CAN BTC SURVIVE WITHOUT FIAT CURRENCY ?

[Michele1940]

My provocation is as follows:

Mining does not bring any sort of benefit for the individual. Therefore you need to buy using fiat money BTCs and at the end of the game someone needs to sell BTcs for fiat money. This is far from being an ecosystem that can survive outside today’s economy which is based on fiat money.

[FreeMoney]

One time I mined a block and bough a piece of gold.

[FreeMoney]

This other time I bought coffee.

[Tronlet]

1. What are you talking about?

2. Even if what you were saying made sense, not everyone who uses Bitcoin is a conspiracy theorist who is convinced that all currencies besides Bitcoin must be brought down and/or are going to crash to nothing. I highly doubt USD is going to disappear, no matter how successful Bitcoin gets. USD and Bitcoin both have their own benefits and negatives.

[nanotube]

this has nothing to do with mining at all

once we have enough people accepting bitcoins, we have complete economic cycles in btc, wherein merchant accepts btc, then pays his supplier in btc, the supplier pays his supplier in btc, they pay their employees in btc, the employees use btc to buy stuff they need, etc.

there will still have to be some exchange into fiat for the purposes of tax payments - but that's a separate issue.

[FreeMoney]

Then there was that time I bought buttons.

[FreeMoney]

And the time I bought a domain name, firstbits.com.

[Michele1940]

1. What are you talking about?

2. Even if what you were saying made sense, not everyone who uses Bitcoin is a conspiracy theorist who is convinced that all currencies besides Bitcoin must be brought down and/or are going to crash to nothing. I highly doubt USD is going to disappear, no matter how successful Bitcoin gets. USD and Bitcoin both have their own benefits and negatives.

Totally agree on this. I am referring to the an ecosystem BTC might be able to create for its own survival. Please note I have stated this is a provocation only.

[FreeMoney]

Then I hired a programmer.

[FreeMoney]

Then I bought some design work.

[FreeMoney]

I can't even tell you the other things I buy.

[Michele1940]

this has nothing to do with mining at all

once we have enough people accepting bitcoins, we have complete economic cycles in btc, wherein merchant accepts btc, then pays his supplier in btc, the supplier pays his supplier in btc, they pay their employees in btc, the employees use btc to buy stuff they need, etc.

there will still have to be some exchange into fiat for the purposes of tax payments - but that's a separate issue.

Provocation again, just for discussion :

Even if a large number of merchants would adopt btc as a form of payment ( finding it convenient according to your article ), they still will need a way to change btc into real cash. Unless, of course, the chain does not stop here and they would be able to buy from their suppliers paying with btc, go shopping for their personal needs and pay with btc and so on….
At present, btc move from the exchange market to people who buys them. From these people could move to merchants , providing there would be enough to notice this movement which, at present , is not the case, Than from merchants btc can only move back to the exchange market.
Thus for merchants adopting btc as a form of payment , ( aside from the advantages you have illustrated in this article ) could be considered as a form of investment, a speculation if you like.
This tends to limit the number of merchants interested in btc for obvious reason.
It is my opinion that , in order to boost btc economy, the final place where btc have a real tangible value, cannot be the exchange market alone.
There is nothing wrong in trying to make some extra money in speculation, but this bounds btc potential.
For example e-commerce, would be advantaged from adopting btc as a form of payment. Once the transactions are made, we will have these e-merchants loading up with btc and while they will unload their available stock of goods. Than, what ? They have to go to the exchange market and buy back fiat money in order to fill up theirs werehosues.
If btc economy is confined into this boundaries, it is very unlikely that we would see it booming up like many are expecting.
The underling concept of btc ( being a currency that allows to avoid double spending on transactions cutting of all the middle man ) remains intact even inside the boundaries I have outlined above. Merchants would have benefit from a cost free transaction on theirs sales even if they would have to buy back real cash at the end of the game.

[FreeMoney]

And I use mullvad when I do.

[Rage]

My provocation is as follows:

Mining does not bring any sort of benefit for the individual. Therefore you need to buy using fiat money BTCs and at the end of the game someone needs to sell BTcs for fiat money. This is far from being an ecosystem that can survive outside today’s economy which is based on fiat money.

Mining is not the only way to get bitcoins. It's not even the easiest or most profitable way. Direct trading (buying and selling) in bitcoins does not need to involve fiat in any way. If fiat went away tomorrow, I could still pay you for your product and service with bitcoins just as I could in gold.

In my mind, bitcoins are linked to fiat only for convenience. As the economy grows, the need to convert between bitcoin and fiat will lessen until, at some point, we will be able to do most business without any reliance on fiat.

Rage

[Michele1940]

this has nothing to do with mining at all

once we have enough people accepting bitcoins, we have complete economic cycles in btc, wherein merchant accepts btc, then pays his supplier in btc, the supplier pays his supplier in btc, they pay their employees in btc, the employees use btc to buy stuff they need, etc.

there will still have to be some exchange into fiat for the purposes of tax payments - but that's a separate issue.

Provocation again, just for discussion :

Even if a large number of merchants would adopt btc as a form of payment ( finding it convenient according to your article ), they still will need a way to change btc into real cash. Unless, of course, the chain does not stop here and they would be able to buy from their suppliers paying with btc, go shopping for their personal needs and pay with btc and so on….
At present, btc move from the exchange market to people who buys them. From these people could move to merchants , providing there would be enough to notice this movement which, at present , is not the case, Than from merchants btc can only move back to the exchange market.
Thus for merchants adopting btc as a form of payment , ( aside from the advantages you have illustrated in this article ) could be considered as a form of investment, a speculation if you like.
This tends to limit the number of merchants interested in btc for obvious reason.
It is my opinion that , in order to boost btc economy, the final place where btc have a real tangible value, cannot be the exchange market alone.
There is nothing wrong in trying to make some extra money in speculation, but this bounds btc potential.
For example e-commerce, would be advantaged from adopting btc as a form of payment. Once the transactions are made, we will have these e-merchants loading up with btc and while they will unload their available stock of goods. Than, what ? They have to go to the exchange market and buy back fiat money in order to fill up theirs werehosues.
If btc economy is confined into this boundaries, it is very unlikely that we would see it booming up like many are expecting.
The underling concept of btc ( being a currency that allows to avoid double spending on transactions cutting of all the middle man ) remains intact even inside the boundaries I have outlined above. Merchants would have benefit from a cost free transaction on theirs sales even if they would have to buy back real cash at the end of the game.

sorry forgot to add the link to the article : http://falkvinge.net/2011/07/03/bitcoins-four-drivers-part-3-merchant-trade/#comment-87807

[Michele1940]

My provocation is as follows:

Mining does not bring any sort of benefit for the individual. Therefore you need to buy using fiat money BTCs and at the end of the game someone needs to sell BTcs for fiat money. This is far from being an ecosystem that can survive outside today’s economy which is based on fiat money.

Mining is not the only way to get bitcoins. It's not even the easiest or most profitable way. Direct trading (buying and selling) in bitcoins does not need to involve fiat in any way. If fiat went away tomorrow, I could still pay you for your product and service with bitcoins just as I could in gold.

In my mind, bitcoins are linked to fiat only for convenience. As the economy grows, the need to convert between bitcoin and fiat will lessen until, at some point, we will be able to do most business without any reliance on fiat.

Rage

Agree. So this means we just need to sit down and wait for BTC economy to grow, while posting good deeds on this forum, or we can do anything better ? Only a question not a comment to your post, please note.

[Babylon]

My provocation is as follows:

Mining does not bring any sort of benefit for the individual. Therefore you need to buy using fiat money BTCs and at the end of the game someone needs to sell BTcs for fiat money. This is far from being an ecosystem that can survive outside today’s economy which is based on fiat money.

Mining is not the only way to get bitcoins. It's not even the easiest or most profitable way. Direct trading (buying and selling) in bitcoins does not need to involve fiat in any way. If fiat went away tomorrow, I could still pay you for your product and service with bitcoins just as I could in gold.

In my mind, bitcoins are linked to fiat only for convenience. As the economy grows, the need to convert between bitcoin and fiat will lessen until, at some point, we will be able to do most business without any reliance on fiat.

Rage

Agree. So this means we just need to sit down and wait for BTC economy to grow, while posting good deeds on this forum, or we can do anything better ? Only a question not a comment to your post, please note.

offer goods and services for bitcoin.

[Michele1940]

offer goods and services for bitcoin.
[/quote]

Looks like not so many have any idea about this.

http://forum.bitcoin.org/index.php?topic=25693.0

[Rage]

Agree. So this means we just need to sit down and wait for BTC economy to grow, while posting good deeds on this forum, or we can do anything better ? Only a question not a comment to your post, please note.

One important distinction to keep in mind between bitcoin and fiat is that the bitcoin economy is evolving naturally while the fiat economy is government mandated. One reason the dollar enjoys such wide acceptance is because it's a government 'backed' currency while bitcoin isn't.

I don't think we have to sit around and post good deeds on the forum all day while we wait for the economy to expand. I think we all need to be active in the community, talking to friends about the currency, introducing it to merchants, etc. Unlike the dollar, it's not a government or regulation that's going to cause acceptance of bitcoin, it's going to be user advocacy and natural currency evolution. That takes time but it's not impossible.

[Michele1940]

Agree. So this means we just need to sit down and wait for BTC economy to grow, while posting good deeds on this forum, or we can do anything better ? Only a question not a comment to your post, please note.

One important distinction to keep in mind between bitcoin and fiat is that the bitcoin economy is evolving naturally while the fiat economy is government mandated. One reason the dollar enjoys such wide acceptance is because it's a government 'backed' currency while bitcoin isn't.

I don't think we have to sit around and post good deeds on the forum all day while we wait for the economy to expand. I think we all need to be active in the community, talking to friends about the currency, introducing it to merchants, etc. Unlike the dollar, it's not a government or regulation that's going to cause acceptance of bitcoin, it's going to be user advocacy and natural currency evolution. That takes time but it's not impossible.

How about a Social network where we can all discuss about BTC, invite friends and explain them what btc is, letting merchants advertise and sell only using btcs...would that be a workable idea to further develop btc economy ?