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Author Topic: Is it too hard to enter the bitcoin world?  (Read 5318 times)
ploum
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May 17, 2011, 12:09:28 PM
 #1

This week, Bitcoin had some big coverages (including wired and a tweet by scobleizer). The twitter #bitcoin is updating at an insane rate.

Nevertheless, we didn't see any price increase or ask increase.


I think that entering the bitcoin world is way too hard for non-geeks.

1)  Understanding that bitcoin is not mining.

Lot of people still don't understand that you can use bitcoin without mining. They don't understand mining but the only thing they remember is "mining" because they see it as "receiving money for CPU time" (which is false). The fact that there's still a mining option in the official client doesn't help. We should really make mining less proeminent.

I've received several mails following my blog posts about bitcoin: each one of them was to help them to mine. They activated "mining" in the official client and had no result after a few hours. I should insist more on that: I don't speak about mining in any of my article (not once) and *each one* of my reader that contacted me was too have information about mining. As soon as I told them what mining was and that mining was not profitable without huge hardware, they abandonned the idea to mine.

2) Buying bitcoin.

It's very hard to buy bitcoins when you think about it. On bitmarket.eu, you now have to be "trusted" (which newcomers will not have). I don't speak about otc, which is over geekish. And site like mtgox or btcex don't look professionnal at all (in the eyes of most people). They are not confident to send money to that kind of website. Also, sending the money is not straightforward. The wiki page (which is at the bottom of the result page when looking for "buying bitcoins") is not attractive and a list of providers.


Conclusion:

I believe that bitcoiners start to live in their own little island. Any more media coverage without solving those issue would be useless. I'm really concerned that this could be an issue for newcomers.

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elewton
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May 17, 2011, 12:14:24 PM
 #2

Me too.
A percentage of those caught in the current wave will probably figuer out Mt Gox, and that may take a few days to show up as bank transfers make their way through.

I think the main uncertainty is in legality; the people with the core capital and competencies  to establish a physical exchange would like to know the legal status of BTC before they dive in.
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May 17, 2011, 12:18:12 PM
 #3

The nice thing about bitcoin-otc is that it's the only place where Paypal will continue to be an option for the foreseeable future, at least for the small amounts that newbies will typically be buying.

A user friendly interface for bitcoin-otc would be fantastic. Unfortunately I lack the manpower to develop it.   Why don't you have a go?

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May 17, 2011, 12:21:01 PM
 #4

Good point. It did not seem that daunting to me to buy my first bitcoins. However, when I helped some non- tech friends get started i realized how many computer skills one must have. Even more if you want to understand the block chain, or get into security.

The gospel according to Satoshi - https://bitcoin.org/bitcoin.pdf

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Drifter
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May 17, 2011, 12:27:51 PM
 #5

Nevertheless, we didn't see any price increase or ask increase.

It's been very little time for anyone to fund their accounts if they even do want to buy bitcoins. I'd imagine this week Mt Gox as well as the other markets will get a little extra business once funds start to roll in.

I agree bitcoin is somewhat hard to get into but it's more a sense of popularity than anything. The more popularity rises, and more important the more legal issues are made clearer, it will raise the ability for others to get involved easier. When my neighbors or friends have bitcoin to trade, major markets won't be as necessary. And if you're using something like Dwolla is it really that much harder than Paypal? Besides the fact most people already have paypal, it isn't much different.


stakhanov
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May 17, 2011, 12:30:30 PM
 #6

One good way for newcomers to get their first bitcoins is by earning them: sell something on biddingpond.com, provide a simple service, ...

This is an option that is almost never mentioned to newcomers, but I think it's a good one: it's fun, you learn a lot about bitcoin in the process, and it is almost easier than going through complex bank transactions. Plus, it's where bitcoin really shines!
ribuck
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May 17, 2011, 12:59:02 PM
 #7

...sell something on biddingpond.com...

BiddingPond is by far the best way for a newcomer to get some Bitcoins, beyond the 0.02 they can get from the faucet.
wareen
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May 17, 2011, 02:37:32 PM
 #8

Yes it is indeed rather hard to enter the bitcoin world atm. Currently you have to be tech-savvy, risk-loving, somewhat idealistic and have some money available to buy them (or at least stuff to sell). I think the sudden rise in value also put some potential newcomers off because they either think they have missed the train or they think it's a bubble/pyramid/scam/whatever.
It will surely help to have the fiat exchange rates to stabilize a bit because then both merchants and customers will gain more confidence using it like normal money and not viewing it as a high-risk speculative asset.

Mining bitcoins was a nice concept to get them distributed but with difficulty skyrocketing at current rates this will soon be a monopolized business and therefore we might have to think of new ways to distribute the coins to interested users.

Bounties are probably a good way, but chances are they are collected by the die-hard hoarders as well.
The faucet is a great thing but it has been abused and nowadays doesn't really offer you that much in return for a Google account.
Physical bitcoin-cards maybe a neat idea as a gift, but without explaining the concept (which can be a bit daunting for the average not-so-enthusiast) they are probably going to throw them away or just quickly selling them for $$.

A good idea is probably to have talks or booths at conventions where the concept could be properly introduced and people could get a small amount of bitcoins as starter-packs, maybe buy them at subsidized rates or better still: have some games with the chance to win bitcoins. This would be kind of a real-world faucet and could surely be funded by donations as well.

Another issue is the usability of the official client. I think the client needs much more work in terms of user-friendliness - it should ideally be self-explanatory, not only for its own usage but for the bitcoin system as a whole. Maybe even have something in the style of the "What is Bitcoin?"-video as a tutorial mode...

The other side of this issue is, that people will more likely want to overcome the difficulties to come aboard, if the incentives for using bitcoins were higher. Currently the great advantages of the bitcoin system are often not recognized by the average non-geek and I think we still have way to go in terms of using bitcoins to their full potential for the them.

One possibility would be to get them "one community at a time". Ok, right now we probably have a subset of the geeks, the gamers, the venture capitalists, the libertarians, the anarchists,... Anyone reading this who does not fit in, please stand up Wink
But to go more mainstream we probably have to look at something like the music communities - bitcoins are a great method of payment for independent artists but we still need some good system for that. Micropayments are another thing which could be an incredibly well-suited use-case for bitcoins (given we sort out a few things regarding transaction-fees) and also used to get websites introducing their visitors to the coin.

I am sure bitcoins could be utilized to suit the needs of many different communities/interest groups and there is much work done but we're not there yet.

All in all, I'd say give it some time - let the market stabilize a bit, get more work done on the different online-platforms, improve the client-usability, sort out some legal issues for the merchants and work on new ways to incentivize users to come aboard. Sooner or later they sure will Wink
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May 17, 2011, 03:08:04 PM
 #9

Anyone reading this who does not fit in, please stand up Wink

Freelance project manager. He can convince freelancers to receive bitcoins as payment (It should be easy to cash out in the destination country)
barbarousrelic
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May 17, 2011, 03:13:19 PM
 #10

It used to be hard, but now Dwolla - > MtGox is as easy as could be.

The only drawback is that it takes a few days for your funds transferred from your bank account to become available on Dwolla. But three days isn't that unreasonable.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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May 17, 2011, 03:18:07 PM
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It used to be hard, but now Dwolla - > MtGox is as easy as could be

In which countries Dwolla works? China, India, Brasilia or may be Russia ?
barbarousrelic
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May 17, 2011, 03:22:00 PM
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It used to be hard, but now Dwolla - > MtGox is as easy as could be

In which countries Dwolla works? China, India, Brasilia or may be Russia ?

Apparently it only works in the USA. Does anyone know if there are similar services from other countries?

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
ploum
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May 17, 2011, 03:22:44 PM
 #13

It used to be hard, but now Dwolla - > MtGox is as easy as could be.

1. You have to trust MtGox and be willing to send money to them. (which is not the case for a lot of people according to reaction on twitter)

2. You have to understand that you need to go through Dwolla (which isn't so famous). (Have you seen the number of people on IRC which don't even figure out how to get their BTC back from mtgox?)

3. You have to trust Dwolla or be willing to have an account

4. You've to live in the US.


That's a lot of requirements for something "easy as it could be"

Blog posts about Bitcoin - 1KdRBbhjo72CqKTrFsQed6s9NMrvwvrUkq
barbarousrelic
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May 17, 2011, 03:27:01 PM
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It used to be hard, but now Dwolla - > MtGox is as easy as could be.

1. You have to trust MtGox and be willing to send money to them. (which is not the case for a lot of people according to reaction on twitter)

2. You have to understand that you need to go through Dwolla (which isn't so famous). (Have you seen the number of people on IRC which don't even figure out how to get their BTC back from mtgox?)

3. You have to trust Dwolla or be willing to have an account

4. You've to live in the US.


That's a lot of requirements for something "easy as it could be"

Trust will be required in any exchange. The rest of your points stand.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
edd
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May 17, 2011, 03:30:41 PM
 #15

Back on topic:

How hard is it to acquire any currency if you're new to the game?

If I land on the shore of some foreign country, with only the clothes on my back, I'll have to either rely on the kindness of strangers or find something to do in exchange for money. I don't see how Bitcoin is any different.

Still around.
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May 17, 2011, 03:40:33 PM
 #16

How hard is it to acquire physical gold or cash? Now how hard is it to acquire Bitcoins? Remember, Bitcoins are non-refundable. Of course it’s a bit difficult to get them.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
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May 17, 2011, 04:05:53 PM
 #17

The "Generate Coins" option has already been removed from the code, so the next release won't have it. I think it should be removed from weusecoins as well, but didn't manage to convince Stefan of that yet.

The other problems stand. I think everyone agrees it's too hard to buy coins, and nobody wants Bitcoin to become a geek niche. The problem is it's difficult to solve.

Moving money from credit cards into BitCoins is just fundamentally hard because of chargebacks and the fact that currency exchange (of any currency) is often forbidden by payment processors due to it competing with the banks cash advance loans. I don't know any good solutions for that.

Non-CC based services are going to have country restrictions and time delays. Buying from people you know is the best way but obviously doesn't apply to most people.

More generally, the Bitcoin community is very mining focused right now. There is a bubble on and so the bulk of the effort is going into either mining or developing alternative implementations. There isn't much support for merchants so the economy is still very small.

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May 17, 2011, 04:27:20 PM
 #18

Hm. Paypal has banned currency exchange, but have they banned payment to sites that only facilitate currency exchange?

As in, I PayPal some dollars to Mt. Gox, "an e-wallet service". Then I exchange those dollars for bitcoins there. Does this count as using PayPal for currency exchange? I mean, banks do currency exchange, but I'm sure PayPal wouldn't stop Bank of America from opening an account as a convenience to its customers.

Not that Mt. Gox seems interested in accepting PayPal. But with their volume they probably could---the proportion of dishonest people is not that high.

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barbarousrelic
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May 17, 2011, 04:59:46 PM
 #19

Hm. Paypal has banned currency exchange, but have they banned payment to sites that only facilitate currency exchange?

As in, I PayPal some dollars to Mt. Gox, "an e-wallet service". Then I exchange those dollars for bitcoins there. Does this count as using PayPal for currency exchange? I mean, banks do currency exchange, but I'm sure PayPal wouldn't stop Bank of America from opening an account as a convenience to its customers.

Not that Mt. Gox seems interested in accepting PayPal. But with their volume they probably could---the proportion of dishonest people is not that high.
I don't think the problem is so much that PayPal has "banned" sending to currency exchangers like MtGox, but that they are very pro-sender when it comes to disputes. Too many fraudsters have sent money to Mtgox, and then later claimed they never received their goods, and it was impossible to convince Paypal that the purchaser was scamming.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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May 17, 2011, 05:12:44 PM
 #20

I think there's a silver lining to all of this. Essentially, if someone wants bitcoins they can either (a) figure out the logistics of the financial markets and buy in, or (b) figure out some good or service that they can offer in exchange for bitcoins. When I was first turned onto btc, I bought a few, but buying them was complex enough that eof and I decided that it wouldn't be that much more work to set up a micro-business - and thus http://www.iusecoins.com was born Smiley. If others are driven by logic similar to ours, then the current state of affairs might actually be driving the growth of the real bitcoin economy (which I think we all prefer to massive speculative swings).
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