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Why I'm Interested in Bitcoin

cdixon.org

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Re: Why I'm Interested in Bitcoin

#81

Post by otterley »

waterlesscloud wrote: post #48
mbesto wrote: post #33

Earlier quoted context omitted.

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?

Currently our choice is to pay the fee to the banks for convenience they provide. If it's possible to provide the same convenience without the banks and with much lower fees, is that not an improvement?

The fee isn't just a "convenience" fee. A significant proportion of the 2.5% overhead is fraud insurance.

Re: Why I'm Interested in Bitcoin

#82

Post by porter »

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 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.

Re: Why I'm Interested in Bitcoin

#83

Post by conception »

porter wrote: post #82
cdixon wrote: post #12

Earlier quoted context omitted.

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 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.

Really small transactions (eg the reddit bitcoin tipbot, small website donations, payment for content) for one. iTunes tries it aggregate transactions to lower credit card fees, with bitcoin, you wouldn't need to do that.

Re: Why I'm Interested in Bitcoin

#84

Post by robinhoode »

porter wrote: post #82
cdixon wrote: post #12

Earlier quoted context omitted.

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 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.

Micropayments is one obvious example. Credit card fees make micropayments very difficult. I'm sure there are workarounds, but that's only one possible use-case for Bitcoin. There are more that have yet to be invented.

Re: Why I'm Interested in Bitcoin

#85

Post by cdixon »

porter wrote: post #82
cdixon wrote: post #12

Earlier quoted context omitted.

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 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 (recurring payments, creating an account etc). This is why "cards on file" is considered a major business asset online.

As a result, any online service that doesn't make the cut is forced to resort to an advertising based business model.

Re: Why I'm Interested in Bitcoin

#86

Post by quack »

steveklabnik wrote: post #51
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…

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 intention of purchasing. With BTC you can verify that a bidder is able to pay for an item, and you can immediately hold the funds in escrow. There is no "overcharging" a Bitcoin account.

> As a consumer, the irreversability of BTC transactions is a bug, not a feature.

Bullshit. Credit card companies are paying people with their own fat. The 3% cashback that you get on purchases for gas and food comes from the profit theyre making on top of that. Many local stores give cash discounts when buying goods, and some refuse to accept cards because they are so expensive.

> It's only when certain financial instruments are built on top of Bitcoin that have the same kinds of consumer protection and regulatory compliance built in.

We dont need your middlemen. I dont need an account to hold my funds when I sell an item online. I dont want to give eBay, paypal, et al, a unilateral authority to withdraw from my bank accounts.

Re: Why I'm Interested in Bitcoin

#87

Post by natrius »

aggronn wrote: post #77
MrBlue wrote: post #74

"... I’m a lifelong Democrat who supported Obama in the last two elections. I think the Federal Reserve plays an important function..." I stopped reading here.

Regardless of what any armchair economist thinks about the federal reserve, how can you love bitcoin as a currency if you think that the fed 'plays an important function'?

I think the Fed plays an important function, but I also think that paper money won out over gold only because it was much easier to spend and verify. Otherwise, gold's track record as a store of value is clearly better. I think Bitcoin could outcompete the dollar, and if it does, central banking will end regardless of how I feel about it.

Re: Why I'm Interested in Bitcoin

#88

Post by dublinben »

logicallee wrote: post #31
diminoten wrote: post #5

Earlier quoted context omitted.

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.

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.

Re: Why I'm Interested in Bitcoin

#89

Post by dragontamer »

bluedino wrote: post #56
wsxcde wrote: post #49

Earlier quoted context omitted.

I'm sorry, I don't follow. I don't keep my savings in cash, but I can withdraw as much cash as I could reasonably want at zero cost from my bank. How can I do this (i.e., USD->spending money conversion for free) with Bitcoin? Also, are you making an assumption that the volatility of Bitcoin USD will go away at some point in the future? If that happens, keeping Bitcoin around instead of USD will become reasonable. > B…

>> I don't keep my savings in cash, but I can withdraw as much cash as I could reasonably want at zero cost from my bank. And once you are over a certain amount, the government finds out.

http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/23...

BTC is no different. In fact, all transactions are public in BTC due to the nature of the public crypto system.

Re: Why I'm Interested in Bitcoin

#90

Post by Guvante »

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…

Huge issue with that model, while cash has a fixed value against a fiat currency that is known to be stable, bitcoins have a fixed value against a commodity that is known for being unstable.
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