1 BTC equals 456.35 USD May 1 2014
Money is the common denominator in our current financial system, the currency that facilitates all of our daily interactions. We take its existence for granted, and while the debate in recent years has grown to include whether or not the government should “print more of it” or “print less of it,” the lack of comprehension about how dollars, Euros, yen, pesos and other government regulated national currencies are themselves the very root of the problem, conceived in iniquity and born as debt owed to the commercial banking system itself has prevented the conversation from moving past this infantile debate.
In recent years, mathematicians, cryptologists, computer programmers and others have been working quietly on the problem of how to create a system of exchange that bypasses the central banks and allows for instantaneous, pseudonymous, free transactions between individuals anywhere on the globe. Their answer: cryptocurrency, with its most well-known representative, Bitcoin.
Imagine a stock market where every trade had to be conducted on a public ledger like the block chain. If traders could see all the actions of other traders, it would be nearly impossible to get away with insider trading. Every institutional investor out there would develop algorithms to catch other traders who are engaging in highly suspicious or illegal activity. Next, insider traders discovered by the investors themselves would get reported to the SEC for further investigation and potential prosecution.
Customer is King
This brings us to the most important aspect in every shop, the customer. It seems 36% of all the 1,042 consumers polled said they are more likely to shop with retailers that offer a range of payment methods. What’s even more interesting is that 31% of all shoppers won’t even consider buying an item if their preferred method of payment is not supported by the store. This puts a new perspective on payment methods. In the past, shops just wanted to accept the most common payment methods available. It did not matter how the customer paid, as long as he did. This survey points out that the presence of a particular payment method might be the difference between a sale or no sale at all.
Bloomberg LP plans to list bitcoin prices on its financial data terminals, a move that could give the volatile digital currency a stamp of respectability and spark interest in U.S.-based trading platforms.
Ron Paul on Bitcoin
We have a terrible monetary system today. We have a government that purposely counterfeits and debases the currencies and I believe that the alternative would be a competition. That means that anything that wants to substitute for the American dollar should be permitted. There should be no prohibitions; there should not be a monopoly and a cartel running our monetary system because it so often benefits the privileged few. … Bitcoin is an introduction to that. It should be perfectly legal. For this to operate, we need to have freedom from government intervention when it comes to the Internet. I am concerned that the government ultimately wants to curtail the Internet and there have been attempts to do so. The internet is the salvation for those of us who believe in liberty because it is an alternative way of getting around the system not only in the spreading of our ideas in this instance but in in terms of getting around the monetary system on the whole if they do permit crypto-currencies and other forms of transactions. So, this is something that we should all be concerned about whether we endorse it or not. Ron Paul
Preserve Privacy and Freedom of Speech
Bitcoin is the next battle ground in the fight against supranational political domination. Nation states harrass their governed populations with parades of open lies, and dedicate their time to the modern statist paradigm: developing emergency powers and containing the growth of new technologies. Digital anonymity and freedom of financial speech are some of the last tools left in the dwindling garrisons of Liberty.
Public-key, or asymmetric cryptography. Unlike traditional methods of encoding and decoding messages, this one relies on pairs of keys, each of which can be used to encrypt messages that only the other can unscramble. Cryptography of this sort, in fact, is used widely on the Internet, underlying virtually every secure system on it, so the creators of Bitcoin knew that it could be relied upon for their purposes as well.
The key, quite literally, to that wallet lies in the other half of the public key pair. This one is kept secret, because anyone in possession of it can use it to control the Bitcoin associated with its other half on the blockchain. When an owner of some Bitcoin, then, decides that he wants to spend or transfer them, he uses this private key to sign the desired transaction.
The nodes on the Bitcoin network, because they all have access to the corresponding public key, can verify that the transaction was signed, and therefore made, by someone with access to that secret. That, in effect, is Bitcoin wallets explained, and it’s a simpler picture than many would expect. It also shows why it is so important that access to the secret key portion of Bitcoin wallets be guarded very carefully, whether through strong passwords or even through storing offline when possible
We love Bitcoin and the way it empowers and reorients individual and community commerce. Dark Wallet as a project will serve as a platform or starting codebase for delivery of a high quality Bitcoin that serves The People over enterprise and government interests.
The Dark Wallet premiere client will work as a light browser extension featuring trustless mixing, multisig, and colored coin support. See more technical info here, a list of our past work, and how we will use the money.
Yelp is going after the cryptocurrency-users-who-lunch demographic.
Freedom vs Federal Reserve
Federal Reserve money created from thin air backed by military power vs an underdog opponent the Freedom vs Federal Reserve . Unlike the Fed’s central planning and control of the dollar a Bitcoin is an up and coming destroyer of the current money paradigm of control and manipulation of the world monetary means. For generations those controlling monetary policy has been enabling illegal wars, bail-outs, creating and bursting economic bubbles of financial terrorism, backing and funding terrorist groups along with proxy wars. A corporate-military takeover through their means. A global bailout with the creation of the International Monetary Fund IMF and the World Bank at the United Nations International Monetary Conference in Bretton Woods, New Hampshire, in 1944, the Federal Reserve went global in its operations, underwriting loans for Third World nations as well as the United States. While Congress in the fall of 2008 passed the Troubled Asset Relief Program, authorizing the purchase of $700 billion in assets from failing financial institutions, a Government Accounting Office audit of the Fed’s TARP purchases showed $16.2 trillion spent in bailing out banks in the United States, the United Kingdom, Germany, and Switzerland. The Federal Reserve has, in effect, become the Central Bank of the World. According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” The dollar has lost 83 percent of it’s value since 1913. Andrew Jackson one of our most famous presidents was absolutely obsessed with getting rid of central banking in the United States.
Bitcoin Legality by Country: Green – Legal, Yellow – Restricted, Red – Illegal
Bitcoin Legality by Country: Green – Legal, Yellow – Restricted, Red – Illegal
The Australian government has been warm towards Bitcoin. Companies are allowed to trade in Bitcoins, and buying or mining Bitcoins is not considered illegal. The Australian government has released tax guidelines for the country. The Australian Taxation Office has announced that it intends to work Bitcoin capital gains and sales tax guidelines into its system for users to declare on tax returns this year. On April 9 the National Austrlia Bank (NAB) has decided to dissociate itself from bitcoin, informing bitcoin-related customers it will be closing their accounts next month.
|Belgium||Yes||The government has decided to take a hands-off approach to the currency. Belgium’s finance minister has publicly stated that he sees no problem with the currency and that the national bank would have no objections to it. The country’s money laundering agency has also not released any guidelines or warnings against the currency.|
|Canada||Yes||In November, 2013, the Canada Revenue Agency issued a statement clarifying the tax treatment of Bitcoin. The statement is a brief outline which states that tax rules apply when Bitcoin is used to pay for goods and services in the same way the rules apply for barter transactions.In Canada, the federal government announced that it was going to regulate Bitcoin under its anti-money laundering and counter-terrorist financing legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The Quebec government agency, the Autorité des marches financiers, also announced that it would prosecute violations of the Securities Act (Loi sur les valeurs mobilières), the Derivatives Act (Loi sur les instruments dérivés) and the Money Services Businesses Act (Loi sur les enterprises de services monétaires) for Bitcoin transactions, particularly those involving Bitcoin ATMs.|
|On 5 December 2013, China Central Bank barred financial institutions from handling Bitcoin transactions, moving to regulate the virtual currency. The People’s Bank of China said financial institutions and payment companies can’t give pricing in Bitcoin, buy and sell the virtual currency or insure Bitcoin-linked products, according to a statement on the central bank’s website. On 16 December it was speculated that the People’s Bank of China had issued a new ban on third-party payment processors from doing business with Bitcoin exchanges, however a statement from BTC China suggests this isn’t accurate, and rather payment processors had voluntarily withdrawn their services. Trading bitcoins by individuals is however legal in China.|
|On 16 November 2013, Norman Chan, the chief executive of Hong Kong Monetary Authority (HKMA) said that bitcoins is only a virtual commodity. He also decided that bitcoins will not be regulated by HKMA. However, the authority will be closely watching the usage of bitcoins locally and its development overseas.|
|Taiwan||Restricted||On 21 November 2013, Perng Fai-nan, the governor of Central Bank of the Republic of China (Taiwan) (CBC) said that the central bank view bitcoins similar to precious metals transactions and has adopted measures to prevent money laundering in bitcoins.On 6 December 2013, Perng Fai-nan said that Bitcoins is only used in certain communities. Besides, he also opined that the value of Bitcoin is a bubble and is highly volatile. Therefore he advised the public against the speculation of bitcoins to prevent making a loss during the process. The central bank is closely watching the development of Bitcoin and plan to impose regulations in the future.On 31 December 2013, Financial Supervisory Commission (Republic of China) (FSC) and CBC issued a joint statement which warns against the use of bitcoins. It is stated that bitcoins remains highly volatile, highly speculative, vulnerable to cyber attacks, malicious defaults, theft, and is not entitled to legal claims or guarantee of conversion.
On 5 January 2014, FSC chairman Tseng Ming-chung stated that FSC will not allow the installation of Bitcoin ATM in Taiwan because bitcoin is not a currency and it should not be accepted by individuals and banks as payment.
|Colombia||Yes||On 26 March 2014, The Superintendencia Financiera de Colombia (SFC), the government body responsible for overseeing financial systems in Colombia, stated that “The Bitcoin is an asset that has no equivalent statutory legal tender in Colombia since it was not recognized as currency in the country”, and made it clear that “supervised (financial) entities are not authorized to guard, invest or mediate these instruments (Bitcoins). Additionally it is for people to know and accept the risks inherent in their operations with ‘virtual currency’ risks”.|
|Denmark||Yes||In December 2013, Denmark’s Financial Supervisory Authority (FSA) has issued a statement that echoes EBA’s warning. In addition, FSA says that doing business with Bitcoin does not fall under its regulatory authority and therefore FSA does not currently prevent anyone from opening such businesses. FSA’s chief legal adviser says that Denmark might consider amending existing financial legislation to cover virtual currencies. In March 2014, the Danish Tax Board, the nation’s top tax authority, declared that personal profits and losses from Bitcoin trading would not be taxed, although Bitcoin trading businesses would be taxed.|
|Finland||Yes||Finland issued a regulatory guide to Bitcoin in September 2013, which imposed capital gains tax on bitcoins, and taxes bitcoins produced by mining as earned income.|
|Germany||Yes||On 19 August 2013, the German Finance Ministry announced that Bitcoin is now essentially a “Unit of account” and can be used for the purpose of tax and trading in the country. It is not classified as a foreign currency or e–money but stands as “private money” which can be used in “multilateral clearing circles”, according to the ministry.|
|Iceland||No[dubious ]||Due to the capital controls put in place in 2008 to stop money flight on the króna, buying and selling Bitcoin in Iceland, which appears to consider Bitcoin as a foreign currency, is Illegal. The Icelandic Central Bank confirmed that “it is prohibited to engage in foreign exchange trading with the electronic currency Bitcoin, according to the Icelandic Foreign Exchange Act”, however commentators suggest bitcoins mined within Iceland could be freely traded.|
|India||Restricted||In June 2013, the Reserve Bank of India (RBI) issued a notice acknowledging that virtual currencies posed legal, regulatory and operational challenges. In August 2013, a spokesperson wrote in an email that Bitcoin was under observation.On 24 December 2013, the Reserve Bank of India issued an advisory to the Indian public not to indulge in buying or selling of virtual currencies, including Bitcoins. Following the announcement Bitcoin operators in the country began suspending operations.The first raid in India was undertaken a couple of days later in Ahmedabad by the Enforcement Directorate (ED) on the office of the website, buysellbit.co.in, that provided a platform to trade in this virtual currency. The preliminary investigations found it to be in violation of the Foreign Exchange Management Act (FEMA).|
|Indonesia||Restricted||On 21 December 2013, Difi Ahmad, the executive director of communication at Bank Indonesia (BI) said that Bitcoin is a potential payment method but could potentially used in scams and money laundering operations. Since it is not regulated by banks, it has its associated risks. The central bank of Indonesia is currently studying Bitcoins and they have no plans to issue regulations on it.On 16 January 2014, Ronald Waas, deputy governor of Bank Indonesia said that bitcoins usage would break a number of laws including Undang-undang Bank Indonesia (Bank Indonesia Act), Undang-undang Informasi dan Transaksi Elektronik (Information and Electronic Transaction Act), and Undang-undang Mata Uang (Monetary Act). For example, Undang-undang Mata Uang states that Rupiah is the only legal tender in the country. He also strongly advised the public against using bitcoins because security of bitcoins transactions are not guaranteed. However, currently BI does not have detailed policies of regulating or banning bitcoins usage.On 6 February 2014, Bank Indonesia is stating that Bitcoin and other virtual currencies are not currencies or legal tender in Indonesia. The people are urged to exercise caution towards Bitcoin and other virtual currencies. All risks regarding ownership or use of Bitcoin are borne by the owner or user of Bitcoin and other virtual currencies.|
|Israel||Yes||The Israeli Tax Authority is said to be considering a tax on bitcoin, but no statements have been made until today. However, the Israel Bar Association considers the virtual currency an appropriate form of payment for attorneys.|
|Japan||Restricted||On March 7, 2014, the Japanese government, in response to a series of questions asked in the National Diet, made a cabinet decision on the legal treatment of bitcoins in the form of answers to the questions. The decision did not see bitcoin as currency nor bond under the current Banking Act and Financial Instruments and Exchange Law, prohibiting banks and securities companies to deal bitcoins. The decision also acknowledges that there is no laws to unconditionally prohibit individuals or legal entities to receive bitcoins in exchange of goods or services. Taxes may be applicable to bitcoins.|
|Jordan||Restricted||The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. While it warned the public of risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by small businesses and merchants.|
|Lebanon||Restricted||On December 19, 2013, the Bank of Lebanon issued a warning against purchasing, keeping or using digital currencies, citing volatility, potential losses, and other risks. It also pointed out that the issuance and use of “e-money” by financial institutions and exchange institutions is prohibited under a decree issued in 2000.|
|Lithuania||Yes||Bank of Lithuania released a warning in 31 January 2014 that Bitcoin is not recognized as legal tender in Lithuania and that Bitcoin users should be aware of high risks that comes with the usage of it.|
|Malaysia||Yes||Bank Negara Malaysia (BNM) issued a statement in January 2014 that Bitcoin is not recognised as a legal tender in Malaysia. The central bank will not regulate Bitcoin operations at the moment and users should aware of the risks associated with Bitcoins usage.|
|Norway||Yes||The Norwegian Tax Administration stated in December 2013 that they don’t define Bitcoin as money but regard it as an asset. Profits are subjected to wealth tax. In business, use of Bitcoin falls under the sales tax regulation.|
|Philippines||Yes||On 6 March 2014, Bangko Sentral ng Pilipinas (BSP) issued a statement on risks associated with Bitcoin trading and usage. Bitcoin exchanges are not regulated by BSP at the moment. BSP will be monitoring the possibility of Bitcoin usage in money laundering and other illegal purposes.|
|Poland||Yes||Poland made a first official announcement on the legality of Bitcoin on 18 December 2013 stating Bitcoin is “not illegal”. The announcement was made by Szymon Woźniak of the Ministry of Finance but further also clarified that while not Illegal, bitcoin cannot be considered legal as a form of tender, as yet.|
|Russia||Yes||On January 27, 2014 the Bank of Russia issued a statement on Bitcoin usage in which it was characterized as money substitute banned for emission in Russia. The Bank warned against potential illegal usage of such substitutes, including money laundering and financing terrorist activities. It also stated that exchanging money substitutes for any hard currency would be regarded suspicious. In February 2014, Russia’s Prosecutor General’s Office claimed that Bitcoin is a money substitute and “cannot be used by individuals or legal entities”. However, the Central Bank clarified that there are no plans for immediate ban on any cryptocurrencies; the government intents to prevent illegal usage of such currencies, and to develop legal framework protecting citizens and legal entities that use the cryptocurrencies.|
|Slovenia||Yes||On December 23, 2013 the Slovenian Ministry of Finance made an announcement  stating that Bitcoin is not a currency nor an Asset. There is no capital gains tax chargeable on Bitcoin however Bitcoin mining is taxed and business selling goods/services in Bitcoin are also taxed.|
|Singapore||Yes||On September 22, 2013, the Monetary Authority of Singapore (MAS) warned users of the risks associated with using Bitcoin stating “If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse” and in December 2013 made a followup statement regarding Bitcoin stating “Whether or not businesses accept Bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene” In January 2014, the Inland Revenue Authority of Singapore (IRAS) has issued a series of tax guidelines on Bitcoins. It is stated that bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their sales of bitcoins.|
|Switzerland||Yes||On 5 December 2013 a proposal was put forth by 45 members of the Swiss Parliament for digital sustainability (Pardigli), that calls on the Swiss government to evaluate the opportunities for utilization of Bitcoin by the country’s financial sector. It also seeks clarification on the Bitcoin’s legal standing with respect to VAT, securities and anti-money laundering laws.|
|Thailand||Yes||In July 2013, Bitcoin Company Limited said it had given a presentation to the Bank of Thailand about how the currency works in a bid to operate in the country. At the end of the meeting, “senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets… Bitcoin activities are illegal in Thailand”. The ruling means it is illegal to buy and sell bitcoins, buy or sell any goods or services in exchange for bitcoins, send any bitcoins to anyone outside of Thailand, or receive bitcoins from anyone outside the country. However, since February 15, 2014, according to a letter from the Bank of Thailand, the current situation is that Bitcoin can be traded in Thailand so long as it’s only converted to/from Thai baht. So Bitcoin cannot be used as a way of converting foreign currencies in the nation. Bank of Thailand says it has no plans to expand the laws to regulate Bitcoin.|
|Turkey||Yes||Bitcoin is not regulated as it is not considered to be electronic money according to the law.|
|United Kingdom||Yes||When Bitcoin is exchanged for Sterling or for foreign currencies, such as Euros or Dollars, no VAT will be due on the value of the Bitcoins themselves. However, in all instances, VAT will be due in the normal way from suppliers of any goods or services sold in exchange for Bitcoin or other similar cryptocurrency. Profits and losses on cryptocurrencies are subject to capital gains tax.|
|United States||Yes||On 18 November 2013, the United States Senate held a committee hearing titled Beyond Silk Road: Potential Risks, Threats and Promises of Virtual Currencies to discuss virtual currencies. At this hearing, held by senator Tom Carper, Bitcoin and other currencies were received generally positively, with it being stated that Bitcoin was a “legal means of exchange” and that “online payment systems, both centralized and decentralized, offer legitimate financial services” by US officials such as Peter Kadzik and Mythili Raman. It was noted, however, that the Justice Department’s Criminal Division has seen an increased use of virtual currencies for illegal purposes such as drugs and child pornography.After the Government Accountability Office recommended that the Internal Revenue Service make its position clear on Bitcoin, the IRS announced in March 2014 that opted to consider Bitcoin a form of ‘property’ rather than a currency, meaning that every transaction where Bitcoin is used as payment would be subjected to capital gains tax. The IRS also announced that Bitcoin mining activity would be taxed as income on the basis of fair market value as of the date of the specific activity, and that all of the foregoing guidance would be applied retroactively. On the other hand, US Treasury authorities subject Bitcoin to money transmitter regulations, which imposes fairly high regulatory burden on any entity that would envisage, for instance, to operate an ATM for Bitcoin. In March 2013, FinCEN issued an advisory that their rules for combating money laundering and terrorist financing, as well as the state-by-state licensing as money transmitters apply to virtual currency businesses, which must collect and report relevant data.The FEC deadlocked on Nov 21, 2013 on whether to allow Bitcoin in political campaigns. Their decision was split across party lines (three members Democrat voting nay, three Republicans voting yay). While their decision covered group donations, political Bitcoin pioneers US House member Mark Warden and Southern California politician Michael B. Glenn acted independently in accepting Bitcoin, and paved the way for others to follow suit. As of January 2014, both Warden and Glenn continue to accept Bitcoin donations. Other candidates accepting began to regularly emerge in late-January 2014.|
|Vietnam||No||The State Bank of Vietnam released a warning statement on 28 February 2014 which states that the use of virtual currency Bitcoin and other similar means of payment is not legally recognized and protected, according to the current law on currency and banking in Vietnam, and that investment in such the currencies was potentially very risky.|
The bitcoin ‘China Syndrome’ fills the news these days with attempts by Chinese authorities to steer bitcoin legitimacy. This gives us an excellent opportunity to contemplate and reiterate the core attributes of bitcoin’s overall strength.
Bitcoin shows that national fiat money systems are an artificial construct. The debates around regulation are really restrictions on getting into or out of the US dollar rather than getting into or out of bitcoin. Dollar and other national currency endpoints will always be regulated.
Aside from the fact that bitcoin survives and outlasts political institutions just like the Internet does, its greatest strength lies in the fact that it does not require government or other third parties to sanction its legitimacy. Bitcoin’s legitimacy derives from its market adoption and continued usage among its participants.
The exchanges, or on-ramps to the legacy financial world, are just convenient enablers and it makes sense for some threatened political institutions to clamp down on the facilitating enablers. Incidentally, it also reveals to the world which nations feel the most threatened by the existence of an incorruptible, non-political monetary unit.
Far more important to bitcoin’s future are the robust mining communities and the decentralized global nodes. Ultimately, any new bitcoin regulation yields market-based reactions to that jurisdiction’s regulation. Outright bans simply do not work. Price discovery still finds a way.
Of course, people in certain countries get annoyed when they cannot use an exchange to acquire or sell bitcoin and instead must go to excellent sites like LocalBitcoins to arrange a transaction. It can make you feel like you’re engaging in something seedy, but that is the intent of the regulators and the Fourth Estate. They drive it underground to dampen or slow adoption.
The way forward
We can do something. There is a solution. First, don’t worry every day about the USD or EUR price of bitcoin. Manage the risk via currency diversification.
Secondly, don’t fall victim to believing that nation-states can bestow legitimacy on a monetary unit. The most that governments can do is demand a favoured monetary unit in payment for taxes and other payments to the authorities, thus declaring a legal tender. A declaration such as that has little to no effect on person-to-person digital exchanges.
Also, reject the premise that bitcoin must be mainstream in order to be massively successful. Of course, it wouldn’t hurt for bitcoin to go mainstream, but not at the risk of diluting some of its core attributes.
Bitcoin needs to be successful on its own terms unlike PayPal, which capitulated from its original mission to then become a watered-down version of itself, enabling the same third-party choke points and legacy financial roadblocks that it originally set out to challenge.
Lastly, while research articles may tout a seductive future where ‘Bitcoin’s Promise Goes Far Beyond Payments‘, it is unlikely that a future of block chain-like applications will dispense with the original building blocks of bitcoin.
Bitcoin stands to win
Distributed trust networks are built upon gradually expanding computational strength provided by the network’s increasing hash rates. The incentive for continued mining is directly related to the value of the network-embedded monetary unit which is the bitcoin unit.
Side chains that exploit bitcoin’s early mover advantage are more likely to be the future of block-chain applications than government-managed trust networks that centralize and malign the incentives.
Therefore, bitcoin wins more broadly even though payments may only represent the first application of block-chain technology. The bitcoin monetary unit is the inseparable part of the world’s largest and computationally strongest distributed computing network.
Like languages, value standards trend towards commonality, which is why we will never see over 300 independent altcoin valuation standards succeed.
A standard for measuring value is similar to a standard for measuring volume, length, or temperature. The world may accommodate a few competing standards (like Fahrenheit and Celsius), but the market will reject an abundance of counterproductive competing standards.
Issues that broad adoption solves
As bitcoin is a global unit, we must talk about adoption on a global scale. It is insufficient to talk only of bitcoin adoption within a single country because its global nature breaks down borders for more robust international trade and transactions.
Unlike boundary-specific monetary units, bitcoin facilitates exchanges between different jurisdictions, thus weakening the advantage of the providers of the regional monetary unit. Bitcoin does not recognize the relevancy of jurisdictional borders and sees them as damage that it needs to route around.
Many positive things begin to happen with broad bitcoin adoption. For instance, the need for online local fiat exchanges begins to diminish because people on the receiving end of bitcoin are also able to spend bitcoin. A closed loop is created.
Also, the focus of bitcoin-related businesses shifts to usage rather than concerns around regulation, because if people are not exchanging bitcoin with fiat there become fewer regulatory endpoints to the legacy financial system.
All that remains are people trading digital scarcity ‘tokens’ for goods and services via their personal electronic wallets. Economic growth is centred around the participants of that new economy which reinforces market-based legitimacy for bitcoin.
Strategies for increasing adoption
How can we increase bitcoin adoption? This is the famous chicken-and-egg question. Do consumers lead the way for merchants to provide bitcoin payment choices, or do merchants provide fabulous bitcoin offerings that drive consumers to enthusiastically acquire their first bitcoins?
Both can be correct and there is no right or wrong answer. Aggregate consumer purchasing power could indeed influence merchant payment choices, while the fabled ‘killer app‘ for bitcoin will probably be merchant-driven.
Local groups and bitcoin nonprofits around the world could start holding contests with awards for the merchants that have the greatest bitcoin sales in a given period. ‘Bitcoin Accepted Here’ decals could be distributed in the same way that other payment decals are distributed. Large and influential merchants could debut shippable products to parts of the world that have no ability to purchase goods in the global economy without a bank card.
The existing bitcoin merchant processors like BitPay, BIPS, and Coinbase play a significant role in increasing adoption, especially since they provide streamlined apps and plugins for existing e-commerce software packages.
This will continue to be a high growth area as both physical and virtual merchants seek to plug into the rapidly growing bitcoin economy.
Consolidated consumer pressure promising large Groupon-like sales volume could also be directed at favoured merchants, thereby adding new bitcoin merchants to the ecosystem. This also creates a reason for consumers to acquire bitcoin.
Source: MIT Technology Review
As the chart above demonstrates, we are already witnessing greater bitcoin payments turnover than we were in the early years. This is encouraging because it means that new bitcoin is being transacted and used in some manner generally within 24 hours.
Furthermore, all of this has happened without an official government pronouncement or declaration of a legal tender. The future belongs to bitcoin.
Sources: http://www.cnbc.com/id/101625723 , http://www.nasdaq.com/article/bloomberg-to-list-bitcoin-prices-offering-key-stamp-of-approval-20140430-01226 , http://www.cryptocoinsnews.com/news/positive-bitcoin-news-business-leaders-customers-want-cashless-society/2014/04/30 , https://www.indiegogo.com/projects/bitcoin-dark-wallet#home , http://theriseandriseofbitcoin.com/ , https://agoracommodities.com/ron-paul-bitcoin/ , http://en.wikipedia.org/wiki/Legality_of_Bitcoins_by_country , http://www.coindesk.com/bitcoin-adoption-chinas-central-bank-underlies-legitimacy/