On 12/06/2011 13:23, Ian G wrote:
On 12/06/11 4:21 PM, Peter Gutmann wrote:
Am I the only one who thinks it's not coincidence that the (supposed) major
use of bitcoin is by people buying hallucinogenic substances?


The best way to think of this is from the marketing concepts of "product diffusion" or "product life cycle".

http://www.quickmba.com/marketing/product/diffusion/

The challenge for the new product is to migrate from left to center to right of that graph in above link.  In doing so, the newer groups come to dominate the earlier groups, and the earlier groups typically fall away.

Recall the video story?  The innovators got in very early, and bought Betamax because it was better quality.  But they got stuck when the market was captured by the VHS system.  So lesson #1 is that early groups are risking punishment.  Same story for DVD.

Also, the backroom story for video was that the porn films, the big market that lifted the revenues of the distribution chains, and made it worthwhile.  These products/people/chains kept the industry alive while it built up steam for the mainstream.  Lesson #2 -- you need these strange uncomfortable groups to get to where you want to get.

Later on, as more mainstream comes into play, these strange uncomfortable groups can be eased out.  Or they go somewhere else, or we change our minds about them.  We also write them out of history...

So, as far as recreational pharma product is concerned, this is typical of these things (if that is what it is).  E.g., SSL certificates early revenue was also porn, Paypal had some dodgy customers, and for e-gold, it was ponzis / games that pushed the business into the black.

The challenge is what to do next, how to grow up.  This is going to be practically impossible for BitCoin because it has no guiding hand like e.g., Paypal had.  It's only got the invisible hand, which suits the innovators fine ... but it also means it hasn't got much of a chance of going mainstream.

Ah well.  I joined bitcoin quite early, seeing it as like donating spare cycles to an interesting experiment.  I ended up with quite a substantial balance, at no cost that I can identify.

Now I find I can exchange a little over five bitcoins for a £50 Amazon gift certificate that Amazon seems happy to credit to my account.

I quite see the force of the critical comments made here; but they remind me of a (probably apocryphal) remark attributed to the late Garret Fitzgerald when Prime Minister of Ireland.  After a new scheme had been outlined to his cabinet, and greeted with enthusiasm by several ministers, he remarked, "Well, it's all very well in practice; but will it work in theory?"

Nicholas Bohm
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