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Author Topic: Here's the problem - BitCoin users are too cheap and just want to hide it  (Read 3989 times)
5grainsilver
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June 20, 2011, 12:04:15 AM
 #21

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?

Maybe.  

(Paper) Fortunes have been made in bitcoin from literally nothing.  I believe the smart ones have been quietly cashing in for good old regular currency.  I know I would.  The naive ones (no offense intended) are the vocal ones on this board claiming they are waiting for the $1000 bitcoin or whatever other crazy amount they have thought of.  What isn't happening is regular spending on anything more than a small scale.  

It doesn't make sense to spend much money with bitcoin.  Here is why:

1.  No buyer protection.
2.  Not many merchants.
3.  Better prices elsewhere.  

It doesn't make much sense to sell products in bitcoins either.  Here is why:

1.  No buyers!
2.  Bitcoins fluctuate huge amounts all the time.  
3.  No real motivation to take the steps necessary to do so.  The biggest motivation would be to reach a new market but that is mostly negated by point #1.

My experience as a merchant so far trying out bitcoin:  

posted an ad here no takers
put up auctions on the 2 main sites.  Got one sale for 75% of what it goes for on ebay.  Buyer still didn't even pay or respond to communication.  

The best thing bitcoin had going for it was silk road.  Bitcoin actually filled a need there that couldn't be met by any other payment method.  Like it or not, bitcoins biggest draw is black market trade.    

And last but not least the biggest bitcoin downside of all.  Security.  It is funny I was going to post this this morning before todays fun but was away from the computer.  Here are some fun things to think about:

-  If you have lots of bitcoin you better keep it to yourself.  You would be a dream target for a couple guys with guns to come visit your home and borrow your computer for a minute.  
-  How about chinese and other hackers?

Bitcoin is drawing every hacker and online criminal organization worldwide like bugs to a big bright tasty light. 

The security concerns alone are enough reason that bitcoin will NEVER be used as a serious investment vehicle.

Just IMHO of course.  I have nothing riding on this because I can't short bitcoins.  But I am enjoying the show.    


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June 14, 2012, 05:43:56 PM
 #22

I've noticed this as well as a guy who tried to expand his business ventures into more areas with very few takers on here.I'd like to get feedback from potential customers in the BTC community as to what things they want.My lottery was the only thing that had very few takers (0.25btc total but hey a winner was picked randomly, so at least some good came out of it).My loans venture was a loss maker (lost 4BTC to a scammer,it's not that much lost but still nice to sell off the debt asap or sell part ownership of that venture about 5-10% of all total ownership while I hold majority control for now).

A good business minded person will ask for and listen to feedback from potential clients/actual customers as well.So I'm listening. This is also the mindset (as well) that makes me question whether it's worth keeping my ventures in the BTC world or to take it back to the real world (like it was before).Oh well,no turning back now.Got to restructure some of my ventures by letting people have a chance of part ownership (for BTC of course) as well as trying harder to give people what they want.

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June 16, 2012, 06:19:03 PM
 #23

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.

You didn't try to buy any shirts or stickers.   Smiley

I ship product all the time and sell items for as little as .2 btc .

I do admit that people hold on to bitcoins pretty tightly.  That should change some as they are easier to get with bitinstant and others like them now.  I have found the market for services to be more lively then the market for physical items.  Logo design, VPN services and of course gambling. 

The fairest place I have seen is Satoshi Dice, as the outcome is predicable and the house margin is low and all of the traffic is visible. 

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June 16, 2012, 06:40:30 PM
 #24

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.

You got a prepaid cell phone? Not only will you find a trusted and fair trader I will sell you PIN codes below retail.  See CellCoin link in my sig. 

It will take time but one by one I really do believe you will see reputable places to spend your hard earned coins. 
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June 16, 2012, 08:57:39 PM
 #25

Just my 2c: bitcoin is being hoarded because it lacks good and transparent investment opportunities. Many people have lost their investment so they rather buy and hold. One laudable example of transparent accounting is MPOE,hope there will be more...but it still hangs on the goodwill of its owner, and on security of its code. In practice I (and certainly, many other people, who  may even think of themselves as libertarians) find it still weaker guarantee than if it would be guaranteed by law.

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June 16, 2012, 09:09:59 PM
 #26

i am buying (trying to buy) broken n64 controllers and broken wii controllers for btc.
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June 16, 2012, 11:05:32 PM
 #27

After fees for trading and exchanges, Bitcoin is more expensive than fiat for me. This is a temporary problem. Also I've noticed when there is a lot of volatility, the Bitcoin stores have problems. Again, a temporary problem. You can believe I'll be spending Bitcoin when the value soars.

I don't think there are any true bears holding Bitcoin. So we hoard. It's not that we're cheap, it's just that it is safer to spend $100 in fiat money that will be going down in value, than $100 worth of Bitcoin that will be going up.

If anyone is to blame for folks not spending Bitcoin, it is merchants that are not willing to give Bitcoin discounts or simply demand Bitcoin only payments for their unique merchandise that cannot be easily bought with fiat money elsewhere. Bitcoin vendors need to be looking for niche markets and exploiting the unique properties of Bitcoin.

Examples: Ticket scalping would be an ideal business for Bitcoin only. It is for short term, last minute sales. Last minute reservations at hotels, restaurants, and transportation should be secured through Bitcoin to eliminate identity fraud. Yet none of these exist.

That's just a few reasons I'm not ready to spend Bitcoin, but I am hoarding them for the day when I will be able to do these things. Blame the market, not the customer.

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dirtydiego
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June 16, 2012, 11:57:20 PM
 #28

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.

You got a prepaid cell phone? Not only will you find a trusted and fair trader I will sell you PIN codes below retail.  See CellCoin link in my sig. 

It will take time but one by one I really do believe you will see reputable places to spend your hard earned coins. 

Hey TangibleCryptography I have two prepaid phones and would love to buy pin codes as my girlfriend and I use those phones a whole lot. I PM'ed you about this. You guys really are taking bit coins to a positive direction. Thank you!
nybble41
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June 18, 2012, 07:23:09 PM
 #29

Gresham's Law (the simple version): Bad money drives good money out of circulation.

In this case, BTC is the good money, and dollars and other fiat tend to drive BTC out of circulation. We want to keep our BTC (which are holding value, or even becoming more valuable) but get rid of our dollars as quickly as possible, before they become completely worthless. Normally Gresham's Law only applies when the exchange rate between the currencies is fixed, but a similar principle is in play here due to the contrast in monetary policies: market-based vs. deliberately inflationary.

In general, the currency people demand and hold and save in is the stronger of the two, and more likely to hold its value long-term. However, the weaker currency will have a higher "velocity" (which mainly benefits those imposing a tax every time wealth changes hands, not those spending or receiving it).

Given the current trends in BTC value, it really would make more sense for vendors with a stake in BTC to give discounts for paying in BTC, rather than surcharges, then hold on to those BTC rather than immediately exchanging them for USD, and make up the difference through the change in market value.
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June 18, 2012, 09:23:01 PM
 #30

Good, important thread. The main problem I can see at the moment actually comes from Bitcoin's strength - namely, that BTC allows easy *spending* among a distributed network, but for buying "things" that always means paying for postage and having to wait. It's not about users being "cheap" - it's about diversity of choice, and being able to resort to existing alternatives which are a) work well enough, even if they're more expensive, or b) are large enough to support free and fast postage.

Driving spending based on the currency doesn't make much sense, long term (ironically the same problem facing major economic powers currently) - using bitcoins needs to "piggyback" on existing and *new* trading, as a better alternative to paypal etc. But, in a sense, having the "bitcoin community" come up with business ideas is somewhat arse-end-first. That's why I get more excited about existing small businesses offering to take BTC.

That's also why I think it's important to at least study what makes local economies successful or not. A lot of local currencies spring up where local trade is already doing pretty well, and people want to stop value from leaving the local system. I'm glad there's some talk of tying Bitcoins to local or "child" currencies as that, I think, is one huge area of potential of a *technological* currency (rather than a legal one). The idea of forking a blockchain is amazing because it *can* be done, even if it's not necessarily a good idea (YMMV).

Right now I'm spending a lot of time wondering where BTC could be applied in the real world, rather than worrying about hoarding BTC and hoping someone comes up with a site that doesn't get hacked. Tip jars are interesting, but I'm not sure tipping is actually fashionable at all (too much free stuff around anyway). People still like to think of consumption as a social activity, rather than creation.

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June 18, 2012, 11:42:04 PM
 #31

But, in a sense, having the "bitcoin community" come up with business ideas is somewhat arse-end-first. That's why I get more excited about existing small businesses offering to take BTC.

My thoughts exactly.
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June 18, 2012, 11:49:09 PM
 #32

Holy thread necro bumping, film2240.  Shocked
It's good to know this is still true 1 year later lol

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June 19, 2012, 09:37:28 AM
 #33

It'd be interesting if difficulty were affected by not only block gen rate, but also by the amount if coins being sent for a given cycle.  The more commerce there is, the lower the difficulty (or at least has some weight in determining difficulty). Someone build that into an alt chain! Cheesy

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June 19, 2012, 09:47:56 AM
 #34

Hardly. There would be no incentive to pay transaction fees. If, then, there was sudden increase in number of transactions(like satoshidice just did), it would lead to faster block generation and blockchain size would mushroom out of control, much more than it does today.  We need to mind the environment Cheesy

It'd be interesting if difficulty were affected by not only block gen rate, but also by the amount if coins being sent for a given cycle.  The more commerce there is, the lower the difficulty (or at least has some weight in determining difficulty). Someone build that into an alt chain! Cheesy

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June 19, 2012, 12:19:20 PM
 #35

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.

Ah; so you want owners of bitcoin to make purchases they otherwise would not have?

The point of a market economy is that both parties to a trade walk away better off than they were had they not traded.  If you encourage altruistic spending (i.e. spend for the good of the currency, rather than the good of yourself), then you are arguing that one party should trade and walk away at a loss.  How would that be a good thing?  What if everyone engaged in the behaviour you suggest?  Both parties trade, not at mutual benefit, but at mutual loss -- I'm pretty sure that ends in everyone being poorer, not richer.

Fortunately, self-interest is built in, and your cry that bitcoiners should become spendthifts won't make the slightest bit of difference.  People will buy when they have more desire for the purchase than they do for the currency.

Besides all that; I don't believe that hoarding is the problem.  It's simply that you can't expect there to be bitcoin-paying customers just because you offer to sell something.  The market simply isn't big enough yet.

Here's an example.  I don't spend a lot (other than bills) in USD or BTC.  But today, I've just bought one of these DVB-T devices.

http://www.ebay.co.uk/itm/110898287043

I wanted specifically that model for playing with software defined radio.  If I had been able to purchase it with bitcoins, I would have.  I wasn't able to though.  That's my disposable income purchase for this month; and it was in fiat.  Bad luck bitcola, you weren't selling what I wanted this month.  Maybe next month?

The fact that nobody bought your bargains doesn't mean bitcoiners are mean, it means they didn't want what you were selling.  Suck it up and offer something they do want.

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June 19, 2012, 03:35:43 PM
 #36

It'd be interesting if difficulty were affected by not only block gen rate, but also by the amount if coins being sent for a given cycle.  The more commerce there is, the lower the difficulty (or at least has some weight in determining difficulty). Someone build that into an alt chain! Cheesy
How can you determine that someone isn't just sending themselves a bunch of coins to keep the diff low? Won't work.

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June 19, 2012, 05:33:06 PM
 #37

Here is what I would like to pay for with Bitcoins:
- My mortgage
- Inexpensive children's clothes
- My credit card and personal loan bills
- My auto insurance
- Groceries at the local store
- Gas
- BFL miners

I don't have any room in my budget for anything else, except maybe a video game every once in a while.

So, if you don't offer one of the above items, then I won't be buying from you.  Simple as that.  If I had more discretionary income, it wouldn't matter so much, and I'd buy lots of the trinkets and toys offered.  I have little interest in precious metals, or in holding much BTC, as that's just money that could be used to pay down my debts.
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June 19, 2012, 06:32:36 PM
 #38


- Inexpensive children's clothes


You might be into something there Wink

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June 19, 2012, 06:46:30 PM
 #39


- Inexpensive children's clothes


You might be into something there Wink
Haha.  It's completely opposite from the typical bachelor-nerd demographic of Bitcoin users, but it is something I need to buy from time to time.
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June 19, 2012, 06:51:01 PM
 #40


- Inexpensive children's clothes


You might be into something there Wink
Haha.  It's completely opposite from the typical bachelor-nerd demographic of Bitcoin users, but it is something I need to buy from time to time.

You and everyone with kids. I have one boy and I know exactly what you mean.

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