Bitcoin in 2012: By the Numbers

Our humble digital currency continued to show resilience in 2012, growing in all respects and steadily building its user base. The expression "slow and steady" is a fitting descriptor; let's take a look at the stats:

The rate of downloads of the main client increased slightly toward the latter half of the year, with approximately 70,000 per month. 

The number of users of the popular "My Wallet" service provided by blockchain.info has grown nearly exponentially, especially over the last month. Blockchain.info arguably has the most user-friendly mobile app for Bitcoin, which has likely contributed to the success shown in this chart.

Another popular client, MultiBit, receives approximately 200 downloads per day (6000 per month), which is quite respectable.

Always a favourite statistic is the exchange rate. Over the past year Bitcoin's value when compared to the US Dollar, and most other currencies, increased steadily, though there was a large spike and subsequent dip in August.

Interestingly, the current market cap is actually at a peak for 2012, exceeding the spike in August. This can be attributed to the fact that tens of thousands of Bitcoins have been introduced into the economy since August, though now at the slower rate of 25 per block.

Bitcoindata.net has been tracking several other statistics, including the number of items listed at Bitmit (an auction site that operates in Bitcoin), the number of users at Ogrr (an MMORPG marketplace), and the number of views of the "What is Bitcoin" YouTube video. All three of these have shown steady growth over the past year.

Bitcointalk forum membership growth and subscribers to the Bitcoin sub-reddit are also increasing steadily (charts again courtesy of Bitcoindata.net):

In the online gambling scene, things appear to be looking up as well. Bitcoin's top poker site, SealswithClubs, is gaining new users on a daily basis, with attendance at the tables on the rise:

Even the Bitcoin discussion on the TwoPlusTwo forums, the most popular poker discussion forum on the 'net, has 3,000 posts and 165,000 views!

Other notable stats:

Bets made at SatoshiDice.com: 2,354,830
Merchants using Bit-Pay: 1000+ in 98 countries (as of Sept 2012)

All-in-all, a very impressive year for Bitcoin. Here's to an even stronger performance in 2013!

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Merry Christmas!

Happy Holidays to all the Bitcoiners out there, and may your 2013 be full of independent financial awesomeness!

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Got the Smarts? Put your Bitcoins on the Line at BitTrivia.com

So, there I was, sitting at BitTrivia.com thinking to myself, "more people need to know about this site!"

Opened just two days ago, BitTrivia is exactly what it sounds like, a site where you can put your Bitcoins on the line against others in a no-holds-barred trivia competition. Got the smarts but never had an opportunity to cash-in on your talent? Now you can!

BitTrivia's design is intuitive and enjoyable, giving competitors a satisfying multiplayer experience. I've attended a few trivia nights at the local bar, and I would say that BitTrivia's bank of questions is a little easier than what you would find in a real life trivia competition, with the occasional stumper mixed in with the usual trivia fare.

The site takes a 10% cut of the prize-money, which can be as much as you're willing to bet, multiplied by the number of players who match your bet. If you're not feeling overly brainy, you can bet as little as you wish, but your winnings will never be more than you're willing to risk. Deposits are instant and withdrawals are as well, as long as your deposit has a single confirmation against it.

Update: the site now lets you play on your own!  If you get a question right, you automatically win 0.001 BTC - a great way to earn Bitcoins if you don't already have some.

I suspect the Bitcoin-backed online gaming scene has a lot of room to grow; BitTrivia is definitely a good example of its potential.

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Set up your own electronic bitcoin exchange using localbitcoins.com!

Today we have added a new escrow feature to localbitcoins.com. This differs from the previous transaction feature by being completely designed only for electronic money transfers and not for physical cash trades.

The service requires that you have bitcoins in your localbitcoins.com wallet before you can start using it. The escrow service is disabled by default, and currently enabled only for selling advertisements.

The service generates reference messages automatically for the buyer, so that doing the trade is very easy for both the seller and buyer. The buyer has just to pay the invoice automatically generated by localbitcoins.com, and the seller must watch his bank/payment service account and release the funds when they are spotted.

Every trade builds up reputation for both participants. We always suggest to be cautious with first timers - in the bitcoin community, bank account hackers sometimes use services like localbitcoins.com to buy bitcoins. Therefore check the reputation of the counterparty when accepting bank transfers. Banks will notice these transfers usually pretty quickly, about in 0-3 days. With new users with no existing trade volume, it is recommended to wait or ask for additional validation before accepting the transfer.

Of course all the existing features of localbitcoins.com are also integrated with the new process, such as messaging, feedback and SMS/email notifications. You can also specify your price using equations, as before. Examples:

• Sell for market price, but at least 13.5 USD: max(mtgoxUSD_ask, 13.5)
• Buy always at competitive but fair rate (EUR): min(min(min(mtgoxUSD, bitstampUSD), USD_24h)*USD_in_EUR, EUR_24h)

Read more about the escrow feature from our guide.

For more examples for equations and all parameters, see our cash exchange guide.

We are developing localbitcoins.com constantly forward, and more features will be coming all the time. Stay tuned!

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Watch out with bank transfers!

For all localbitcoins.com users, be very careful when using bank transfers. Localbitcoins.com hasn't been designed with bank transfers in mind in the first place, so we don't have infrastructure for it. Bank transfers can also be chargebacked/accounts frozen like with paypal or credit cards. There are some people using stolen bank accounts to purchase bitcoins from sellers, on localbitcoins.com

If you are going to sell bitcoins with bank transfers, check the profile/feedback beforehand. Watch out with new users. It doesn't hurt to wait or cancel the deal when unsure.

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25 Bitcoins per Block - Not Enough for Some Miners

On the 28th of November, the reward for solving a Bitcoin block dropped from 50 Bitcoins to 25 as the first of several programmed Bitcoin inflation controls kicked in. There was rampant speculation on what the immediate repercussions would be at the time of the halving, with some expecting an immediate jump in the exchange rate, and others thinking that miners all over would begin turning off their rigs.

Neither of those predictions came to pass on the 28th, but they might have been correct after all.

Over the last two weeks, the exchange rate has indeed climbed, from about $12.25 USD to $13.50 today. Additionally, the network hash rate has begun to drop off, with the first decrease seen in more than six months. The current difficulty is 3,370,182, and the next could very well be south of 3,000,000, as predicted by the algorithms at BitcoinX at the time of this posting.

The question is, what happens next? My opinion is that we should continue looking to outside influences to determine how the next chapter will play out. Evidently, Bitcoin's popularity is beginning to grow rapidly, which will eventually take the exchange rate, and the difficulty, to new highs in the very new future. What we're seeing today is Bitcoin taking a short breather before the next ramp up, so hang on!

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Email Address Fixed

If any of you were trying to get a hold of me over the last couple of months at gowest@thebitcointrader.com, I apologize; the address wasn't working.  It's working again.

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SMS messages not delivered in multiple places

Our SMS service provider twilio, for some reason, has stopped receiving incoming SMS's altogether this weekend. We are looking for alternate provider ASAP.

Edit: now we have implemented Nexmo, and added couple of numbers. THis should help with the situation.

The Localbitcoins.com SMS numbers are: +15813330250 (CA), +43676800505463 (AT), +442033222117 (GB), +46769436195 (SE), +16466994674 (US)

These are all normal phone numbers, which don't have any special fees attached to them. Sometimes there might be problems delivering the SMS's, in this case you should try a different number. 

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