But I think there's a bitcoin fundamentals issue here, too: it doesn't take a genius to see that if Mt. Gox's total trading volume is 6000 bitcoins, and 7200 new coins are minted a day, miners have to hoard almost all of their bitcoins in order for bitcoins to not drop like a stone. How long will miners hoard before they want or need to start cashing out? Anyone that can afford mining rigs can probably afford to pay the electric bills for a few months without cashing out their mined coins, but will bitcoins see a significant increase in usage and demand before miners need to sell to cover the bills? That's the million dollar question, in my mind.
Exactly what I was thinking. At this point I think we may truly be witnessing the signs of how desperately Bitcoin infrastructure needs to grow. I just checked out www.bitmunchies.com
and loved what I saw. The ability to buy everyday, household products and perishables is exactly what Bitcoin needs. Here's how I see it. I'm mining coins, making several $ USD a day. Why go to the store (gas is expensive + time considerations) when I can just take my mined BTC and do my errands online in a few minutes? I have no good reason to sell my bitcoins and also no good reason to buy more with the markets as they are. But I do have a good reason to buy household supplies and food. If this is the case, we don't need high exchange volume because of the high volume outside of the exchange. The problem to me is that it seems like there aren't enough competing merchant sites outside of the gambling and precious metals arenas. We need 100 bitmunchies.coms, 100 BTC-accepting clothing apparel sites, etc. BTC is supposed to be a more convenient method of exchange, and if I can buy the same things that I would with USD at the same price more conveniently, then my demand for BTC will certainly increase. This is ESPECIALLY true if I can purchase things with BTC at a discount (i.e. a slightly lower price than USD) since this would give me a reason to buy BTC at an exchange explicitly for product purchases. All this precious metals crap is great (seriously, who wouldn't want a 1 oz. troy silver Bitcoin to give you the warm fuzzies?), but it's NOT more convenient when I could buy silver cheaper without BTC. Less focus on novelty, more focus on what's practical!