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Why I'm Interested in Bitcoin

cdixon.org

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Re: Why I'm Interested in Bitcoin

#31

Post by logicallee »

diminoten wrote: post #5
quack wrote: post #2

I used to believe that the reversibility of transactions was a major benefit of using cards, but it turns out that is really just a reversibility of liability. Credit cards are an outdated tool. They pass plain text data about a user to authorize a transaction allowing hackers to pull something off like the Target hack. One of the advantages of bitcoin is the ability to digitally authorize a transaction that cannot b…

As an online retailer, what do you do if someone reports fraud? Shrug your shoulders and tell them they should have been more careful with their wallet? If Bitcoin == cash, what does a storefront do if someone comes to them and says "my stolen cash was used to buy items here"? Usually nothing, yes? Is that what we're saying is the burden of responsibility for an online store with Bitcoin?

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.

Re: Why I'm Interested in Bitcoin

#32

Post by tomasien »

I know it's not quite "not relying on banks and credit card companies", but removing ONE of them from the equation (credit cards skimming fees) is what I'm working on now. This is how it works https://www.youtube.com/watch?v=QR5UTLxe5zA&feature=youtu.be

By removing them and decentralizing the banking process by centralizing it into a third party (which could be many third parties), I think we'll allow anyone who wants to start a bank of any size to compete for marketshare with the big boys by providing better services.

Re: Why I'm Interested in Bitcoin

#33

Post by mbesto »

sliverstorm wrote: post #18
mbesto wrote: post #15

> 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?…

Payment fees typically go to Visa or MasterCard, I thought. And considering the financials of those companies, operating the existing payment networks must be costly- both companies are growing & profitable, but not nearly as much as you might expect if the payment networks were zero-cost to operate.

Ya, agreed. I think this statement sticks out the most: Of all of those choices, handing 2.5% to banks to move bits around the Internet is the worst possible choice.

Regardless of whether its a bank or a credit card processing company, why is it the "worst possible choice" to give it to them? Who are we to judge who gets $1 when we are the ones who chose to spend the $1 in the first place?

Re: Why I'm Interested in Bitcoin

#34

Post by Sambdala »

gizmo686 wrote: post #11
quack wrote: post #2

I used to believe that the reversibility of transactions was a major benefit of using cards, but it turns out that is really just a reversibility of liability. Credit cards are an outdated tool. They pass plain text data about a user to authorize a transaction allowing hackers to pull something off like the Target hack. One of the advantages of bitcoin is the ability to digitally authorize a transaction that cannot b…

There is no reason we cannot have credit card like things that do not pass plain text authorization. I believe some places have already switched to useing smart cards which leverage cryptography to proved identification without revealing the secret. I'm not sure exactly what crypto is used in practice, but as a proof of concept you can imagine this being done with normal public key chryptography.

The only reason is that credit card companies haven't implemented such a system.

I'm actually shocked that we've been able to use our current pull payments system for so long without more problems than we've currently seen.

One innovation I did like (which I only saw when I was using Bank of America) was a feature that allowed you to create new, internet-only, credit card numbers on the fly with a self-chosen credit limit that was tied to your checking account. I would have loved to see this implemented in a physical card so that you could just use a different cc# for each separate transaction and only authorize it (in perpetuity) for the exact amount of the transaction.

Re: Why I'm Interested in Bitcoin

#35

Post by tvladeck »

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.

Thanks for the response. I hope so too! I work in climate policy so unlikely to come from me, but will keep the thought in mind if my hacker friends start getting on it.

Re: Why I'm Interested in Bitcoin

#36

Post by analog31 »

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…

In my view, if anybody could upset the monopoly of Visa and MasterCard by creating a new payment system with lower fees, they could do so today using dollars.

Bitcoin isn't the missing piece of this puzzle. In fact I suspect Bitcoin would be an obstacle, due to lack of public confidence.

Re: Why I'm Interested in Bitcoin

#37

Post by nicholas73 »

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 artificial supply limitation. That in itself is not a solution because its monetary base cannot possibly grow at the rate overall goods do, and thus have a stable price point.

Re: Why I'm Interested in Bitcoin

#38

Post by rhino369 »

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…

But internet transactions for most people are a one way street. You still have to pay the fees to go from USD to bitcoin for all the bitcoin you have.

Also, this exposes you to crazy risk because of price fluctuation. Bitcoin has fluctuated over 3% today, and today is a relatively flat day for it.

Re: Why I'm Interested in Bitcoin

#40

Post by BlackDeath3 »

Sambdala wrote: post #26
BlackDeath3 wrote: post #14

Earlier quoted context omitted.

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.

I'm not entirely sure what point you're making?

You seemed to be implying that most peoples' interest in BTC is related more to its inflating exchange than anything else. I was remarking that I like to see willful ignorance, people who care not about actually understanding BTC, be punished for it.

At any rate, there need not be any point to what I'm saying. Sometimes, a comment is just a comment.

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