Detaching Bitcoin as much as possible from fiat

[Merkazu]

I've been hearing about how too many people treat Bitcoin as a speculative instrument rather than a real currency. I want to know what people think is the most important thing to do at this time to establish a functioning economy with Bitcoin.

Here's my perspective. I think people are focusing too much on B2C merchants like those selling retail products to consumers. I feel that the best way to help Bitcoin become more established and "just spend"able like dollars would be to focus on the raw material providers and service providers. For example, if someone was to buy a bunch of farmland, quarries, mines, etc and set up a small investment account to generate the fiat for property taxes and governmental expenses. At that time, they would start offering the use of the property in exchange for Bitcoins. Doing so would allow other businesses below it on the supply chain like assemblers, distributors and retailers to be independent of fiat with the exception of at tax time. As a retailer, i would be uncomfortable with accepting bitcoins unless i could pay my suppliers in bitcoin as well due to the variation in price per coin. This might also improve the perspective of it. Make it be this many bitcoins rather than this amount of fiat in a slightly less liquid form.

So, other than shotgunning the bitcoin name to people you know, how about lubricating the cogs for the bitcoin economy itself by addressing the source of products and services?

Thoughts? Criticism? Alternate perspectives? I'd really like to learn the general public's perspective for improving bitcoin as a currency rather than speculation.

[bitcoinscanada]

I'm sure this will happen slowly, over time.

[tabbek]

Well, one way to get more general movement of coin outside of speculation while lessening the dependence on goods would be to provide (and make use of) services offered for bitcoin.  Services dont really need to be 'produced' like a good, so that cuts out a bit of the uncertainty around paying the supply chain.

[parroquiano]

I think The Economist said it best: http://www.economist.com/blogs/freeexchange/2013/04/exchange-rates. As of now the Bitcoin economy is functioning like a micronation where all goods are imported and all jobs are offshored. Bitcoin merchants pay their suppliers in fiat (i.e., they "import") and pay their employees in fiat (i.e., their labor costs are "offshored"). No internal supply chain has developed.

In order to get the supply chain developed, I think the best approach is to promote BTC with B2C merchants and work backward and forward from there. As more merchants accept BTC, the incentive for their suppliers to offer their goods and services denominated in BTC will grow, as there are clear advantages for them to do so. So the economy grows from the B2C point back to suppliers. Also, more B2C points for consumers to directly spend BTC means less resistance from employees to accept paychecks denominated in BTC, so the economy grows from the B2C point forward to consumers.

[Vikerus]

Bitcoin hedge funds.

Nuff said

[BitMI]

As of now the Bitcoin economy is functioning like a micronation where all goods are imported and all jobs are offshored. Bitcoin merchants pay their suppliers in fiat (i.e., they "import") and pay their employees in fiat (i.e., their labor costs are "offshored"). No internal supply chain has developed.

Nice simile.

Internal supply chain may develop, but many of its elements will still use some fiat as "storage of value" before they need to spend the coins again. (At least until the exchange rate +/- stabilizes.)

[Merkazu]

I think The Economist said it best: http://www.economist.com/blogs/freeexchange/2013/04/exchange-rates. As of now the Bitcoin economy is functioning like a micronation where all goods are imported and all jobs are offshored. Bitcoin merchants pay their suppliers in fiat (i.e., they "import") and pay their employees in fiat (i.e., their labor costs are "offshored"). No internal supply chain has developed.

In order to get the supply chain developed, I think the best approach is to promote BTC with B2C merchants and work backward and forward from there. As more merchants accept BTC, the incentive for their suppliers to offer their goods and services denominated in BTC will grow, as there are clear advantages for them to do so. So the economy grows from the B2C point back to suppliers. Also, more B2C points for consumers to directly spend BTC means less resistance from employees to accept paychecks denominated in BTC, so the economy grows from the B2C point forward to consumers.

Nice read, so the general gist I'm getting from the thread so far is that we should look into service providers in general since they are easier to access or create than raw material providers. A list of services that accepts Bitcoins in exchange for work rendered. Then seeing if people can find services that they do fairly well that aren't currently filled in yet in order to expand the options that 1 BTC can access. Retail products are fairly easy to get right now with things like Bitmit and Bitspend but services in general are still a bit limited.

[LuxeChains]

I think parroquiano is correct. For example, I'm a merchant. Looking to sell products in BTC. But I will have to pay my suppliers and raw goods and overhead all in fiat currency. Once I get up and running with the currency I intend to tell my suppliers about, who will tell theirs, etc, etc.

[WhatsUpFreak]

In order to get the supply chain developed, I think the best approach is to promote BTC with B2C merchants and work backward and forward from there. As more merchants accept BTC, the incentive for their suppliers to offer their goods and services denominated in BTC will grow, as there are clear advantages for them to do so. So the economy grows from the B2C point back to suppliers. Also, more B2C points for consumers to directly spend BTC means less resistance from employees to accept paychecks denominated in BTC, so the economy grows from the B2C point forward to consumers.

Exactly, it all has to do with the adoption of BTC, which will happen slowly given the unfamiliarity and lack of understanding involved with crypto-currency. IMO the only issue with mainstream adoption is understanding and awareness. This will be the greatest hurdle for BTC. It has such incredible potential, and we are in its infancy.