Gavin Andresen - 2011-02-27 20:16:06

@s{quotedtext} @s{quotedtext}
Saving for the future:  bitcoins are designed to be like gold: durable, only a limited supply.  They have some advantages over gold-- they're much easier to store safely (you don't have to buy a bank vault or hire guards or trust a storage company) and, because they're electronic, they can be backed up.  And when it is time to sell them the transaction costs are very, very low.

Buy some goods online:  I don't think bitcoins have any significant advantage... yet.  Transaction fees are lower once you get bitcoins, but the transaction fees to get bitcoins probably eliminate that advantage.

I think Bitcoin's real, hidden advantage is the fact that you don't have to ask anybody's permission or fill out any paperwork to start doing creative, innovative things with them.  Lots of people are doing lots of innovative things with bitcoins, and while most of those innovative things will probably fail (most startups fail), I'm optimistic that some will succeed and in 5 years we'll be using bitcoins in some way we haven't even imagined yet.  I'm not going to pretend to know which market niches bitcoin will fill-- maybe it will be migrant workers using bitcoin to send money back home and avoiding international wire transfer and currency conversion fees.

Maybe teenagers in China will use them to buy stuff online because they can't get a credit card.

Maybe big multinational corporations will decide to use bitcoins to pay their supply chain to avoid currency exchange risk and save 0.1% on their transactions.  Who knows?  Even if bitcoin turns out to be just "a better store of value than gold" it will be hugely successful.