Let's face it, the last three months have been nothing short of ugly for Bitcoin. Just about the entire Internet has called Bitcoin's time of death, tagged it's toe, and thrown it in the freezer, not even granting it a funeral worthy of pets.com.
Those of us who continue to guard the flame are confused, tired, and starting to ask ourselves if we're crazy. If Bitcoin is so great, why isn't it catching on?
Well, let's look at the facts:
1) Until a week ago, you had to know how to build a computer from scratch to secure your wallet. Okay, maybe that's an exaggeration, but it sure felt that way. At one point I had so many USB sticks and TrueCrypt files on the go, I felt like I could start an on-stage show at the Mirage, juggling flash-drives while singing Celine Dion songs in binary. Once I installed the new client, it took me two hours to undo it all and consolidate my Bitcoins into one secure wallet. Finally, I can tell my friends about Bitcoin, and I don't have to lay awake at night wondering if their Bitcoins are being stolen by crazy hackers from the Caribbean.
2) The Exchanges and E-Wallets are very new and legally ambiguous. There can't be a functioning Bitcoin economy until a solid, time-tested, secure network of exchanges is in place, all around the world. This summer has been absolutely brutal for hacks, stolen coins, and fraudulent website operators. None of this is doing the Bitcoin economy any good. It's going to take time for reliable sites to prove themselves, and for the legal schmozzle to sort itself out, before the average Joe is going to dare dip his big toe in the pool of freedom-coated Bitcoins. Sure, the blackmarket will continue to thrive and grow, but that's not going to help Bitcoin go mainstream.
3) Bitcoin is new, like, Facebook-with-1000 users new. If Bitcoin was a website, it would be on geocities with a bunch of "under-construction" gifs. It's going to take time to build the infrastructure and attract merchants to accept the currency. The last few months have seen a massive drop in Bitcoin value, yet a huge influx of new exchanges and services. Just imagine how many projects are on the go that we don't yet know about, or how many haven't even been thought of yet. Patience is a virtue, and it's desperately needed here.
Within a few years, we'll be looking back at 2011 the same way we look back, today, at the 10,000 BTC pizza, saying, "my God, what were they thinking? How could anyone have written off something that had so much potential?"
The tipping point will come eventually - I'm convinced it's inevitable - but it's not going to happen tomorrow. Anyway, what's the rush? In the meantime, put on your Alpaca socks, smoke some e-cigarettes, and play some bittleships.
That is a really depressing post.
ReplyDeleteHunker down, Bilbo. Hunker down. It's going to be a while...
ReplyDeleteGreat article! My thoughts entirely on the Bitcoin potential.
ReplyDeleteI think China will prove to be a major tipping point, in two ways:
ReplyDeleteFirstly, they are politically evil to the right-wing politicos in the East - if they try to stop Bitcoin for their population in any way, the West will be in opposition to that on the grounds of yet another trampling of the personal freedoms of the Chinese people. It's all bullshit, of course - but that will leave the West with no choice but to support Bitcoin, on the grounds of consistency.
Secondly, the sheer numbers of that high-tech population with access to cheap and cutting edge technology. And there's plenty of money to invest. It's a no-brainer.
In six months, the WebGL Bitcoin Globe spikes in China will make the US spikes look like nothing...
And, speaking of tipping points, I threw 5BTC at evorhees' OccupyWallStreet campaign.
You should too.
Ooops:
ReplyDelete"Firstly, they are politically evil to the right-wing politicos in the East..."
West, of course.
Could the anonymous poster above site links to OccupyWallStreet campaign page and maybe a Bitcoin wallet address?
ReplyDeleteThis is what Bitcoin is all about!
Sure.
ReplyDeletehttps://bitcointalk.org/index.php?topic=45943.0
Obsolete the Fed...
Between Paypal's inception and me having a Paypal account, 5-6 years passed. I began using it as the preferred method of payment years later than that. And I'm a regular (non-US) online shopper. The time intervals you are talking about are pretty short in real world terms. Why a lot of Bitcoin users are panicking all the time is because they are the ones creating the system. They are like stock holders of Paypal or more. Most not invest only money, but time and attention. It's normal for them to get nervous, but there will be a lot of "tipping points" ahead, and what will stay important is the technical foundations of Bitcoin.
ReplyDelete@goks:
ReplyDeletePerhaps you mistake 'panic' for the speed at which the internet moves, these days. I started with PayPal when they first began, and for selling on eBay they were remarkable. For awhile.
"Always Free! We make our money on the float."
Remember?
Now, of course, they've decided not only to rake us over the coals with fees, but they're getting political. I will brook no political shenanigans with my money - I spend it where I please. Hence... Bitcoin.
But you're correct - there will be a lot of tipping points ahead. I look forward to them - both as a test of political will, and as the opportunity to earn a profit.
Triple entry accounting for the win. Central banking is over, just doesn't realize it yet. Has a lot of momentum behind it and will probably require going off a cliff before everyone jumps ship and starts looking for 'something better'.
ReplyDeleteFortunately due to the work of many dedicated thinkers and tinkerers over the last few years we can pretty safely say "We have something better".
All that needs to happen now is the masses to clamber for it. The central bankers will offer their latest turd, only this time, for the first time in the history of our people, we wont be stupid enough to fall for it. They'll be too little, and too late, and we'll be using our bitcoins (or similar) to keep the wheels of our cities turning.
Then we'll turn the other cheek and not cut their heads off for six thousand years of pain. Cuz we're better than that.
Depressing post, but I agree. I think Bitcoin still has a long way to go before it can be usable by the masses. However, we'll still be here to stay and support Bitcoin.
ReplyDeleteLong live Bitcoin (or something like it).
Nice post. Interested to see how things go in the next 90 days.
ReplyDeleteI'm working on another article along these lines that you will all enjoy... stay tuned.
ReplyDeleteNot really a depressing post - at least not in my view. It merely highlights the fact that Bitcoin is here for the long term. For mass adoption, as with any product, it has to be 'retard-proof'. This necessitates services that are easy to use by the average Joe. Layers that abstract the underlying complexity into a friendly, easy to use applications.
ReplyDeleteMost people don't want to know about the ingenious mechanisms used to secure and distribute Bitcoin, in the same manner most people don't want to know what the OSI model is and how it governs todays network communication.
Easy of use rather and the services encapsulating that rather than regulatory rules will ultimately determine Bitcoins success or failure.
good thoughts, im with you. especially when it comes to your thoughts about the bitcoin economy and what we don't know about.. i indeed think there are at this point a big amount of startup projects making their final tweaking before going abroad.
ReplyDeletei myself, while having bought my first bitcoins just a month ago, saw some projects develope really fast. there is more stuff to be baught with bitcoins soon. it developes fast! - there are, example given, at least 3 different commercial bitcoin-poker startups, concuring with each other!
pizza:
10k BTC for a fucking pizza^^
O_o
i hope in the future it is like: 0.003 BTC for a Pizza!! :)
anyway, im enthusiastic. I will buy more bitcoins and i will keep them! and so should YOU, dear reader, also!
SECURITY..... SECURITY... The Mt Gox hack and ewallets being stolen is what has put a deep hurt on bitcoin. MtGox needs to reassure the public and news media they have fixed any security holes and it should not happen again. The hackers stealing bitcoins is another big problem that needs to be addressed. I have my bitcoins sitting at MtGox as I am terrified to have them on my computer even though they would be encrypted.
ReplyDelete