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Why I'm Interested in Bitcoin

cdixon.org

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Re: Why I'm Interested in Bitcoin

#111

Post by minimax »

johmas wrote: post #68
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…

We began accepting bitcoin last month and aren't converting all of our bitcoin to dollars. We have several employees who accept their pay in bitcoin. Taking things a bit further, we are optimistic about bitcoin as a payment form with our suppliers as the volatility stabilises. As an example, one of our suppliers is Belgium based and we'd be able to save on the currency exchange with those payments. We've discussed it…

That is certainly an interesting datapoint, though paying your employees in bitcoin... I'm not sure how I feel about that in ethical terms. What would you as an employer do if you paid someone on Friday and on Monday that paycheck only bought half as much bread as it did on Friday? Also doesn't it make income/FICA tax kind of a pain?

Re: Why I'm Interested in Bitcoin

#112

Post by drinkzima »

One important fact that seems to be getting ignored with payment fees is that credit cards have much higher fees than debit/ATM cards.

If bitcoin intends to be a cash-like currency, the more apt fee comparison would be swiping ATM cards, which are much closer to 1% (rather than credit card fees of 2.5%+).

Re: Why I'm Interested in Bitcoin

#113

Post by andrewfong »

cdixon wrote: post #12
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…

Here's one model that could work. Think of Bitcoin as analogous to physical cash. Cash = small casual payments in offline world. Bitcoin = small casual payments in online world. (btw, the original Bitoin paper says this pretty explicitly). I don't keep my savings in (physical) cash. I keep some spending money there. Similarly you will have your internet spending money. You'll converts to and from USD occasionally but…

The analogy doesn't work perfectly because there is usually no cost to withdrawing and depositing cash from an ATM. And when there is a fee, it tends to be fixed as opposed to percentage-based. These may very well be solveable problems, but there's definitely a bit of work to do to make bitcoins function like pocket cash.

Re: Why I'm Interested in Bitcoin

#114

Post by thisosound »

dublinben wrote: post #88
logicallee wrote: post #31

Earlier quoted context omitted.

what do you do if you're a real retailer and someone says : "Hey one of your customers last week paid you with cash that was stolen from me!" The answer is: "Well go report the stolen cash, we have no idea how to help you." It's just the nature of cash that it works that way. People need to / will learn the nature of bitcoin, whatever that is exactly.

That's a significant reason why many people do not use cash for all their purchases. The consumer protection of credit cards is one of their primary benefits. Bitcoin takes away all of those protections.

But the fees are a lot lower and it doesn't mean that those protections can't be added back on on a different layer. You can also do a lot more with Bitcoin than with CCs.

Re: Why I'm Interested in Bitcoin

#115

Post by [deleted] »

steveklabnik wrote: post #110
quack wrote: post #86

Earlier quoted context omitted.

> 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.

[deleted]

Re: Why I'm Interested in Bitcoin

#116

Post by quack »

foley wrote: post #95
wsxcde wrote: post #59

Earlier quoted context omitted.

Maybe this is an issue for you, but I don't see this as compelling advantage.

I've been working on a Bitcoin card over the past twelve months so I have had a lot of time to think about the benefits and drawbacks of using Bitcoins for everyday transactions and I completely agree with you, no compelling advantage. Besides the obvious problem of the volatile exchange rate there is just no trust in any of the Bitcoin institutions, if I can't trust anyone else to manage my Bitcoins I need to do it…

If someone hacks your netbanking details and sends the money before you realize it the bank most certainly not cover your losses. Debit card fraud transactions have a very short window to report. It's a good thing that you have a 4 digit pin because 4 digits is secure

Bitcoin allows a merchant to recognizing a transaction without considering fraud/KYC. I've sold items on a forum with an escrow moderator and paid 0% in fees. You just cant do that with paypal.

Re: Why I'm Interested in Bitcoin

#117

Post by andrewfong »

drcode wrote: post #80
wsxcde wrote: post #76

Earlier quoted context omitted.

> Yes, the risk of fraudulent creation of bitcoins or of double spending of a well-confirmed bitcoin are essentially zero (assuming no major flaw in the current science of cryptography.) This is a pretty narrow definition of fraud. Credit card fraud isn't caused by double-spending or counterfeit currency. It's caused by people stealing your credit card information. This is akin to people stealing your bitcoin wallet,…

> This is akin to people stealing your bitcoin wallet No it isn't. If I buy something on amazon, I need to enter my credit card information. If I buy something with bitcoins from cointagion.com, I don't need to upload my bitcoin wallet. > Credit card fraud isn't caused by double-spending If I buy some socks on Amazon with my credit card info intended only for buying those socks and a hacker steals this info and then…

> If I buy some socks on Amazon with my credit card info intended only for buying those socks and a hacker steals this info and then uses it to buy a plasma TV at Best Buy, this exactly meets the definition of double spending, and this is exactly what credit card thieves do (and what you can't do with bitcoins.)

That's not double spending. The same "dollar" isn't being spent twice. Credit card theft basically means using someone else's credentials (in this case, a credit card number) to purchase goods. If you get the private key for someone's wallet, you can do the same thing (although it should, in theory, be much harder to do this since there's never any need to share your private key, unlike with credit card numbers).

Re: Why I'm Interested in Bitcoin

#118

Post by steveklabnik »

cdixon wrote: post #85
porter wrote: post #82

Earlier quoted context omitted.

The reason why you carry cash is because you sometimes find yourself in situations where a credit card won't work - tipping the valet, vending machines, car washes, etc. In what cases will bitcoin be better for small transactions online than a credit card? I'm at a loss for examples.

I think the original Bitcoin paper said it well: "small casual payments." To pay online right now, you have to decide: 1) do I trust this vendor 2) do I want to fill out this form with all my info Generally this (plus transaction fees) only make sense for transactions above $10. The vendor responds by trying to build a relationship with you- by building brand trust and by pushing you toward an ongoing relationship (r…

> I think the original Bitcoin paper said it well: "small casual payments."

You can see this with the tipping culture on Reddit. It's helped Dogecoin really take off, because it's pretty trivial to send a small, casual payment to someone.

Re: Why I'm Interested in Bitcoin

#119

Post by nazgulnarsil »

minimax wrote: post #111
johmas wrote: post #68

Earlier quoted context omitted.

We began accepting bitcoin last month and aren't converting all of our bitcoin to dollars. We have several employees who accept their pay in bitcoin. Taking things a bit further, we are optimistic about bitcoin as a payment form with our suppliers as the volatility stabilises. As an example, one of our suppliers is Belgium based and we'd be able to save on the currency exchange with those payments. We've discussed it…

That is certainly an interesting datapoint, though paying your employees in bitcoin... I'm not sure how I feel about that in ethical terms. What would you as an employer do if you paid someone on Friday and on Monday that paycheck only bought half as much bread as it did on Friday? Also doesn't it make income/FICA tax kind of a pain?

The employer as paternal unit paradigm needs to die. If the employee wants to take a risk they are an adult and should judge the merits of the scheme for themselves.

Re: Why I'm Interested in Bitcoin

#120

Post by adventured »

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 agree that inflation has been mild.

http://www.shadowstats.com/alternate_data/inflation-charts

It's only mild if you use their fraudulent CPI accounting, and only if you use the latest version of it, designed solely to hide inflation. If you use the 1980 CPI we're running at 9% inflation, which is not mild at all. In fact, Volcker would have raised rates long ago to fight that level of inflation.

It's exactly the same way they commit fraud in obscuring the real unemployment rate - the U6 - while referring only to the U3 anytime they want to talk about the economy. 14% vs. 6.8% is a dramatic difference, and it only works because they hide the people that have fallen out of the labor force.

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