Let's Do Some Field Work About Bitcoins.

Economics Economics Questions
1

Pete Surda graced my blog with a comment in which he claimed a few things about bitcoin.

The velocity of Bitcoin is similar to that of US dollar and the Euro.

Exponential growth in consumer markets [as far as use of bitcoin].

“Nobody is actually buying anything with bitcoins” is false.

I asked:

  1. For a complete list of what has he bought with bitcoins.

  2. For a statement of what percent of his bitcoin stash he is hoarding, and what percent he shops with.

  3. A list of the exponentially more things that he buys with bitcoin.

  4. What is the velocity of his bitcoins? Meaning how long does he hold onto a bitcoin before he spends it? To be on a par with the US dollar, the answer has to be two weeks or less, with much of it spent right away, because that’s how people use their paychecks.

So all you bitcoin fans, here is your big chance to come out and support your currency. Give us your answers to these questions.

Just for laughs, I’ll tell you what I think the typical answer is going to be [of those who touch bitcoins at all].

  1. Slice of pizza two years ago.

  2. 99.99999999% hoarding.

  3. Buying exponentially less now bitcoin is in a phony bubble. I’m not stupid, the price is going to go up, so of course I’m not spending any of my bitcoins. I use real money for that.

  4. Velocity = zero. I’m holding on tight to those bitcoins, are you crazy?

But hey, prove me wrong. Let’s see your shopping receipts.

2

"BitPay Inc, the world’s leading payment processor for bitcoin, announces it has processed over $5.2 million in bitcoin transactions for its merchants during the month of March, with over 5,100 completed invoices during the month. The pace accelerated with over $3 million in transactions during the final 8 days. This eCommerce activity from merchants selling computers, consumer electronics, precious metals, and even government services has likely eclipsed the illicit activity widely estimated from sites like Silk Road.

BitPay has also approved over 1,300 new merchant applications during the month of March, bringing their total number of approved merchants to over 4,500. The explosive growth in BitPay’s business comes after February’s payment processing volume of $687,000 in transactions with 2,300 completed invoices…****"

3

$350,000 worth of bitcoin per day, at it’s peak. Total value of bitcoins in the world, 11 million bitcoins times $155= $1,705 million.

Do the math. Result: 99.9794721407625% of bitcoins are hoarded.

BTW, anenome, tell us your personal numbers. Pete Surda just avoided answering them, too, on my website. The only thing he confessed to was that he hoards his gold even more than his bitcoins. The exact quote, “I spend a larger proportion of my Bitcoins that of my gold.”

C’mon, guys. Open our eyes. Put your money where your mouth is, Malachi and Pete and anenome, and all you others. Show us your sales receipts from what you bought with bitcoins. Or else forever hold your peace.

4

All I’m willing to tell you is that I’ve spent 102 of my 141 bitcoin.

5

seeking to verify (or disprove) an analytic proposition via empirical means? you have truly lost the plot.