Re: The Next Step for Bitcoin: From Mining to Transaction Economy

Quote from: swusc2 on July 01, 2011, 12:36:54 AM

Quote from: iamhiv on July 01, 2011, 12:32:36 AM

You guys worry far too much about people using BTC to buy goods. Its not suprising to me at all that not many people are spending BTC. Besides a .02 donation to you, Atom, I haven't spent anything recently. Here is a great quote from bitcoinbull,

Quote

You've already assumed that people buy BTC in order to buy real goods. They don't. We know that because the volume on the exchanges (who trade BTC for USD etc) is far greater than the volumes merchants see (who trade BTC for goods).

So we know that most people buy BTC to store and transfer value, not goods per se. They do so because bitcoin has many advantages over USD and gold (digital, decentralized, etc). I agree it carries more risk, but with that risk also comes reward Smiley. Bitcoin is like any other speculative asset (which can include any investment: currencies, real estate, commodities, tulips, etc) and is certainly one of the riskier (since it is newer).

But the speculation is not that people will want bitcoins as collector items or to buy alpaca socks or virtual avatars or anything else. I speculate mainly that people will want bitcoins to store or transfer value not seizable by a central authority (which is to say that bitcoin is secure), and that others will continue speculating.

Ask the financial industry if speculation isn't a "real economy". Or ask a homeowner burnt buy the mortgage crisis. Bitcoin is a very real economy of a digital good and could be sustainable for as long as we live in a digital age.

True but you have to consider this "I speculate mainly that people will want bitcoins to store or transfer value not seizable by a central authority (which is to say that bitcoin is secure), and that others will continue speculating".

If Bitcoin is just a manner to store money and act as an in-between for transaction, then Bitcoin will never be an independent economic system but instead just the next Paypal.

Interesting. It's quite possible this may be the true and only strength of bitcoins. Purely as a wealth holder and speculation tool, and nothing else. A p2p swiss bank (with a stealable wallet ftw). I agree that security is the next step for better bitcoins, but I'm also starting to believe that will be where the experiment predominantly ends. The list of problems with bitcoins as a trade tool is as long as my arm - most of them remarking on the attractiveness of hoarding over trading stifling actual trade.

I'm actually starting to think the best economic trade currency is something that's *not* valuable at all, except as limited as time.