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Bitcoins are used quite a bit for buying/selling goods. I think the latest round of currency increases is mostly a function of people wanting to purchase goods, and needing to "bid up the price" in order to make their purchase. As vendors receive bitcoins, they usually immediately sell them to get back local currency.

In the last 6 months, I've never held onto a bitcoin for more than about 30 minutes. Strictly use them for their utility as a currency.




>I think the latest round of currency increases is mostly a function of people wanting to purchase goods, and needing to "bid up the price" in order to make their purchase. As vendors receive bitcoins, they usually immediately sell them to get back local currency.

But because retailers will only hold onto them for probably seconds, using BTC as a transfer medium won't significantly affect the price: average selling and buying will be the same.

The only way BTC can go up is if more people hold on to more of them (reducing the available money supply), which when they are rising happens more, causing a bubble.

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If you don't mind me asking, what do you buy with them? I know of only a few things that are only acquirable via Bitcoins, or that couldn't be acquired more cheaply using dollars.

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Lots of online services, from hosting to DNS to VPNs accept bitcoins. Several online stores accept them, and they're a good way to donate to, eg, Wikileaks or the Manning Defense Fund.

As far as the cost of using them, while it is non-zero, some of us just want to do our part in establishing a currency and surrounding ecosystem that is free from gov't, corporate, and other meddling. Thus we accept the small hit in price.

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My guess is that 99% of the non-speculative drivers for BitCoin currency are purchases from SilkRoad.

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Several friends of mine prefer to pay for their VPNs anonymously, they get two VPNs, pay with bitcoin, don't give their name to the VPNs, and tunnel one into the other for pretty much complete anonymity online, provided they don't do something stupid like log into facebook from the VPN.

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I lack the courage or foolishness to make such purchases.

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Not everything on Silk Road is particularly illegal. And I'm sure the LEA have better things to do with their time than chase down some consumer of 1200mg of modafinil.

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