchants to do end-to-end BTC transactions. OTOH, the merchants might just grab some open source cart software, configure it themselves, and accept the BTC right into their own wallet, making the payment processor a thing of the past. Heck, maybe payment processors are doomed to become historical relics once everyone becomes their own bank anyways. Who knows.

May the market decide! 

[niko]

Get payment processors, ad networks, affiliate networks, etc. to PAY OUT using Bitcoin.

This is interesting. Payment processors could advertise to their clients the benefits of receiving payment in BTC rather than having it converted to Fiat. For instance, the rates would be lower, the BTC would most likely gain value, diversifying currency, etc. And of course merchants can still peg prices to the USD or EUR.

The only issue is it is kind of a short-term/long-term gain/risk debate for the payment processors. In the short term they would lose out since they can make more money charging higher fees to convert to fiat and then ACH transfer to bank account.
In the long term, they are taking the chance that increased transactions that are end-to-end BTC will strengthen the BTC economy a great deal, which would result in a great deal more business. Also, that volume of business is needed to really make BTC last.
I think in the end the payment processors will realize it's in their best interest to "convince" merchants to do end-to-end BTC transactions. OTOH, the merchants might just grab some open source cart software, configure it themselves, and accept the BTC right into their own wallet, making the payment processor a thing of the past. Heck, maybe payment processors are doomed to become historical relics once everyone becomes their own bank anyways. Who knows.

May the market decide! 

Excellent points. It would be nice to hear an official statement from BitPay, Paysius, and BitWallet.

[blueadept]

I was talking more about oDesk, ClickBank, OpenX Market, etc. Businesses that now conduct operations in fiat and pay out to independent contractors. If enough contractors, publishers and affiliates ask to be paid in bitcoins, and they comply, it becomes much easier to work directly for bitcoins even if your customers pay in fiat.

[notme]

I was talking more about oDesk, ClickBank, OpenX Market, etc. Businesses that now conduct operations in fiat and pay out to independent contractors. If enough contractors, publishers and affiliates ask to be paid in bitcoins, and they comply, it becomes much easier to work directly for bitcoins even if your customers pay in fiat.

When I was looking, I had no trouble finding programming work for bitcoin.

[Stephen Gornick]

I was talking more about oDesk, ClickBank, OpenX Market, etc. Businesses that now conduct operations in fiat and pay out to independent contractors. If enough contractors, publishers and affiliates ask to be paid in bitcoins, and they comply, it becomes much easier to work directly for bitcoins even if your customers pay in fiat.

Don't expect them to do that willingly.  International payments being relatively hard for sending small amounts (i.e., amounts below the level where an International bank wire makes sense) is one of the reasons employers aren't hiring these freelancers/contractors directly.  It is one of the major features for these services.   So bitcoin is disruptive to them in that about all you would need an oDesk for is to match employer with employee.  But after that, why pay oDesk when you can go direct (and cut oDesk out of the deal).

It isn't like they don't know about Bitcoin or nobody has suggested they use it to either accept payment from employers or for paying out to employees.

Here's a talk by Michael Levinson, VP of Product, oDesk, from almost two years ago.  oDesk has a lot of freelancers from developing nations.  He describes the challenges to (and importance of) paying those contract workers.  Notice that the bitcoin topic just keeps coming up over and over by those in the audience. 

 - http://vimeo.com/29287295

[MonadTran]

If you view it that way, Bitcoin might be following the path of Monaco, St. Kitts & Nevis, those kinds of states. Bitcoin economy is not producing anything substantial at the moment, but it is providing a less-regulated capital-friendly zone, which causes money to flow in.