The US dollar is the #1 fiat currency in circulation (and reserve currency) in the world, but it really has no value except the one we all give it.

Everywhere in the world the US dollar is recognized and it’s “real” value I believe comes from this ubiquitous recognition and acceptance. As soon as its price starts to get too high more currency is issued, as soon as the value starts to go too low the fed will buy it back and burn it, therefore its value or strength is synthesized by the federal reserve banks. (the strength of the USD vs EUR is merely the result of interventionist design by bankers setting interest rates and controlling the supply of currencies)

To put it in layman’s terms, if tomorrow you wanted to pay for a coffee, and the cashier would refuse to take your USD dollars, how valuable would it be?

Since Overstock.com adopted Bitcoin it became clear to me that the most important factor towards making the value of Bitcoin higher and stable is usability. I’ve come to this realization not when I get to buy things there, but when I can’t buy things there and I’m forced to go to Amazon or eBay to get those things.

The limited inventory in Overstock.com makes me feel my bitcoins are useless as they sit there on my wallet day after day (as ~3,600 new coins are “minted” every 24 hours), until I eventually find something that can be bought, or someone that will accept Bitcoin for payment somewhere else in the world (graphic designers, musicians, writers in Latin America have taken my bitcoins as form of payment during the last year, making Bitcoin useful in those latitudes even for a few)

Bitcoin will only be as useful as the things/services it can get you.

You can have all the Bitcoin you want in your wallet, but if nobody is willing to take it from you it’s worth nothing.

can you go now and buy a coffee in the corner using the Bitcoin wallet in your cellphone? can you put gas on your car? can you pay your bills with Bitcoin? can you buy your lunch today? The answer is probably not for most of us in September 2014, and it will continue to be tht unless we get Bitcoin to be useful online first for everyone. Not just to buy, but also to sell things.

How Bitcoin’s value grows through usability

Bitcoin’s value will grow (maybe non linearly) through this compound effect cycle: 1. The more things you can buy with Bitcoin, the more Bitcoin you will have to buy so you can spend it.

2. The more people spending Bitcoin, the more entrepreneurs and companies that won’t want to miss on accepting Bitcoin (with your help via the OpenBazaar network), therefore you will be able to spend Bitcoin on even more things.

3. The more Bitcoin that is being bought, the less Bitcoin available for everyone that becomes interested -as there’s a well established amount of Bitcoin being mined everyday, currently ~3,600 new bitcoins every 24 hours-, the more expensive a finite resource like Bitcoin becomes. #ToTheMoon

“I’m starting with the man in the mirror” — Michael Jackson