Its strange though to mention something like that at a "thinking about it" level. If paypal were to actually implement it, surely taking the world by surprise would be the better strategy.
Paypal President: We're thinking about adding Bitcoin (2:50) [video]
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Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#102Earlier quoted context omitted.
Does the divisibility of bitcoin make any difference? If they changed the protocol now and then so that the number of decimal places (currently 8) increased to 9, then 10, etc, would that be viewed as increasing the supply of bitcoins?
If the US government started minting 0.1 cent coins and 0.01 cent coins, would that be viewed as increasing the supply of dollars?
In Bitcoin the supply and availability of currency are decoupled. By funging or splitting a unit of Bitcoin currency into pieces you increase the availability for use while preserving the value of everyones holdings. Based on the supply and demand the price will fluctuate independently of supply levels.
My understanding is that regardless of how inflationary or deflationary Bitcoin is, there will be no effect on the availability for anyone to buy and sell.
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#103Earlier quoted context omitted.
What if you have large vendors like PayPal only offering transfer to other institutionally-controlled wallets? for example: "Since your funds are transferred only between other PayPal users, PayPal can always reverse a fraudulent transaction." Then you would have a veritable roach motel of bitcoins.
you could easily send BTC out of paypal to any bitcoin address, they could nto sue it and disable those coins from accessing the blockchain. However they could say that if you do a BTC transfer from paypal account to paypal account they could offer protection then by freezing the funds or having a 5 day period before the user could withdraw them. Once they are withdrawn there is nothing paypal could do, of course thi…
They could place any restrictions on it they want if they keep both keys secret. They could also just keep all the bitcoins in the same wallet, and keep track of how much each account owns.
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#104Earlier quoted context omitted.
Does the divisibility of bitcoin make any difference? If they changed the protocol now and then so that the number of decimal places (currently 8) increased to 9, then 10, etc, would that be viewed as increasing the supply of bitcoins?
If Zimbabwe adding extra zeros before the decimal point to its money doesn't cure inflation, then Bitcoin adding extra zeros after the decimal point won't cure deflation.
Inflation killed the Zimbabwe currency because delusion caused it to become worthless not because of availability or velocity issues that people are worried about in Bitcoin. These are two separate issues that people always seem to talk past each other on the subject of Bitcoin deflation. Splitting a Bitcoin into smaller units allows for unrestricted availability and velocity. Anyone can always buy and sell at market rates to complete a transaction. Inflation or Deflation of the currency has no effect on its availability. So why is it bad if it is deflationary?
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#105Can't click this link right now. Abbreviated transcript please? It's weird to see Paypal and Bitcoin in one sentence on the domain bloomberg.com... Bloomberg is one of the biggest financial companies and entirely against Bitcoin. I can't rhyme this; what are they saying about it?
> Bloomberg is one of the biggest financial companies and entirely against Bitcoin. You say this as if it is fact. Care to expand on why you feel this way?
It seemed to me that they were publishing negative news articles about Bitcoin non-stop while the price was climbing. I have a Google News Alert for Bitcoin, and (if I remember correctly) almost every day there would be some negative headline about it from Bloomberg. I then looked up what kinda website it was on Wikipedia, and it turns out they make up 1/3rd of the global financial data market. That kinda confirmed their motivations for me.
I might still be wrong of course, perhaps I should have made more clear that it was my opinion and not really a fact. To me it was like a fact, but now that you make me think about it more objectively, I realize that I can't really say for sure.
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#106Earlier quoted context omitted.
Zimbabwe was very different: the amount of money people had was devalued by new notes being printed that had extra zeroes before the decimal point. Adding extra zeroes after the decimal point for money already in circulation leaves the total supply the 'same' but could also be viewed as increasing supply 10-fold, without disadvantaging anyone currently holding the currency. Its never happened before, so I'm not sure…
Changing denominators has an effect on the liquidity of small transactions, but it's not going to change inflation. What inflation does in an economic sense is much bigger - it changes who has relatively more or less wealth or debt over time. If you take out a loan for $10,000 and inflation makes both your prices and wages go up 2x, then you now have half as much debt. Deflation does the opposite and makes debt more…
To me this is one of the most interesting things about Bitcoin. It is an asset based currency. In a debt based fractional reserve dollar economy you or someone else owes that currency back with interest. The economy is like a game of musical chairs. If a society was based on something like Bitcoin everyone could have assets, there wouldn't be as a strong need to borrow as there is today.
If Bitcoin was a predominant part of an economy borrowing a loan in it could be very bad. In a predominantly Bitcoin based economy everyone could have abundant wealth and there would be no need to be a debt slave.
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#107Earlier quoted context omitted.
> Bloomberg is one of the biggest financial companies and entirely against Bitcoin. You say this as if it is fact. Care to expand on why you feel this way?
It seemed to me that they were publishing negative news articles about Bitcoin non-stop while the price was climbing. I have a Google News Alert for Bitcoin, and (if I remember correctly) almost every day there would be some negative headline about it from Bloomberg. I then looked up what kinda website it was on Wikipedia, and it turns out they make up 1/3rd of the global financial data market. That kinda confirmed t…
Some of the articles you mention are actually op-ed pieces that are published on bloomberg.com. Those types of pieces allow the writer to express their own opinion, whether it be positive or negative. They should not be treated individually or collectively as the opinion of the company, however. Sometimes it is unclear to readers that a piece is an op-ed, so I can see how the viewpoint might be attributed to the company. I can assure you though, there is no company-wide secret agenda to discuss it negatively. My own personal opinion is that the community does not do a good enough job of educating non-programmers about the details of the ecosystem. Here's an example of a good discussion (my personal opinion):
http://www.bloomberg.com/video/bitcoin-is-gold-for-nerds-con...
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#108Earlier quoted context omitted.
I am sorry I cannot agree with you. You cannot collect profits from a transaction between 2 Bitcoin users like PayPal does right now with "real" money. If the world adopted Bitcoin, it would be the end of PayPal's business model. If PayPal were ready to replace their business model with something way less profitable, but more future-proof, it would still make no sense for them to adopt bitcoin. It would only make sen…
> The built-in deflation is a fatal flaw Yeah, I mean, gold didn't work as a currency all those hundreds of years. /sarcasm
Many economists believe that the gold standard contributed to several depressions during those centuries. Gold "worked" because nothing better was known, but modern fiat money works better.
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#109Earlier quoted context omitted.
I am sorry I cannot agree with you. You cannot collect profits from a transaction between 2 Bitcoin users like PayPal does right now with "real" money. If the world adopted Bitcoin, it would be the end of PayPal's business model. If PayPal were ready to replace their business model with something way less profitable, but more future-proof, it would still make no sense for them to adopt bitcoin. It would only make sen…
> The built-in deflation is a fatal flaw Yeah, I mean, gold didn't work as a currency all those hundreds of years. /sarcasm
> Yeah, I mean, gold didn't work as a currency all those hundreds of years.
Actually, it didn't. Gold was almost never the exclusive currency, usually wasn't the most common currency, was rarely a significant direct currency (rather than backing for currency) when people actually used currency for most transactions, and when it became the exclusive backing for currency, only "worked" because the actual circulating currency supply became increasingly disconnect from the gold notionally backing it.
Gold, as a currency, works tolerably well much of the time (though still can break an economy with unexpected surpluses or shortages) in the way it was actually used -- the high-value-density one of several commodities used in currencies in systems where most transactions using currency don't use gold, and most transactions don't use currency at all, but not even tolerably well outside of that domain.
Re: Paypal President: We're thinking about adding Bitcoin (2:50) [video]
#110Earlier quoted context omitted.
There's no reason PayPal has to build a vanilla bitcoin wallet interface. It's true that you cannot simply deduct a certain percentage from a direct bitcoin transaction. However, they could pool your coins in their own controlled address, and when you choose to send a payment through them, it makes one transaction on your behalf for that amount, and also a second transaction for 1% to their revenue address. Average J…
One of the advantages of bitcoin is that you do not need a middle man to do a transaction. Some people may choose one for whatever reason, but would they be OK with paying the transaction fees? Would you use a credit card if you had to pay 4% more than if you paid in cash? I do not think many people would be OK with that. It may sound as if I am a PayPal lover and bitcoin hater, which is NOT the case. I just do not s…
Interestingly, Bitcoin does support transactions which have a third party acting as an arbitrator; these transaction require the consent of two out of three participants in order for the money to be transferred. PayPal is essentially a fraud detection business disguised as a money-transfer business, so this seems like a natural niche for them.
(Technically, every Bitcoin transaction has a script in a Forth-like, non-Turing-complete bytecode which specifies the conditions needed for the transaction to be valid. It supports m-out-of-n signature requirements, among many other fun things.)