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Author Topic: A closed bitcoin economy, are we there yet ?  (Read 2427 times)
Isokivi
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August 26, 2013, 05:31:59 AM
Last edit: August 26, 2013, 10:18:36 AM by Isokivi
 #1

I run a small bitcoin venture, in essence it's an e-commerce selling bitcoin niche items. Almost a year in the game and the business landscape is starting to show very strong sings that I could soon be able to operate entirely outside the fiat economy. Geographic location plays a major role in how far one can take this, I am lucky to live in the nation with the highest bitcoin penetration in the world, Finland. I would like to argue that many larger nations are by far more ahead of the curve. The US, Canada and Germany do clearly have a vastly larger amount and diversity in services and goods available for bitcoin directly. This obviously is due to their larger size, which directly translates in to a larger customerbase.

Here is a list of the goods and services I need and use so far, some are ofcourse restricted by location, while others I can purchase from where-ever in the world:

Web hosting, was the first service my business purchased with bitcoin. I found bitronic technologies early on and have stuck with them ever since.

Image design and fabrication. Note that this can and has been synonymous for product desing for me. I've used beefsock's services, found here on bitcointalk, a couple of times and have been satisfied. My logo and the pvc keychain I produced are he's desingns based on my descriptions.

Shipping, to be more specific: Stamps, I ofcourse need to use finnish stamps so the selection of providers to work with is severely limited. However reaalimarket.fi, a finnish online-store, does accept bitcoin and do carry stamps. The price is slightly higher than it would be at any kiosk or store, but when bought in large enough quantities the time I save by getting them delivered instead going out and buying them myself, justifies the added expense. I need to purchase about a months supply at a time, in order to only pay 1% more. Free business idea: if there is not a service selling local stamps in your region for bitcoin, look in to it, on itself it's propably not a viable business, but surely could be a profitable service when added to an existing business.

Envelopes and other office supplies. Reaalimarket does carry a couple of different envelopes and a variety of office supplies, that cater to my needs rather poorly, they would propably be willing to add more suitable ones if I'd ask for them. But as the price of their current items is relatively high  when compared to the ones available in the fiat-economy allready (+60%), I doubt I would actually end up purchasing from them anyways.

Payment gateway services, while I do want to keep my funds in bitcoin when not elswhere needed I do need to price my goods in a fiat currency, so I need someone to calculate the exchange rate and provide a customer with the payment address and/or Qr-code. Providing customers with recieps is an added benefit.  Several options are available for me, I've worked with three different providers to date and have settled with one for now. I am anticipating that  competition over fees will emerge soon.

Computer hardware, not that I need much, but when I do I can find it available for btc. Most recently I purchased a couple of harddrives from bitcoinstore.com, since then a couple of european competitors have emerged, which is good because of the 24% vat when purchasing from outside the Eu is more or less a dealbreaker.

Marketing, a vast variety of bitcoin ad networtks do exist, but show little promise. The person getting paid .0000001 btc for clicking a link or watching a video just does not make much of a customer. Buying traffic would be easy, but pointless. There are also a good amount of listings about vendors accepting bitcoin. By far the most comprehensive still seems to be the original bitcoin wiki one. I do hope someone gets this concept right, sadly I do not have any ideas or pointers on how this will be achieved to dish out.

When I first started out I had moderate succes with providing revards for a mining competition on the bitminter pool. The mining community overall does seem like a solid and fruitful starting point for marketing.

I have aso talked about an affiliate deal where the linker would get a persentage of sales coming trough their link, but have atleast for now opted against it.

[edit] I did also approach bitcoin magazine via email to query what an advertisement in their publishment would cost me, sadly they never responded. They have however published some mentions of my venture in their online content.

Accounting I have been approached by a finnish accounting service that would of have been available to provide the service I need for bitcoin, I chose againts it for now, mainly because my venture is small enough for me to handle it myself with ease. However I am starting to lean toards going with them next year, depending on how the last quarter of this fiscal year goes for me.


What I cannot currently purchase with bitcoin directly, various proxy-services do however allow me to purchase most:

An internet connection, no ISP here takes bitcoin directly and I cant remember seeing any mention of one that did anywhere in the world, correct me if I am wrong.

Cell phone service. Do note that I would not be interested in a prepaid service, I'd just like to see a bitcoin option in my bill.

Taxes, cannot be paid in bitcoin.

The three above ones I can however pay with bitcoin by using a proxy service, bittimania.fi has a service where they pay any finnish bill, up to 500€ whatever amount for you in exchange for bitcoin for ~1.5% fees. I have not used there service yet, but do believe that I will be using it. However I do consider proxy services like this a temporary thing. Within a few short years I anticipate that I can pay atleast an isp and a cell phone service provider directly in bitcoin. Taxes however seem to be far far away in the distant future, I am somewhat reserved about using a proxy service to pay taxes, while technicly entirely possible: how dodgy would it appear when another unrelated company pays my taxes ?

Goods, I have been approached by three manufacturers who have offered their vares for bitcoin. One of them, bkeychain, I found suitable and we struck a deal and I am at current their Eu reseller. The majority of my goods is still sadly paid for in more traditional currencies, I have talked to my main manifacturer about bitcoin, but have decided agains pushing the issue, I myself dont respond well to pressure and feel confident that they will eventually get there. While obviously constantly remaining at risk of losing my business to someone that does accept bitcoin.

Bitcoin trinkets now on my online store: btc trinkets.com <- Bitcoin Tiepins, cufflinks, lapel pins, keychains, card holders and challenge coins.
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August 26, 2013, 06:57:24 AM
 #2

Taxes?

Who needs that? Taxes don't add anything to the economy.
Isokivi
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August 26, 2013, 07:00:54 AM
 #3

Taxes?

Who needs that? Taxes don't add anything to the economy.
I chose from the beginning to go the legit way. I can appreciate the opposing views and sympathise with them to some extent. But imho. the fact is that the surrounding infrastructure I need in order to be able to conduct business globally from the confines of my study simply would not exist without a nation state, with all it's pros and cons.

Bitcoin trinkets now on my online store: btc trinkets.com <- Bitcoin Tiepins, cufflinks, lapel pins, keychains, card holders and challenge coins.
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August 26, 2013, 07:45:20 AM
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Taxes?

Who needs that? Taxes don't add anything to the economy.
I chose from the beginning to go the legit way. I can appreciate the opposing views and sympathise with them to some extent. But imho. the fact is that the surrounding infrastructure I need in order to be able to conduct business globally from the confines of my study simply would not exist without a nation state, with all it's pros and cons.

Mah roads!

Thats a big statement. I can understand a pragmatic aproach, the government exists and has more weapons than anyone else so Im going to pay. I do the same. But that is very different from saying that without government we would not have infrastructure.

For example, in the early days of the USA the roads were build privately by cooperatives formed in the towns that needed the roads. It was later on that the government came in and monopolized its construction. In Somalia when the government collapsed the telephone industry had to build a lot of infrastructure that did not exist, flourished and provided the cheapest service in all Africa (with no regulations at all for obvious reasons). Just because we are used to government monopolies on infrastructure does not mean that if the government wasnt there the infrastructure would not exist. We can not know how it would be because the government is using force to impose its system, but the examples we have where governments werent there or have allowed the private sector to freely provide show better results than government monopoly.

But I understand that after a whole life of living under government monopolies it can be hard to even imagine. Politicians count on this effect too. A common complain among a lot of people when the communist regime in Russia felt was that, without the government having companies, jobs would disappear. To us its absolutely hilarious but they were dead serious. All their lifes they had looked up to the government for a job so they could not imagine it otherwise, the same way people in western countries have lived under government monopolies for infrastructure and can not imagine it otherwise.

Maybe the next step is cryptoroads... Cheesy

justusranvier
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August 26, 2013, 07:56:41 AM
 #5

I use BTC to pay for rent and utilities.
MXRider
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August 26, 2013, 10:17:20 AM
 #6

Very good post. Like many people suggested, you should translate this to Finnish and post it to a website like http://www.uusisuomi.fi/

I would also like to correct your statement about bittimania.fi: the old limit was 1000€ per day.That limit has been removed now. It was just a precaution due to legislation regarding money laundering and funding terrorism. I now know more and that's why I removed the limits.

Isokivi
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August 26, 2013, 10:19:13 AM
 #7

Very good post. Like many people suggested, you should translate this to Finnish and post it to a website like http://www.uusisuomi.fi/

I would also like to correct your statement about bittimania.fi: the old limit was 1000€ per day.That limit has been removed now. It was just a precaution due to legislation regarding money laundering and funding terrorism. I now know more and that's why I removed the limits.


Corrected the misinformation, thanks for pointing it out.

Bitcoin trinkets now on my online store: btc trinkets.com <- Bitcoin Tiepins, cufflinks, lapel pins, keychains, card holders and challenge coins.
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August 26, 2013, 12:59:35 PM
 #8

Taxes?

Who needs that? Taxes don't add anything to the economy.
I chose from the beginning to go the legit way. I can appreciate the opposing views and sympathise with them to some extent. But imho. the fact is that the surrounding infrastructure I need in order to be able to conduct business globally from the confines of my study simply would not exist without a nation state, with all it's pros and cons.

Mah roads!


He lives in Finland. That's a cozy country. It's something entirely different than the US. Even in a libertarian society, you'd maybe live in a cozy housing community. You'd pay by contract a little fee for upkeep and maintenance of the gardens and roads inside, as well as for sewage and wiring hookup. If you don't like it, fine, look for another housing community. Smaller countries like Finland are just like bigger housing communities. If you don't like it, fine, go someplace else.

https://localbitcoins.com/?ch=80k | BTC: 1LJvmd1iLi199eY7EVKtNQRW3LqZi8ZmmB
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August 26, 2013, 01:11:16 PM
 #9

What about rent for business premises?
All it would take would be to find a private landlord who owns a property outright (so doesn't need to pay a mortgage to banks in fiat) who would be willing to accept bitcoin. If that landlord wants to build up savings it would make sense to save partially in bitcoin.
How do you pay for property at the moment? (I'm guessing like many small business owners you work from home)

edit: I've put one of my properties to rent for bitcoin, it's a holiday home in the sun. Tourist season is basically over and nobody for the entire summer has enquired. I imagined it would be a good place for bitcoin because most people pay with paypal. Maybe I just didn't advertise enough, I was pretty busy this year.
Isokivi
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August 26, 2013, 01:28:55 PM
 #10

What about rent for business premises?
All it would take would be to find a private landlord who owns a property outright (so doesn't need to pay a mortgage to banks in fiat) who would be willing to accept bitcoin. If that landlord wants to build up savings it would make sense to save partially in bitcoin.
How do you pay for property at the moment? (I'm guessing like many small business owners you work from home)

edit: I've put one of my properties to rent for bitcoin, it's a holiday home in the sun. Tourist season is basically over and nobody for the entire summer has enquired. I imagined it would be a good place for bitcoin because most people pay with paypal. Maybe I just didn't advertise enough, I was pretty busy this year.
Yes I do work from home, this is atleast for now a sideventure at best. I do hold a dayjob. I could pay my rent via bittimania's bill paying service tough.

Bitcoin trinkets now on my online store: btc trinkets.com <- Bitcoin Tiepins, cufflinks, lapel pins, keychains, card holders and challenge coins.
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August 26, 2013, 02:14:14 PM
 #11

All this is well and good, guys and gals. But don't enter the trap of self sacrifice, for the good of bitcoin or the bitcoin economy or the bitcoin society, whoever that is. Use or hoard as you see fit based on your own rational self interest. Bitcoin is a perfect tool for that.
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August 26, 2013, 07:14:12 PM
 #12

Taxes?

Who needs that? Taxes don't add anything to the economy.
I chose from the beginning to go the legit way. I can appreciate the opposing views and sympathise with them to some extent. But imho. the fact is that the surrounding infrastructure I need in order to be able to conduct business globally from the confines of my study simply would not exist without a nation state, with all it's pros and cons.
I know, right? I mean... Who will build the roads? More importantly, who will put out the fires?
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August 26, 2013, 08:56:59 PM
 #13

Just like a foreign currency, as long as there are many exchanges, no need to worry about the rest

Isokivi
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August 28, 2013, 06:13:48 AM
 #14

I was hoping to spark up a bit more conversation, I'd love to see other vendors and service providers jumping in and telling what thay are purchasing and providing trough bitcoins.

Bitcoin trinkets now on my online store: btc trinkets.com <- Bitcoin Tiepins, cufflinks, lapel pins, keychains, card holders and challenge coins.
xxjs
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August 28, 2013, 07:58:46 AM
 #15

I was hoping to spark up a bit more conversation, I'd love to see other vendors and service providers jumping in and telling what thay are purchasing and providing trough bitcoins.

The bitcoin economy will never be closed, i hope. With adoption, opportunities for direct use (or should I say "direct indirect use") will come.
Isokivi
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August 28, 2013, 08:11:30 AM
 #16

The bitcoin economy will never be closed, i hope. With adoption, opportunities for direct use (or should I say "direct indirect use") will come.
Your misunderstanding my entire point. I dont root or hope for a closed economy in any way. Just an economy where I have to do as little as possible or absoluteley with fiat currencies.

Bitcoin trinkets now on my online store: btc trinkets.com <- Bitcoin Tiepins, cufflinks, lapel pins, keychains, card holders and challenge coins.
xxjs
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August 28, 2013, 10:53:02 AM
 #17

The bitcoin economy will never be closed, i hope. With adoption, opportunities for direct use (or should I say "direct indirect use") will come.
Your misunderstanding my entire point. I dont root or hope for a closed economy in any way. Just an economy where I have to do as little as possible or absoluteley with fiat currencies.

Cool
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