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Bitcoin's Use in Commerce Keeps Falling

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Re: Bitcoin's Use in Commerce Keeps Falling

#91
post #10

It has been clear for a while now that Bitcoin is an inferior payment system for the consumer: * The fees are higher. * The risk to the consumer is higher. * The difficulty of use is higher. * It is accepted at an extremely low amount of vendors and even that is falling. So you really how to wonder why people ever thought consumers would use it en masse.

One of your points is of dubious validity: fees may not be higher. Fees went very high when the network became congested; but when it’s not congested, they’re much lower than credit card systems are for normal businesses. https://bitcoinfees.earn.com/ suggests that right now, what equates to about nine US cents is sufficient for a basic transaction. And if you’re happy to wait an hour, then two cents ought to do you…

I agree. It's almost hilariously counterintuitive. I recently needed to send a moderate sum of money (4 figures) to someone who lives across the country. There's no obvious reason why this should cost me anything or not happen in the same day. However,

* Checks / ACH takes days to close, plus in many situations you might have to actually mail the person a check

* EFT seems reliable, but takes days and requires having been previously set up and authenticated (which borders on impossible if you don't own both accounts).

* Wiring seems like the obvious solution, but depending on your combination of banks fees are going to be >1% for transactions of my size. I also failed to get a wire to happen in * Using a money sending service like Google Pay sounds reasonable enough, but even assuming you're under the transaction limit and have already set up everything necessary to satisfy their fraud prevention systems, any large amount will still take multiple days to fully clear.

On the other hand, while Bitcoin's slow transaction times are a pain for in-person merchant payments, being able to send even large sums of money reliably in less than an hour for (comparatively) a small fee seems almost miraculous. It's true that if you need to go USD -> BTC -> USD it takes much longer, but that's more a problem with currency exchange than an inherent limitation of the currency itself.

Re: Bitcoin's Use in Commerce Keeps Falling

#92

Earlier quoted context omitted.

More than just power, you have depreciating assets (mining chips, servers, buildings) that are effectively losing money constantly. Operating them at a small loss is better than leaving them idle for a huge loss. You see similar economics when farmers sell crops at a net loss.

So slightly negative margins but making it up in volume?

No, it's positive margins offseting negative fixed costs.

Re: Bitcoin's Use in Commerce Keeps Falling

#93

It sounds weird, but I think a big part of Bitcoin's, and other crypto's value, isn't in the day to day ability to use it to buy and sell things, it's the inability of the government to devalue it. This isn't as big a problem in many richer countries with relatively stable currencies, but I sure as hell would prefer Bitcoin to anything the Venezuelan government or the Argentinian government would issue. The kinks are…

I'll add to this -

As someone who's country is actively looking at expropriation of white-owned land a bank account that NO ONE can access without your permission is hugely appealing. If you're living in a country with functioning institutions you take this for granted

Re: Bitcoin's Use in Commerce Keeps Falling

#94
post #77

Earlier quoted context omitted.

> That's not how it works. Obivously, the meaning of the original sentence is that miners will turn off the mining equipment when they decide that it's more profitable to leave it off than leave it on. > …you can either sell it for $50 and only be down $50 on your electricity, or you can not sell it at all and be down $100 on your electricity. This is a false dilemma, the question is not just whether you sell the coi…

> Obivously, the meaning of the original sentence is that miners will turn off the mining equipment when they decide that it's more profitable to leave it off than leave it on. Well, it all depends on price of electricity in your region. If you mine for almost free using solar/other renewable energy/your energy is subsidized by government then you will still make profit while miners in high cost electricity regions w…

Even with subsidies, there's an effective price floor.

Even with renewable energy there's an opportunity cost - you can sell it back to the grid. Plus the fixed costs of buying the solar panels and mining equipment in the first place.

Re: Bitcoin's Use in Commerce Keeps Falling

#95
post #41

Earlier quoted context omitted.

One of your points is of dubious validity: fees may not be higher. Fees went very high when the network became congested; but when it’s not congested, they’re much lower than credit card systems are for normal businesses. https://bitcoinfees.earn.com/ suggests that right now, what equates to about nine US cents is sufficient for a basic transaction. And if you’re happy to wait an hour, then two cents ought to do you…

Average person pays fees twice. One buying the currency, and a second time at sale. On top of that exchanges have even more fees so, consumers are paying more than just one block chain fee.

That's not a big of a deal as you're making it out to be. I can say this because I use bitcoin regularly in commerce. I pay 3 cents equivalent (typical fast fee over the last handful of months) plus maybe 20 cents if I'm silly and use something like coinbase to purchase bitcoin initially.

And then my transaction clears in 10-20 minutes instead of a day or two like the banks' ACH network.

Re: Bitcoin's Use in Commerce Keeps Falling

#96

It sounds weird, but I think a big part of Bitcoin's, and other crypto's value, isn't in the day to day ability to use it to buy and sell things, it's the inability of the government to devalue it. This isn't as big a problem in many richer countries with relatively stable currencies, but I sure as hell would prefer Bitcoin to anything the Venezuelan government or the Argentinian government would issue. The kinks are…

I mean, what advantage does it have over gold? Advantages of gold vs. Bitcoin: - gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything but - gold is physical in form and securing it is not hard; BTC is not physical, exchanges get hacked with losses to accounts, in the event of a natural disaster or some event where power generation and internet is lost you lose access to BTC. (So…

Securing bitcoin is much easier than securing gold. Gold can be confiscated easily; bitcoin is much harder, especially with things like brainkeys.

Additionally, gold does not have a built in global teleporter. Bitcoin does. I can send basically an unlimited quantity of value to anyone with internet access in minutes with bitcoin; the same is not possible with gold.

If bitcoin is only useful for global remittance and bypassing the long-distance-money-transfer cartels of the world, it is an insanely valuable tool. My estimation is that it is valuable for at least that, and probably several other things as well (e.g. online payments for physical goods that are subject to high chargeback risk, et c).

Re: Bitcoin's Use in Commerce Keeps Falling

#97
post #21

A currency with no mechanism for monetary policy is not going to be adopted. Bitcoin is purely deflationary for more reasons than just people losing their keys. For example, a fixed reward split between a growing group of miners will also cause a rising price floor. The miners will not sell for less than their electricity costs, which makes the smaller piece of the block reward they receive have a higher price. So yo…

> A currency with no mechanism for monetary policy is not going to be adopted.

...except that bitcoin has been adopted, just not widely. Your basic premise is false.

Re: Bitcoin's Use in Commerce Keeps Falling

#99
Bloomberg's use in news keeps falling too. They have set up computational paywalls to prevent people from reading their articles. But for some reason people on HN just keep posting them. It's a weird exception to the no-paywalled article status quo.

Re: Bitcoin's Use in Commerce Keeps Falling

#100
post #18
post #2

When can we call Bitcoin a failed experiment? And don't tell me it was "always about storing value", that's not in the original paper.

You want to join the growing list of Proclaimers that Bitcoin is dead? It’s growing ever since 2011. Edit: typo

Wild how consensus forms over time, huh?
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