Miners and early adopters, make it rain!

[w1R903]

I'm a little surprised not to see more support and promotion for Bitcoin coming from the early miners and big pool owners.  For example, I have made some extremely modest (5 bitcoins or less) contributions to worthy Bitcoin development projects.  These are Bitcoins I've bought on exchanges at $15+, by the way, not mined.  But based on the surprised and grateful reaction of the developers, such donations are not exactly common.  Some of the most promising Bitcoin projects are being build part-time on a shoe-string budget, because no one is putting their money where their mouth is.

It's interesting to me that the old adage about the wealthy being the most tight-fisted is proving true with Bitcoin.  However, unlike in the world of established fiat currency, holding on to vast reserves of a new currency in its infancy, and never spending it, has significant implications for the growth of that currency.  I know that many of the early adopters with thousands of Bitcoins secured away are totally convinced that this project will continue to take off, but let me assure you that unless many more people adopt Bitcoin, it could well turn back into the experiment and hobbyist currency that it was six months ago.  I'm a strong supporter of Bitcoin for both ideological reasons and selfish reasons (I'm building a product involving Bitcoin), but I'm also very aware that the market has not made up its mind about Bitcoin.  I don't think Bitcoin's success is a foregone conclusion just because it's a better currency.  Look at what happened to Betamax.  At this stage of Bitcoin's development, it needs infrastructure.  And the beauty of Satoshi's creation is that he has given those with the most vested interest in Bitcoin's success *the very means to fund that infrastructure*.  But this is clearly not happening to a significant degree, since there are relatively few projects involving Bitcoin that are being done by well-funded professionals (and hat tip to Camp BX for being just that).

So miners and early adopters, consider that in order for this venture to succeed, it's possible -- likely even -- that you're going to have to start spending some of those thousands of Bitcoins you have stashed away.  With that in mind, I offer you this easy-to-understand action plan that will take you from Montgomery Burns to Pacman Jones in three easy steps:

1.  Start patronizing merchants who accept Bitcoin.  I mean, look at: https://en.bitcoin.it/wiki/Trade  Art, music, clothing, gift cards -- it's all there.  You *could* almost live off of Bitcoins alone at this point.  So start spending!

2.  Share some with your non-Bitcoin-owning friends.  And make them promise not to immediately convert them to USD, but instead to at least buy something useful with them. (But don't get mad at them if they do go running to the nearest exchange -- at least they'll finally believe you when you tell them you're a millionaire).

3.  Decide on a worthy Bitcoin-related start-up project to fund.  Take your time.  I realize this forum is full of scam artists, but there are some worthy projects going on.  I don't care if it's software, porn, gambling, exchanges, or alpaca socks.  If it's related to Bitcoin, it needs your help.  And to be clear, we're not talking charity here, we're talking *investment*.  If you do this one smart, you have the opportunity to make some big bucks.  But it does involve releasing the death grip you've now got on your coins.  So spend some money.*

I realize I'm painting the largest holders of Bitcoins with a wide brush.  To be clear, my criticisms don't apply to all Bitcoin rich individuals.  I'm sure that some of them are doing everything I described above, and to them I say thank you.  Also, I should make it clear to the Bitcoin wealthy that I don't begrudge you for your money.  I'm glad you made it big!  I do, however, begrudge you for your tightfistedness.  If this were an established project, I could care less.  But at this point, Bitcoin needs you to spend, spend, spend!  Not play Silas Marner.  And Bitcoin is too good of an idea to go back to being an crypto experiment and hobbyist activity run by ex-pats selling gamer trading cards.

tl;dr Miners and early adopters, this project may not succeed without your help.  So start spending some Bitcoins.  (And in my opinion, manipulating markets doesn't count as help.  That's only postponing the inevitable.)

* For the record, my venture is already fully funded.  Rest assured that I'm not looking for your money.

[drrussellshane]

Hear, hear!

[DamienBlack]

What we need is people willing to take their paycheck each month, drop it into bitcoins, and live off of it.

Who is willing to take the bitcoin challenge? It doesn't even need to be early adopters, anyone can do this. Bitcoin is a way to buy things, make it your only way.

[CurbsideProphet]

What we need is people willing to take their paycheck each month, drop it into bitcoins, and live off of it.

Who is willing to take the bitcoin challenge? It doesn't even need to be early adopters, anyone can do this. Bitcoin is a way to buy things, make it your only way.

Sounds like you're volunteering? 

[DamienBlack]

What we need is people willing to take their paycheck each month, drop it into bitcoins, and live off of it.

Who is willing to take the bitcoin challenge? It doesn't even need to be early adopters, anyone can do this. Bitcoin is a way to buy things, make it your only way.

Sounds like you're volunteering? 

I would, really, if it were possible. We need to try petitioning a mom-and-pop grocery store into accepting bitcoins. They could have a bunch of addresses, and give each customer an address to send to. When money is sent to that address they could sell immediately, and put the dollar value onto your tab. When you come in and shop, they just deduct it from your tab.

Hell, I should make that system. It would be an easy way to accept bitcoin as payment without any risk. Any store that can work off of a tab could use it.

[drrussellshane]

What we need is people willing to take their paycheck each month, drop it into bitcoins, and live off of it.

Who is willing to take the bitcoin challenge? It doesn't even need to be early adopters, anyone can do this. Bitcoin is a way to buy things, make it your only way.

Sounds like you're volunteering? 

Nice!   

[Rogue Star]

I've put some Bitcoins into projects that I found interesting (similar amounts to the OP). The biggest problem I have found are the best projects (i.e. profitable) aren't actively seeking investment, probably because they don't need it (I'd love to make token investments in bitlotto and bit-pay for example). Projects that do seek investment don't seem to have much of a plan on how they are actually going to generate a return.

One project I made a small investment in hasn't moved forward much in the last month and is probably no closer to generating any sort of return. Looking at the balance sheet made me raise an eyebrow. The other two are recent investments so I can't comment on how they are run.

In any case, yes I do have some coins I'd like to toss at worthy projects.

[w1R903]

I like this idea of a Bitcoin challenge. I'm thinking about taking it for a month.  It could be done using Spendbitcoins.com, and buying Groceries from Amazon.  If enough people do it, Amazon might start considering Bitcoin as a payment method.  And I like the idea that we all can do this.  

But realistically, no group of people in this community can influence Bitcoins future more than the handful of early adopters and big pool miners who hold upwards of a million Bitcoins.

[Trader Steve]

I feel it's really none of my business what the early adopters and miners do with their bitcoin money. If they haven't spent much it is because they value holding their funds over spending them. It's simple economics that the holding vs. spending actually increases the demand for bitcoin by limiting supply and raising their value (increasing their desirability). When new people to the community see that bitcoin is valued enough to save they will see the merit in acquiring some and doing the same. The idea that "hoarding is bad" is a myth (see  http://economicsandliberty.wordpress.com/2011/06/10/bitcoin-and-the-virtue-of-hoarding-and-deflation/ ).

But, it shouldn't be hard for each of us to think about our everyday purchases and then try and figure out how to patronize bitcoin vendors who can supply us the same goods and services that we normally buy elsewhere. We can put our money where our mouths are and keep our paychecks in bitcoin and spend it out as needed - saving the excess.

Vendors, seeing a rising price of BTC will begin to see the benefit of getting paid in an appreciating currency, and will be more open to accepting it as payment. If you are a vendor and want to acquire bitcoin consider offering a discount to customers as an incentive for using bitcoin over other forms of payment.

[FlipPro]

Bitcams will be that revolutionary project that everyone is waiting for.

[evoorhees]

Extremely well-written post, OP. Thank you for your salient message.

Remember, many of the .com millionaires went on to fund stage 2 projects in the web world, and made MUCH MORE from those investments. Something to keep in mind

[w1R903]

I feel it's really none of my business what the early adopters and miners do with their bitcoin money. If they haven't spent much it is because they value holding their funds over spending them. It's simple economics that the holding vs. spending actually increases the demand for bitcoin by limiting supply and raising their value (increasing their desirability). When new people to the community see that bitcoin is valued enough to save they will see the merit in acquiring some and doing the same. The idea that "hoarding is bad" is a myth (see  http://economicsandliberty.wordpress.com/2011/06/10/bitcoin-and-the-virtue-of-hoarding-and-deflation/ ).

I appreciate your ideas, and I enjoyed reading the post you linked to, but more importantly the debate that followed.  I also appreciate the idea of a deflationary economy, but this is not a mature economy.  It's in a fragile state.  And it needs people to spend Bitcoins, so that more merchants will adopt it as a mode of exchange.

But, it shouldn't be hard for each of us to think about our everyday purchases and then try and figure out how to patronize bitcoin vendors who can supply us the same goods and services that we normally buy elsewhere. We can put our money where our mouths are and keep our paychecks in bitcoin and spend it out as needed - saving the excess.

So it's none of your business how early adopters do with their money, but it is your business what we do with our money?  I'm not sure I follow that logic.  Why should we patronize Bitcoin vendors when it would be so much smarter for us to save our Bitcoins, since they're worth so much?

The answer to that question is that we should patronize Bitcoin merchants and spend instead of save because if we don't, additional merchants won't adopt Bitcoin, and it will fade into obscurity and pennies on the dollar.  And what goes for us, who have only a few Bitcoins, goes for the early adopters, who have thousands of Bitcoins, a thousandfold.

[w1R903]

Extremely well-written post, OP. Thank you for your salient message.

Remember, many of the .com millionaires went on to fund stage 2 projects in the web world, and made MUCH MORE from those investments. Something to keep in mind

Yes, exactly.  Put it this way, if Bitcoin succeeds in becoming a widely-accepted currency, it may or may not eventually hit 1000 dollars/Bitcoin.  Some people forget how easy it is to re-denominate Bitcoins into microbitcoins, and so forth.  But if Bitcoin does take off, whoever invests in the first professionally-run Bitcoin predictions market *will* become a very, very wealthy individual.  Of that there is no doubt.

[Noam]

Extremely well-written post, OP. Thank you for your salient message.

  But if Bitcoin does take off, whoever invests in the first professionally-run Bitcoin predictions market *will* become a very, very wealthy individual.  Of that there is no doubt.

What is a Bitcoin predictions market?

[DamienBlack]

Extremely well-written post, OP. Thank you for your salient message.

  But if Bitcoin does take off, whoever invests in the first professionally-run Bitcoin predictions market *will* become a very, very wealthy individual.  Of that there is no doubt.

What is a Bitcoin predictions market?

A prediction market, based on bitcoins, like intrade.

[FreeMoney]

The reason the rich are the tightfisted is that anyone with a loose grip doesn't have much left after a while.

If early adopters were splashing coins around like crazy it would be easy to get them and they would be worth much less.

[Seraphim401]

Rest assured that I'm not looking for your money.

Thank God!Thought this was one of those communist/beggar threads.

[coinvestor]

Demand will rise when prominent merchants accept only bitcoins. That would create a tangible backing for bitcoin and really get the ball moving. Merchants in the US should be more than willing after all the stress of the recent debit card transaction fee debates in Congress.

Coinvestor (Ryan)

[FreeMoney]

The more I think, this is really counterproductive advice. We don't want a bunch of shitty merchants because everyone knows people are dying to get rid of their coins. We want solid products offered by professional merchants. We want stuff so good we'll happily part with some of the best money ever created.

[coinvestor]

To whom was that post directed? That was my exact point. The merchants that are well known and respected have the ability to influence demand...pretty basic stuff. There should be more efforts to do so.