Quote from: lazycodre on September 05, 2011, 09:25:29 PM

Why should Joe Average start using Bitcoins?

Right now? There's no real reason. Later, maybe, but not now.

1. BitCoin security is weak. Joe Average is using Windows, and *will* have his BitCoins stolen by malware (it's not an 'if', it's just a matter of time). If he knows enough about security or bitcoin to keep it secure, he ain't Joe Average. An ideal situation for Joe Average would probably be a two tier system: an iPhone app for making purchases with a client that handles your "chequing account" and day-to-day purchases, plus a separate, password-protected, handheld device stored in a secure location in your house that handles your "savings account" by wirelessly communicating with your router.

Of course, there's the risk of a break in robbing you of every last penny if the private keys to your bitcoins are stored only on a physical object. I can imagine that there's methods out there that can read the flash drive (or whatever) of the device, meaning backups won't help against theft. I suppose if the data in the object is kept mostly encrypted and sent through a third party decrypter or something via the internet...

Then there's the reliability of the trading hubs, online accounts, and Mining Pools. Look at MtGox getting hacked, MyBitCoin disappearing, and everyone was moaning and groaning about the fact that one mining pool had over 50% of the network (plus the fact that DDoS attacks against the weaklings could give a heavyweight majority control). The systems are just not there, or just not reliable.

2. BitCoin is unstable. We're inflating at a rate of what, 50 bitcoins every 10 minutes? So an increase of 2,629,800 bitcoins per year? That's 36.4% of the current bitcoin supply. And yet waves of Joe Averages keep hearing about bitcoin; even Paul Krugman recently commented on it (he dismissed it, sure, but the fact that he's commenting on it is something). This is driving up speculation: people are buying in to speculate, not to use the currency.

Then again, the currency has been stable-ish the past few months... as compared to its history of $0 to $30 to $5 to $20 to... and so on. So we could see a future where people hold bitcoins to buy. Right now they usually just trade fiat for btc on a trading site, buy something from a merchant, then the merchant converts it back into fiat. Bitcoins are held to speculate, and traded to purchase. They aren't being held to make purchases, not by anyone smart anyways.

3. BitCoin isn't useful. All of it's major features, like security, anonymity, and instant online transactions of anything are yet to be actually developed. The potential is there, yes: it has the potential to be trustworthy without needing a central authority, and it has the potential to be anonymous if you're smart about it, and you can theoretically buy anything you want (eventually)... but we just don't have that yet, or to a lesser degree than is advertised to the Joe Average joe, which *will* cause backlash. Right now the profit is in mining; in a decade the main income for miners will be transaction fees, and that's when we'll see transactions.