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Author Topic: Make peace with the black market  (Read 1919 times)
lemonginger
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June 16, 2011, 04:59:34 PM
 #1

Hookers and Blow

or:

Why if people want bitcoin to be successful as a currency/platform they need to accept that many early adopters will be in the market of drugs and porn.

--

To drive adoption of a new technology it must be either clearly superior to technologies at hand or it needs to fill a giant need, even if it is inferior in other ways. Bitcoin will be inferior in many ways to other currencies for a long time -- It will take time for clients to be built on top of the protocol, it will take time for the market to get deeper, it will take time to keep the speculators from driving bust/boom cycles, etc. Put simply, anyone that is focused in the short term on mom and pop shops accepting bitcoins is bound to be disappointed -- no doubt there will be white market businesses accepting bitcoins, but they will be started by or allied with people already ideologically predisposed to like bitcoin.

However, there are two huge markets that have large needs which bitcoin fills nicely. One is actually the mostly white market world of adult entertainment. No, not paying for a prostitute in countries where that is illegal, but things like webcam sites and streaming video, etc.

Why?
One word: Chargebacks.

The porn industry has the highest rate of chargebacks by a wide wide margin. Call it post-orgasm remorse or the partner gets pissed when they get the credit card bill.  But chargebacks and the lengthy process of disputing them eat up tons of profits. Chargebacks are, of course, impossible with BTC.

The drug industry has other obvious uses of bitcoin - and while we have seen some of that on the consumer side of the spectrum with TSR and other sites (which no doubt will grow in number), there are obvious needs to move large amounts of money on the producer/dealer side as well. And while the banking industries blind eye towards cartels (see recent Wachovia case) is pretty much out in the open, there are still obvious advantages to moving funds around using bitcoin.

A fair amount of this money can't be moved in until the market is big enough to absorb it though, which is why I think the demand/consumer side will drive bitcoin growth for awhile.

I'm not saying this is good or bad, just saying that in the short-medium term black market activities and white market activities associated with vice stand to be the biggest markets for bitcoin adoption,and people may as well get comfortable with that fact rather that pretend it's not the case.
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Dobrodav
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June 16, 2011, 05:11:39 PM
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Well, is implied. Do not be afraid, - nobody interested in the black market, not confused by statements of knights in white.

We will  meet in not-so-distant future.
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will580
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June 16, 2011, 05:27:21 PM
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You make good points (I'd never even thought about porn but it's a good one definitely). However, bitcoin should not be promoted as a currency for these things in my opinion. The idea that bitcoin is the currency of perverts and drug addicts will alienate many possible adopters of the currency. I'm not saying that we should discourage the use of it in these industries, but rather not promote/discuss them because when we do we get the current situation we're in: politicians try to crackdown on it claiming that it's a currency for drugs. Again, I have no problem with the use of bitcoin for these things but I don't think that it belongs in these forums. A third party website, sure, but this is where journalists and pretty much anyone wanting to learn more about bitcoins will come to and form their opinions from.
lemonginger
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June 16, 2011, 05:36:46 PM
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You think if we just don't talk about it here that journalists will still not report on it? I mean, I agree that the media is lazy and all, but not that lazy. Whatever bitcoin is "promoted as", and certainly I think it has many values that are far greater that allowing a porn company to avoid chargebacks, I am just speculating on what will be its main avenues for growth in the immediate future. International money transfers, espec to developing countries is another (perhaps more virtuous one) where Western Union currently holds a monopoly and charges dearly for it.

Imagine a little shop in every city in Mexico for example where you could go pick up pesos that were transferred from family members in the US.

I think it's delusional to expect that you will be able to go to the corner store and buy milk and eggs or to the pub to grab a pint with bitcoin anytime soon except in "vanity cases".

But the other avenues for growth are definitely there and will lead to a more stable platform for more traditional commerce to build off of......5 years or so from now.
cryptoanarchist
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June 16, 2011, 07:38:36 PM
 #5

The new bitcoin economy is no different from the wild west. People came out to mine, and other people mined the miners with things like, you guessed it: Booze, drugs, whores, and gambling.

Nothing has really changed in 150 years.
passerby
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June 16, 2011, 07:55:45 PM
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I'm not saying this is good or bad, just saying that in the short-medium term black market activities and white market activities associated with vice stand to be the biggest markets for bitcoin adoption,and people may as well get comfortable with that fact rather that pretend it's not the case.

 Undecided

Why not pretend?

I mean, pretending costs 0 BTC, does not offend the Black Market (they aren't sensitive types), and allows us to expropriate the Moral Hye Hoss from our opponents.

Irrespective of your opinion of their Moral Hye Hoss, we will be taking it away without paying, that is, for free.

So, I believe it is quite worthwhile to pretend   Cool
smackdaddy
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June 17, 2011, 03:09:06 PM
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OP is correct.

The bottom line is that nobody would jump through hoops to use bitcoins for the types of things they can just happily pay for with their credit cards.

The real and true value that bitcoins bring to the table is the ability to move capital virtually and securely without the various governments of the world knowing about it.

The best chance bitcoin has to make it in the long term would be for drug cartels, ethnic mafias, and any other types of organized crime to adopt it as their currency of choice.

The chances of Walmart or Amazon ever accepting bitcoins is miniscule.

The same aspects of crypto currency that many view as revolutionary (unregulated, pseudonymous, irreversible transactions) are the very aspects that will ultimately prevent mainstream big business (who has a vested interest in the status quo) from allowing it to become a currency of the masses.

That said, it holds a lot of potential to become a very strong currency, with it's value ultimately being backed by the advantages it provides rather than raw materials (such as gold) or confidence in government (such as national currency).

99% of the people on this forum are clueless.

byronbb
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June 17, 2011, 06:46:06 PM
 #8

The new bitcoin economy is no different from the wild west. People came out to mine, and other people mined the miners with things like, you guessed it: Booze, drugs, whores, and gambling.

Nothing has really changed EVER.

fyp

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99% of the people on this forum are clueless.

Agreed. Your whole post is bang on.

TradersEdgeDice
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June 17, 2011, 08:16:52 PM
 #9

The Narcodollar is dead. Long live the Narcodollar.

Like what I posted?

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