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A Bitcoin Battle Is Brewing

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Re: A Bitcoin Battle Is Brewing

#21

Post by daveytea »

nickthemagicman wrote: post #18
danbruc wrote: post #17

Earlier quoted context omitted.

All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?

I was trying to think of a good answer but you're right. The key advantages are decentralization and anonymity and to the average person who just wants a simple secure payment solution a credit card has all the advantages.

Bitcoin is not anonymous and not meant to be. It never will be and shouldn't be to gain widespread adoption.

For the average person, I can list a few reasons: - near immediate transfer of money across international borders - close to zero fees or greatly reduced fees when transferring money internationally - safe and secure store of value (for the unbanked)

Then there are the future killer apps that will be created - tipping on the internet (changeTip / Coinbase) - programatic money - smart contracts - pure play digital banking - ??

It's hard to see how bitcoin could apply to the general public sitting at your computer in a first world country. But keep in mind there are nearly 5 billion unbanked or unserved people in the world where bitcoin (or similar) will change their life.

Re: A Bitcoin Battle Is Brewing

#22

Post by pbreit »

ghshephard wrote: post #20
danbruc wrote: post #17

Earlier quoted context omitted.

All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?

Bitcoin is awesome for anybody who needs to send money to family back home. And there are a lot of people who do that - and it's very expensive.

They are good for a range of things including cross-border and micro txns.

Re: A Bitcoin Battle Is Brewing

#23

Post by natrius »

danbruc wrote: post #17
ThomPete wrote: post #11

Earlier quoted context omitted.

Replace bitcoin in what you just said with internet, VOIP, airplanes, ipod and you got a pretty solid template for historic underestimations of technology in the long run.

All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?

Bitcoin transactions are cheaper than credit card transactions. Using the card networks exposes merchants to chargeback fraud, but since the internet now has cash, many merchants can transact with wide swaths of the globe that they previously avoided. Remittances. Capital controls.

No one's telling you to switch to Bitcoin, but it's clear that lots of people are going to use it.

Re: A Bitcoin Battle Is Brewing

#24

Post by cheald »

danbruc wrote: post #17
ThomPete wrote: post #11

Earlier quoted context omitted.

Replace bitcoin in what you just said with internet, VOIP, airplanes, ipod and you got a pretty solid template for historic underestimations of technology in the long run.

All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?

I'm no bitcoin apologist, but off the top of my head:

1. Due to Bitcoin's cash-esque nature, you don't hand over your account keys when you make a transaction. Every time I hand my credit card to a 16-year-old waiter I'm trusting that he's not going to take a quick picture of it with his cell phone to go shopping with online later. Since a Bitcoin transaction encodes a specific transfer of a specific amount from one address to another, I don't have to worry that that transaction is going to get leaked down the road (/stolen at an ATM/gas station/POS terminal) and end up putting my entire financial stability at risk.

2. Credit card processing fees inhibit a lot of services that could be microtransaction-based from becoming reality, because they aren't financially viable to run once you consider transaction fees. Bitcoin opens opportunities for a huge range of services that are only viable with minimal transaction fees to become reality.

Re: A Bitcoin Battle Is Brewing

#25

Post by danbruc »

daveytea wrote: post #21
nickthemagicman wrote: post #18

Earlier quoted context omitted.

I was trying to think of a good answer but you're right. The key advantages are decentralization and anonymity and to the average person who just wants a simple secure payment solution a credit card has all the advantages.

Bitcoin is not anonymous and not meant to be. It never will be and shouldn't be to gain widespread adoption. For the average person, I can list a few reasons: - near immediate transfer of money across international borders - close to zero fees or greatly reduced fees when transferring money internationally - safe and secure store of value (for the unbanked) Then there are the future killer apps that will be created -…

Fast transfer, agreed. Cost per transaction is currently between 10 and 20 dollars and has been close to 100 dollars. I don't know what a wire transfer costs but I don't think the advantage is huge if you are only transferring a couple hundred or a few thousand dollars. Safe and secure store - taking malware, hacked exchanges, price fluctuations and the like into account, I am not sure it looks really bright. Future killer apps - let's talk again, when they are real. And tipping, for example, does not look like it could work - transactions are way to expensive to be used to tip a dollar. And when it comes to unbanked people I am not sure that it would be better or easier for them to adopt Bitcoin instead of a traditional banking system.

Re: A Bitcoin Battle Is Brewing

#26

Post by danbruc »

cheald wrote: post #24
danbruc wrote: post #17

Earlier quoted context omitted.

All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?

I'm no bitcoin apologist, but off the top of my head: 1. Due to Bitcoin's cash-esque nature, you don't hand over your account keys when you make a transaction. Every time I hand my credit card to a 16-year-old waiter I'm trusting that he's not going to take a quick picture of it with his cell phone to go shopping with online later. Since a Bitcoin transaction encodes a specific transfer of a specific amount from one…

Not sure about the situation elsewhere but here in Germany credit card usages usually requires a PIN or a signature. And the credit card company will pay for abuse if you are not responsible.

With transaction costs currently between 10 and 20 dollars per transaction and with a record of close to 100 dollars it does not really look like a good way to implement micro transactions.

Re: A Bitcoin Battle Is Brewing

#27

Post by danbruc »

natrius wrote: post #23
danbruc wrote: post #17

Earlier quoted context omitted.

All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?

Bitcoin transactions are cheaper than credit card transactions. Using the card networks exposes merchants to chargeback fraud, but since the internet now has cash, many merchants can transact with wide swaths of the globe that they previously avoided. Remittances. Capital controls. No one's telling you to switch to Bitcoin, but it's clear that lots of people are going to use it.

Bitcoin transactions are way more expensive than you think, currently between 10 and 20 dollars.

Re: A Bitcoin Battle Is Brewing

#28

Post by natrius »

danbruc wrote: post #27
natrius wrote: post #23

Earlier quoted context omitted.

Bitcoin transactions are cheaper than credit card transactions. Using the card networks exposes merchants to chargeback fraud, but since the internet now has cash, many merchants can transact with wide swaths of the globe that they previously avoided. Remittances. Capital controls. No one's telling you to switch to Bitcoin, but it's clear that lots of people are going to use it.

Bitcoin transactions are way more expensive than you think, currently between 10 and 20 dollars.

Let's say I'm buying an Overstock rug with bitcoins. I do an instant buy with Circle and and send the bitcoins over. Am I paying $10-$20? Is Overstock?

Block rewards have no effect on whether people will use Bitcoin, especially since there are other digital currencies that don't have that issue. Inasmuch as it's a problem, it's fixable.

Re: A Bitcoin Battle Is Brewing

#29

Post by waterlesscloud »

danbruc wrote: post #27
natrius wrote: post #23

Earlier quoted context omitted.

Bitcoin transactions are cheaper than credit card transactions. Using the card networks exposes merchants to chargeback fraud, but since the internet now has cash, many merchants can transact with wide swaths of the globe that they previously avoided. Remittances. Capital controls. No one's telling you to switch to Bitcoin, but it's clear that lots of people are going to use it.

Bitcoin transactions are way more expensive than you think, currently between 10 and 20 dollars.

Huh? The current fee is about 4 cents.

Re: A Bitcoin Battle Is Brewing

#30

Post by danbruc »

waterlesscloud wrote: post #29
danbruc wrote: post #27

Earlier quoted context omitted.

Bitcoin transactions are way more expensive than you think, currently between 10 and 20 dollars.

Huh? The current fee is about 4 cents.

Not the fee, the costs, block reward divided by transactions in the block. Miners will use that to cover their electricity bills and you are paying for this indirectly when you buy Bitcoins.
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