Fred Wilson posted better adoption metrics which are a more accurate (and more impressive) record of how Bitcoin is doing: http://avc.com/2014/10/bitcoin-adoption-metrics/ It is smarter to look at these than at merely the number of transactions.
Coinbase and blockchain publish wallet numbers which is used here and is another useless.
When they start publishing MAU I'll be impressed until then I'll just see wallets as a vanity number that is always going up.
Number of uniquely used addresses is being inflated by actions like the one I post about above.
Merchants and Merchants annual revenue are again vanity metrics. Merchants like wallets above does not accurately reflect current demand(go look up every story of people trying to travel using coinmap and finding almost all the merchants listed no longer accept bitcoin). Merchants annual revenue inflates the importance of companies like Overstock and Dish.
If VC investment was a good metric to follow we'd all be using Flooz and Beenz.
Hashrate has more to do with the improvements in ASIC miners than growth in usage/adoption.
And number of bitcoin repos is silly since everyone in the bitcoin space wants to be a bitcoin developer so the number of vanity repos is astounding.
I'm denying the ones I've commented on are important.
>implying that Bitcoin's usage is either stagnating or declining
I think it is but thats not what I'm implying. I'm implying that people heavily invested in bitcoin tend to use vanity metrics like this.
That said the things I look at that make me believe bitcoin is stagnating/declining are things like the continued slide of the price over the year, Bitcoin Black Friday 2014 being a huge failure, Overstock missing their bitcoin sales expectations by 17 million dollars. Basically every vendor I've seen comment on sales has said there have been pretty much none this year. The fact that 2014 was meant to be the year of bitcoin and there has been no breakout in the general public. Everyone seems vaguely aware of bitcoin but no one is investing any time in learning anything about it because it solves problems that most people don't care about(freedom) and creates problems they do(security).
Now I just see people in the community rallying around remittance and the killer app that will save bitcoin but the actual transfer of funds isn't the expensive part of remittance the compliance around the transfer of funds is and the existing services that do remittance cheaper using bitcoin only work now because they are ignoring compliance completely. They will either get more expensive or be shut down in the near future.
No, BBF 2014 was a huge success: "we saw an 82% increase in the number of merchants who completed transactions compared to last year’s BBF", "Both Gyft and NewEgg experienced their best day of bitcoin sales ever" - http://blog.bitpay.com/2014/12/09/bitcoin-black-friday-2014-...
> every vendor I've seen comment on sales has said there have been pretty much none this year
You are wrong, which is why you quote no source. 2014 was the best year ever for bitcoin sales. See the BBF numbers above. CheapAir recently passed $1.5 million in bitcoin sales (http://www.coindesk.com/cheapair-litecoin-dogecoin-flights/). Newegg, although they quote no numbers, was sufficiently pleased with their Bitcoin sales that they decided to accept them in Canada in August. Same thing for Overstock who decided to expand bitcoin acceptance to their international market.
> Bitcoin solves problems that most people don't care about(freedom) and creates problems they do(security).
Bitcoin solves a lot more than that. You must not be very familiar with it. I will give you 2 basic examples. The most important problem that Bitcoin solves is fraud: a merchant who receives a payment in bitcoins can be assured it won't be "charged back" or "cancelled" due to fraud, because Bitcoin payements are cryptographically irreversible. So once a merchant receives a payment in Bitcoin, the product or service can be shipped or executed ASAP with no risk of fraud. And conversely, Bitcoin solves the problem of financial theft for customers: if Joe Schmo decides to pay a trusted merchant like Dell in bitcoins (as opposed to using a credit card) he can be assured that if Dell is hit by hackers who steal CC data, they won't be able to financially steal from Joe, because the payment he made in bitcoins authorized cryptographically a certain amount of coins to be transferred, nothing more. Whereas if Joe had given his credit card information to Dell, hackers would have been able to initiate any number of other transactions.
Now, I do recognize that Bitcoin is not automatically easy and secure to use. But there are plenty of smart people working to make this happen: cryptographic 2-party escrow to deal with untrusted merchants (which is superior to 3-way escrows used by the traditional financial system: removing the third-party escrow simplifies the trust model), hardware wallets to deal with wallet security, etc.
> the actual transfer of funds isn't the expensive part of remittance the compliance around the transfer of funds is
That's false. Compliance in the financial industry is mostly automated: it is just software checks like who sends what to who, and data logging/retaining records. The most expensive part of the business is the requirement to have physical presence --offices and employees-- to deal with the need to be able to handle cash deposits and withdrawals. Bitcoin services make this cheaper because they don't need physical presence. https://www.sendbitcoin.mx for example accepts deposit by sending coins to their service, and they rely on the ATM network of an established bank for withdrawals. They are cheaper than Western Union for the same reason why simple.com is cheaper than traditional banks: they don't have physical presence.
Notice they changed the metric from the number of sales to the number of merchants? Because it was a huge flop.
>"Both Gyft and NewEgg experienced their best day of bitcoin sales ever"
Congrats to those two companies. That doesn't change the fact that the event was a flop.
>You are wrong, which is why you quote no source.
I quote no source because I'm too lazy to go search through the /r/bitcoin posts. Go search for accepting/started/etc then contact the merchants and see what they say. Better yet search for "no sales" or similar, search for complaints about coinmap they generally revolve around a store not receiving any sales, getting rid of bitcoin and having the user be stuck. Or look at Adafruit.
>CheapAir recently passed $1.5 million in bitcoin sales
It's been over a year since they started taking bitcoin we have no indication if they are seeing growth or shrinkage in sales with just one figure.
>Newegg, although they quote no numbers
Enough said.
>Same thing for Overstock who decided to expand bitcoin acceptance to their international market.
This being the same Overstock that recently announced they missed their bitcoin target by $17 million dollars? Overstock is helpful in that they release their figures regularly so you can plot the decline in sales on a chart easily.
>The most important problem that Bitcoin solves is fraud
It solves fraud for merchants by removing consumer protections. Merchants having no fraud doesn't matter if no one uses it because they don't want to get screwed over by merchants. (Look at all the complaints related to Tigerdirect and bitcoin orders).
>And conversely, Bitcoin solves the problem of financial theft for customers: if Joe Schmo decides to pay a trusted merchant like Dell in bitcoins
Note the trusted part? What about all the millions of other merchants online? Or do you expect everyone to centralize into a few trusted retailers? Besides that there are plenty of trusted merchants who make mistakes sometimes that require charge backs. With bitcoin you're out of luck.
>he can be assured that if Dell is hit by hackers who steal CC data, they won't be able to financially steal from Joe
If they steal his CC data he can be sure they won't be able to financially steal from him either since he is insured against loss by his credit card company.
Unfortunately for Joe he isn't a security expert and his odds of losing money due to accidentally installing a coin stealing virus are way higher than the odds of him losing money due to Visa not accepting his fraud claim.
>cryptographic 2-party escrow to deal with untrusted merchants
A new one appears every few months at which point I post the reason they don't work and the developer moves on.
>The most expensive part of the business is the requirement to have physical presence --offices and employees-- to deal with the need to be able to handle cash deposits and withdrawals
That is another very expensive part of it. It's required because you're often dealing with the unbanked who can't just have an exchange deposit money in their account. Again bitcoin doesn't solve this problem.
>Bitcoin services make this cheaper because they don't need physical presence. https://www.sendbitcoin.mx for example accepts deposit by sending coins to their service, and they rely on the ATM network of an established bank for withdrawals.
They do actually need a physical presence to compete with the services that have a physical presence. There are a lot of people who can't receive a bank transfer.
Sendbitcoin.mx will not be around for long once the bank they utilize finds out they are using their service for remittance because they are avoiding all regulations which make remittance to MX expensive. If it was so easy to do remittance using the ATMs surely the bank that owns the network would be doing it by themselves and raking in the money.
> Notice they changed the metric from the number of sales to the number of merchants? Because it was a huge flop.
Most likely they quoted this number because 10 or 20 or 30% "increased sales" sounded less impressive. It doesn't really matter. The reality is that there are 82% more merchants who completed sales than last year, so no it was not a huge flop. By the way you still fail at providing any data why it was a "huge flop". Second time I have called you on this, and second time you ignore me. Burying your head in the sand saying something does not make that thing a reality.
> I quote no source because I'm too lazy
You quote no source because you have no source.
I am confident you are able to find some anecdotes on /r/bitcoin from a few mom-and-pop shops disappointed by their bitcoin sales this year. But anecdotes are not data. Data is the "+82%" number I reported above.
> This being the same Overstock that recently announced they missed their bitcoin target by $17 million dollars? Overstock is helpful in that they release their figures regularly so you can plot the decline in sales on a chart easily.
Their sales are not declining anymore. They have reached a steady state of $7000-8000 a day for the last 3 months: http://www.coindesk.com/overstocks-2014-bitcoin-sales-miss-p... But I am sure you will ignore this piece of so called "data" and continue shouting around that "overstock sales are declining!!!!1!!one"
> Merchants having no fraud doesn't matter if no one uses it
"if no one uses it" -> that's the thing, people actually use Bitcoin, and pay with it: Newegg, CheapAir, Overstock, etc. So it really does matter to such merchants that Bitcoin removes the risk of fraud.
> Note the trusted part?
That's precisely my point: most sales are performed with trusted merchants. It is OK for a payment system to not provide the consumer protections of credit cards. That's why cash works. You go to a restaurant and pay cash because you don't care about giving up the ability to contest the charge: you trust the restaurant. For the same reason, when I go to a local restaurant accepting bitcoins, I have no qualms paying in bitcoins. There are SOME transactions for which Bitcoin does not work well out of the box, like paying an untrusted online merchant without escrow, but that's OK. Bitcoin doesn't have to satisfy 100% of use cases to be successful. You seem to see Bitcoin as binary: it has to be perfect or it can't work at all. But you are wrong. It is just like cash or credit cards: they don't work in 100% of use cases either (can't send cash online, my CC can't be used when I encounter the 3rd merchant of the day who only takes Visa/Mastercard but not my Amex), yet they are successful payment systems.
> Besides that there are plenty of trusted merchants who make mistakes sometimes that require charge backs. With bitcoin you're out of luck.
I chuckled at this. Obviously you are unfamiliar with how it's done. The standard way of doing a "charge back" in Bitcoin is to ask the customer to provide a refund address. Easy peasy :)
> If they steal his CC data he can be sure they won't be able to financially steal from him either since he is insured against loss by his credit card company.
You completely ignored what I said: despite not losing money, it can be a tremendous annoyance and hassle to cancel and replace a CC, with the incident affecting your credit score, etc. These are real problems, real annoyances, NOT solved by credit cards. Bitcoin fixes that.
> Unfortunately for Joe he isn't a security expert and his odds of losing money due to accidentally installing a coin stealing virus are way higher than the odds of him losing money due to Visa not accepting his fraud claim.
Second time you completely ignored what I said: yes security is hard, but hardware wallets are improving security. You can't deny this.
> A new one appears every few months at which point I post the reason they don't work and the developer moves on.
They do work (I have used one). Please enlighten us.
> That is another very expensive part of it. It's required because you're often dealing with the unbanked who can't just have an exchange deposit money in their account. Again bitcoin doesn't solve this problem.
Wrong. My example (sendbitcoin.mx) absolutely does work with the unbanked. The recipient does not need a bank account.
> They do actually need a physical presence to compete with the services that have a physical presence. There are a lot of people who can't receive a bank transfer.
Wrong. As I explained, my example (sendbitcoin.mx) does not need physical presence, as they rely on an existing bank ATM network, even if you don't have a bank account.
> If it was so easy to do remittance using the ATMs surely the bank that owns the network would be doing it by themselves and raking in the money.
Banks don't do it for the same reason large companies often fail to innovate compared to small agile startups: inertia, redtape, etc.
Coinbase and blockchain publish wallet numbers which is used here and is another useless.
When they start publishing MAU I'll be impressed until then I'll just see wallets as a vanity number that is always going up.
Number of uniquely used addresses is being inflated by actions like the one I post about above.
Merchants and Merchants annual revenue are again vanity metrics. Merchants like wallets above does not accurately reflect current demand(go look up every story of people trying to travel using coinmap and finding almost all the merchants listed no longer accept bitcoin). Merchants annual revenue inflates the importance of companies like Overstock and Dish.
If VC investment was a good metric to follow we'd all be using Flooz and Beenz.
Hashrate has more to do with the improvements in ASIC miners than growth in usage/adoption.
And number of bitcoin repos is silly since everyone in the bitcoin space wants to be a bitcoin developer so the number of vanity repos is astounding.