Bootstrapping a local economy

[n0m4d]

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The limited resource of proselytising
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Presently, the bitcoin economy would appear to be mainly those interested in making margin profits in trading, with attendant financial services springing up to service those that deal mainly in currency trading - escrow, etc.

Without _local_ currency markets, bitcoin would appear to be a trader's game - more or less (to a layman) an online game that they may not understand all the rules of.  Why bother when they could invest their money in a "real" market that is so widely trusted the risk is seen as nonexistant (legitimate belief or not).

Take the time to educate that person on hidden taxations such as inflation, etc, and there is a possibility that they will begin to consider putting a portion of their savings into bitcoin - as just another way to spread risk in their portfolio.


Premise
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I have a small pool of investors that would like to bootstrap our local economy in bitcoins.

We have a reasonable amount of initial capital to inject into the system (perhaps a couple K USD between us) and accept that we may take a total loss as these bitcoins flee the local geographic area.

Although we have a wide range of services / goods that we can offer to each other - necessarily we will need to do (at least at first) a majority of our trades with the local community.  Obviously, we need to take our limited resources - our time and energy spent educating others about Bitcoin - and establish beachheads in the community that promote the greatest uptake.


Request For Comment
===================

What (in your opinion) are the key places to establish adoption of Bitcoin outside of our initial pool?

* Businesses dealing primarily in cash?
* College students?
* Persons that might like to have nonreputable "cash" that can't be stolen by a malefactor at point-of-trade?
* Employers of below-minimum-wage or undocumented workers?


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[fabianhjr]

Now there are a few projects that must be fullfiled before this can really progress. Such projects are:
-Android Client
-Ripple Distributed Protocol for the Exchange and Instant Payments
-ATM Machin exchanges?
-POS Systems
-Animated Movie(When it is done buy tons and give them for free at schools, workplaces, universities, cinemas, grocery stores, etc)

As of the audience open minded(Young people) are more likely to adopt it at first then drag the elder ones. :-)

[n0m4d]

Now there are a few projects that must be fullfiled before this can really progress. Such projects are:
-Android Client
-Ripple Distributed Protocol for the Exchange and Instant Payments
-ATM Machin exchanges?
-POS Systems
-Animated Movie(When it is done buy tons and give them for free at schools, workplaces, universities, cinemas, grocery stores, etc)

As of the audience open minded(Young people) are more likely to adopt it at first then drag the elder ones. :-)

For the demand for software, do we have a centralized threshold pledge system set up? http://en.wikipedia.org/wiki/Threshold_pledge_system

If we had a trusted agent for source code escrow, I would imagine that the rate of development would increase.

I know that I would immediately start looking into writing an Android client (which I would in turn open source) if someone escrowed >100 BTC.

[n0m4d]

I know that I would immediately start looking into writing an Android client (which I would in turn open source) if someone escrowed >100 BTC.

Wait a minute - what would this offer above and beyond https://www.mybitcoin.com/?

[Sultan]

I know that I would immediately start looking into writing an Android client (which I would in turn open source) if someone escrowed >100 BTC.

Wait a minute - what would this offer above and beyond https://www.mybitcoin.com/?

MyBitCoin.com, although a very trustworthy site, is a central point of failure, something that BitCoin is trying to steer away from. However I am not against the idea of "banks" like MyBitCoin.com in anyway. Using these as current accounts would be best where money can be transferred instantly between each other as long as they are MyBitCoin.com account holders.

As far as android clients and what-not, what about POS technology? How would that interface with BitCoin?

[n0m4d]

As far as android clients and what-not, what about POS technology? How would that interface with BitCoin?

The gist of my question is which merchants, rather than how.  How can get hashed out by the market once there's some buy-in.

And to directly answer your question - perhaps by having a display screen that shows inbound payments to the merchant's BTC account?

Client steps up, says what account the BTC will be coming from, and then makes their order.

[n0m4d]

Bitcoin is a principally new asset class!

Forgive my economic ignorance - are you saying that BTN has more speculative potential right now than potential for use as a new/shadow currency?

I can completely agree with that viewpoint - it does appear that BTN are still finding their level vs other currencies.

Does that invalidate or count as a huge demerit towards using it as a currency at the moment?

It seems like that provides a lot of incentive for the people at the edge of the network (BTN / real world) to speculate and trade back and forth - which will be needed at first.

If it's too early to bring BTN to the 'real world' - will there be an accurate indicator when it's finally 'safe'?  How far into 'early adopter' until I'm in 'hare-brained risk' territory?

[n0m4d]

Bitcoin is a principally new asset class!

Forgive my economic ignorance - are you saying that BTN has more speculative potential right now than potential for use as a new/shadow currency?

No I am not saying that. Do not put words in my mouth please.

[...]

How what you say follows from what I say escapes my comprehension.

[...]

Wasn't trying to put words in your mouth - just trying to figure out the relevance to the post topic.

[n0m4d]

Sorry, if my post sounds too harsh. I mean no offense.

We were just talking past each other.  All good.

The relevant point I was trying to make is that since you have investors who want to invest into local economy and use bitcoins. The investors must have some warm and fussy feeling knowing that they've invested money into interesting asset class which is nice to have in a modern investment portfolio.

That's an excellent point - I think I've been thinking about the problem backwards (not unusual for me) - if someone puts up a local exchange BTN for cash in the area they want to "take over" with BTN, that incentivizes initial buy-in.  Sounds like that's possibly Phase I.

I suggest all of the above. I would speculate that if some local business accept bitcoins, some local business buy and sell bitcoins for cash, bank transfers etc... , some local business pay some wages in bitcoins, and some students mine bitcoins in their dorm rooms this is already pretty healthy foundation for circulation of bitcoins in a local community.

But if I view my time in economic terms: I only have a limited supply of time - so I want the highest return on investment.  I can't possibly do everything at once, so I need to prioritize.  Who do I "infect" with the idea of BTN in my community in order to get the most people trading in them?  Identifying the "high value" people would appear to be Phase II...

[kiba]

I can't possibly do everything at once, so I need to prioritize.  Who do I "infect" with the idea of BTN in my community in order to get the most people trading in them?  Identifying the "high value" people would appear to be Phase II...

Don't you mean BTC instead of BTN?

[n0m4d]

I can't possibly do everything at once, so I need to prioritize.  Who do I "infect" with the idea of BTN in my community in order to get the most people trading in them?  Identifying the "high value" people would appear to be Phase II...

Don't you mean BTC instead of BTN?

Apologies.  Swear I looked it up.   

[n0m4d]

[...] if there are wages paid in BTC and some goods are being traded for BTC and some students mine BTC's [...]

That makes really good sense.

So, Phase II needs to be broken out into three parts.

Looks like what I need to round up is folk that are willing to be 'ambassadors' of BTC, that will take payment in BTC.

Then, we send them out towards the three legs.

Local college can have bulletin board postings put up.  Check.

Paying wages...  Maybe lawn care services?  Other small shops that would _like_ to pay under minimum wage or under the table...

Goods...  All I've been able to come up with here is gift cards for small local shops, and black markets.

Anyone have any insights for other 'vulnerable' market segments?

Seems to me isolating a complete supply chain loop locally would also yield benefits.

[Garrett Burgwardt]

The drug trade is a big one, anonymous payment is huge in that regard.

[fabianhjr]

The drug trade is a big one, anonymous payment is huge in that regard.

This isn't nice at all. If people correlate bitcoin with socially unaccepted behaviours then the adoption would be harder. xD

[n0m4d]

The drug trade is a big one, anonymous payment is huge in that regard.

This isn't nice at all. If people correlate bitcoin with socially unaccepted behaviours then the adoption would be harder. xD

That's why I'm soliciting for alternatives - but I'm not going to hamstring adoption by counting it out, either.

I'm interested in uptake and taking BTC to the streets - if it comes to it - by any means necessary.

[fabianhjr]

Ok, this is what we need first:
The POS system and the Ripple Decentralized Protocol/Exchange(F2F)

I am working on a PrestaShop module which will use MtGox merchant service. This shall allow more merchants to start offering tangible and non-tangible goods for bitcoins.

I have leverage on my current school(about 2K students and staff) and if I can get my hands to a POS system(Where you just walk, scan a QR address pay and you are done) system I wouldn't mind donating it to offer lunch and school material for Bitcoins.

[maxvendor]

could use a cash in mail, or cash deposit exchanger in the UK for buying bitcoins and in Germany that's reliable. or a ukash to btc in both countries if the fees are reasonable. especially in Ireland

a US exchanger that sells bitcoin to moneypack

everything else could just convert to hdmoney and use atm cards or cash in mail

[n0m4d]

I'm currently considering a local BTC -> USD business, as a first step to getting the community involved.

If anyone running a local exchange can put in their .02BTC worth on their experiences, that'd be awesome!

[abstraction]

I, too, am interested in localizing bitcoin in my town. I live in a college town with a college that mostly caters to engineering, agriculture, and business degrees. The local residents are accustomed to gathering for farmer's market every week.
My strategy is to:

• recruit friends to gain familiarity with BTC
• start exchanging goods and services between us
• grow the user base to 25 people
• create a weekly newsletter listing what people want to buy and sell, and bitcoin related services
• set up a website devoted to local exchange only
• start directing people to the website from the newsletter
• grow the user base to 50 people
• set up a scheduled time and place for people to meet and exchange what they buy (possibly during the farmer's market)
• enlist people from the community gardens to sell vegetables
• polish up the newsletter and start talking to local businesses (cafes, pizza, sandwich shops, etc.)about accepting bitcoin tips, showing them the website so they can see what they can exchange the tips for
• move the swap meets to local businesses so they can host them (and maybe compete for meeting times)
• roll out the POS system

I can do much of this through my own effort. However, I am not skilled enough to develop a website that can:

• allow me to write updates about the local bitcoin community (like a blog)
• securely authenticate users
• allow users to create their own product listings (with a quantity option)
• put hooks into clearcoin or some other escrow service for facilitating safe transactions
• create a rating system for transactions
• allow a growable taxonomy for organizing goods and services
• create "watch"es on items that either send an email or create an RSS feed based on items that are back in stock or for an item that I want that is not yet listed (so someone else can see that the item I want is not currently available and add the item to the market if they have it

Many of the website pieces exist already, but not in this configuration that I am aware of. What do you think about my strategy? How many BTC would cost for someone to build such a website (and allow people in other communities to configure it to their own location)?

[n0m4d]

These are far better milestones than my nebulous:
1)
2) BTC are accepted by the general populace.
3) We win.
Business plan.

It looks to me like you're setting up a cross between Craigslist and Ebay...

A few things that come to mind:

• Separating the social from the business aspects - ie managing a blog/forum/PM system seems like a lot of b*tchy political user overhead to me.
• On that same note, that implies a system of moderators...  Not a huge deal but there may be a cleverer way of setting up both a hierarchy of goods and anti-troll/spam measures with some sort of community policing.  Maybe that's just my militant laissez-faire speaking.
• Though this thread is (nominally) about a "local economy" - I don't see a reason that geographic tags can't be added to items, or sellers, or whatever, rather than limiting the scope of users by design.
• Leveraging anonymity - something else not to throw away would be the privacy BTC facilitates.  There are plenty of grey market items that might want to be traded.  There is also the possibility that BTC will attract unwanted attention from the powers that be, and being ahead of the game by allowing people to "go dark" is something that can be provided without too much overhead, if it's designed in from the start.[/i]
  

With caveats, this is a manageable project.  You have a "business" plan and what looks like the beginnings of some example use cases.

It's certainly something I'd entertain working on for fame, and release the code under some threshold pledge setup for BTC.  Just don't let me near the presentation layer.