I'm a total newbie here, and I've read a bit on Bitcoin. I get that it's a cryptographic currency, and that it can't be directly "cashed", etc.
I'm interested in the common purchase using Bitcoin - what do you buy with Bitcoin?
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As I see it, there are currently (April 4th 2013) two main uses for bitcoin.
As a store of value, similar to gold or stock. The idea is that you buy bitcoin and it holds or ideally appreciates in value.
As a medium of exchange, though in reality few people actually except bitcoin for goods and services due to its volatility. However the Silk Road which lives on the Tor network exclusively uses bitcoins for exchange. This is because it deals in illegal goods, and makes use of bitcoins anonymity.
I found this link the other day that shows where you can use bitcoins https://www.spendbitcoins.com/places/?place_type=service mostly for hosting companies, some poker sites/online casinos & many computer co's that i'm sure most people would never use right now. Saw an article that a restaurant in NY wanted to accept them soon but probably its a marketing gimmick before the crash to get some free publicity. there is also that article of the guy in Canada wanting to sell his house for bitcoins. I'm sure he's going to need much more bitcoins now after the 2 day crash unless bounces back.
Many have used them on Silk road for buying drugs too but I'm sure gov't going to crack down on that . Heard they caught some guy in Australia recently for Silk Road.
Hope that helps
There won't many statistics obtained from a psuedonymous digital currency, so unless there is data released voluntarily there is mostly only educated guesses as to how how much bitcoins are used for specific transactions.
BitPay, the largest payment processor (by a huge margin) only did $5 million USD worth of transactions in March. That's such a tiny percent of all bitcoin transactions for the month that is doesn't really even register.
So why did bitcoins transfer? To and from exchanges.
Bitcoin's #1 use is for speculation. To a lesser, but still significant degree, it is used as a money transfer -- similar to how PayPal or Western Union is used.
Way down the list you'll find it being used for e-commerce transactions, and retail purchases, etc.
However, because Bitcoin has so much potential in replacing PayPal and VISA/Mastercard/AMEX for many transactions, that doesn't mean there won't be bitcoins used for commerce in the future. It just means speculators are believing that day will come, and are buying up the coins that consumers will eventually need for making their purchase transaction.