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Why Bitcoin Matters

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Re: Why Bitcoin Matters

#51

Post by minimax »

ye wrote: post #36
minimax wrote: post #16

Bitcoin is the first Internet-wide payment system where transactions either happen with no fees or very low fees (down to fractions of pennies). Existing payment systems charge fees of around 2 percent to three percent As long as consumers are paid in their local currency and vendors pay their employees, their taxes, and their other costs in local currency, then bitcoin as a payment technology has similar costs as cr…

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

You can place a buy ad on LocalBitcoins and actually buy at below the market rate.

Maybe in your town, but for me the spread on LocalBitcoins is hilariously huge. I just punched in my city (Chicago) and got $818 bid by $850 offered. That's a $32 spread, which is much larger than I see on any of the online exchanges.

edit: Actually I think you are talking about the equivalent of a resting order (placing an ad) which isn't what I'm talking about. My scenario involves crossing the spread, which in the localbitcoins case would mean answering an ad.

edit 2: I encourage everyone who hasn't seen localbitcoins to go check out the ads there. "Hilariously sketchy" is about the best way I can describe it.

Re: Why Bitcoin Matters

#52

Post by dllthomas »

kaonashi wrote: post #50
ye wrote: post #36

Earlier quoted context omitted.

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

> people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. Still have to exchange for taxes.

But only enough to pay those taxes.

Re: Why Bitcoin Matters

#54

Post by kaonashi »

dmix wrote: post #11
jt2190 wrote: post #9

> The criticism that merchants will not accept Bitcoin > because of its volatility is also incorrect. Bitcoin can be > used entirely as a payment system; merchants do not need to > hold any Bitcoin currency or be exposed to Bitcoin > volatility at any time. Any consumer or merchant can trade > in and out of Bitcoin and other currencies > any time they want. I'm having trouble understanding this point of view because…

1. no, but stability will increase with mass adoption. It's not tied down to one specific geographic market as nation-state currencies. Once it's based on global trade then it requires global instability, which is a higher threshold. USD has a similar global stability because of that vs other currencies. 2. no, how would this would decentrally? You could pay into an insurance policy maybe, that pays out in alternativ…

> but stability will increase with mass adoption

I don't see how this is realistic; the needs for bitcoins will be endogenous to the people using it, whereas the supply increases based on arbitrary constants (until it stops increasing altogether).

That says to me that the more people that use it, the more volatile it will become (especially after the supply freezes). When it becomes less volatile, it's merely because the needs coincidentally line up with the supply (i.e. when transaction volume drops -- fewer people 'using' it).

Re: Why Bitcoin Matters

#55

Post by dllthomas »

hooande wrote: post #40

Andressen is making bitcoin out to be a decentralized paypal, when it was more intended to be a form of currency. It makes more sense as a long term investment or speculative bet than it does a way to transfer money from point A to point B. An analogy would be if person A and person B conducted a transaction by converting their money from dollars to euros or vice versa (assuming A and B are both in the same country).…

"Bitcoin the protocal, however, is freaking awesome. I expect to see a lot of startups taking advantage of some of the non-monetary uses, up to and including micropayments."

I agree with all of this except the implication that micropayments are a non-monetary use.

Re: Why Bitcoin Matters

#56

Post by comex »

Future email systems and social networks could refuse to accept incoming messages unless they were accompanied with tiny amounts of Bitcoin – tiny enough to not matter to the sender, but large enough to deter spammers, who today can send uncounted billions of spam messages for free with impunity.

Heh. Talk about historically backward:

http://en.wikipedia.org/wiki/Hashcash#Bitcoin

Re: Why Bitcoin Matters

#57

Post by vasilipupkin »

baddox wrote: post #23
candybar wrote: post #5

The part about bitcoin entirely as a payment system makes no sense, because both the consumer and the merchant need an existing payment system, to convert into and out of bitcoin for this to work, in which case bitcoin is just a middleman doing no work. I suppose some payment systems are localized and bitcoin can work as a global bridge, but that seems like a trivial legal hack that will be shut down soon.

> in which case bitcoin is just a middleman doing no work So you're saying that, pessimistically, all Bitcoin could do is disrupt the credit/debit card companies? That's very pessimistic, and still a very big deal.

It sounds to me like what we need is a single place where I can deposit my credit card info, which I trust is secure, and then all the merchants transact with me by doing some version of auth against that web service/api without ever exchanging any credit card numbers. For consumers this is great, since they never have to update their credit card info on 10 million places. It's good for businesses, too. That kind of service would undercut one of the main premises behind bitcoin usefullness.

Re: Why Bitcoin Matters

#58

Post by ye »

minimax wrote: post #51
ye wrote: post #36

Earlier quoted context omitted.

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

You can place a buy ad on LocalBitcoins and actually buy at below the market rate. Maybe in your town, but for me the spread on LocalBitcoins is hilariously huge. I just punched in my city (Chicago) and got $818 bid by $850 offered. That's a $32 spread, which is much larger than I see on any of the online exchanges. edit: Actually I think you are talking about the equivalent of a resting order (placing an ad) which i…

Which means if you place a buy ad at $819, you will have the best buy offer, and you will be the first one the sellers will go to.

Re: Why Bitcoin Matters

#59

Post by bluekite2000 »

anyone has experience with remittance from US to countries that don't have a local bitcoin exchange? How would it work in such case since the receiver can't convert the money to the local currency?

Re: Why Bitcoin Matters

#60

Post by kolev »

Bitcoin matters, but it won't survive "as is" ("thanks" to hoarders and speculators). It just brought attention to a problem, which will get solved more elegantly.
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