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Why I'm Interested in Bitcoin

cdixon.org

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Re: Why I'm Interested in Bitcoin

#101

Post by nadaviv »

cdixon wrote: post #25
tvladeck wrote: post #24

Earlier quoted context omitted.

Chris, are you looking into non-currency uses for BTC, a la Albert Wenger [0]? My own feeling is that the protocol (secure ledger) is more generally valuable and can likely be put to work in a lot of uses. Is that your feeling as well or are you primarily excited in its use as cash? [0] http://www.usv.com/posts/bitcoin-as-protocol

Definitely interested in lots of other uses for the ledger. If you or someone you know is working on something, we (a16z) would love to talk. I'm hoping next year we'll see a lot more startups building on top of the Bitcoin protocol.

Hey Chris, I was trying to reach you to talk about Bitrated. Drop me an email (in my profile) if you're interested to chat about it and see if we can do something together.

Re: Why I'm Interested in Bitcoin

#102

Post by Sambdala »

glesica wrote: post #94
Sambdala wrote: post #30

Earlier quoted context omitted.

If it's not a core competency (although for certain marketplaces, it may be), you can use a 3rd party escrow. You're already effectively using an escrow service when you provide a Credit Card payment option; you just don't get to choose who provides the service, you can't unbundle it from a larger product offering, you have very little control over it, it doesn't work well for certain types of goods & services, and i…

I agree that un-bundling the escrow from the rest of the stack would be a good thing. However, I think it is important to keep in mind that replacing credit cards with something less effective (for whatever definition of "effective" matters) than credit cards isn't a true replacement. The way I am thinking about it is sort of like those threads on HN where someone says "You can create a Dropbox clone in N lines of X…

I would argue in this case that Bitcoin is likely to be more effective in a huge number of cases, not less effective.

I agree with the first part of your second paragraph, but I don't necessarily think it's going to apply here for any places where we see Bitcoin in wide deployment.

Re: Why I'm Interested in Bitcoin

#103

Post by waterlesscloud »

yebyen wrote: post #70
waterlesscloud wrote: post #45

Earlier quoted context omitted.

I'm not aware of any exchange charging 1% for a one-way exchange. That would be very high. Most tend to be around 0.5-0.6%, with some as low as 0.2% Actually, many of the Chinese exchanges are currently 0% to trade, though they charge to bring money in or out of their systems. It's also worth noting that many of the exchanges have fees that get lower if you trade larger amounts in a given time frame. If you're a high…

Coinbase is probably the most popular US exchange (no source on this, sorry... I just use them) and they charge $0.15+1%. I think I have read that if you are a merchant and establish a merchant account that you can get the first 1 Million Dollars (USD) free of fees. I am not sure what bar you must pass to earn merchant status, but I do have a link[1] to back this up. Presumably it's not more complicated than "accept…

The Chinese exchanges still have money coming in and out through a variety of methods. The primary method is internal bank transfer from your account to their account, using one of the state banks. It's not clear if this is a permanent solution, but it's how things work as of now.

The main thing that happened a few weeks ago was that 3rd party processors were forbidden from dealing with bitcoin. The transfers from banks to exchanges were handled by 3rd party processors, so for a few days there was no way to get money into the exchanges.

Re: Why I'm Interested in Bitcoin

#104

Post by steveklabnik »

minimax wrote: post #72
steveklabnik wrote: post #51

Earlier quoted context omitted.

Hi, I work for Balanced Payments, a payments company for marketplaces, YC W11. You can track our plans for cryptocurrency support here: https://github.com/balanced/balanced-api/issues/204 > In an online marketplace it's far far easier to accept bitcoins than credit cards because you have no fraud risk, which is a HUGE problem in online retail. I'm not sure how you are getting this. Bitcoin is absolutely susceptible t…

Agree with everything you said. Credit cards have useful consumer protections baked in. What happens when you look at it from the merchant's perspective? Lets say someone buys something from me with a card, I ship it out, but then it turns out the card was stolen. Who takes the loss? The merchant or the credit card company? I guess what I'm trying to figure out is whether or not the irreversibility of a transaction m…

Generally speaking, the merchant takes the loss. It would be a good thing for the merchant, except then, they wouldn't have any buyers. I know I wouldn't use a financial instrument structured like that, especially when there's a plethora of ones where I don't hold that liability.

Re: Why I'm Interested in Bitcoin

#105

Post by nicholas73 »

andrewla wrote: post #64
nicholas73 wrote: post #37

I don't think Bitcoin will ever be a viable currency, at least not on the scale of national currencies. Despite all the flaws fiat currency has, it is actually backed by something - the power of the country's government to tax. Thus, any buyer of sovereign debt has a calculable probability of return. Despite America's printing of dollars, inflation has actually been mild so far. Bitcoin has nothing backing it but an…

I don't understand the argument that "the power of the country's government to tax" is a point in favor of a currency. I would say that it is pretty clear that the opposite is true for almost every significant tax; that a country collecting taxes in a currency would be a disadvantage of a currency. The fact that countries need to pass laws allowing taxation of non-local currencies seems to support that. For a limited…

The excess dollars in circulation tend to be absorbed by treasury bonds, which is backed by the US taxpayer. If there were doubt about this tax base, then the dollars would stay in circulation and devalue the currency. Of course inflation still happens, but it is controlled to a low level which economists claim is helpful to spurring the economy.

Re: Why I'm Interested in Bitcoin

#106

Post by hippich »

pron wrote: post #28
hippich wrote: post #7

The reason why people should get excited about Bitcoin is not a bubble or money, but rather a something completely new. Large group of people put financial rules into software and agreed that they are going to use these rules without external central entity and enforcement. If this continue to roll, same might be applied to many other areas I believe. It is just my random fantasy at this moment, but why we will need…

But now you're putting a libertarian political agenda into Bitcoin again, and this is what makes many people (including me) very nervous. You see, many people think about the terrible pain and suffering the US experienced about a century ago when the economy and law were largely unregulated and unenforced. Much of the country became quickly enslaved to a small group of individuals; terrible exploitation and rampant p…

I am not trying to put any agenda. It was a mistake to include random idea off top of my head.

My excitement comes not from being able to get free from government, but rather from the fact humanity found a way to agree on complex topic (money) and set these rules in open source software.

Re: Why I'm Interested in Bitcoin

#107

Post by steveklabnik »

pault wrote: post #75
steveklabnik wrote: post #51

Earlier quoted context omitted.

Hi, I work for Balanced Payments, a payments company for marketplaces, YC W11. You can track our plans for cryptocurrency support here: https://github.com/balanced/balanced-api/issues/204 > In an online marketplace it's far far easier to accept bitcoins than credit cards because you have no fraud risk, which is a HUGE problem in online retail. I'm not sure how you are getting this. Bitcoin is absolutely susceptible t…

M-of-N transactions solve most of the trust problems with online marketplaces without having to cede total authority to the escrow service. If you want to favor the buyer in disputes a la paypal, that's easy, but the worst thing that can happen in the case of a false positive (from the seller's perspective) is the loss of a single transaction, rather than having an entire account frozen.

M of N is useful, yes. All I'm saying is that reversibility is an important part of online transactions, and you need _some_ kind of mechanism here to facilitate trust.

Re: Why I'm Interested in Bitcoin

#108

Post by nwzpaperman »

minimax wrote: post #8

For all the people out there who are thinking about bitcoin as a payment technology: If you assume that customers get paid in dollars and that vendors will have to use dollars to pay their taxes, pay their employees and buy the raw materials for their products (reasonable assumptions, I think), then a payment consists of one conversion from dollars to bitcoins by the purchaser, and one conversion from bitcoins to dol…

Technically, you'd be looking at BTC fiat CONVERSION cost + traditional TRANSACTION cost on the secondary party's ensuing transactions.

Fundamentally, money is nothing more than a unit by which to quantify value. Fiats can temporarily solve some problems like the issuer's spending constraint caused by a lack of units. The problem is that the unit is not standardized and thus becomes undesirable for trade as contracts for future goods/services become speculative beyond the operating complexities.

Which is longer: 2.54 cm or 1 inch?

The traditional transaction cost of the legacy financial system depend on the legal system perpetuating. Without the legal system and administrators (government) and its users (everyone), there are no contracts, no taxes and no fiat money.

This is why global legal harmonization is critical in the context of preserving the status quo. As discussed in the HyperMusic thread, changes in IP law in one "stable" country can engender massive economic flows to less regulation or more regulation depending upon who is favored.

BTC and its forks represent a parallel financial system that could possibly facilitate the preservation of much of the world's functionality in the event that the present legal system doesn't survive its next iteration to global force.

Re: Why I'm Interested in Bitcoin

#109

Post by yebyen »

waterlesscloud wrote: post #103
yebyen wrote: post #70

Earlier quoted context omitted.

Coinbase is probably the most popular US exchange (no source on this, sorry... I just use them) and they charge $0.15+1%. I think I have read that if you are a merchant and establish a merchant account that you can get the first 1 Million Dollars (USD) free of fees. I am not sure what bar you must pass to earn merchant status, but I do have a link[1] to back this up. Presumably it's not more complicated than "accept…

The Chinese exchanges still have money coming in and out through a variety of methods. The primary method is internal bank transfer from your account to their account, using one of the state banks. It's not clear if this is a permanent solution, but it's how things work as of now. The main thing that happened a few weeks ago was that 3rd party processors were forbidden from dealing with bitcoin. The transfers from ba…

Ah. So this is something like US DHS coming to raid the accounts of Mt.Gox affiliate Mutum Sigillum at Dwolla.

The Chinese exchanges are then adopting the practice of Coinbase, the situation sounds much the same (Coinbase initiates ACH transactions with your bank and makes you wait the 5 days until it clears to actually receive and withdraw your Bitcoins.) Mt.Gox works the same way now, except last I heard their Japanese bank was limiting them to some absurdly low number of ACH transactions to USA, like on the order of a maximum of 10 per week. Coinbase, being a US company with their choice of banks, obviously does not have this restriction.

Re: Why I'm Interested in Bitcoin

#110

Post by steveklabnik »

quack wrote: post #86
steveklabnik wrote: post #51

Earlier quoted context omitted.

Hi, I work for Balanced Payments, a payments company for marketplaces, YC W11. You can track our plans for cryptocurrency support here: https://github.com/balanced/balanced-api/issues/204 > In an online marketplace it's far far easier to accept bitcoins than credit cards because you have no fraud risk, which is a HUGE problem in online retail. I'm not sure how you are getting this. Bitcoin is absolutely susceptible t…

> Let's make this a bit more concrete: assume eBay accepts BTC. I could sign up for a seller account, make some auction listings, once some people buy them, never ship the goods, and disappear. This already is a problem on ebay. People post dishonest listings all the time and run with the cash. You have the additional problems of people buying goods with stolen cards or running up the price of an item with no intenti…

> This already is a problem on ebay.

Exactly. It's a problem that doesn't go away with Bitcoin.

> Credit card companies are paying people with their own fat.

I am certainly not arguing that they don't charge a premium. I'm saying that they do add value.

> We dont need your middlemen.

You may not, but I am quite certain most people do.

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