State of the Real Bitcoin Economy

[johnyj]

Why do you mine bitcoin?
To buy USB Block Erupter
What is the use of a USB Block Erupter?
To mine bitcoin
 

[jdbtracker]

Comparisons to the internet and it's growth are utterly irrelevent.

The internet allowed people to do so many things that just weren't possible before the internet and it has utterly transformed peoples lives and the methods of interactions, shopping, entertainment etc.

By comparison Bitcoin does virtually nothing that cannot be achieved already with money. It is a potential store of value/speculation, but at its heart was designed to be a payment mechanism and it has yet to prove to the masses that it is a better or cheaper payment mechanism than that which exists already.

As for the state of the Bitcoin economy, there are a number of BTC evangelists (mainly on here) who do buy stuff with Bitcoins, but the rest of the use is either gambling, illegal purchases or the biggest use of Bitcoin - buying it hoping that some other people will use it and it'll go up in value. Until that changes it's a rough-ride folks.

This is the most realistic post in the thread.

Bitcoin is not the new internet.  It is not the new Paypal.  It is not the new ecommerce, or dotcom boom.  It is not a shiny new toy for the world which will be joyfully adopted by teenaged girls and grandmas.

It is something much grimmer then that.  It is a response to, and a defense against the increasing repression by the corporate and governmental powers that be which has been enormously facilitated by the internet.

Reading Satoshi's posts this is very clear.  Did he sound to anyone like some starry eyed web entrepreneur?

So far, its only real advantages have been in circumventing drug prohibition, contributions to banned organizations, tax avoidance, and "money laundering".  It's nature is to be against the system.  That isn't going to change, and I predict that all the purveyors of techno-utopian Silicon Valley happy-talk are going to waste millions before they
recognize this.

The year is not 1992.  The year is 1984.  The world is not about to enter a boom.  The financial system is absurdly overburdened with debt, and global demographics point to a catastrophic decline, and quite likely large scale war, over the next 20 years.  Power has become more and more concentrated in fewer and fewer hands, and those entities, whether states or corporations are actively seeking to increase their control over the masses.

Like it or not, the role of Bitcoin is as a weapon of resistance. 

Bitcoin is most definitely a weapon, the weapon of choice for mass Intelligence, information. It is basically encouraging 3 million current users to learn; What is money? learn about the money system and how it is built, to question why people have to work 2-3 jobs with their spouses and soon their children too. What does the system do? does it encourage consumerism? does it establish schools as the single source of life education? We know the Neo-Keynsian model, force them to work, force them to spend... is this healthy?

Bitcoin is definitely a response to our current system with the question; Why the hell do you need my name and payment information just to read your article?

  Power is being concentrated, a paycheck is increasingly being used as the weapon of choice to control the masses as it ever dwindles into fewer and fewer hands; Can you believe that out of the billions made by online companies the ones who benefit could fill up a medium sized stadium? What will you do with money when it is hoarded by the 1 percent and it becomes harder and harder to make them spend it... do you see an analogy with Bitcoin?
  Automation is not helping out either, it just strikes me as funny that a message was sent out with this software; We can automate your industries too and your money and power has prevented your industry from being automated even though it is easier to automate than the auto industry.

  Bitcoin is a system a technique for freedom from mass serialization... do you know your number? is it tattood on your skin along with your bank account number and information, are these governments and corporations truly entitled to have this knowledge about you? Why shouldn't we? you know there are laws against people opening your mail, why can they read your e-mails? They are amassing so much knowledge about us, why not let us all see what you are up to too? If you get too tired and need to re-invent yourself in Bitcoin you just need to make a new address and start fresh, in the real world your information follows you till the day you die.
 
As society further entrenches itself in new laws and new lines of power created by our current system a new one must be created with a better foundation to create a new path that these laws do not allow us to follow. Bitcoin is creating incredible innovation it is letting people see things in a new way without the baggage from the old, we will only take what is useful from the old to the new. Think of all the barriers they create through laws that control us in a broken system that lobbies for our strict control as if we were cattle, think of all the fear that is created as the purveyors of purchasing power now control who and what we can empower, should a system as big as that of the credit cards, banks be this politisised that it controls through fear what is allowed without government mandate from the people.

[westkybitcoins]

Comparisons to the internet and it's growth are utterly irrelevent.

The internet allowed people to do so many things that just weren't possible before the internet and it has utterly transformed peoples lives and the methods of interactions, shopping, entertainment etc.

By comparison Bitcoin does virtually nothing that cannot be achieved already with money. It is a potential store of value/speculation, but at its heart was designed to be a payment mechanism and it has yet to prove to the masses that it is a better or cheaper payment mechanism than that which exists already.

As for the state of the Bitcoin economy, there are a number of BTC evangelists (mainly on here) who do buy stuff with Bitcoins, but the rest of the use is either gambling, illegal purchases or the biggest use of Bitcoin - buying it hoping that some other people will use it and it'll go up in value. Until that changes it's a rough-ride folks.

This is the most realistic post in the thread.

Bitcoin is not the new internet.  It is not the new Paypal.  It is not the new ecommerce, or dotcom boom.  It is not a shiny new toy for the world which will be joyfully adopted by teenaged girls and grandmas.

It is something much grimmer then that.  It is a response to, and a defense against the increasing repression by the corporate and governmental powers that be which has been enormously facilitated by the internet.

Reading Satoshi's posts this is very clear.  Did he sound to anyone like some starry eyed web entrepreneur?

So far, its only real advantages have been in circumventing drug prohibition, contributions to banned organizations, tax avoidance, and "money laundering".  It's nature is to be against the system.  That isn't going to change, and I predict that all the purveyors of techno-utopian Silicon Valley happy-talk are going to waste millions before they
recognize this.

The year is not 1992.  The year is 1984.  The world is not about to enter a boom.  The financial system is absurdly overburdened with debt, and global demographics point to a catastrophic decline, and quite likely large scale war, over the next 20 years.  Power has become more and more concentrated in fewer and fewer hands, and those entities, whether states or corporations are actively seeking to increase their control over the masses.

Like it or not, the role of Bitcoin is as a weapon of resistance. 

*slow clap*

+1

[101111]

Comparisons to the internet and it's growth are utterly irrelevent.

The internet allowed people to do so many things that just weren't possible before the internet and it has utterly transformed peoples lives and the methods of interactions, shopping, entertainment etc.

By comparison Bitcoin does virtually nothing that cannot be achieved already with money. It is a potential store of value/speculation, but at its heart was designed to be a payment mechanism and it has yet to prove to the masses that it is a better or cheaper payment mechanism than that which exists already.

As for the state of the Bitcoin economy, there are a number of BTC evangelists (mainly on here) who do buy stuff with Bitcoins, but the rest of the use is either gambling, illegal purchases or the biggest use of Bitcoin - buying it hoping that some other people will use it and it'll go up in value. Until that changes it's a rough-ride folks.

I guess you had to be there. The internet in the mid 90's was about as welcome as PC-DOS was in the late 80's. Most people back then did not want to use the internet, after all they could get the news on TV or newspaper and didn't have to wait for images to slowly display, line by agonising line over a 2400 baud modem that hogged their telephone line. Where was the advantage in that, they would say, given the cost and hassle of setting things up. Email? No one else they knew had it so there was no point, it was useless.  99.9% of people haven't heard of bitcoin; for most of those that had 4 months ago it was akin to a kids gaming currency; to even be taken serious by a gov't agency is a major step forward. If you don't think it's got promise and potential that's fine, but don't write it off just yet. You don't have to be starry eyed, but at least be open-minded.

[casualcash]

We need to market bitcoin like its a new product. Companies spend millions and never sell anything. We can start small with T-shirts From a website like www.thebitcoinminingoutlet.com.. Here is a great place to pick up a T-shirt and support our cause.

[johnyj]

Winklevoss Twins IPO is a big move, I also think digital asset is the best suitable category for bitcoin currently

The interesting thing with bitcoin is, the fundamental support behind bitcoin (mass acceptance by merchants) will only be established after it is widely accepted as an asset with high return, not the other way around. In bitcoin's world, almost everything is against the traditional wisdom 

[WaverleyStreet]

 ",,,since miners are the biggest actor in bitcoin economy.. "

try: coders and developers putting in the hard hard work~what we need is all the bitcoin hoarding to stop and get back on track with the open source concept like satoshi said: i'm gonzo--- call me crazy!!!LOL

>>>WHATTT!!GIVE MY COINS UP!!!!BOOOO

[WaverleyStreet]

".. their telephone line. Where was the advantage in that, .."

>>the advantage you could hank the wire out of the wall if and when you were being hacked i remember!!LOL




"  99.9% of people haven't heard of bitcoin; for most of those that had 4 months ago it was akin to a kids gaming currency; to even be taken serious by a gov't agency is a major step forward. "


>> are you referring to the stateside drug bust last week which involved a certain guv agency?

>>WTF!!!

[vokain]

Winklevoss Twins IPO is a big move, I also think digital asset is the best suitable category for bitcoin currently

The interesting thing with bitcoin is, the fundamental support behind bitcoin (mass acceptance by merchants) will only be established after it is widely accepted as an asset with high return, not the other way around. In bitcoin's world, almost everything is against the traditional wisdom 

oh how far we've come. I remember when the only market that existed was SR 

[Mike Hearn]

And I remember when there were no markets at all and Satoshi was working to integrate a simple sales board into the P2P network itself.

People complaining about slow growth have no historical perspective. Bitcoin is growing faster than most other technological phenomenons that I can think of. There's also a lot of growth happening that you can't directly observe. I talk to a bunch of Bitcoin businesses and their growth figures in terms of signups per week are eyepopping.

Transactions per day excluding popular addresses (ie SD and DeepBit):

  http://blockchain.info/charts/n-transactions-excluding-popular

Increased by 10,000 per day in 6 months, despite strong banking headwinds.

I agree that the next step is to increase visibility of Bitcoin businesses, especially the in person kind. I have some ideas for how to do that, if you have some Android experience and are looking for a project, get in touch.

[axus]

VPS and VPN are the primary things I'd spend bitcoins on.  Would you list some vendors for us?

Right now it is just too confusing, difficult and slow.

Can't agree with that - I pay for my VPS using Bitcoin - takes only seconds and is easier than any other way I've ever done a payment over the internet (and costs me no intermediate fees).

[MGUK]

I think the state of the Bitcoin economy depends on the context and expectations you examine it with.

If you're expecting Bitcoin to be the new individual global currency to rule the world and to render all currencies worthless, the the Bitcoin economy is still very far away from achieving that.
If you do see Bitcoin this way, I may be wrong here, there's no comparison that can be drawn as there hasn't recently been a global currency, but for all we know, Bitcoin my be doing exceptionally well at becoming a global currency compared to other attempts!

If you're seeing Bitcoin as a piece of open source software (which ultimately is what it is) then it's doing pretty good: lots of users, lots of publicity, lots of active development.

Regarding the Bitcoin economy, personally, I think usability or understandability as a result of marketing is still an issue. I'm in 2 minds about this though. The computer scientist nerd side of me that loves the amazing technology thinks that everyone should know about Bitcoin just to appreciate it's ingenuity, and that a person shouldn't use Bitcoin unless they fully understand how the block chain works and other core concepts otherwise it's almost a waste.
However, the average Joe non-computer-scientist side of me remembers that the whole point of a currency is convenience and practicality. From that side, a user should be able to use Bitcoin without knowing or having any understanding of the tech behind it. After all, I'm sure a lot less people would use cash if you thought you first had to understand quantitative easing, fractional reserve banking and futures trading.

At the moment, it's very rare to see people sell the concept Bitcoin to the average joe. Most people sell it to the techie or the libertarian or the anarchist. Most of the time, people are selling ideas and beliefs associated with Bitcoin, e.g. "Bitcoin is this really cool piece of software. It's a p2p currency with some really novel uses of cryptography." or "Bitcoin is this new currency that's going to overthrow the banks and solve problems of quantitative easing and distribution of wealth."

I think, in reality, Bitcoin should be marketed more as "it's quick cheap payments. Go to <insert BTC payment processor or online wallet> sign up and you can accept payments far quicker and easier even than PayPal!" Arguably that's still selling my idea of the benefits of Bitcoin, but the point I'm making is that we need to sell Bitcoin for what it is at the moment for the average joe, not what each of us believes it should be or what we each think is amazing about it.

Also, giving away bitcoins would probably help. That's obviously not what a lot of people and to do and is highly contradictory to the current trend which is to hold your Bitcoins. Imagine if the Winkelwhatever twins stood in the middle of New York or London giving away their Bitcoins for free on memory sticks, gox vouchers, casascius coins etc. If someone gave you something you weren't familiar with and said it was worth nearly $100 - you'd probably go away and learn some more about it.
If only it was legal tender, then merchants that do deal with Bitcoin could give all their change in bitcoins, even for fiat transaction - now that would boost things a bit!

[ErisDiscordia]

The year is not 1992.  The year is 1984.  The world is not about to enter a boom.  The financial system is absurdly overburdened with debt, and global demographics point to a catastrophic decline, and quite likely large scale war, over the next 20 years.  Power has become more and more concentrated in fewer and fewer hands, and those entities, whether states or corporations are actively seeking to increase their control over the masses.

Like it or not, the role of Bitcoin is as a weapon of resistance. 

+1

This is why I feel that people supporting "regulation" of Bitcoin are missing perhaps the crucial point of this technology.

Like it or not, but money is at the very core of how our society works. While many agree that the current system is not very good as it allows for huge centralization of power, wealth as well as misallocation of capital, unsustainable projects and economic behavior etc. a lot of those people would argue that the way to change this is by passing new legislation and changing the system from the top down i.e. a revolution. I don't agree with this at all, because it seems quite clear to me that this approach tends to yield just more of the same. The way to go in my eyes is by evolution of a parallel system. One of the reasons why people cling to the old system is fear of the unknown. They have trouble imagining (helped by massive amounts of propaganda) things working in alternative ways. Growing alternative systems can go a long way, but those systems will be seen as a threat by the status quo and fought as such. Fortunately decentralized technology provides ways of defense against attacks by current power elites. The internet P2P sharing have done this with the flow of information - it's getting more and more out of control of those who would seek to control it. Bitcoin is a way to the same with money - the foundation of our current society. It's a big thing.

To me, Bitcoin is not about enhancing the current system. I don't want to see something as dreadful as the current financial system getting more efficient. It's about replacing the current system. All the pieces are in place - the inherent flaws of the current system are becoming more obvious to more and more people every day, it is primed to collapse sooner or later and there is fertile ground in terms of culture for the embracing of alternatives. The technology to address this has already been created. Now it becomes a question of growing this technology up to scale.

The Bitcoin economy is obviously still in its infancy. It has come a long way already in a short period of time. I reckon there will come a time, before widespread adoption, where the community will arrive at a crossroads and have to decide; do we want to go the way of trying to integrate Bitcoin with current systems, or do we want it to stand its ground as a "weapon of resistance" and provide a much needed alternative?

H.G.Wells famously noted that "history is a race between education and catastrophe". Watching the slow motion collapse and consecutive propping up of the current financial system in recent years has made me pessimistic about the outcome of this race. Bitcoin is the biggest factor to emerge in recent years which makes me think/hope that education might win after all. Just think about how much you learned thanks to Bitcoin. I know I have. Not too long ago I knew nothing about cryptography and digital signatures. Now I have appeared in print media and given a presentation about just that. Same goes for the topic of money and political philosophy. Bitcoin is a huge catalyst for educating people and only educated people are able to make informed decisions.

[fenican]

Let's be clear and admit now that BTC does NOTHING to solve wealth imbalance issues.  It is entirely worthless in that capacity for a variety of issues:

1.  Anyone who presently has dollar wealth can just exchange dollars for BTC on an exchange

2.  Once BTC is widely established as a currency, a robber baron of industry can demand payment in BTC and acquire disproportionate amounts of it

Arguably worse than Fiat once great wealth imbalances occur since BTC is largely anonymous. You would know that huge accounts exist out there but have no idea which 1%'er owns the private key.

[westkybitcoins]

Let's be clear and admit now that BTC does NOTHING to solve wealth imbalance issues.

I agree. However, I believe Bitcoin exposes the truth: that wealth imbalances are primarily the result of political restrictions, not merely capital inheritance.

[westkybitcoins]

Also, giving away bitcoins would probably help. That's obviously not what a lot of people and to do and is highly contradictory to the current trend which is to hold your Bitcoins. Imagine if the Winkelwhatever twins stood in the middle of New York or London giving away their Bitcoins for free on memory sticks, gox vouchers, casascius coins etc. If someone gave you something you weren't familiar with and said it was worth nearly $100 - you'd probably go away and learn some more about it.

Hmm. Personally, I think that's about one of the worst ways to go about it.

First, it requires someone to spend a vastly disproportionate amount of their wealth for what is essentially advertising.

Second, it's not very good advertising. In my experience, you simply can't prompt busy people to explore technical challenges like that. Half of the people given those $100 USB sticks wouldn't believe you and would throw them in the trash. Half of those left would either not have the technical capacity (or care) to extract the money, and would never get around to it. Most of the rest would simply be given to a more computer-savvy friend to figure out, and would curiously be never brought up again by the friend.

But hey, I could be wrong. I wouldn't bet my money on it though.

[benjamindees]

even after 3 years he only knows of 3 main places that sell legitimate products for bitcoins. although i know that there are over 10,000. no one truly knows them all..

The point is that a "real economy" is larger than just "selling legitimate products".  We can build businesses all day long that sell legitimate products, but if none of them ever expand beyond the point of immediately cashing out into some other currency in order to pay suppliers and employees, they will eventually fail and the Bitcoin economy will simply be worse off for the experience.

If there really are 10,000 legitimate Bitcoin businesses (which I doubt), then why are you the only one who knows about them?  Why aren't there more than a few of them in only two areas trading Bitcoins with each other?

[TippingPoint]

We must become social engineers.  We must be innovative.  It is not about cryptography.

The wallet must be cool.  The transactions must be exciting.

[Kuzushi]

Women are the answer.  

In most societies women do the most of the shopping, and until women use Bitcoin as easily and freely as they use their credit cards Bitcoin will never be mainstream.  In the retail consumer space women are the star players, but in the Bitcoin space these star players are not on the field, on the bench, or even in the stadium!  Talk to all the women you can about Bitcoin and how it can make their lives better.

Women love power:
Money is a form of power and with Bitcoin it's power that nobody can take away from her.

Women love security:
How much easier would it be for a woman to get out of an abusive relationship if she had a stash of Bitcoins?

Women love their children:
Getting some Bitcoins for her kids when they're young and giving it to them when they're 18 or 21 could potentially be a life changing event.

Women love to look good in front of other women:
Bitcoins are very stylish and will never decline her purchase in a department store or while having lunch with her girlfriends.

Women love to buy things on sale:
Goods and services priced in Bitcoin can be sold for less, and discounted female oriented products and services priced in BTC will  increase both awareness and adoption among the people that do most of the shopping.


Get someone like Dr. Stephanie Murphy from the "Let's Talk Bitcoin" podcast to be on the Oprah Winfrey show and you'll really see things heat up.


Also, don't forget to teach your kids about Bitcoin.......they are the future.
 

[bytemaster]

How about taking the idea of Bitcoin to a new level with BitShares:

https://docs.google.com/document/d/1RLcjSXWuU9vBJzzqLEXVACSCdn8zXKTTJRN_LfoCjNY/

This will solve the volatility problem and PAY people interest to save their USD in BitUSD.  THe reduced volatility and built in exchange combined with the demand for a real rate of return would drive liquidity of BitUSD to much higher levels that Bitcoin.  Merchants could accept BitUSD and all fees would be lower.

The idea of Bitcoin will live on and grow and mature. 

As for real things being purchased with Bitcoin... it is funding a ton of labor and my startup company to the tune of 6 figures by making it easy to move funds despite insane capital controls.