A Look at the Bitcoin Economy
thegenesisblock.com
thegenesisblock.com
And, the number of full peer nodes is about 130,000 – per the network scan done by http://getaddr.bitnodes.io/.
To an extent, the total value is an emergent property of all the nodes together. But for grins we could distribute the value over them equally, to discover each node's pro-rata contribution to the total value.
That number, $5.4B/130K, is $41,538/node.
So, fire up Bitcoin-QT! It's free open-source software that'll use about 15GB of your hard drive space (<$2) and suck up some fraction of your cycles. Even if your wallet is empty, your peer instance will be backing over $40K of Bitcoin market capitalization!
My 64GB SSD disagrees with this proposition :(
I think Bitcoin is going to be revolutionary but the application is lacking - entrepreneurs really need to find a real world application where the use of Bitcoin actually improves the experience. Remittances and International Money Transfers are the first legal industry I can think of where that will work, but businesses in that area need time to grow and navigate the uncertain regulatory environment before Bitcoin will actually see adoption that really means something.
The current rise of Bitcoins' value is actually very unhealthy for the market.
See, let's say i start out with 5k worth of bitcoin and 5k worth of USD. The bitcoin go up in value while the USD go down via QE.
As you suggested I avoid spending the 5k in BTC but thing is eventually I will run out of USD and even if I don't because say I got a day job source of USD income eventually I will want to buy something which is above my pay rate and I will have to use my btc.
The same thing happens with gold or with an estate property, only thing, bitcoin is more liquid than that and unlike gold or a house I can decide to use a tiny part at anytime without selling or exchanging the whole cake.
And with BTC merchant can offer discounts which may encourage the use of btc.
Time will tell.
For the majority user, who is mostly buying and not selling, Bitcoin currently has an advantage only in cases where I can't/don't want to pay with a card - say, a need for anonymity, but that is only a small niche. How bitcoin can improve the experience for common transactions?
That would be nice to know and definitely more informative than a graph of daily activity within the blockchain.
* preferably something mundane and totally within the boundaries of the law
From whos point of view?
As a merchant, I'd love it if our customers all paid in BTC as it would eliminate all fraudulent/charge-backed transactions which cost us $15 each time. (A nice little money earning industry for the CC companies btw!)
As a customer, I'd rather pay with my CC so I have some protection over my payment.
If you're looking for something that's better from both points of view, then drugs is the obvious one that springs to mind.
Consumer based foreign exchange (swapping my GBP for USD for my holiday to USD) by using Bitcoin as an intermediary vehicle could save me a ton of money as well, this isn't exactly possible yet but would be awesome if it could be done one day. It's better for everyone except the rip off middle men who charge horrible fees and rate spreads.
Another service that would be better with Bitcoin would be remittance. This one is cited often, and should not be overlooked. Again, middle men banks and rip off services are the only ones who would suffer. And it's a huge huge market.
Take a look at the control large institutions have on the market as well to see further benefit. Wikileaks for example endured a "banking blockade". The banking industry stopped for a moment in time Wikileaks being able to accept donations via Mastercard, Visa etc. With Bitcoin, no corporations can interfere with fund raising.
What about charity?
> When you donate via credit card, the charity has to pay a transaction fee of 2-3% on the transaction. If you make a $100 donation, your charity only gets $97 of it. According to a Huffington Post article, banks and card networks make about $250 million a year off of charitable donations. http://www.nerdwallet.com/blog/nonprofits/donate-charities-c...
Let's cut these middle men out of the equation, if I donate to charity 100% of my Bitcoin are guaranteed to arrive in their control. It makes me feel sick that when I donate to charity some credit company is taking their cut.
As a customer I would never pay with BTC for exactly the same reason.
Why wouldn't you, if you trust the merchant?
It's really easy to donate money with bitcoins. You don't have to give up any identifying information and every dollar you send goes directly to the charity. That's how I donated to the EFF and it was an awesome experience. I wish more non-profit orgs accepted Bitcoin. NPR I am talking to you!
Buying things online from other countries without having to go through the "demoninational dance"
Anyone who is unbanked and/or uncredited (still most of the world, btw) could benefit from doing business with cryptocoin
Anyone who is in a country with a completely overinflated currency
Anyone who wants to take their money out of a country with lame capital controls
Anyone who wants to carry their money inside their head (brainwallet) instead of in a controlled-by-third-party bank account
Donating without giving any personal information (don't even get me started about the outright harassment I experienced after donating to someone who unfortunately got my number)
Kids can use them to buy things online without credit
Check this site out. Seconds after you send the specified bitcoins to the QR code/address using your smartphone or bitcoin wallet app... It triggers the download.
No entering in of CC information or account creation required. Just blip, get download of book, done.
How fucking cool is that?
Seems to me that all of the recent news has brought attention to bitcoin which has helped with it's popularity. Is it something that will continue to rise or will it fall once people aren't talking about it as much?
Can anyone weigh in with their opinions?
What would further increase demand?
Well the status quo, i.e. BTC breaking new market highs, having crashes and recovering, that's news and so increases the public awareness of BTC, and so more people buy.
More companies accepting BTC will increase it's usefulness (therefor provide some intrinsic value), more startups working to make transacting in BTC easier will also help increase demand.
What would decrease demand in a meaningful way?
Unfavourable legislative changes. These are mitigated in that they have to happen on a country by country basis, but generally countries follow the leader on matters of new policy or policy related to new technology.
At the moment most BTC demand is for speculative hoarding by investors. Most realise that it's a gamble where the downside is losing 100% of capital, but the upside is potentially 1000% or more.
<opinion>There are undoubtedly future market rallys and crashes ahead, but I think in the long run BTC has a long way to go. It's very difficult to "price" BTC because it generates no return in it's own right, and has no intrinsic commodity value. It's a gamble but the potential return seems worth the risk of potentially losing 100% of your capital.</opinion>
It is important that you regard BTC as speculative - i.e. not an investment.
In the end the long term survival of BTC will depend on it's adoption. So if you want to make money, horde some BTC and work on a project that makes uses it to solve a real business problem for a meaningful market.
https://blockchain.info/charts/n-transactions
[edit] I see he's excluding the 100 most popular addresses. Is there any justification for that? I'm sure he would have left them in if the chart looked right.
Probably because most of the top 100 are things like SatoshiDICE.
Really? You're sure? Actually, the top 100 addresses would almost certainly have supported his thesis even more, since they include high-transaction rate addresses from the exchanges, and the betting companies.