I've been lurking for the last couple of days and have been very impressed with the whole bitcoin concept and what it could mean for
the internet, black markets and the world economy.
From what I've gathered bitcoin's impact has been fairly limited in terms economic activity
thusfar. You can convert USD to bitcoin (or vice versa) using mtgox or other services, but of course what is the point of shifting paper around?
The key utility of bitcoin in my view isn't what it is worth vs. the US dollar or other currencies, it's key utility is transactions that can not
be restricted or tampered with by governments. Who are the merchants that have the most use for bitcoin unique features? That is an easy answer: Those who want
to purchase or sell illegal goods and services. My prediction is, whether you like it or not (pretty sure most of you like it), the bulk of the bitcoin economy with be in illegal goods and
services in the near future.
Based on this premise, I have a proposal. My proposal is to use these black markets to fuel legitimate markets using bitcoin.
I'll give an example how this proposal could be carried out; The internet poker market. given recent events this one has huge potential for bitcoin, there are possibly millions
of american poker players who are not able to play their game because the government has hampered all methods of payment processing. I know that there is already significant discussion on this subject, but i just want to stress it's importance.
First of all someone needs to set up a reputable and reliable poker site that uses bitcoin as it's currency. I know there is already one, www.betco.in
, and that there are others in the works.
So how does my concept apply to this situation? Answer: We need these future bitcoin poker sites not to just be a medium for shifting USD to bitcoin and back to USD again. We need them to get people interested
in using their bitcoin to buy other goods and services! Therefore I suggest that future bitcoin pokersites strongly consider advertising other bitcoin businesses (maybe ones that specifically target the poker demographic).
This would be a huge boost to the liquidity and legitimacy of bitcoin, and would grow the non-black market bitcoin economy.
In short, what we don't want is USD --> bitcoin --> illegal goods and services --> back to USD, what we want is USD --> illegal goods and services --> legal bitcoin economy --> repeat.
You can apply this to any black market that bitcoin could be applied to, drugs, pornography, file sharing etc.
Thanks for reading.