Bitcoin Still Used Less Than Linden Dollars (Despite Years of Hype & $400 Million+ VC Funding)

At a recent high tech conference (I forget which one, so let's just say SXSW), the topic of Bitcoin came up, with a very young developer enthusing to me how it was going to be The Next Big thing. I pointed out (as I often do) that Bitcoin still lacks the key thing a currency needs to be a currency -- that is to say, a mass group of people regularly using it to buy, you know, stuff.

But my new friend stood his ground. "Transactions have been growing like crazy since last year," he insisted, "they're over 100,000 a day now." I checked Bitcoin's daily transaction info, and that's indeed the case: Over 100K transactions a day, almost double what it was in the Summer of last year. Which is definitely solid growth of some kind, I'll give him that. 

But here's the thing, and it bears emphasis: At 100K transactions a day, Bitcoin is still less used than Linden Dollars.

I mean, just look at the data:

According to Linden Lab stats, Second Life has about 1 million monthly users, and about 125K+ hardcore users (i.e. in SL over an hour a day). Insiders tell me about 400,000 users regularly spend Linden Dollars. So with all that activity in mind, it's safe to estimate 100K Linden Dollar individual users a day. (Conducting a lot more total transactions.)

Contrast with Bitcoin:

The much-hyped currency -- lauded weekly in the tech and mainstream press for the last 4-5 years, with over $400 million invested in Bitcoin-related startups since 2012 -- is still used only about 100K times a day. (Which means unique users are significantly less than 100,000.)

This isn't to say Linden Dollars are superior to Bitcoin -- which after all, are a virtual currency intrinsically tied to a social game MMO platform. However, after all that hype, you'd think Silicon Valley would be quick to have the same skepticism for Bitcoin as they did for Second Life after it failed to deliver on its promises in 2006-2008.

I mean, if this poor dude still can still hardly sell his delicious chocolate for Bitcoin in the heart of Bitcoin hype, maybe it's time to wonder if some assumptions are deeply, deeply wrong?

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Comments

[Lindal Kidd]

But what is the daily volume in $USD for both "currencies?" A Bitcoin is worth MUCH more in dollar terms than a Linden Dollar!

Not that I disagree with the thrust of your commentary. Both currencies are very shaky in terms of being commonly accepted mediums of exchange.

[Amanda Dallin]

"Both currencies are very shaky in terms of being commonly accepted mediums of exchange."

Very true but LL is not trying to have the Linden commonly accepted as a medium of exchange anywhere except their own virtual world.

A fiat currency is pretty much virtual anyway. The really unique aspect of Bitcoin is that there is no government or other organization controlling the supply. That's a good thing but also why we won't see it commonly accepted. Governments will not want to give up that power.

[megabucks]

For anyone wanting to experiment with Bitcoin, I've been giving away a very small amount for free via an automated object in Sandbox Shiromani - as Ive been curious about the amount of crossover within Second Life.

Currently the giveaway is 0.005 BTC per avatar born before 2015 (or about $1.10 at today's rate). Look for the Bitcoin sign at http://maps.secondlife.com/secondlife/Shiromani/10/140/55 :)

[Joey1058]

Consider this: how hard would it be for Linden Lab to convert L$ to blockchain technology? Is it that hard to imagine the L$ as a cryptocurrency? It would open the currency to a broader audience and Wall Street would take notice all over again.

[Issa Heckroth]

Back when we had other exchanges, L$ was kind of like a currency, but LL have moved to change that situation for exactly the reason that they DONT want L$ to be considered a "real/virtual" currency by the Feds. L$ is a game token. You cant trade it on markets anymore and it has a roughly fixed value.

[Bitcoins are dirty money]

Bitcoin has plenty of other problems, like being loved by drug cartels, crime syndicates, assassins, pedophiles, slave traders and the general scum of the earth. Cryptocurrencies avoid tax and the kind of oversight that governments use to prevent things like slavery. If you've touched a Bitcoin, you may well be touching very dirty money.

[zz bottom]

I think that is the other way around, All governments love drug cartels, crime syndicates, assassins, pedophiles, slave traders and the general scum of the earth and all that allows them to keep them in power for as long as they wish, be a democracy or any other kind.

[melponeme_k]

The Linden currency is Linden Lab's ace.

They could very easily roll this into a massive virtual currency exchange. They seriously should reach out to other MMOs like WOW and EO to work out a real, legal exchange between the games currency. People already do it on the sly. Why not make it easier and safer?

[Thomas]

"It's 1995, and telephone shopping is still being used more than the internet. In the heart of internet hype, maybe it's time to wonder if some assumptions are deeply, deeply wrong?"

You aren't considering the off-chain transactions, the potentials of sidechains and similar projects, and altcoins. I suppose you wouldn't, as you seem to be completely anti-crypto, as if it's sole goal is to kill off Secondlife or something.