



This isn't click-bait, I promise. I really am handing out free Bitcoin. Anyone interested in Bitcoin's ultimate success should do the same.

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Bitcoin is at a very interesting inflection point in its development. Infrastructure, availability, access, and investment are all maturing at an insane pace. Among the top major Bitcoin platform plays, over 100,000 vendors have registered to accept Bitcoin for financial transactions. Coinbase alone has signed up more than 36,000 vendors on their platform. BitPay claims to have more than 40,000 customers that process transactions using the company's services. On the low-level transaction validation side of things (also called mining), there is a mind boggling amount of processing power dedicated to Bitcoin at this point. Blockchain.info reports that as of Sept. 2014, the network was processing nearly 300 petahashes per second. That's 300,000 trillion hashes calculated every second. To put that in perspecrtive, that's nearly 60,000 times more powerful than the US government's most powerful supercomputer. Finally, venture capital investment in Bitcoin is expected to reach nearly $300 million dollars in 2014.

Demand, however, is emerging very slowly by comparison. There are a number of different ways to evaluate demand, but probably one of the most telling statistics is the number of transactions that are recorded per day. In July 2012, there were about 30,000 transactions validated per day. Two years later, in July 2014, the number of transactions had only increased to just over 60,000 transactions per day. Yes, it's going up, but it's not anywhere near the exponential hockey stick experience that you see in mining power. It feels very much like the infamous Chinese ghost cities built over the past decade.

Queue the crickets.

With all of this amazing infrastructure, where are all of the consumers that should be clamoring to spend their hard-earned Bitcoin? Why hasn't there been a dramatic increase in demand for the technology as customers scramble to convert their outdated fiat bills and coins into crypto currencies?

In an attempt to offer an explanation, let me digress for just a moment.

As a kid, I had an old fashioned hand pump in my back yard. We used it occasionally when the power went out, or when we wanted to fill the water troughs for the horses. Anyone that has used a traditional water pump understands the concept of "priming the pump". It's actually an often-used metaphor in the financial industry to explain the concept of injecting liquidity into a financial system in an effort to stimulate growth. The terminology was introduced by President Hoover and FDR to describe the public works projects of the 1930s as a mechanism for kick starting the lagging US economy during the Great Depression.

Obviously this simple concept is not something reserved for presidential economic initiatives. Opportunists from drug dealers to Internet startups understand the concept of priming the pump as a mechanism to drive consumers to a product. Amazon has been operating at a loss for over two decades in an attempt to prime the online retail market, offering everything from heavily discounted cell phones to free shipping and movies at a loss in an effort to stimulate consumer participation.

Why is Bitcoin any different? Why can't we prime the Bitcoin infrastructure pump by offering attractive incentives that encourage consumers to start using the amazing infrastructure on which we've spent so much to develop?

Well, truth be told, Bitcoin actually is a bit different, and here's why. To date, the currency has been driven largely by speculation. It goes something like this.

Reasonably smart person that understands the basics of the blockchain convinces their friends, family, and maybe a few investors to finance the purchase of a large pile of Bitcoin mining hardware.

Smart person uses hardware to mine Bitcoin as fast as they can, using the cheapest electricity available.

Smart person hoards mined Bitcoin waiting for the next spike in value, or at least until the Alibaba IPO.

The vast majority of the Bitcoin in "circulation" today is not actually in circulation at all. It's being held by speculators that are waiting for the value of the currency to go up dramatically so that they can cash out. This is also why one of the questions that you hear asked most often at a conference focused on the future of Bitcoin is "what do you think the value of Bitcoin will be by the end of the year?".

Pay attention now. Here's the solution to the biggest problem facing Bitcoin for both speculators and platform plays: give your bitcoin away.

If Bitcoin is really as much of a game changing innovation as we all claim it is, then let's give people a reason to try it out. There's over $5.6 billion worth of the virtual stuff floating around out there at this point. Give away ten percent of your holdings to your grandmas, priests, friends, and babysitters. Once demand kicks in, exchange rates will spike. Once transactions start to take place for real, more vendors will sign on to realize the savings in transaction fees, and platform plays will begin generating revenue too.



It's a one-time investment that will pay off for everyone.

I'll get the ball rolling by giving away ten percent of my meager Bitcoin balance (about $300 US) to a few random readers who like and comment on this post. Just assure me that you are a new Bitcoin user, setup a wallet (coinbase is an easy place to do this), and give me an address. If you're lucky, the check will be in the mail, or on the blockchain, or something to that effect. Look for a way to spend your new-found riches, and have some fun doing it!

For those of you in the Bitcoin community that are banking on the success of the currency, it's time to follow suit.

Give your Bitcoin away.