If you look at that and click on the destination, then do the same again you'll see someone pushing out 10s of thousands of very small transactions per day across the network. They do the same thing pretty much every day I've checked(the above is an old link since its the only one I had handy).

The days I've checked though these sorts of things have accounted for 30-50% of transaction volume.

They are odd not just because of the volume of transactions but the size of them and the fact that they pay a fee for every one. Ideally for the amounts and frequency they would be grouping many outputs into a single transaction to save on fees.

I think its safe you ignore transaction volume for the near future and recent past while this is going on unless you start accounting for it.

I'm not sure what the sender of these transactions is doing (trying to inflate tx volume? some badly written software?strange mixing algorithm?) though even if you discard those transactions from analysis it doesn't change the overall picture much.

Tab-separated columns are as follows:

- Date - Percentage of "strange" txs - Number of transactions with strange txs discarded - Length of the longest chain of strange txs

Note: coinbase transactions are ignored by the script as they are "involuntary" and do not represent economic activity.

http://i.imgur.com/sgzVwYm.png

I'm not sure why these sorts of transactions would be considered ignorable. If you have a large bank balance and most of your payments are for groceries, does that somehow make those payments irrelevant?

If they actually need to pay to that many different addresses it would be far superior to make a single tx with multiple outputs.

My first theory was that someone is trying to inflate tx volume and the simplest idea they came up was scripting the Bitcoin client to make thousands of small payments in a row.

There's a great attitude for pumping!

It seems to me that if you have a person or persons in possession of a commodity and by using that commodity in a certain way, while expending just a very small fraction of their holdings they could potentially increase the market value of the commodity they are holding or perhaps just stem/slow the decline of its market value, that would seem to be something worthwhile to engage in, provided doing so did not require a large amount of time or resources that could be better spent.

In the case of bitcoin, creating a lot of dummy transactions to create an illusion of economic vitality in the interest of increasing the value of your stake in the economy requires little time, effort, or resources beyond the initial creation of a small program or two, and thus places it high on the list of explanations for what is going on here.

So you're saying if the ruse of creating dummy transactions is successful in attracting speculative interest[1] and driving up the price, that is no big deal because what attracted the speculative interest, the raw transaction count numbers, actually occurred in a kinda sorta way, if what those transaction numbers are often painted as, genuine utility, is not actually there, well then that's just like 'circular' man..., is that what you're saying?

Consider if a public company 'X,' conducted its finances in such a way that they set up a bunch of shell companies, transferred money to these companies in a non-visible way then had those shell companies send that money back to company X in exchange for some nominal goods or services. Then they repeated this process over and over such that the company's public filings showed a steady increase in revenue quarter after quarter, such an increase that they attracted considerable investor attention, resulting in a stock price that rose steadily on the back of these circular accounting tricks. As the stock continued to rise, the company's major stockholders cashed out their shares.

Would that be 'circular' or would that be illegal? Would that feel "fake" or feel like "an illusion" to you?

-

[1] Yes, we are talking speculative interest here, this is a metric that is more interesting to a speculative investor than a non-speculative user/'adopter,' a non-speculative user is just going to use it for what they are going to use it for if they have a genuine use beyond speculating.

What you describing here is dotcom IPO scheme.

Inflated revenues (instead of profits) were enough to be considered IPO-worthy.

But it DOESN'T. That's why this is garbage. The "increased adoption" is based on spam transactions like these.

I just know that it makes using the transaction volume as an indicator pointless.

I realize that a lot of crackdowns have been made to make BitCoins less anonymous and prevent laundering, but it ultimately hurts the UX and the utility I get from owning BitCoins isn't enough to make me want to jump through banking hoops.

...and then...

"Perhaps this is all just a coincidence, but it appears that 2014 was a year of relatively static demand for transacting value through bitcoin. Static demand implies that either 1) the number of people using bitcoin to transact value has been relatively stable, or 2) the number of people in the ecosystem using bitcoin to transact value is growing but offset by churn/decreased usage by other participants."

Am I being slow here? The graph showed the number of daily transactions was increasing over 2014, yet the conclusion being reached is that the demand for usage of Bitcoin is static. Perhaps I'm reading it wrong, but from where I'm currently standing it doesn't make sense.

One thing that needs to be understood about Bitcoin usage is that the transactions are not always for whole Bitcoins, it's increasingly common to see trades for fractions of a Bitcoin. The protocol explicitly allows this... https://en.bitcoin.it/wiki/FAQ#How_divisible_are_bitcoins.3F

If trades of fractions of a Bitcoin are being made frequently, then it does not mean there is a demand problem, but rather that prices are readjusting.

This touches dangerously on correlation-implying-causation.

But consider: does the sentence read exactly the same if we rewrite it as,

>Taking these three charts together, the relatively static USD transaction value per day metric in 2014 appears to be the result of the increase in transaction volume being offset by a falling market price of bitcoin.

Not at all!! So the author really is saying something that implies a causative effect: the price is falling, so people how need a certain transaction amount (in real terms) will transfer more.

This makes perfect sense when you consider the authors follow-on sentences.

So absolutely, the author is making a causal relationship. The author even justifies it (pretty well in my opinion.)

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.

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.

Fewer transactions and lower volume than last year. Multiple vendors on /r/bitcoin claiming little to no volume either compared to last year.

>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.

Right so reports from multiple vendors about lackluster sales are anecdotes. A vanity number like 82% increase with no indication of the size of the transactions, etc is data. How about the fact that bitpay has been claiming the 1m a day in transactions now for over half a year? How about that for no growth?

>Their sales are not declining anymore. They have reached a steady state of $7000-8000 a day for the last 3 months

That is a decline

Here are the figures from their releases so far

Jan 10 - 130K Jan 11-29 - $26K/day average Next 36 days to March 4th they do $400K - $11K/day average Next 83 days to May 27th they do $600K - $7200/day average

Now they are claiming $7000 a day. Given that the $7200 * the number of days left in the year = $3m I'm guessing we'll see that $3m number change again when they actually release their financials.

>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

Cash works like this because you are physically present with the merchant when you use it so you can validate immediately if you are getting ripped off or not.

>Bitcoin doesn't have to satisfy 100% of use cases to be successful.

Right but it has to satisfy enough common ones to convince users to make the additional effort to acquire it. It's not doing that.

>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 :)

Yes that explains why there are no scams in bitcoin at all. And there were no complaints about Tigerdirect fulfillment related to bitcoin orders.

>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.

But it's not a tremendous hassle. You call the bank tell them the card was stolen(or they detect it) list any transactions you didn't make and the money is refunded and a new card is posted. There are a handful of cases where it is more difficult than that. Do you have examples of it affecting credit scores?

>Second time you completely ignored what I said: yes security is hard, but hardware wallets are improving security. You can't deny this.

Walk me through the steps to buying and putting bitcoin on your hardware wallet that wouldn't be compromised by the user having a virus on their computer that targeted bitcoin.

>They do work (I have used one). Please enlighten us

Which one have you used and I'll tell you how to abuse it.

>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.

That is a physical presence. The fact that they are using someone elses physical presence doesn't mean they don't need one. It means they are using someone elses locations to subsidize their own. Companies tend to not like that which is why I would put money on sendbitcoin.mx being shut down within the next 6 months.

>Banks don't do it for the same reason large companies often fail to innovate compared to small agile startups: inertia, redtape, etc.

Actually there were a lot of banks doing the US->MX remittance up until a few years ago when regulations and compliance got to be way too expensive for it to be profitable.

Again, for the 4th(!) time, you have no data proving this.

> Multiple vendors on /r/bitcoin claiming little to no volume either compared to last year.

A few anecdotes != reliable statistics

> Right so reports from multiple vendors about lackluster sales are anecdotes.

Yes. Your "multiple vendors" probably means "less than a dozen vendors", which is insignificant given there are tens of thousands of vendors in the world accepting Bitcoin.

> How about the fact that bitpay has been claiming the 1m a day in transactions now for over half a year? How about that for no growth?

Ha! Now you change your claim. You talked earlier about a significant reduction, a "huge flop". Now you claim stagnation, no growth. That's very different.

> Here are the figures from their releases so far > Jan 10 - 130K Jan 11-29 - $26K/day average Next 36 days to March 4th they do $400K - $11K/day average Next 83 days to May 27th they do $600K - $7200/day average > Now they are claiming $7000 a day. Given that the $7200 * the number of days left in the year = $3m I'm guessing we'll see that $3m number change again when they actually release their financials.

Sales were declining, but not anymore, not since September, not since the last 3 months. That is exactly what I claimed, and nothing more. I said: "They have reached a steady state of $7000-8000 a day FOR THE LAST 3 MONTHS" (emphasis mine).

> Cash works like this because you are physically present with the merchant when you use it so you can validate immediately if you are getting ripped off or not.

Exactly, and I am glad to see you acknowledge that Bitcoin's lack of CC-like consumer protections is a total non-problem in such scenarios. You made it sound like such protections were absolutely necessary, at all time, or else Bitcoin can never work!!!!!1!one

> Right but it has to satisfy enough common ones to convince users to make the additional effort to acquire it. It's not doing that.

Yes, and I think you will agree that "reducing fraud to zero for merchants" is a pretty major use case given that fraud is a huge problem for merchants online. As well as "being able to pay a trusted merchant online while guaranteeing not having a CC number that can be stolen" since financial theft is becoming more and more frequent.

> Yes that explains why there are no scams in bitcoin at all. And there were no complaints about Tigerdirect fulfillment related to bitcoin orders.

Technological problems from one merchant's deployment of Bitcoin is hardly a sign that "OMG Bitcoin totally doesn't work and will never be adopted" as you make it seem to be. For every customer who experiences one issue paying/getting a refund in Bitcoin, there are many more customers who do so without any problem.

> But it's not a tremendous hassle. You call the bank tell them the card was stolen(or they detect it) list any transactions you didn't make and the money is refunded and a new card is posted. There are a handful of cases where it is more difficult than that. Do you have examples of it affecting credit scores?

Obviously, whether it is a tremendous or a minor hassle is a matter of personal experience, and a matter of how much of your life depends on credit cards. But my point is: it can be a tremendous hassle, and credit cards do not automatically make a theft a non-issue. Some examples of major hassles: having you card stolen and having to cancel it during a vacation away from home. After a theft you have to re-configure all automatic periodic payments that were due to be processed on the CC. You forgot to give the new CC number to your cloud service provider? Oops they can suddenly shut down your instances at 3am with little to no notice. Your wife had set up some other random online service paid through the CC, but you were not aware of it? Oops her online account will be closed as fraudulent and it will take multiple phone calls and emails to the support department to get it re-opened. The CC thief's actions lead to some negative events added to you credit history? Oops good luck spending multiple WEEKS contacting the credit scoring agencies indepedentently to get your records cleaned up, and submit the proper documentation to prove it was all due to a theft.

Bottom line: you know how some Bitcoin fanboys blatantly ignore its kinks? Well you are guilty of the same thing when you blatantly and childishly ignore the kinks of credit cards when they are stolen and have to be replaced.

> Walk me through the steps to buying and putting bitcoin on your hardware wallet that wouldn't be compromised by the user having a virus on their computer that targeted bitcoin.

You mean the same computer where the virus will also steal the CC number that the user enters on a website when making a payement? Hmm? How does this virus scenario demonstrates that credit cards are safer? If the user cancels the first CC, gets a second one, what prevents the virus from stealing the second CC number at the next purchase? CCs don't solve this virus problem at all.

However I can envision scenarios where Bitcoin hardware wallets actually solve this virus problem. The simplest one is: you could buy a pre-loaded cheap disposable wallet (maybe in the form factor of a credit card) hence completely skipping the virus-ladden PC.

> Which one have you used and I'll tell you how to abuse it.

I used casascius's Bitcoin Address Utility. It has a self-escrow (two-party escrow) functionality which is not user-friendly, but the it is cryptographically well implemented and very secure.

> That is a physical presence. The fact that they are using someone elses physical presence doesn't mean they don't need one. It means they are using someone elses locations to subsidize their own. Companies tend to not like that which is why I would put money on sendbitcoin.mx being shut down within the next 6 months.

We shall see.

Go forth and compare https://blockchain.info/charts ignoring that the fact that they didn't mention sales at all is a pretty good indication.

>A few anecdotes != reliable statistics

A random statement about a random metric does not indicate growth

>Yes. Your "multiple vendors" probably means "less than a dozen vendors", which is insignificant given there are tens of thousands of vendors in the world accepting Bitcoin.

There are 10s of thousands of bitpay/coinbase accounts. That doesn't meant they are all still accepting bitcoin.

>Ha! Now you change your claim. You talked earlier about a significant reduction, a "huge flop". Now you claim stagnation, no growth. That's very different.

No change just another data point.

>Sales were declining, but not anymore, not since September, not since the last 3 months. That is exactly what I claimed, and nothing more. I said: "They have reached a steady state of $7000-8000 a day FOR THE LAST 3 MONTHS" (emphasis mine).

And given they change their numbers reported every few months I don't believe for a second it has stabilized. I'll wait for their year end.

>Exactly, and I am glad to see you acknowledge that Bitcoin's lack of CC-like consumer protections is a total non-problem in such scenarios. You made it sound like such protections were absolutely necessary, at all time, or else Bitcoin can never work!!!!!1!one

Yes, in face to face transactions bitcoin would be a good solution if cash wasn't already easier.

>Yes, and I think you will agree that "reducing fraud to zero for merchants" is a pretty major use case given that fraud is a huge problem for merchants online. As well as "being able to pay a trusted merchant online while guaranteeing not having a CC number that can be stolen" since financial theft is becoming more and more frequent.

The problem is consumers aren't willing to give up their customer protections to improve the rate of fraud for merchants. All the merchants in the world could accept bitcoin and that fact won't change. Why would you be willing to increase your own fraud window just to decrease the merchants?

>Technological problems from one merchant's deployment of Bitcoin is hardly a sign that "OMG Bitcoin totally doesn't work and will never be adopted" as you make it seem to be. For every customer who experiences one issue paying/getting a refund in Bitcoin, there are many more customers who do so without any problem.

I didn't say that. I said that they were a trusted merchant and they repeatedly screwed up. And the customers had no easy recourse like they'd have with credit cards.

>Some examples of major hassles: having you card stolen and having to cancel it during a vacation away from home.

What happens if you lose your phone/laptop while on vacation with bitcoin?

>After a theft you have to re-configure all automatic periodic payments that were due to be processed on the CC. You forgot to give the new CC number to your cloud service provider? Oops they can suddenly shut down your instances at 3am with little to no notice. Your wife had set up some other random online service paid through the CC, but you were not aware of it?

Given that bitcoin doesn't allow for automatic pull payments you have to remember all your accounts and manually pay them every month anyhow. This isn't an improvement.

>Oops her online account will be closed as fraudulent and it will take multiple phone calls and emails to the support department to get it re-opened.

Bullshit. No company is going to do this without contacting you and fraudulent? Seriously what world do you live in. This would never happen.

>The CC thief's actions lead to some negative events added to you credit history? Oops good luck spending multiple WEEKS contacting the credit scoring agencies indepedentently to get your records cleaned up, and submit the proper documentation to prove it was all due to a theft.

Notice you haven't shown a single example of any of this? Because it is fantasy.

>You mean the same computer where the virus will also steal the CC number that the user enters on a website when making a payement? Hmm? How does this virus scenario demonstrates that credit cards are safer? If the user cancels the first CC, gets a second one, what prevents the virus from stealing the second CC number at the next purchase? CCs don't solve this virus problem at all.

If a virus steals my CC details and spends on them I get the money back in my account. Does that happen now with bitcoin that I'm not aware of or do you lose your money for good?

It is not the same thing so I ask again. Can you walk me through those steps or do you admit you cannot do it easily?

>I used casascius's Bitcoin Address Utility. It has a self-escrow (two-party escrow) functionality which is not user-friendly, but the it is cryptographically well implemented and very secure.

What happens if we set up the transaction and I don't send you anything? Your funds are now trapped at no cost to me.

These charts do NOT show Bitcoin Black Friday sales, but all worldwide Bitcoin transactions. But even assuming they showed BBF sales, they prove you wrong, as they show a nice increase over time: https://blockchain.info/charts/n-transactions-excluding-popu...

So for the 5th(!!) time: you have no data proving sales went down.

> A random statement about a random metric does not indicate growth

The OP gave not 1 but 10 metrics showing growth: http://avc.com/2014/10/bitcoin-adoption-metrics/ You discarded some of them as "vanity metrics", but regardless, that's better than the how many metrics you gave that presumably showed a decrease of Bitcoin's adoption? Oh yeah, zero.

> There are 10s of thousands of bitpay/coinbase accounts. That doesn't meant they are all still accepting bitcoin.

Wrong. There are millions of wallet accounts on bitpay/coinbase (see http://avc.com/2014/10/bitcoin-adoption-metrics/). Out of them, there are 10s of thousands of vendors accepting Bitcoin. These are widely accepted numbers. No one debates them.

So the "multiple vendors" (less than a dozen) you claim who saw fewer sales on BBF 2014 than on BBF 2013 are a completely insignificant number compared to 10s of thousand, or 10 thousand, or even 1 thousand.

> And given they change their numbers reported every few months I don't believe for a second it has stabilized. I'll wait for their year end.

Sales vary from month to month, so the numbers reported vary from month to month. Shocking!

> Yes, in face to face transactions bitcoin would be a good solution if cash wasn't already easier.

Except Bitcoin can be easier/faster/more secure than paying in cash. Ever seen how annoying it is to split a restaurant bill with multiple people when no one has the right amount of change? You can always transfer the exact amount with Bitcoin. Ever been waiting at the cashier's line when a guy in front of you is wasting time looking for the exact change to pay the cashier? A Bitcoin hardware wallet could pay in an instant with an NFC tap. Ever had a wallet full of cash stolen? A Bitcoin hardware wallet could be PIN-protected and could have a backup at home.

> The problem is consumers aren't willing to give up their customer protections to improve the rate of fraud for merchants. All the merchants in the world could accept bitcoin and that fact won't change. Why would you be willing to increase your own fraud window just to decrease the merchants?

You assume that customers who pay in bitcoins had to "give up" credit cards. This isn't necessarily true. Bitcoin opens up new markets for customers who didn't even have the ability to use a credit card before. For example Overstock couldn't sell in many countries because these countries weren't supported by their credit card processors. But accepting Bitcoin lets Overstock sell in any country in the world. So customers in some random country are now happy to see a new option to shop at that just didn't exist before.

Also, I think there are quite a few reasons why customers would be willing to give up the credit card protections. For starters, some merchants offer Bitcoin discounts, like Air Baltic who removes a 5.99 euro fee when paying in Bitcoin (https://pbs.twimg.com/media/BtWPJVvCMAAPgzG.jpg). Other merchants can waive the 2-3% fee that credit card processors usually charge. Other merchants don't take credit cards when the amount is less than a certain amount. And in other cases, the customer might want to NOT give his CC number because he does not want to risk it having stolen (read any of the numerous stories of restaurant waiters cloning and skimming customer's cards: http://www.nbcnewyork.com/news/local/Dave-Busters-Waitress-A...) You cannot deny that these are all very good and valid reasons for preferring paying in bitcoins.

> I didn't say that. I said that they were a trusted merchant and they repeatedly screwed up. And the customers had no easy recourse like they'd have with credit cards.

Everything I read indicates they screwed up by mistake, not by malice.

> What happens if you lose your phone/laptop while on vacation with bitcoin?

Bitcoin hardware wallets can be PIN-protected and backed up.

> Given that bitcoin doesn't allow for automatic pull payments you have to remember all your accounts and manually pay them every month anyhow. This isn't an improvement.

More and more hosted wallets let you set up recurring payments.

> Bullshit. No company is going to do this without contacting you and fraudulent? Seriously what world do you live in. This would never happen.

Yes it does happen.

> Notice you haven't shown a single example of any of this? Because it is fantasy.

Yes it can happen. A friend of mine had a credit card that she was not using anymore that was stolen. The only reason she noticed the theft is because one day she was looking to get a car loan. The financing company ran a credit report, and it ended up returning a credit score lower than what my friend expected. The report showed that one of the factors that lead to a negative score was listed as "AMOUNT OWED ON DELINQUENT ACCOUNTS". The detailed history showed that a thief used the stolen credit card for an expensive purchase a few months back. My friend never received the credit card bill because she had moved and never updated her billing address on her credit card account (so the bill presumably went to her old address). So she thought she had a zero balance on this credit card, but in fact a high balance was due for multiple months which lead her account to be tagged as delinquent. It took her about 3 months of phone calls and writing letters to get this sorted out, and get her credit history fixed up.

I have no way to prove it, but I swear this is a true story. I wish people like you would stop clamoring how amazing the consumer protection feature of credit cards are, because although they work well in some cases, there are stills tons of scenarios where financial theft causes majors hassles and annoyances that credit cards DON'T solve.

You don't even have to look very far for other fraud problems that credit cards don't solve. Heck, with most credit card issuers, if you happen to catch a fraudulent payment made more than 60 days ago, you typically don't have any recourse because it's too late to file a claim...

> If a virus steals my CC details and spends on them I get the money back in my account.

But the attacker still has your CC details and if you file a claim for a fraudulent charge, the attacker can place other ones, as many times as he wants. So you have to keep cancelling fraudulent charges all the time. After a point you get sick of it and cancel and replace your CC. But the virus will steal again the replacement credit card number, hereby making it impossible to use ANY credit card on this virus-infected computer. The attacker will in effect have permanent authorization to spend your credit card funds, until you remove the virus or until you stop using this virus-infected PC for internet purchases. So for the 2nd time: how will credit cards somehow solve magically this virus problem? They can't!

> Does that happen now with bitcoin that I'm not aware of or do you lose your money for good?

Bitcoin can completely solve this virus problem, with proper processes and wallets: have the private addresses stored on the hardware wallet (inaccessible by the virus), and verify the payment address by an out of band mechanism. For example if you suspect the PC where you were about to complete the purchase may be infected by a virus, use a smartphone or another PC to verify the payment address the merchant wants you to send the bitcoins to. If both show the same address, send the transaction from the hardware wallet. So the ECDSA-signed transaction exits the wallet, and the virus will have no chance to steal the bitcoins as it would involve modifying the transaction bytes and breaking the signature.

> What happens if we set up the transaction and I don't send you anything? Your funds are now trapped at no cost to me.

But you have no financial incentive to do this. History shows that malicious economic actors in the VAST MAJORITY of the cases act maliciously to gain something from it, not just for the hell of it. Therefore this two-party escrow system works well enough in almost all cases, except in the 0.001% of cases where a malicious actor acts maliciously just for the hell of it. And, as I said earlier, Bitcoin doesn't have to solve everything to be successful, it just has to satisfy the majority of use cases. Remember that our discussion about escrow systems started by talking about how to deal with untrusted merchants. That's exactly a case that would be solved by this two-party crypto escrow system. A malicous merchant doesn't set up an online shop with fake items, and go through all this effort just to lock bitcoins up in the ether. A malicious merchant wants to make financial gains, and this two-party crypto escrow prevents him from being profitable running such a scam.

PS: Merry christmas!

That's exactly what they're stating, that the metrics do not capture real-world usage.

Would you recommend using a logarithmic graph because you expect Bitcoin use to increase exponentially? In that case, wouldn't the use of a logarithmic scale at this point imply a direct belief in the future of Bitcoin use?

It has nothing to do with scale. It has to do with change. The change in value for bitcoin is what we care about, we want to see how it changes over time.

> Would you recommend using a logarithmic graph because you expect Bitcoin use to increase exponentially

No, that's not why at all.

It's because if the value goes from $10 to $20 - that's exactly the same as from $20 to $40. A logarithmic graph shows that correctly, a linear graph makes it looks like 20 to 40 is twice as large as 10 to 20, but it's not.

This is pretty much it exactly, and why the whole "OMG log graphs!!!" thing pops up in finance only when you're talking about Bitcoin and its alts.

Though even then I can't figure out why, you only would want log graphs for exponential growth or decay, which isn't something we're seeing out of Bitcoin except for a brief period of tulipmania.

> pops up in finance only when you're talking about Bitcoin

If you are looking at linear stock value graphs you are being mislead. If you want to make correct decisions based on graphs they must be logarithmic (except percent graphs). Any stock trader that uses linear graphs will lose his shirt. (And I am well aware that the default stock graphs are all linear.)

> you only would want log graphs for exponential growth or decay

No, that's not correct (for the common meaning of exponential meaning "huge"). You want a logarithmic graph anytime the future value of something depends on the present value (i.e. the mathematical meaning). Which is most of the time. Most things in the world, the amount you have today influences how much you will have tomorrow.

It's actually rare to want a linear graph. You only want that when how much you have tomorrow has nothing to do with today.

So population should be logarithmic (the more people you have the more will be born), but infant mortality per capita should be linear (future levels of infant mortality do not depend on how many died in the past).

I wanted to, but the site has no place for comments and no info on how to reach him.

His conclusion at the end is that the total dollar volume is approximately flat, and he bases this on the graph, but it's not completely flat - it's bumpy, so you can't actually tell on a linear graph if it's flat or not.

Can you show me a stock trading platform that uses log values by default?

Yes, log graphs are very useful when you're looking at developments of stock values and many other financial variables - predominantly over longer terms when the changes are high enough that the difference matters.

Non-logarithmic: https://upload.wikimedia.org/wikipedia/commons/0/01/United_S...

Apparent conclusion: Highest bracket is growing much faster than the others!

Logarithmic: https://upload.wikimedia.org/wikipedia/commons/archive/0/01/...

Correct conclusion: All the brackets are growing identically.

The scale actually matters a lot.

There is no logarithmic relation between any number of series in the linked article because there is only one series in any figure. As such, a linear scale works just fine.

I'm not trying to link number series in the original article, I'm trying to decide if the dollar volume is indeed flat like he says, but I can't tell by looking at the graph.

Coinbase can settle most trades internally and push out any 'interbank trades' onto the chain. Some of the patterns others have noticed could be them settling internal accounts, not sure though.

Regarding the prospect of growth in value exchange occurring via off-blockchain services: I still think we would expect to see off-blockchain value transfer manifest itself on-blockchain, in much the same way that buy and sell pressure at a single off-blockchain service flows throughout the entire ecosystem. If an off-blockchain service did somehow manage to become an “island” and transact increasing amounts of value without any of the growth showing up on-blockchain… it would be bad for bitcoin on a number of levels.

--

the rise of cloud players like Coinbase means that a lot (and I'd think probably most) of the Bitcoin transactions taking place these days are off-chain.

It's ironic that you so often see these comments forecasting how in the future most bitcoin activity will occur in these single authority corrals, or 'cloud players' as you call them. It's really no different from saying "Most people using bitcoin in the future, won't actually be using bitcoin."

So it raises the question of, if the future of using bitcoin is not actually using bitcoin, what is the future of bitcoin?