http://realestate.msn.com/blogs/post--buy-a-house-in-bitcoin I met with Baron in Chicago recently, and he got me interested in bitcoin. I am not completely comfortable on how it works, and how it does not violate the governments law that you cannot set up your own currency. Still, as the link above shows, you can buy real things with bitcoin!
I have been thinking about bitcoin, and it seems to me that one of the key places where it might really take off (if it hasn't already like I said I know next to nothing about it) is online gambling. For example, the US restritcs [online poker] gambling by not allowing banks to wire transfer money to online poker sites. But what if instead you played with bitcoins? Nothing could stop you? Another obvious application is the buying and selling of drugs, particularly on "The Silk Road" http://en.wikipedia.org/wiki/Silk_Road It reminds me of a scene from scarface when he has problems with all the money he is making and where to put it:
The biggest reason I like bitcoin is I really can't stand banks, save PNC. Charge me for cashing a check if I don't have an account at their bank but it was made out to me by their customer? Motherfuckers.
BTC is great if you're on the credit side of the transaction. It serves no purpose to spend it, only to receive. Accumulate what you can and convert to precious metals. I will never buy a consumable with BTC. Barring that, it's a great tradable if you can trust the dealer and can use a viable front-end.
I know someone who has placed a few bets on bet coin sports dot com. The volatility (of the value) of BTC comes into consideration during the time of the bet. For example, if a friendly wager of .30 BTC when BTC was worth $110/BTC; is now no longer a "friendly" wager. A bet of .50 BTC was within comfort levels, but nowadays a bet of .15 BTC is not... To sign up; only email and password is required. no need for name, address, phone #, etc... Seals with clubs is a good online poker for BTC but SNG's are not fully developed, yet. fwiw. I should say that (imo) BTC should not be promoted for gambling or purchasing illicit products, exclusively. I bought domino's pizza (via gift card) and burger king burger (via gift card) using gyft dot com. Some people bought many different products/services during bitcoin black friday (ie laptops, graphics cards, etc.) I like to think of bitcoins as: 1. Currency (you can't buy groceries from Walmart or Wholefoods with twitter stock. you can with bitcoins via gift cards) 2. Investment vehicle (USD value/purchasing power is gonna be about the same a month or a year from now. not so with BTC, depending on the news. it could be significantly up or down, just like twitter stock getting a downgrade) 3. decentralized, deflationary, store of value. (Zimbabwe vs US, vs any govt. They can just print away as much as can be mandated and approved by the central authority. Not so with bitcoins. Deflationary? I can't even guess how many bitcoins are lost forever because the wallet.dat files have been deleted/lost or passwords cannot be recovered. 12 million bitcoins currently have been produced and only 21 million bitcoins will ever be in existence) bitcoins can be divided into many, many different units. so, there's more than enough bitcoins to go around if it becomes really mainstream. millibitcoins was popular when bitcoin price hit $1000/BTC. https://en.bitcoin.it/wiki/Units
In a perfect world, limiting to 21 million coins would be deflationary. IE. people would lower prices. However, in reality, people are not going to lower prices and the velocity of money will dry up. Not enough bitcoins to keep up transactional demand. Then lending will come in, but that's usury: paying interest for a transactional currency. This has the same problem as a gold-backed currency.