Musings about growing the Bit-conomy

[Guardian]

Hi.  I'm new, as you can tell by posting this forum.  I have some questions I'd like to throw out there with regard to the Bitcoin (BTC) economy and how it will grow.  I promise I'm not trolling (not that you can ever trust someone who says this), just curious and I'd like to see what the feedback is.  If these issues are discussed elsewhere more appropriate, point me to it and I'll take my questions there when I get out of Newb Mode.

1.  How do we make BTC easier to use?

Imagine trying to explain BTC to your [insert non-technical family member here].  I consider myself a fairly technical person, and I'm struggling to understand how to actually keep my pile of bit-cents safe.  If the average person could use BTC safely and understandably, then the economy would grow vastly beyond where it is now.  As it is, there's an 8-step process involving making a boot disk on some flash drive to secure your BTC.  Let's be honest, that's too much work for most people. 

Also, I forget passwords on a regular basis.  The idea of putting my money into a locked vault so secure that I could lock myself out of it (along with everyone else) does not sound smart or feasible.  How can we solve these issues?

2.  How do we convince people BTC is about more than buying illegal crap in the US?

Do a Google News search for BTC and you're likely to find stories about how BTC is evil because people are using it to buy illegal stuff (principally drugs) more anonymously.  The only thing that's going to accomplish is getting various US legislative bodies to make our life more difficult.  I'm not suggesting we try to control how the BTC is used; we just need to replace the negative publicity with something positive.  What is that positive thing, and how do we get it out there?

There are likely some people with a "screw you" attitude towards any US legislative action.  So be it.  However, if you want the BTC economy to grow (and your BTC to appreciate in value), then I think that's a bad attitude for business.  Constructive solutions would be more productive.

3.  Who will be BTC's first major user?

I feel like the BTC economy would gain much more momentum with one star user.  It could be a person or a business, but someone or something that turns a lot of heads when they announce they'll use it.  Maybe Amazon?  Google?  What would it take?

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[remmy]

1. Using bitcoin is a bit like taking cash out of the bank and hiding it under your mattress.  You really must protect yourself and your own money.  I'm a newbie myself and I don't know all the facts, but I think we're still waiting for the most popular client to include encrypting wallets with a passphrase as an option in the UI (coming soon according to github).  Most people are not ready to take on the responsibility of holding the keys to their own kingdom.

Bitcoin needs banks in order to be successful with the general public.  The problem is that breaking rules in the bitcoin economy carries no risk, so fraud is inevitable.

2. Bitcoin significantly lowers the bar for entry into every market, including illegal ones.  Websites like http://forbitcoin.com (not an endorsement) show how bitcoin can be positively used, it allows anyone to market their skills with a few clicks.  My problem is that there are too many people offering useless services and defrauding others; the signal-to-noise ratio is too low.  These websites need moderation and a measure of reputation for buyers and sellers to be effective.

You could point out that its anonymity allows an individual from an oppressive country to secretly move funds into a trust before escaping.  Less dramatically, it also allows merchants to accept a non-reversible form of payment over the internet, which eliminates their risk of being defrauded.  Consumers now carry the risk by themselves.

3. I do not wish to speculate on this right now.

[Ono Nadagin]

There is about to be a new Star Wars MMORPG released I think that if making BTC a legit currency for buying ingame currency was worked out would be a huge boon for BTC as this game will rival WOW in magnitude... it will be the new MMORPG standard and its currency/credits will be in HUGE demand and could play a large role in standardizing BTC as a legit currency.

If nothing else it could prompt star wars gamers into mining in their down time to earn btc to purchase credits for the game

[qwk]

3.  Who will be BTC's first major user?

I feel like the BTC economy would gain much more momentum with one star user.  It could be a person or a business, but someone or something that turns a lot of heads when they announce they'll use it.  Maybe Amazon?  Google?  What would it take?

None of the usual suspects. I think we'll see something completely unexpected as the first major application that puts bitcoins to use.

I guess it will be a money transfer service, very much like Western Union. People working in the first world, who want to send money to their families in the third world. At present, they use Western Union for it, but at a high price. Once shopkeepers at your regular bazaar in north Africa learn about bitcoins, they will pick it up as a business model, delivering the same service at a discount. And we're talking Billions of Euros / Dollars transferred this way.

[ffuentes]

3.  Who will be BTC's first major user?

I feel like the BTC economy would gain much more momentum with one star user.  It could be a person or a business, but someone or something that turns a lot of heads when they announce they'll use it.  Maybe Amazon?  Google?  What would it take?

None of the usual suspects. I think we'll see something completely unexpected as the first major application that puts bitcoins to use.

I guess it will be a money transfer service, very much like Western Union. People working in the first world, who want to send money to their families in the third world. At present, they use Western Union for it, but at a high price. Once shopkeepers at your regular bazaar in north Africa learn about bitcoins, they will pick it up as a business model, delivering the same service at a discount. And we're talking Billions of Euros / Dollars transferred this way.

Indeed, I just buyed some BTC with the purpose of transfer it to other in another country with another currency and it seems cheaper (too much) than WU. The only con is (currently) the number of steps to do it. If someone make a bit-money transfer (currently there are only exchangers and it's not the same) web service, he could win much money.

[qwk]

I guess it will be a money transfer service, very much like Western Union. People working in the first world, who want to send money to their families in the third world. At present, they use Western Union for it, but at a high price. Once shopkeepers at your regular bazaar in north Africa learn about bitcoins, they will pick it up as a business model, delivering the same service at a discount. And we're talking Billions of Euros / Dollars transferred this way.

Indeed, I just buyed some BTC with the purpose of transfer it to other in another country with another currency and it seems cheaper (too much) than WU. The only con is (currently) the number of steps to do it. If someone make a bit-money transfer (currently there are only exchangers and it's not the same) web service, he could win much money.

The number of steps will decrease, once you have local shop-owners trading cash for bitcoins and vice versa. There is no need for any kind of web service involved, actually, so there will probably not be anyone who will make a lot of money out of that particular use of bitcoins.

[ffuentes]

I guess it will be a money transfer service, very much like Western Union. People working in the first world, who want to send money to their families in the third world. At present, they use Western Union for it, but at a high price. Once shopkeepers at your regular bazaar in north Africa learn about bitcoins, they will pick it up as a business model, delivering the same service at a discount. And we're talking Billions of Euros / Dollars transferred this way.

Indeed, I just buyed some BTC with the purpose of transfer it to other in another country with another currency and it seems cheaper (too much) than WU. The only con is (currently) the number of steps to do it. If someone make a bit-money transfer (currently there are only exchangers and it's not the same) web service, he could win much money.

The number of steps will decrease, once you have local shop-owners trading cash for bitcoins and vice versa. There is no need for any kind of web service involved, actually, so there will probably not be anyone who will make a lot of money out of that particular use of bitcoins.

Of course, it's not needed but currently to know how to do it , is not easy. That's why I think is needed  a particular web service on money transfers, this would be a WU low cost even for those who don't know or understand what is that bitcoin thing.

[maxmint]

I can imagine that some band on the edge of technical innovations could jump on this.
Think about Radiohead selling their new album for 2 BTC. This would give the whole movement a big push forward.
I'm sure something like this will come in the not to far away future.

[Kyt Dotson]

There is about to be a new Star Wars MMORPG released I think that if making BTC a legit currency for buying ingame currency was worked out would be a huge boon for BTC as this game will rival WOW in magnitude... it will be the new MMORPG standard and its currency/credits will be in HUGE demand and could play a large role in standardizing BTC as a legit currency.

If nothing else it could prompt star wars gamers into mining in their down time to earn btc to purchase credits for the game

Having a major video game (soon to be MMORPG) developer like Bioware embrace BTC would certainly be a gigantic boon for the bitcoin currency market. However, getting them to make that step will be the initial hurdle.

I would suggest aiming smaller and looking at the Korean free-to-play game market like Pefect World Entertainment, Nexon, GamesCampus, and the like who don't already have mass-markets that feed them extremely well. If an up-and-coming free-to-play MMO publisher can be convinced to adopt BTC as part of their cash shops, it could become the driving force of a revolution amid the same peer group.

Bioware, EA, and LucasArts would be a worthy goal; but unlikely attainable without a mountain of groundwork.

Also, I see Activision Blizzard coming out possibly first into this market if only someone were to make an exchange service that would act as one of the third party payment services for the Diablo III cash auction house. Say, the third party payment vendor exchanges outgoing dollars from D3 into bitcoins and vice versa for sales in their cash auction house. Prove that working, it will only add to popular appeal.

[timmey]

3.  Who will be BTC's first major user?

I feel like the BTC economy would gain much more momentum with one star user.  It could be a person or a business, but someone or something that turns a lot of heads when they announce they'll use it.  Maybe Amazon?  Google?  What would it take?

uploaded.to (a "big" OneClickHoster in the german speaking parts of Europe) has announced that they will use Bitcoins. They are quite big and this will draw some attention on bitcoins. But since they are a just shady filehoster for stolen goods...i'm not sure if that will be the attention needed to convince a real company like Amazon to use Bitcoins

[TalkingAntColony]

In order for bitcoin to go more mainstream, and thus grow its economy, there needs to be more extensive software development on the client side. Even the main bitcoin windows client is not yet ready for "Joe the Plumber" type users. Part of this is due to the complex nature of bitcoin, but I think that if someone developed and sold a feature-rich software suite for bitcoin that handled things like wallet safety, savings accounts, etc, then the barrier to entry could be lowered.

Mobile device bitcoin clients have seen some growth, but again, there is still much room for improvement. This could one day merge the function of a physical wallet into smartphones, assuming enough businesses accepted BTC, or some proxy BTC->USD service was available to remotely pay people who did not accept BTC.

[spruce]

3.  Who will be BTC's first major user?

I feel like the BTC economy would gain much more momentum with one star user.  It could be a person or a business, but someone or something that turns a lot of heads when they announce they'll use it.  Maybe Amazon?  Google?  What would it take?

None of the usual suspects. I think we'll see something completely unexpected as the first major application that puts bitcoins to use.

I guess it will be a money transfer service, very much like Western Union. People working in the first world, who want to send money to their families in the third world. At present, they use Western Union for it, but at a high price. Once shopkeepers at your regular bazaar in north Africa learn about bitcoins, they will pick it up as a business model, delivering the same service at a discount. And we're talking Billions of Euros / Dollars transferred this way.

Could be. Exchanging BTC for local currency could be done as a sideline by almost any shopkeeper with (currently) an internet connection. Remember all those "Send a fax $1" notices you used to see in random mom-and-pop store windows? Bitcoin exchanges could be done as a sideline. Look out for all the "Bitcoins sold/bought here" signs to spring up around the globe. To start with the exchange rates wouldn't be so hot, but they would come down with competition and increased infrastructure that would facilitate the third-world shopkeeper cashing in his excess BTC for local currency himself.

[Guardian]

I really think my first question is the key, though.  If no one uses (or if people are scared to use) this technology, it won't take off.  It's the same reason we pay for large transactions with checks or cards instead of cash or gold coins.  People don't want to be carrying around that sort of risk of loss.

I think the BTC concept is brilliant.  Isn't there some correspondingly brilliant way to deal with this problem? 

[cbeast]

I watch the hashrate distribution, the BTC sent per day, and read about application development. These three factors point to a shiny future for bitcoin. I think it's great that there are poseur digital currencies out there like farm-gold and face-pal. They are like modern S&H Green Stamps. They are fun to collect, but not very useful. Their failures will strengthen bitcoin's perception as having all the strongest attributes.

Namecoin or any other similar technology will not take away from the value of bitcoin, but will help bitcoin miners fill roles that will strengthen bitcoin just like all precious metals do with respect to each other. Branched block chains will make mining/auditing more productive and bitcoin itself will be the gold standard of crypto-currencies.

P.S. qikaifu suggested we drop the term miner and adapt the term auditor. I heartily agree!
https://bitcointalk.org/index.php?topic=32943.0

[ffuentes]

I watch the hashrate distribution, the BTC sent per day, and read about application development. These three factors point to a shiny future for bitcoin. I think it's great that there are poseur digital currencies out there like farm-gold and face-pal. They are like modern S&H Green Stamps. They are fun to collect, but not very useful. Their failures will strengthen bitcoin's perception as having all the strongest attributes.

Namecoin or any other similar technology will not take away from the value of bitcoin, but will help bitcoin miners fill roles that will strengthen bitcoin just like all precious metals do with respect to each other. Branched block chains will make mining/auditing more productive and bitcoin itself will be the gold standard of crypto-currencies.

P.S. qikaifu suggested we drop the term miner and adapt the term auditor. I heartily agree!
https://bitcointalk.org/index.php?topic=32943.0

If they actually acting like auditors I would agree with.

[qwk]

I really think my first question is the key, though.  If no one uses (or if people are scared to use) this technology, it won't take off.  It's the same reason we pay for large transactions with checks or cards instead of cash or gold coins.  People don't want to be carrying around that sort of risk of loss.

I think the BTC concept is brilliant.  Isn't there some correspondingly brilliant way to deal with this problem? 

There is. It's online wallet services, just like mybitcoin.com. But of course, it will take some time until trustworthy, secure, reliable services pop up. Until then, we'll see a few more scams, screw-ups etc.

In, say, 2 or 3 years, i guess more than 90% off all bitcoin transactions will be done over online wallets, 99% in 5 years. Just some random numbers i totally picked out of thin air, but probably true.

[cbeast]

In, say, 2 or 3 years, i guess more than 90% off all bitcoin transactions will be done over online wallets, 99% in 5 years. Just some random numbers i totally picked out of thin air, but probably true.

I don't even see the point of online wallets stored on private servers. BTC is a decentralized currency for many good reasons. I am sure there will be products developed to secure keys with multiple backups and encryption. As far as transactions go, sure they may be done with escrow services for major purchases, but it's more likely that adding small transaction fees with allow speedy processing. At some point trusted auditing (mining, for some) pools will be prioritized for initial verifications and they will compete for transaction fees, but the consumer will always drive the development of the bitcoin network.

[goodlord666]

somebody really BIG would have to endorse bitcoins...

maybe an entirely new brand, a personality that accepts only bitcoins as payment

somebody or something that speaks to people in a language they can understand...

somebody that offers stuff that can only be purchased using bitcoins

somebody that makes using bitcoins a fun and exciting new thing

somebody that could function as the public patron of bitcoins

but who would that be?