Quote from: Michele1940 on July 03, 2011, 07:03:43 PM

Quote from: nanotube on July 03, 2011, 06:57:14 PM

this has nothing to do with mining at all

once we have enough people accepting bitcoins, we have complete economic cycles in btc, wherein merchant accepts btc, then pays his supplier in btc, the supplier pays his supplier in btc, they pay their employees in btc, the employees use btc to buy stuff they need, etc.

there will still have to be some exchange into fiat for the purposes of tax payments - but that's a separate issue.

Provocation again, just for discussion :

Even if a large number of merchants would adopt btc as a form of payment ( finding it convenient according to your article ), they still will need a way to change btc into real cash. Unless, of course, the chain does not stop here and they would be able to buy from their suppliers paying with btc, go shopping for their personal needs and pay with btc and so on.
At present, btc move from the exchange market to people who buys them. From these people could move to merchants , providing there would be enough to notice this movement which, at present , is not the case, Than from merchants btc can only move back to the exchange market.
Thus for merchants adopting btc as a form of payment , ( aside from the advantages you have illustrated in this article ) could be considered as a form of investment, a speculation if you like.
This tends to limit the number of merchants interested in btc for obvious reason.
It is my opinion that , in order to boost btc economy, the final place where btc have a real tangible value, cannot be the exchange market alone.
There is nothing wrong in trying to make some extra money in speculation, but this bounds btc potential.
For example e-commerce, would be advantaged from adopting btc as a form of payment. Once the transactions are made, we will have these e-merchants loading up with btc and while they will unload their available stock of goods. Than, what ? They have to go to the exchange market and buy back fiat money in order to fill up theirs werehosues.
If btc economy is confined into this boundaries, it is very unlikely that we would see it booming up like many are expecting.
The underling concept of btc ( being a currency that allows to avoid double spending on transactions cutting of all the middle man ) remains intact even inside the boundaries I have outlined above. Merchants would have benefit from a cost free transaction on theirs sales even if they would have to buy back real cash at the end of the game.

What do you consider to be real cash? Fiat?
In my opinion there is no such thing as "real cash". The only value cash has is as a medium of exchange. The things that are real are typically on the other side of the transaction. Cash is an attribute of the transaction itself and has no "real" intrinsic value. It's only value is as a medium of exchange. For that reason, the USD is no more real than Bitcoin. The primary difference is that people are familiar with the fiat currencies and Bitcoin is new.