We're rapidly approaching critical adoption rate.

[BadBitcoin (James Sutton)]

So initially back in 2011, I was skeptical of bitcoin.
I couldn't see the big deal, I didn't read the whitepaper, all I seen was a way to make easy money from mining, there wasn't much value in the coins themselves.

However, after seeing the congressional hearing and the rumors of the IMF potentially adding bitcoin to their "basket" for international trade, I started thinking. Bitcoin is superior to national currency in literally every way, there is absolutely zero reason not to own bitcoin over your local equivalent besides its ease of use, however even that's starting to change. I live in canada, Virtex has recently released their own bitcoin -> CAD debt card, this is huge, this means that if you're canadian and you trust virtex (which I do), you can essentially never actually hold Canadian Dollars if you don't specifically need to.

What I see happening sooner rather than later, is people beginning to convert to 100% bitcoin as their bank account, completely removing their own bank from the equation besides having some spending cash to buy drinks with, and even then I can see that being supplanted by physical bitcoins.

We're living in an amazing time, I can definitely see bitcoin taking off in my city, after the recent rise in value most of my buddies have been very interested in bitcoin as an investment tool, I've tried my best to talk them into using it as a replacement of dollars that stores value rather than slowly erroding it in fiat based economies.

Any thoughts guys? Pitfalls? I'm strongly considering mass producing a "standardised" physical bitcoin that I can sell locally in my friends shop, and sell via mail, creating almost like a "bitcoin information centre" in my city

[Izerian]

All I can say is that adoption is the only hurdle bitcoin has. (In my own limited mindset)

[BadBitcoin (James Sutton)]

agreed, I think it should be our duty to not only spread the idea of bitcoin as a governmentless, "be your own bank" system, but also  setup systems in place to actively help people get bitcoin, don't sell them "1 btc coins" but start looking at 1mbit, 5mbit, 1cbit, 5cbit coins, to start having people realize the potential day-to-day trading value of a currency that physically can't decrease in value due to inflation.

No one wants to lose money because their government can't stop printing bills, and the bitcoin foundation shown that with the proper lobbying, even the US congress can see the value with what bitcoin has to offer.

EDIT: Just to clarify, this is coming from a person who sold all his bitcoins at 10 dollars for tuition and isn't spiteful of missing out on the price gain

[empoweoqwj]

I agree with most of what you say.  There are still issues however:

1) Convincing people to spend instead of hoard bitcoins when the value has increased 50x in the last year. I look back at stuff I bought with bitcoins just 6 months go and think "OMG" - should have paid with cash instead.

2) Price volatility - whatever people say, its hard having a currency which is so volatile. You might own enough bitcoins to buy a car / house / whatever one day, then next day go to buy the thing and be 30% short of the asking price  ;-)

Let's hope the price becomes more stable and less volatile as mass adoption happens.

[dominicwin]

I agree with most of what you say.  There are still issues however:

1) Convincing people to spend instead of hoard bitcoins when the value has increased 50x in the last year. I look back at stuff I bought with bitcoins just 6 months go and think "OMG" - should have paid with cash instead.

2) Price volatility - whatever people say, its hard having a currency which is so volatile. You might own enough bitcoins to buy a car / house / whatever one day, then next day go to buy the thing and be 30% short of the asking price  ;-)

Let's hope the price becomes more stable and less volatile as mass adoption happens.

One could also say the volatility makes people spend. Also entering a time of the year when people spend more anyways.

[empoweoqwj]

I agree with most of what you say.  There are still issues however:

1) Convincing people to spend instead of hoard bitcoins when the value has increased 50x in the last year. I look back at stuff I bought with bitcoins just 6 months go and think "OMG" - should have paid with cash instead.

2) Price volatility - whatever people say, its hard having a currency which is so volatile. You might own enough bitcoins to buy a car / house / whatever one day, then next day go to buy the thing and be 30% short of the asking price  ;-)

Let's hope the price becomes more stable and less volatile as mass adoption happens.

One could also say the volatility makes people spend. Also entering a time of the year when people spend more anyways.

Yep agreed. Its certainly something that will stick in your mind either way, whether you've have a great experience buying with bitcoin because the price had just gone high and you got great value, or the opposite. Will turn a lot of people into "love bitcoin forever" or "never touch the thing again"

Volatility is great for trading, and inevitable for the near future. But the person on the street doesn't want to be checking the exchange rate every two minutes to see if they can afford that "item" that is still priced in US$, CA$, whatever.

[dominicwin]

I agree with most of what you say.  There are still issues however:

1) Convincing people to spend instead of hoard bitcoins when the value has increased 50x in the last year. I look back at stuff I bought with bitcoins just 6 months go and think "OMG" - should have paid with cash instead.

2) Price volatility - whatever people say, its hard having a currency which is so volatile. You might own enough bitcoins to buy a car / house / whatever one day, then next day go to buy the thing and be 30% short of the asking price  ;-)

Let's hope the price becomes more stable and less volatile as mass adoption happens.

One could also say the volatility makes people spend. Also entering a time of the year when people spend more anyways.

Yep agreed. Its certainly something that will stick in your mind either way, whether you've have a great experience buying with bitcoin because the price had just gone high and you got great value, or the opposite. Will turn a lot of people into "love bitcoin forever" or "never touch the thing again"

Volatility is great for trading, and inevitable for the near future. But the person on the street doesn't want to be checking the exchange rate every two minutes to see if they can afford that "item" that is still priced in US$, CA$, whatever.

I like to think we have a fair share of the different mindsets going in either direction. If you want to be a trader and make income, then that is your mindset. Then there's people just holding out and nothing else. Then you have people who also want to enjoy by spending their gains. You could wait and lose or gain, but you would still have bitcoin, but not what you were thinking of spending it on haha.

Though one thing is for sure, the last 30 days may have been some of the wildest for bitcoin and it's probably going to get crazier before normalizing.

[Probably]

One could also say the volatility makes people spend. Also entering a time of the year when people spend more anyways.

I disagree.

Think of an institution that is trying to integrate accepting bitcoins into their fundraising / development departments? It competes with other forms of payment that currently require no explanation, are actually more convenient to the vast majority, are approved quicker, and offer consumer protection from fraud.

This institution would, for example, expect $X from development / fundraising a year.

If that $X is now split into $Y+$Z where Y is standard practices and Z is bitcoin, it is CRUCIAL that the $Z is stable, risk is basically unacceptable if someone gives us $Z it has to be $Z when we claim it, or else that is looked upon as waste and not to mention it doesn't meet operational needs.

There are many cases where the volatility doesn't matter, sure, but when you're talking about integrating media campaigns, supporting and maintaining bitcoin there is a cost and a risk associated with doing so that stems from its volatility.



So I don't know about "rapidly approaching critical adoption rate" or what that's really supposed to mean right now... critical implies necessity.


I think people are getting ahead of themselves with senate back-patting "we do a great job so give us new money to fight the mysterious new child rape technology" puff piece. These are similar to the hearings that solved JFK's killing, condemned commies, sold a bogus 9/11 story, the list goes on...

Institutionally, we're talking the large institutions of the world, there is still a lot a government can do to curb adoption of bitcoin, guide it, or funnel it.

Think of any non-profit anywhere that receives tax dollars, aid or federal funding. Think of how easy it would be for the government, considering one of these institutions are under audit microscopes by default, to pull funding or creatively assign funding based on how they're lobbied.

We can toot horns all day long about how its impossible to stop bitcoins, but it is easily possible to curb adoption of them.

Without the cheapness of transaction (fungibility) mattering much yet, the average person doesn't see why they'd convert cash just to risk losses in the timeframe of the conversion, to use bitcoins. That's an eventuality.

But a business that uses that transactional efficiency to offer a higher quality, cheaper product? Nobody will be able to argue with that. Just look at square cell phone credit card swipers? That's what the competition is.

When you're talking about critical adoption, you're talking about businesses leaving money on the table for someone else, losing money, if they don't adopt bitcoin.

[dominicwin]

One could also say the volatility makes people spend. Also entering a time of the year when people spend more anyways.

I disagree.

Think of an institution that is trying to integrate accepting bitcoins into their fundraising / development departments? It competes with other forms of payment that currently require no explanation, are actually more convenient to the vast majority, are approved quicker, and offer consumer protection from fraud.

This institution would, for example, expect $X from development / fundraising a year.

If that $X is now split into $Y+$Z where Y is standard practices and Z is bitcoin, it is CRUCIAL that the $Z is stable, risk is basically unacceptable if someone gives us $Z it has to be $Z when we claim it, or else that is looked upon as waste and not to mention it doesn't meet operational needs.

There are many cases where the volatility doesn't matter, sure, but when you're talking about integrating media campaigns, supporting and maintaining bitcoin there is a cost and a risk associated with doing so that stems from its volatility.



So I don't know about "rapidly approaching critical adoption rate" or what that's really supposed to mean right now... critical implies necessity.


I think people are getting ahead of themselves with senate back-patting "we do a great job so give us new money to fight the mysterious new child rape technology" puff piece. Institutionally, we're talking the large institutions of the world, there is still a lot a government can do to curb adoption of bitcoin, guide it, or funnel it.

Think of any non-profit anywhere that receives tax dollars, aid or federal funding. Think of how easy it would be for the government, considering one of these institutions are under audit microscopes by default, to pull funding or creatively assign funding based on how they're lobbied.

We can toot horns all day long about how its impossible to stop bitcoins, but it is easily possible to curb adoption of them.

Without the cheapness of transaction (fungibility) mattering much yet, the average person doesn't see why they'd convert cash just to risk losses in the timeframe of the conversion, to use bitcoins. That's an eventuality.

But a business that uses that transactional efficiency to offer a higher quality, cheaper product? Nobody will be able to argue with that. Just look at square cell phone credit card swipers? That's what the competition is.

When you're talking about critical adoption, you're talking about businesses losing money if they don't adopt bitcoin.

I agree. I am just trying to look at it from where it is at right now, a bitcoin investor perspective, our own bubble of the internet. I would definitely agree we aren't near any critical adoption or wide acceptance or stability by any means. All we have now come to is a concept that you could say is now proven because a government hasn't taken it away and arrested everyone, which is no small step by any means though.

[lindatess]

"More transactions please. More uptake please."

You do realise what that phrase would imply? The blocks would become full very fast. People should stop spending bitcoins at the moment or we will hit the critical 90,000 transactions per day mark again.

https://blockchain.info/charts/n-transactions

Soon $1 of bitcoin will be dust that is nontransferable within reasonable time limits as the transaction cost will exceed the trade-able value.

[DeathAndTaxes]

Blocks are nowhere close to full.  The 1MB limit is ~4 to ~6 tps that is 340,000 to 520,000 transactions a day.  We are barely 20% of the way there.

Tx fee is 0.1 mBTC per kB that is $0.05 USD at current exchange rates.  The dust limit is roughly half that or 2.5 cents.  For $1 to be dust would require the exchange rate to up by a factor of 40x to say ~$20,000 USD per BTC and the min mandatory fee to not be lowered.  Dust it not hard coded it is set at 54.3% of the min fee to relay.

[BadBitcoin (James Sutton)]

Volatility of price (as max Kaiser talks about http://www.youtube.com/watch?v=WAjL_X_ZesE) will decrease with the bitcoin price increase. When the price was 3 dollars, an increase to 6 dollars did not take a significant amount of capital to do, however it doubled the price. The same is not true at higher valuations (when bitcoin reaches $2k, it will be considerably more difficult to raise the value to 4k, etc) This is particularity true at the sub 1 BTC valuation.

Price swings may seem significant now, and will be for the next few years, however once we start approaching widespread, close ended usage (IE paying rent in bitcoin unpegged from the regional equivalent, buying food in bitcoin unpegged from the regional equivalent, etc) variability of the bitcoin exchange rate will be marginal.

We have to stop looking at "price per bitcoin" and start looking at "price per dollar", if you start looking at it in the inverse perspective, you see that we're doing quite well, even with the volatility.
1 "cbic" (as I like to call it) currently buys = $7 USD (700 per full bitcoin), that's almost 4.5x the GBP to USD exchange rate. We start realizing that bitcoin is considerably more valuable than all other currencies, and this isn't just speculation. We have bottlenecks we need to solve, the normal client needs to shrink in size, the "dust transaction" code should be changed to allow for growth in the mbic transaction volumes, etc. However if the bitcoin foundation (cough mike Hearn) stops trying to change the code and instead helps facilitate early adopters from gaining bitcoin (physical bitcoins that can't be counterfeited? They have enough donation money to do this.)

Even if the US did infact decide to try and regulate bitcoins, and made it illegal for exchanges to function otherwise in the US, there's absolutely no reason why two people wouldn't be able to trade in person somewhere, particularly if there were large volumes of bitcoins being traded  at a time, in this event what needs to be put in place is companies tailored for this kind of transactions, with security and safety as top priorities (something a buddy of mine is working on in the UK, incidentally)

EDIT: I should clarify what I mean about critical adoption, I mean the point at which bitcoin will start replacing national currencies for entire communities, once this starts to happen, we've reached critical adoption in my opinion.