Speed Bumps on the Road to Virtual Cash

nytimes.com

22 points·blatherard··4 comments

If you're interested in Bitcoin, the absolute best thing you can do right now is provide viable, interesting, valuable economic exchange to the system.

Work for Bitcoin, offer to pay for work in bitcoin, sell your farmshare for bitcoin, etc. Bootstrapping an economy is hard, but can be rewarding as the article mentions.

The thing that will keep bitcoin alive is black market transactions. As long as there is a single officially supported currency that can be traded into bitcoin there will be a huge market for it.

I don't see every nation in the world banning bitcoins so that pretty much means it's guaranteed to remain viable (and more likely grow.)

But can black-market transactions support the current $100M market cap? The world black market is probably tens of billions of dollars, but what fraction will adopt Bitcoin?

Check this site out: http://bitcoinwatch.com/

The velocity of bitcoin is 730k/24h or $11M/24h, which is pretty insanely high and suggests that if anything the current value of bitcoin is low (due to perceived risk.)

Lest you think this is all trading volume, the total trading volume on all exchanges for the last 24h is under 20k bitcoin. So that remaining 710k in transactions is coming from somewhere, and I'd bet good money that it's not ISPs or any of the other merchants listed who accept bitcoin. If I had to venture a guess I'd say drugs and money laundering.

Think about it, this is a money launderer's dream come true. A completely untraceable currency with 0 fees. You can pump in a few million in USD, trade it into bitcoin, pull it out of some random exchange, and dump it in any random part of the world you feel like. Then hide it in some Swiss bank account. There's not a thing that anyone can do to trace it.

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