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Expedia Starts Accepting Bitcoin for Hotel Bookings

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Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#41

Post by vijayboyapati »

It's interesting to think what announcement like this have in aggregate on the price of bitcoin. Counter-intuitively the price of bitcoin should face downward pressure as merchant adoption of this sort increases. Expedia doesn't hold any of the bitcoin they receive. The bitcoins are instantly converted to dollars on a market exchange. This means that holders of bitcoin, especially those who are sitting on large capital gains, now have a new outlet to realize their gains.

On the other hand merchants who choose to accept bitcoin using Coinbase (or Bitpay) and who also choose to keep some fraction of their profit in bitcoin (thereby exposing their profits to currency volatility, which may even be a good thing for growth of their profits) will tend to increase the market price of bitcoin.

Overall it seems like most merchants accepting bitcoin are not holding any of the bitcoins they accept. It would be great to see more merchants choosing to keep some fraction, however small, in bitcoin itself.

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#42

Post by avd74 »

When I first read this I thought, why would they start with hotels? may be because the big profit they make out of reservations?

Then I remembered what an accountant friend once said to me: "Hotels are big portals between the black and white worlds".

So you may have black money in bitcoins (and a Hotel which is your "legal business"), and want to "wash" it? now you can do it through Expedia (they having a bite in the process, hence their motivation).

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#43

Post by TomGullen »

vijayboyapati wrote: post #41

It's interesting to think what announcement like this have in aggregate on the price of bitcoin. Counter-intuitively the price of bitcoin should face downward pressure as merchant adoption of this sort increases. Expedia doesn't hold any of the bitcoin they receive. The bitcoins are instantly converted to dollars on a market exchange. This means that holders of bitcoin, especially those who are sitting on large capit…

I think it will happen when their suppliers accept Bitcoin as payment. The chain has to start somewhere, at the moment they have nowhere to spend them.

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#44

Post by notahacker »

vijayboyapati wrote: post #41

It's interesting to think what announcement like this have in aggregate on the price of bitcoin. Counter-intuitively the price of bitcoin should face downward pressure as merchant adoption of this sort increases. Expedia doesn't hold any of the bitcoin they receive. The bitcoins are instantly converted to dollars on a market exchange. This means that holders of bitcoin, especially those who are sitting on large capit…

I suspect that, arguably more counter-intuitively, it will push the price up, fed by increased speculation due to apparent signs of Bitcoin "going mainstream" that will far exceed any actual Expedia transactions taking place.

I'm more intrigued by the commercial decision from Expedia's perspective. Presumably they've done a back of the envelope calculation and decided "group of people more likely to pick Expedia over other OTAs if they can use Bitcoin" > "group of people that will be sufficiently confused by an additional payment option to abandon their cart"

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#45

Post by jmhain »

jordigh wrote: post #13
stevehawk wrote: post #11

Has there been much talk about how stores using Bitcoin reduces the anonymity of Bitcoin by tying IDs in the transaction of acquiring that coin to the person that ultimately uses it? I'm sure the uber nerds were already aware of this but has it been brought up enough that the general community thinks this through? One booking on Expedia and you've revealed any possible Silk Road or other curious transaction you've ev…

How does this work, exactly? I use a unique address each time I receive bitcoins. Then I sometimes move money between more unique addresses in plausible-looking ways. I always use Tor for talking to the bitcoin network. How easy is it to de-anonymise me?

See the two heuristics in this paper for creating clusters of bitcoin users [0].

The first (and rather obvious) one is to cluster all inputs of a transaction, so if you use A and B, and later use B and C, we now know the same user owns A, B, and C and only need to tie your identity to one of them.

The prior one is rather weak, and could be avoided by consistent usage of unique change addresses. Thus, the second heuristic works to reveal which output is the change address. There are various ways of performing this prediction, some more deterministic than others. A pretty conservative and reliable one, described in [0], assumes an output is a change address if it (1) is the first appearance of the address, (2) the tx is not a coin generation, (3) there is no self-change address, and (4) #1 is only true for this address.

There is an open-source implementation of these ideas called BitIodine [1,2] (albeit with slightly different criteria for change-address identification, including an off-by-one error in bitcoin core that caused the first output to always be the change address in a 2-output transaction until it was fixed in early 2013). Punch in one of your addresses and see what it comes up with. However, I may have found a bug that reduces input-clustering, so if it doesn't find your addresses don't get too excited.

Also, don't forget about the recent technique for de-anonymizing coin mixing transactions [3].

[0] http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf [1] https://github.com/mikispag/bitiodine [2] https://bitiodine.net/ [3] http://www.coindesk.com/blockchains-sharedcoin-users-can-ide...

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#46

Post by natrius »

nitid_name wrote: post #34
phantom784 wrote: post #31

Earlier quoted context omitted.

Bitcoins are very divisible. As more and more people use Bitcoins, the coins become worth more and people can simply trade smaller and smaller pieces of them. The limited supply doesn't limit the number of users.

They do have a division limit though. One satoshi is only four orders of magnitude smaller than a penny (US). EDIT: answered my own question

The blockchain describes stakes in a conceptual ledger. The current limitations on divisibility are easy to change in the future. 21 million is arbitrary and meaningless.

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#47

Post by StavrosK »

notahacker wrote: post #44
vijayboyapati wrote: post #41

It's interesting to think what announcement like this have in aggregate on the price of bitcoin. Counter-intuitively the price of bitcoin should face downward pressure as merchant adoption of this sort increases. Expedia doesn't hold any of the bitcoin they receive. The bitcoins are instantly converted to dollars on a market exchange. This means that holders of bitcoin, especially those who are sitting on large capit…

I suspect that, arguably more counter-intuitively, it will push the price up, fed by increased speculation due to apparent signs of Bitcoin "going mainstream" that will far exceed any actual Expedia transactions taking place. I'm more intrigued by the commercial decision from Expedia's perspective. Presumably they've done a back of the envelope calculation and decided "group of people more likely to pick Expedia over…

They have tabs that go "Credit card", "Paypal", "Bitcoin", so, presumably, 0 people will be confused by that, plus they have lower fees than either CC companies or Paypal, so it sounds like an obvious win for them.

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#49

Post by DavidSJ »

vijayboyapati wrote: post #41

It's interesting to think what announcement like this have in aggregate on the price of bitcoin. Counter-intuitively the price of bitcoin should face downward pressure as merchant adoption of this sort increases. Expedia doesn't hold any of the bitcoin they receive. The bitcoins are instantly converted to dollars on a market exchange. This means that holders of bitcoin, especially those who are sitting on large capit…

I think this reasoning is mistaken. Yes, bitcoin-accepting vendors act as a new sink for supply, but for that reason they also increase the incentive to leave bitcoin sitting in your wallet, ready to spend on something you would like to buy (much as we keep money in our checking accounts so we can draw on them at will). In aggregate, if (big if) lots of people are using bitcoin as money, then speculative demand may decrease, but currency demand could increase dramatically.

Re: Expedia Starts Accepting Bitcoin for Hotel Bookings

#50

Post by codyb »

malloreon wrote: post #48

Does Expedia hold any bitcoin reserves? Do they interact with bitcoin at all? Nope. They let someone else do it and just accept real money.

That's okay though. As bitcoin proliferates large businesses will eventually start cutting out the middle man.

But currently, with the drastic swings, it's not a sound economic move (especially publicly owned) to actually have holdings in bitcoin. It requires infrastructure for cash exchanges too. Is Expedia going to pay its dividends with its bitcoin reserves?

Not yet!

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