An easy way to make bitcoin worth millions of dollars

[ranlo]

then you might need an extra database to track the balance of each clients.

What if I don't want to?  You are the one wanting to decrease the already existing utility!!!!!!!!!!!!!!. 

I am not really upset about it, I am just pointing out what you propose may sound good "in theory" but the repercussions will effect a lot of things that you may not have thought of. 

I still don't understand how removing some coins from exchanges will decrease the already existing utility? what utility?

What I propose is not something new, some bitcoiners have been advocating this for years, I just got it more clearly recently. What do you think made up those large sales number that reported by those merchants? I suppose a large part of those sales consists of this kind of "pass through" transactions, and it indeed have some positive effect on increasing merchant adoption and stabilizing the exchange rate

The increase use of Bitcoin increase its price. The dollar is very volatile against most assets like gold and fiat currencies move a lot one against an other.

If the price gets too high, people will likely move to alts. Structurally, there is no difference between Bitcoin, Litecoin, Devcoin and (insert coin here). They all work in the same way for the end user. While we can theorize that people would stick with Bitcoin, that's all it is: a theory.

[johnyj]

that is why the infrastructure is important. To encourage spending, there must be stores accepting it. Most of the time, when I purchase 1 bitcoin, I will end up hoarding it for some time until I find places or merchants that accept bitcoin. I'm not saying the theory is not workable, in fact it is what happening right now, but instead of spending and the whole process reduces supply in the market, we ended up holding it longer, so the spending cycle is not working.

The problem with spending bitcoin is it feels to valuable to the average joe. A person buys 1 bitcoin, and this person treats it like an ounce of gold, not like some coins you use to buy groceries. So people tend to hold, or dump if they dont have patience and are scared.

The people dumping btc instantly for fiat are the big ass whales like overstock (whales in the sense of people running millionaire business). Also mining whales that need to pay expenses.

Suppose that Bob bought 10 bitcoins, then he hold them for 20 years as a store of value, that is the investment you described, perfectly fine. Beyond that, when Bob goes to buy some TV, he first exchange his dollar to bitcoin and then use bitcoin to pay overstock to get the TV delivered. Or, when he is buying a car, he first buy some bitcoins and use those bitcoins to pay the car dealer. These actions does not touch his original 10 bitcoins, but they reduce the amount of coins on exchanges and will raise the value of bitcoins, thus indirectly raise the value of his 10 coins

[johnyj]

Yes, it is possible.
Bitcoin should become mainstream.
It means that we need much more users and many more merchants accepting BTC.
But, there is no easy way to achieve millions of dollars and it's not realistic in short period of time.

Possible but seriously unlikely, even if it goes mainstream that does not give us a million dollar tag does it, at the moment there is no need for bitcoin if there is finally a need for it then we will reach thousands i am sure but million lol

This is the confusing part:

Q: Why should I use bitcoin?
A: Because it can make you some money
Q: How come?
A: 2 steps
1. Buy some bitcoin and store them
2. Let all your monthly consumption go through bitcoin (purchase bitcoin and spend them), then your stored coins will become more valuable and you will get good profit when you sell them

And I don't think it is a pyramid or Ponzi scheme, since the process does not involve anyone else, only your own action: You first invest in some bitcoins and then let your consumption pass through bitcoin to reduce the amount of coins on market. The second action will give the coin value a permanent lift so that when you sell your invested bitcoins, you will always get a good return

If only one people do this, the result might be neglectable, but if every one is doing this, the result will be significant

Of course you can only do this once, when you already have all your consumptions pass through bitcoin, unless you further increase your spending, there is no more support that you can give it. In fact, when your coins worth more, you might have some more spending directly from your stored coins,  that might reduce the value of bitcoin

[johnyj]

Put some numbers in:

Suppose that 2 million bitcoin users, average monthly spending is $3000, they buy $3000 worth of bitcoin (10 bitcoin at today's price) when they receive their salary, and spend them during a month. But this means that they would have to buy 20 million bitcoins, which is impossible: The coins in circulation is around 1 million maximum. So, bitcoin's price will have to increase at least 20 times to reach $6000 to make that happen

This purchase happens during the beginning of the month, and later the price will fall back due to more and more coins flowing back to market. Average holding time for these coins can be regarded as 15 days, if they don't all buy at the same time, it will cut the coin demand by half, so a price of $3000 is more likely

If the user base increase to 2 billion, then price will be at 3 million per coin. Notice that no matter how high the coin price is, most of the coins would still be held as long term storage, the coins in circulation will never be above 2 million

And this is all very rational calculation, in reality the market can be more crazy than people can imagine when the shortage of coins are overwhelm, I'm not surprised to see a price of 1 million with much smaller amount of users

[adworker]

I dont think majority of Bitcoins will go through exchanges in future, it is very costly option because of the exchange fees. More likely the car shop spend the Bitcoins directly, it is cheaper than paying the exchange fees

[AtheistAKASaneBrain]

We would need a ridiculous level of cooperation and synchronization to pull this off OP if im understanding correctly what you mean, I dont see it as very realistic.

[BillyBobZorton]

then you might need an extra database to track the balance of each clients.

What if I don't want to?  You are the one wanting to decrease the already existing utility!!!!!!!!!!!!!!. 

I am not really upset about it, I am just pointing out what you propose may sound good "in theory" but the repercussions will effect a lot of things that you may not have thought of. 

I still don't understand how removing some coins from exchanges will decrease the already existing utility? what utility?

What I propose is not something new, some bitcoiners have been advocating this for years, I just got it more clearly recently. What do you think made up those large sales number that reported by those merchants? I suppose a large part of those sales consists of this kind of "pass through" transactions, and it indeed have some positive effect on increasing merchant adoption and stabilizing the exchange rate

The increase use of Bitcoin increase its price. The dollar is very volatile against most assets like gold and fiat currencies move a lot one against an other.

If the price gets too high, people will likely move to alts. Structurally, there is no difference between Bitcoin, Litecoin, Devcoin and (insert coin here). They all work in the same way for the end user. While we can theorize that people would stick with Bitcoin, that's all it is: a theory.

Why is it so hard to understand that you dont need to buy entire coins? You can buy fractions of a coin ffs. And why would people move to a coin when Bitcoin's got the strongest network on earth? all other coins will never be as secure.

[johnyj]

We would need a ridiculous level of cooperation and synchronization to pull this off OP if im understanding correctly what you mean, I dont see it as very realistic.

You just need to be aware of this, nothing more. For example now some of the IT shops in my city have accepted bitcoin payment, when I purchase IT products, I always buy some bitcoin and spend there. In fact you only need one supermarket and one gas station to accept bitcoin payment, then a large part of your monthly cost can pass through bitcoin

Another way to make coins occupied is to buy the coin and hold it for years, which majority of the people are doing right now (That's the reason that most of the bitcoins are not available on market)

If the exchange rate does not change, you buy $300 worth of bitcoin each month and hold them for 20 years, after one year you will make 12 bitcoins occupied, the same effect as spending 24 bitcoins every month

This chart shows how many coins are hold for a specific length of time:

[Harry Hood]

...mail a check does not change the money supply since it never touches the real money, only changes banks account numbers, just like when you trade bitcoins in an exchange, only numbers in your account changes, bitcoin never moves until you withdraw

In your example you say that "Bob" and the vendor use an exchange to facilitate the transaction. In your explanation quoted here you say that on an exchange the bitcoin never moves (until you withdrawal), this seems to contradict your original theory.

If bitcoins disappear from the system as you theorize, this would already be happening as transactions occur. So the current price should reduced the impact of your reduced supply theory. There wouldn't be a way to manipulate the current price (since it already accounts for the bitcoin taken out of supply due to transactions) unless you coordinated a significantly higher than normal number of transactions, which I guess is what you're proposing? One more point, the increased number of transactions can't happen all at once, I mean even the exchange has to take the orders one by one. So after each transaction the price would increase and increase and people at the end of the coordinated transaction series would get screwed because they'd be paying the very inflated price.

Finally, coordinating price manipulation is what the Fed and central banks do (to a extent). You're falling victim to the same price and value manipulation schemes that this system is trying to correct or escape. Perhaps that's the scariest part of this talk. The fact that someone who's devoted to bitcoin can become so fixated on the price "going to the moon" that they'd propose price manipulation to do it.

[johnyj]

...mail a check does not change the money supply since it never touches the real money, only changes banks account numbers, just like when you trade bitcoins in an exchange, only numbers in your account changes, bitcoin never moves until you withdraw

In your example you say that "Bob" and the vendor use an exchange to facilitate the transaction. In your explanation quoted here you say that on an exchange the bitcoin never moves (until you withdrawal), this seems to contradict your original theory.

If bitcoins disappear from the system as you theorize, this would already be happening as transactions occur. So the current price should reduced the impact of your reduced supply theory. There wouldn't be a way to manipulate the current price (since it already accounts for the bitcoin taken out of supply due to transactions) unless you coordinated a significantly higher than normal number of transactions, which I guess is what you're proposing? One more point, the increased number of transactions can't happen all at once, I mean even the exchange has to take the orders one by one. So after each transaction the price would increase and increase and people at the end of the coordinated transaction series would get screwed because they'd be paying the very inflated price.

Finally, coordinating price manipulation is what the Fed and central banks do (to a extent). You're falling victim to the same price and value manipulation schemes that this system is trying to correct or escape. Perhaps that's the scariest part of this talk. The fact that someone who's devoted to bitcoin can become so fixated on the price "going to the moon" that they'd propose price manipulation to do it.

True, if the coins never leave the exchange, for example paid directly from shoppers coinbase account to merchant's coinbase account, then there will be no impact for coin supply in market. But if the shopper and merchant use different exchanges, the coin will not be available during the transition phase. As soon as you do a bitcoin withdraw to your own wallet, that coin is occupied

And just like bitcoin, no one force you to do this, it purely depends on the users to decide if they will participate. I just realized this possibility recently. Before, I don't even know why should I exchange to bitcoin and consume, but now I at least have some valid motivation

Even if everyone participate, the effect can only be felt little by little, but the end result is clear: If some day everyone let his daily consumption pass through bitcoin network, then the exchange rate of bitcoin must rise many folds. Some hedge funds draw similar conclusion after they evaluated how much coins will be occupied when used in international money remittance

[futureofbitcoin]

this method is about as easy as saying "If every bitcoiner convinces 10 people to become a bitcoiner, bitcoin will reach mass adoption, and the price will increase accordingly"

I'd even say my method is easier.

[johnyj]

this method is about as easy as saying "If every bitcoiner convinces 10 people to become a bitcoiner, bitcoin will reach mass adoption, and the price will increase accordingly"

I'd even say my method is easier.

Of course convincing other people is also a way to raise the value, but that has some kind of suspicion of being a pyramid scheme. To make your own payment with bitcoin does not hurt anyone, and is overall positive for bitcoin ecosystem, I like this approach

[Harry Hood]

this method is about as easy as saying "If every bitcoiner convinces 10 people to become a bitcoiner, bitcoin will reach mass adoption, and the price will increase accordingly"

I'd even say my method is easier.

Of course convincing other people is also a way to raise the value, but that has some kind of suspicion of being a pyramid scheme. To make your own payment with bitcoin does not hurt anyone, and is overall positive for bitcoin ecosystem, I like this approach

You may have that suspicion but it wouldn't be true. Increasing the user rate by 10 fold would increase demand by potentially the same rate and given that supply is tightly controlled the price would have to come up to meet the demand. There's nothing "pyramid scheme" about it.

The great thing is that in both options the price can increase. One option is organic. The other option is manufactured, and borderline collusion, manipulation, "Central-bank like".

[johnyj]

this method is about as easy as saying "If every bitcoiner convinces 10 people to become a bitcoiner, bitcoin will reach mass adoption, and the price will increase accordingly"

I'd even say my method is easier.

Of course convincing other people is also a way to raise the value, but that has some kind of suspicion of being a pyramid scheme. To make your own payment with bitcoin does not hurt anyone, and is overall positive for bitcoin ecosystem, I like this approach

You may have that suspicion but it wouldn't be true. Increasing the user rate by 10 fold would increase demand by potentially the same rate and given that supply is tightly controlled the price would have to come up to meet the demand. There's nothing "pyramid scheme" about it.

The great thing is that in both options the price can increase. One option is organic. The other option is manufactured, and borderline collusion, manipulation, "Central-bank like".

In fact in bitcoin monetary system, every miner is a central banker (since he creates money), so there will be more creative idea popping up every day by these central bankers. Before, people seldom have the possibility to look from a central banker's perspective. An average Joe will never care about how to protect national currency's exchange rate, while a bitcoin miner has every motivation to protect his investment

[ranlo]

Why is it so hard to understand that you dont need to buy entire coins? You can buy fractions of a coin ffs. And why would people move to a coin when Bitcoin's got the strongest network on earth? all other coins will never be as secure.

I reallllllllly hope this post was just trolling. Otherwise I'd highly suggest you look into taking courses on business, marketing and psychological principles behind purchasing.

You're not marketing to me. You're not marketing to Theymos. You're not marketing to (insert name of someone that already knows about Bitcoin). You're marketing to people that have NO idea how things work, are computer illiterate, and just want things to "work." Learn how to run a business and then read my post again and you'll actually understand why it's true.

[johnyj]

Why is it so hard to understand that you dont need to buy entire coins? You can buy fractions of a coin ffs. And why would people move to a coin when Bitcoin's got the strongest network on earth? all other coins will never be as secure.

I reallllllllly hope this post was just trolling. Otherwise I'd highly suggest you look into taking courses on business, marketing and psychological principles behind purchasing.

You're not marketing to me. You're not marketing to Theymos. You're not marketing to (insert name of someone that already knows about Bitcoin). You're marketing to people that have NO idea how things work, are computer illiterate, and just want things to "work." Learn how to run a business and then read my post again and you'll actually understand why it's true.

I'm just analyze some fact, which business school teacher and economy professor will never tell you, since they have never issued any money by themselves and can not look from a money creator's perspective

As a money creator, the most important thing is to maintain his money's credibility. An increase value of the currency is definitely going to help to gain higher credibility, while a constant decreasing of currencies value might ruin it

The use case I described here suits also on fiat money, if there is no billions of people use fiat money to do transactions, thus occupied most of those money, the demand for fiat money will be magnitudes lower

[ranlo]

Why is it so hard to understand that you dont need to buy entire coins? You can buy fractions of a coin ffs. And why would people move to a coin when Bitcoin's got the strongest network on earth? all other coins will never be as secure.

I reallllllllly hope this post was just trolling. Otherwise I'd highly suggest you look into taking courses on business, marketing and psychological principles behind purchasing.

You're not marketing to me. You're not marketing to Theymos. You're not marketing to (insert name of someone that already knows about Bitcoin). You're marketing to people that have NO idea how things work, are computer illiterate, and just want things to "work." Learn how to run a business and then read my post again and you'll actually understand why it's true.

I'm just analyze some fact, which business school teacher and economy professor will never tell you, since they have never issued any money by themselves and can not look from a money creator's perspective

As a money creator, the most important thing is to maintain his money's credibility. An increase value of the currency is definitely going to help to gain higher credibility, while a constant decreasing of currencies value might ruin it

The use case I described here suits also on fiat money, if there is no billions of people use fiat money to do transactions, thus occupied most of those money, the demand for fiat money will be magnitudes lower

Talk to outsiders about Bitcoin and its pricing. The most common thing you'll run into (other than "it's a scam") is complaining about how much a coin costs. Outsiders don't KNOW you can break it down. They don't have that comprehension. Therefore, again, what you or I know about Bitcoin means absolutely zero. Nothing. Nada. We're already in. It's OTHERS we care about bringing on-board, therefore we have to cater to THEM. That's how markets work.

I like hot pink cars that have no windshield, 6 wheels, no AC/heater, no seat belts and no headlights. So I go make them because I like them. Does that mean they're going to sell to others? Hell no. Why? Because not everything I like is something everyone else likes/agrees with. It's that simple.

[Fernandez]

Imagine such a use case:

Bob is a bitcoiner, he spend $300 to buy 1 bitcoin from exchange, then he pays a merchant in another city to buy some car parts, and that merchant sell the bitcoin to exchange to get dollar back

Looking at the whole process, the action has no net effect for the market: The bitcoins on exchange first decreased by 1 bitcoin and then increased by exactly 1 bitcoin. However, the details are more interesting

After Bob bought his coin, he need to transfer it to his wallet, this will take an hour. Then it takes another hour before his coin reach the merchant's wallet, and another hour before the merchant could send coin to exchange and sell it. So this trade makes one bitcoin disappear from the exchange for 3 hours. If Bob make one trade every 3 hours, one bitcoin will permanently disappear from the market, not available for purchase at any moment

If there are millions of users doing one such purchase every 3 hours, then there will be millions of bitcoins disappear from the market, thus make the coin extremely difficult to get, and its value will skyrocket

This process does not cost anything, and it does not hurt anyone:
- Bob does not take any risk since he immediately spend his coins and he might even get some discount
- Merchant get increased income due to lower fees and more customer
- Exchanges earn commission both ways
- Bitcoin become more scarce and more valuable
- Dollar is not affected since same amount of fiat money are still needed to initialize and finalize the transaction

It is an all-win situation

From Bob's point of view, he has motivation to make all his daily consumption pass through bitcoin, since that will make his coin more valuable. Some other people might choose to purchase in batch, and spend after a long time, from weeks to years, that will generate the same effect. Holding a bitcoin indefinitely is the same as using it every day, it just make this coin occupied and not available on market forever

Your fundamental assumption is invalid. Maybe there are a few who will do this way, but most who transact in Bitcoin do so to spend them. Otherwise there no reason for them to do so.

[johnyj]

Your fundamental assumption is invalid. Maybe there are a few who will do this way, but most who transact in Bitcoin do so to spend them. Otherwise there no reason for them to do so.

Isn't making himself some money not a good enough reason ? 

[johnyj]

Talk to outsiders about Bitcoin and its pricing. The most common thing you'll run into (other than "it's a scam") is complaining about how much a coin costs. Outsiders don't KNOW you can break it down. They don't have that comprehension. Therefore, again, what you or I know about Bitcoin means absolutely zero. Nothing. Nada. We're already in. It's OTHERS we care about bringing on-board, therefore we have to cater to THEM. That's how markets work.

I like hot pink cars that have no windshield, 6 wheels, no AC/heater, no seat belts and no headlights. So I go make them because I like them. Does that mean they're going to sell to others? Hell no. Why? Because not everything I like is something everyone else likes/agrees with. It's that simple.

Just because lots of people are afraid of it, I don't think advertising it will help, since that will make them more suspicious about it. The better way is to not tell them anything and just seeing that you making money out of it, then they will become curious and come to you to discuss bitcoin