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That's not true, it's cheaper for me to buy things on Amazon with Bitcoin via Gyft (3% cashback) than using my credit card (1% cashback) or debit card (nada).
You're ignoring the cost of acquiring bitcoins in that 3%. Also cheaper still to buy gift cards via raise, cardpool, giftcardgranny, hundreds of other results for "discount gift cards" which are 3%-6% off AND get your 1% cash back.
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I wonder this too - I rarely use cash right now, because I get: 1) Cashback (1-3%) 2) Chargebacks if needed by using a credit card. Bitcoins are basically like cash in my mind - very easy to move around, but no protections in case of it being stolen, and no cashback. I think Bitcoin is very neat technology, and has some useful features (transferring money between people quickly and easily with basically no fees), but…
Please consider using cash at small and local businesses when possible. You pay the same amount either way, and the extra 2-3% goes to the local business instead of to Visa. Additionally, I've been to one or two stores that will actually give a small discount on cash purchases. I hope that trend continues.
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I mean, e.g. buying $800K worth of bitcoin in 15 minutes, so that you can increase the price and then buy $5M worth of goods NewEgg - would $800K in fifteen minutes press newegg's btc-denominated price well below wholesale on those same electronic goods?
The lower graph here shows the depth of the market. Right now, for $800k USD, you can move the price from $656/BTC to $665/BTC. So you might get a $67,700 discount on your $5,000,000 order. Edit: spaced the link https://bitcoinity.org/markets
1. Note you get bitcoins during your manipulation as well - so how much did you overpay for the bitcoins that it took to get you the $67K discount? I count that you achieved a 1.37% rise in price, so even if you put in your full $800K at the higher price, that cost you $10,960 in overpayment. There is a direct relationship between the amount of move that you cause, and the amount that you overpay. So the question is, what that relationship is - we have to compare it with the profits from the NewEgg orders at the manipulated price.
1b. Also note that there is a chance you can sell some of them back at a slightly increased price if NewEgg confirms your order quickly, as you've just filled all the lower-price bids on the exchange you just manipulated.
If nobody knows about your manipulation directly, you might even cause a bull run where people think the price is just going to go up and up - you only meant to manipulate it to a brief target price, not caring about the price fall after, but maybe you can sell at a profit as a follow-on effect.
2. On the other hand, $67,700 discount on $5M order is nothing – it doesn’t cause the price to fall below wholesale, so there’s no reason to do the manipulation, since NewEgg isn’t offering cash, it’s offering product. The question then becomes: how much would we have to increase „1a” (the $10K ”fee” you paid for a 1.37% drop) by, to cause an, e.g., 15% drop, 20% drop, 25% drop, 30% drop, 35% drop, 50% drop, 75% drop, 80% drop, 95% drop. That would be interesting in table form. The drop would have to be high, as the manipulator would have to get product below wholesale price.
3. $5M is not an upper limit. In a distributed way, there’s no way many customers couldn’t place $10M in orders together. However, they would to coordinate and play ball with each other: if any of them knows that manipulation will happen trying to corner a shallow exchange market, they can take the other side of the transaction. If they know that at a certain time, $15M will be spent on manipulating the spot price for 15 minutes, they can just set aside $15M to place on asks on the other side. So it’s quite dangerous, especially if the price movement is intended to be high. The element of surprise would have to be high.
This seems mostly a theoretical exercise, as in practice NewEgg could fail to honor prices that are outside the previous day’s intraday, or that sort of thing.
Still, I'm curious how the numbers would work.
To some of the common bitcoin concerns:
1) They're easy to steal! Look at this person who did $something_stupid and had all their coins stolen!
Yeah, sure...and if you had left $10,000 in cash just sitting on your table, the same thief could have stolen that as well. There are stories every single day of people having cash stolen from them. The people keeping that much value stored on their local machine are usually pretty crazy bitcoin evangelicals. These are not normal people who bought some coins on coinbase.
2) It doesn't do $things_credit_cards_do!
No, it doesn't! What you people seem to be missing is that it's a totally new way of transferring value. It has its own quirks, requires its own security models, etc. It also does $things_credit_cards_dont_do! That's why people have an interest in it!
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You completely ignored my 2nd paragraph. NONE of the theft victims you read about used hardware wallets.
They'll be replaced by people that forgot their PIN and lost the paper backup.
See, people are used to, and are already pretty good at securing valuables such as cash (in a safe, at home, or on themselves). A paper backup presents to additional complexity to store securely. And Bitcoin offers extra advantages: losing your paper backup does not affect you ability to use the wallet, and you can have multiple backups, etc. So a hardware wallet is at least better than or equal to cash in terms of security.
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True there's no advantage to paying with bitcoin currently and most people are just using it for the novelty value. But enough growth and merchants will just have to offer discounts with bitcoin purchases to stay competitive.
If the numerous and massive data breaches, and subsequent credit card theft and fraud events of the last few years have taught us anything, it is that yes paying in bitcoins has one fundamental advantage: you are never handing the store your full billing info which can be stolen and reused by fraudsters. Now, Bitcoin also has its own security challenges (eg. how to secure a wallet), but there are solutions (hardware…
Of course Bitcoin would be more secure (I own some myself). But from a users point of view this additional security doesn't really matter too much. I rather pay with my credit card and get 1% cashback.
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You are wrong, there is tremendous consumer growth happening. The two biggest US processors (BitPay and Coinbase) release numbers every once in a while. One example: "Since [...] October, along with the integration with Shopify in November, [...] the transaction volume has tripled." Source: http://blog.bitpay.com/2013/12/11/bitpay-exceeds-100-000-000...
Transaction volume and consumer growth aren't even close to the same thing.
I think you are confused and thought I was talking about transaction volume on the Bitcoin p2p network.
Reading these comments is depressing. Bitcoin isn't a few geeks trading bits over IRC anymore, guys. To some of the common bitcoin concerns: 1) They're easy to steal! Look at this person who did $something_stupid and had all their coins stolen! Yeah, sure...and if you had left $10,000 in cash just sitting on your table, the same thief could have stolen that as well. There are stories every single day of people having…
Boats are totally useless they only travel on water. Why would anyone prefer a boat to a truck for moving freight?
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How naive you are. You could basically be arrested and branded as a pedophile if your CC info is stolen: http://news.bbc.co.uk/2/hi/uk_news/magazine/7326736.stm I recognize this is an extreme story, but you cannot claim that CC info theft "does not matter". When it happens, there are many ways in which it can turn in a big pile of hassle for you.
This is a BS, extremely naive argument in favor of bitcoin. For one, you can very much have the same happen to any bitcoin user, using their personal details online in such sites.
Reading these comments is depressing. Bitcoin isn't a few geeks trading bits over IRC anymore, guys. To some of the common bitcoin concerns: 1) They're easy to steal! Look at this person who did $something_stupid and had all their coins stolen! Yeah, sure...and if you had left $10,000 in cash just sitting on your table, the same thief could have stolen that as well. There are stories every single day of people having…