An estimate of the real savings for merchants from Bitcoin
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An estimate of the real savings for merchants from Bitcoin
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Re: An estimate of the real savings for merchants from Bitcoin
#2There are no savings given the volatility. Since it can take days to convert to usable currency, you'd have to bake in 3-20% padding to cover volatility.
Re: An estimate of the real savings for merchants from Bitcoin
#3There are no savings given the volatility. Since it can take days to convert to usable currency, you'd have to bake in 3-20% padding to cover volatility.
Use a service like BitPay and it converts instantly.
Re: An estimate of the real savings for merchants from Bitcoin
#4Re: An estimate of the real savings for merchants from Bitcoin
#5Earlier quoted context omitted.
Use a service like BitPay and it converts instantly.
That's just transferring the expense/risk which is not sustainable.
All payment processors take currency risk. Coinbase has an interesting approach by also being an exchange and doing some algorithmic arbitrage.
The current volatility isn't inherent to the protocol, it's just a function of market depth and liquidity which will presumably improve/stabilize as the network grows.
Re: An estimate of the real savings for merchants from Bitcoin
#620% savings is not ground shaking. Remember that BTC is tackling an entrenched opponent, quasi monopolist. It'd take an order of magnitude in savings to guarantee success. Think 50% to 90% less.
Re: An estimate of the real savings for merchants from Bitcoin
#7If merchants were doing sales and returns using Bitcoin it seems like you could make money on the volatility by returning items when the value of Bitcoins went up within the return window. You'd have to be willing to keep items you bought if the value of Bitcoin went down, but if you systematically made all your regular purchases that way you ought to come out ahead. Is this a real risk for merchants, or am I missing something?
Re: An estimate of the real savings for merchants from Bitcoin
#820% savings is not ground shaking. Remember that BTC is tackling an entrenched opponent, quasi monopolist. It'd take an order of magnitude in savings to guarantee success. Think 50% to 90% less.
It depends. A high-volume, low-margin retailer would save a huge amount from 20% on transactions.
If Amazon were motivated to take on the risk of building the infrastructure, this could happen quickly. But, they have other things to focus on, and I doubt they would make the calculations in the same aggressively optimistic manner.
Re: An estimate of the real savings for merchants from Bitcoin
#920% savings is not ground shaking. Remember that BTC is tackling an entrenched opponent, quasi monopolist. It'd take an order of magnitude in savings to guarantee success. Think 50% to 90% less.
There aren't guarantees in life, but I think you're wholly misunderstanding the scale we're talking about. Visa processes about 200M transactions/day. Almost $17B/day. These are not small numbers.
I think you're also misunderstanding of how the financial system looks at payment rails - there's a pent up (ongoing?) demand for better ones.
Also, while merchant transactions are one market, they certainly aren't the only one. There's lots of talk about international remittances. This is a $500B+ market[1] that is growing at an insane rate[2]. Average fees are 9.3%[3] and way worse for some countries - it's not unheard of to say, pay $40 for sending $100 from the US to Kenya. Now that is a market that's ripe for disruption (you'd have to balance bitcoin inflows w/ capital flight for the economy to work, but it's worth pointing out there's already a service linking bitcoin w/ M-Pesa: http://motherboard.vice.com/blog/one-third-of-kenyans-now-ha... )
IMO, this is a particularly useful page which gives some context on where bitcoin currently sits with other payment networks: http://www.coinometrics.com/bitcoin/btix
[1] http://www.bloomberg.com/news/2013-12-17/global-immigrants-s...
[2] http://gulfnews.com/business/economy/global-remittance-flow-...
[3] http://www.cognizant.com/InsightsWhitepapers/Remittance-Mark...
Re: An estimate of the real savings for merchants from Bitcoin
#10Earlier quoted context omitted.
Use a service like BitPay and it converts instantly.
That's just transferring the expense/risk which is not sustainable.
Exchanging into dollars is momentary, it's dollar withdrawal that takes days. So, actually the only risk that's being taken by bitpay is the fifteen minutes between the moment the price is displayed and someone pays (after 15 minutes the proce they lost in btc becomes invalid)
And even against that risk they can hedge. So it can really be sustaining.