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> Let’s say you sell electronics online. Profit margins in those businesses are usually under 5%, which means the 2.5% payment fees consume half the margin. That’s money that could be reinvested in the business, passed back to consumers, or taxed by the government. Of all of those choices, handing 2.5% to banks to move bits around the Internet is the worst possible choice. In other words, better wealth distribution?…
> Let’s say you sell electronics online. Profit margins in those businesses are usually under 5%, which means the 2.5% payment fees consume half the margin. That’s money that could be reinvested in the business, passed back to consumers, or taxed by the government. Of all of those choices, handing 2.5% to banks to move bits around the Internet is the worst possible choice. In other words, better wealth distribution?…
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…
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…
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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…
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
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...currently. I don't think most people are interested in Bitcoin primarily because of the utility it currently provides and the infrastructure that has so far been built.
And that's unfortunate. It's interesting and somewhat satisfying to see the get-rich-quick people kind of people try to get into Bitcoin, and instead get burned. There is merit to the system, but a lot of people just don't care.
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…
Also, your ideas about an AI-directed or general-consensus utopia are nice but naive. People don't usually agree on what utility function you'd want to maximize, as there is no "right way" for a lot of things that matter to people. Would your Bitcoinish utopia allow late-term abortions? Or school prayer? Or same-sex marriage? Politics is a constant battle of values, many of them are deeply emotional.
But Dixon's idea of Bitcoin as internet pocket-money is actually something I can live with.
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Such an online marketplace should have an escrow included then if they wish to use Bitcoin as a payment method. I believe the Silk Road(s) have used such systems.
So now the online marketplace has to run an escrow service as well. If they're going to do that, why not run an escrow service for credit card transactions? You pay the marketplace, the seller ships the goods, you confirm that you got them (or the seller proves that the shipment took place), and then the marketplace pays the seller. I don't see how Bitcoin really provides any innovation that isn't already available i…
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 it's built on top of a pull payment network instead of a push payment network.