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Author Topic: Here's the problem - BitCoin users are too cheap and just want to hide it  (Read 3997 times)
bitcola
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June 18, 2011, 10:16:52 PM
 #1

like a grandmother hoarding cash under the bed.

I've noticed that many here don't really seem to be spending any. There needs to be a massive increase in buying goods and services with BTC.

I've heard of many more merchants accepting them but my guess is that the community holding them (many from mining days) just won't spend them.

Case in point, I've put up some marketplace ads recently that are an absolute steal in terms of value. Yet nobody biting so far. They seem to want the deal of the century. I sell such services elsewhere for higher and get plenty of orders.

Now the target market is different, for sure, but I get the feeling that people are just too cheap.

What do youy think to this theory?
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Jered Kenna (TradeHill)
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June 18, 2011, 11:56:30 PM
 #2

Might be right. Easy way to deal with it if you're a hoarder and want to buy something.. buy more BTC in the amount of your purchase then use it  Cheesy

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June 19, 2011, 02:37:07 AM
 #3

To best answer your question, it would be helpful to know the reasons why people own bitcoins. The way I see it, there are maybe 3 types of people in this babyconomy:

1. Speculators for real world wealth; buying or mining and holding BTC via exchange as a commodity, to sell back and be real world rich. They have no interest in the BTC economy personally, and are unlikely to spend BTC until they are satisfied they're rich.
2. Valuers; see the value in this type of economy, and are will to gain and trade BTC for other Goods and Services as they get them.
3. Businesses; also see the value in this type of economy, and will trade their Goods and Services for BTC, and pay their suppliers in BTC, to make their business run, while relying on btc/$ conversion as little as possible.

How many are in each group? At a mostly random guess, I would say maybe 98% speculators, 1.8% Valuers, and 0.2% businesses. The number of people who are actually using BTC to trade goods is probably quite small, and thus, your market here is probably tiny.

The BTC economy can survive excessive hoarding quite well because of its infinite splitting (unless I misunderstand that it can be), and people with 100,000 coins when people are buying and selling cars for 1mBTC will be stupidly rich, but once they've bought all they're going to buy, will either die and forget to pass on the encrypted data, or pass it on and it'll make its way through the system, and life will go on in either case.

The issue you are facing right now is that you're trying to sell something to a tiny market. If there are things which can only be bought via BTC, then BTC actually has a value over other currencies. The people buying your stuff already probably wouldn't care that they were paying in USD, or GBP, or EUR, or even BTC, as long as they were all the same "price", and if there's a choice, they'll pick the cheapest if know how to find it.

For example, if a day's work for a person earned them USD$200, GBP120 or 40microBTC, and they decided that they wanted what you were selling, and that paying "half a days' wage was an acceptable price", then they will be happy to pay USD$100, GBP60, or 20mBTC, whichever currency you asked them in, since the easiest way for a person to generally rate the price of something is on how difficult it is to re-earn that same dollar/pound/btc (their time factor). If it turned out that if the BTC price was only a quarter day's wages for the same thing, then they would most certainly do that, if they knew how.

You can safely ignore they hoarders, as they are not here to build an economy. You just offering the ability to accept BTCs is what matters. If you provide a service that another business can use, and they also trade in BTC, you will profit enormously, and that is, I believe, the only way real economies can be built.

Once a real economy is built, people will slowly be attracted to BTC as an economy if prices are always cheaper. Once it's established that prices are always cheaper via BTC (less overhead?), then people will come in droves, and BTCs will explode in usage, and you'd be glad to have been an early adopter. This is the point where banks get shitty and lobby to shut it all down.
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June 19, 2011, 03:49:03 AM
 #4

like a grandmother hoarding cash under the bed.

I've noticed that many here don't really seem to be spending any. There needs to be a massive increase in buying goods and services with BTC.

I've heard of many more merchants accepting them but my guess is that the community holding them (many from mining days) just won't spend them.

Case in point, I've put up some marketplace ads recently that are an absolute steal in terms of value. Yet nobody biting so far. They seem to want the deal of the century. I sell such services elsewhere for higher and get plenty of orders.

Now the target market is different, for sure, but I get the feeling that people are just too cheap.

What do youy think to this theory?

If you care about what people do with their bitcoins and if they use them or not then create something that will entice them to use their bitcoins. They are waiting for you.
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June 19, 2011, 04:39:46 AM
 #5

Oh no, a money good enough that people actually want it. If people are willing to turn down cars and mansions and yachts and hookers all to keep the same number of coins imagine the amazing things people will do in order to get more! Maybe you should get some coins so you can buy some of the great stuff coming.

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bitcola
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June 19, 2011, 06:48:55 AM
 #6

What I mean is, it seems that people are suddenly uber-careful with their money.

Think about it. The might dollar or pound: people don't respect it anymore. It's not backed by gold, you can get credit easily. People spend money as if it were too hot to handle. Little wonder that the average western citizen has no savings but huge consumer debt.

Now contrast that to poorer countries who value their money more and save it. Contrast to people owning precious metals who like to hoard their money.

BTC seems to be behaving more like precious metals.


Basically, BTC is like fiat money. And it seems that the modern economy is incompatible with fiat money to a great extent. A currency like BTC could force the modern economy to grind to a halt. I think this is why BTC is not a true replacement for paper currency. Because people have no desire to return to a lifestyle they had 30 years ago...
killer2021
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June 19, 2011, 07:08:49 AM
 #7

The problem is that the market isn't big enough yet. The people with the goods and services WE WANT don't accept bitcoins and the people with the bitcoins don't want to spend it on goods/services that are currently on the market.

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June 19, 2011, 07:52:07 AM
 #8

I TRIED to buy beefjerky with BTC, but the business owner reneged on the deal.

I TRIED to gamble it all away but couldn't find a fair place to do it that wasn't just some stupid lottery or rigged site.

I TRIED to do lots of things with bitcoins.  The only thing I was able to successfully buy with it was USD.  Not surprisingly I was easily able to buy beefjerky with these magical USD, and my friends sure did enjoy taking them from me in our poker game.

bitcola
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June 19, 2011, 08:28:02 AM
 #9

The problem is that the market isn't big enough yet. The people with the goods and services WE WANT don't accept bitcoins and the people with the bitcoins don't want to spend it on goods/services that are currently on the market.

Chicken and egg then? Could this be the limit of BTC? No more price rises and perhaps even collapse?
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June 19, 2011, 10:05:24 AM
 #10

I see lots of people just looking to convert BTC to cash, or when they want to buy large items they cant find anyone selling them for BTC. Like $2k+ products.

Personally, I've mainly just been buying BTC to use with various projects so I guess I'm hoarding. Its an exciting time right now for new Bitcoin projects to come out of the woodwork and vie for bitcoins.

Besides converting to USD, I think tipping/gambling people are probably up in the top uses right now.


I TRIED to buy beefjerky with BTC, but the business owner reneged on the deal.

I TRIED to gamble it all away but couldn't find a fair place to do it that wasn't just some stupid lottery or rigged site.

I TRIED to do lots of things with bitcoins.  The only thing I was able to successfully buy with it was USD.  Not surprisingly I was easily able to buy beefjerky with these magical USD, and my friends sure did enjoy taking them from me in our poker game.

If you ever want to try your hand again at BTC -> beef jerky, check us out! http://www.stuffpoints.com/browse-new/beef%20jerky/1/


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June 19, 2011, 12:26:58 PM
 #11

If businesses wont accept BTCs for what you want, pool a few of those BTCs together with others and create a business that will.

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bitcola
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June 19, 2011, 12:59:05 PM
 #12

If you look at local currencies (I forget the real name), the ones where a town prints their own paper money, these become a success because people believe in them and use them at a variety of stores.

I can't believe a currency will be a success unless a critical mass actually use it for buying/selling goods and services.

Problem is, most of the currency is in the hands of hoarders. Anyone know what the total figures of issued currency are and how much is traded daily? If the ratio of spend to circulation is very low then this currency is doomed before it's even taken off.
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June 19, 2011, 01:52:43 PM
 #13

What I mean is, it seems that people are suddenly uber-careful with their money.

Think about it. The might dollar or pound: people don't respect it anymore. It's not backed by gold, you can get credit easily. People spend money as if it were too hot to handle. Little wonder that the average western citizen has no savings but huge consumer debt.

Now contrast that to poorer countries who value their money more and save it. Contrast to people owning precious metals who like to hoard their money...

I love the BTC idea and tech, but my 'normal economy' friends would say:

"AHA!" to what you just mentioned above, and also say:

"You see, that is exactly IT... it is the VELOCITY of money that makes for 'rich' countries and economies.  Those who spend their money, by force or by nature end up way better off than those 'poor' countries and economies where people "value their money more and save it"..."

Any comments?

--okay, so I have a quote within a quote... you know what I mean Wink
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June 19, 2011, 02:10:26 PM
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I'm waiting 'til the 'coins i got are worth at least around 1k USD total before starting spending anything more than sporadic donations of a couple bitcents once in a while, i don't wanna run out of money too soon (or at all really).

(I dont always get new reply notifications, pls send a pm when you think it has happened)

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bitcola
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June 19, 2011, 02:19:31 PM
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What I mean is, it seems that people are suddenly uber-careful with their money.

Think about it. The might dollar or pound: people don't respect it anymore. It's not backed by gold, you can get credit easily. People spend money as if it were too hot to handle. Little wonder that the average western citizen has no savings but huge consumer debt.

Now contrast that to poorer countries who value their money more and save it. Contrast to people owning precious metals who like to hoard their money...

I love the BTC idea and tech, but my 'normal economy' friends would say:

"AHA!" to what you just mentioned above, and also say:

"You see, that is exactly IT... it is the VELOCITY of money that makes for 'rich' countries and economies.  Those who spend their money, by force or by nature end up way better off than those 'poor' countries and economies where people "value their money more and save it"..."

Any comments?

--okay, so I have a quote within a quote... you know what I mean Wink

No offence to your friends but current times are proving them wrong.

The West is bankrupt. They thought that debt=wealth but they were wrong. The economies of BRIC countries and the East have citizens that are net savers. Their economies will pummel the West during this next decade.
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June 19, 2011, 02:28:40 PM
 #16

I put up an ad for bullion and got zero takers.  Have to agree.
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June 19, 2011, 04:54:58 PM
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I put up an ad for bullion and got zero takers.  Have to agree.
So bitcoiners are hoarders because they wouldn't buy your metals to hoard?
bitcola
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June 19, 2011, 05:41:13 PM
 #18

I put up an ad for bullion and got zero takers.  Have to agree.
So bitcoiners are hoarders because they wouldn't buy your metals to hoard?

No, they're hoarders because the only things that sell in the Marketplace are things that you would see at a yard sale. There is ZERO serious trade going.

A few people like 5grainsilver and myself are trying to encourage some serious trade but nobody here is interested. Nobody wants to release any capital, they just want to hold it.

If this continues to happen, hardly anything will get into circulation and it will be their own undoing.

Eventually, the market will get fed up of it and demand will drop. Then there will be a panic situation as the hoarders try to secure their profits and the currency will crash.
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June 19, 2011, 05:56:27 PM
 #19

What I mean is, it seems that people are suddenly uber-careful with their money.

Think about it. The might dollar or pound: people don't respect it anymore. It's not backed by gold, you can get credit easily. People spend money as if it were too hot to handle. Little wonder that the average western citizen has no savings but huge consumer debt.

Now contrast that to poorer countries who value their money more and save it. Contrast to people owning precious metals who like to hoard their money...

I love the BTC idea and tech, but my 'normal economy' friends would say:

"AHA!" to what you just mentioned above, and also say:

"You see, that is exactly IT... it is the VELOCITY of money that makes for 'rich' countries and economies.  Those who spend their money, by force or by nature end up way better off than those 'poor' countries and economies where people "value their money more and save it"..."

Any comments?

--okay, so I have a quote within a quote... you know what I mean Wink

No offence to your friends but current times are proving them wrong.

The West is bankrupt. They thought that debt=wealth but they were wrong. The economies of BRIC countries and the East have citizens that are net savers. Their economies will pummel the West during this next decade.

Where do you think the West is getting their debt from?  As long as their debt is denominated in USD and loaned to the West - we are both in trouble.  If the West defaults on their debt to them - we will all be in for a wild ride.
bitcola
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June 19, 2011, 08:46:22 PM
 #20

Where do you think the West is getting their debt from?  As long as their debt is denominated in USD and loaned to the West - we are both in trouble.  If the West defaults on their debt to them - we will all be in for a wild ride.

Yes, the West is funded by everyone else and if the house of cards falls down then everyone will suffer.

But don't kid yourself that the West won't suffer more. They will. The BRIC countries and Africa can do enough trade between them. During the rebuilding process, the West will be severely disadvantaged.

Apart from rampant consumerism, what does the West bring to the table? Relatively little.
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