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re: An IMHO excellent piece on bitcoin
Posted on 4/3/13 at 1:47 pm to Meauxjeaux
Posted on 4/3/13 at 1:47 pm to Meauxjeaux
quote:
So is ours, with inflation.
Um, that's negative Ghostrider. For an obvious example, consider that most personal computers cost $1000 or more in 1990. Now you can get one that is *enormously* more capable for $400 in 2013 dollars. Hell, I remember it cost nearly 2-3 hundred just to buy a hard drive with all of 50MB of capacity. You can get a 4MB thumb drive for the price of a cup of coffee now.
1
Posted on 4/3/13 at 1:55 pm to LSURussian
quote:
It might be lower now than it was in 2007, but 1990?? I don't think so.
I guess It could be true if you cherry pick certain socioeconomic groups or people in industries like manufacturing, but yeah, we're definitely better off today, even as we crawl out of the Great Recession.
Posted on 4/3/13 at 2:04 pm to WikiTiger
quote:
I think it was just last week in a bitcoin thread where foshizzle was arguing that bitcoin is a good thing for people in countries like Cyprus or other countries with a kleptocratic government.
Yeah, it was something like that. The gist of it is that if you are subject to a kleptocratic government that is liable to seize your bank-deposited assets then having bitcoins to stash assets makes sense. The thing about bitcoins is that you are able to secure it yourself. The problem of course is that it does require a bit of technical savvy to do so - not very much but certainly more than Joe Sixpack possesses.
Using bitcoins purely as a medium of exchange also makes sense if you are trading in stuff that is illegal on Silk Road. But otherwise dollars and credit cards are better IMHO, there basically isn't anything legal that you can't get that way. Bitcoins are not *necessary* for this purpose, it's an example of where "good enough" isn't good enough to make people want to switch.
Posted on 4/3/13 at 2:10 pm to foshizzle
quote:
But otherwise dollars and credit cards are better IMHO, there basically isn't anything legal that you can't get that way. Bitcoins are not *necessary* for this purpose, it's an example of where "good enough" isn't good enough to make people want to switch.
This is where I disagree. As a merchant, if you offer both credit card and bitcoin purchase options, you will end up paying about 3% to the CC processor for the credit card purchase, whereas bitcoin purchases will be free or a US penny or two if you manage the system in house. If you use a bitcoin payment processor like BitPay, your fees will be something like 0.99% of the purchase price. Plus with bitcoin you don't have to worry about chargebacks, which are a benefit to the merchant.
So there can be significant financial benefits to using bitcoin over CC's.
Posted on 4/3/13 at 2:14 pm to WikiTiger
quote:For the seller, not the buyers.
So there can be significant financial benefits to using bitcoin over CC's.
Posted on 4/3/13 at 2:15 pm to WikiTiger
I still find it baffling that people with a merchant account have to pay freaking percentage of the purchase price. It doesn't cost anymore to process a $10K transaction than it does a $10 transaction.
Posted on 4/3/13 at 2:16 pm to LSURussian
quote:
For the seller, not the buyers.
Precisely. In my other thread I also agreed that chargebacks can be a problem for sellers.
But buyers don't care about this. Sure, if enough merchants were to band together they could offer a slightly lower price in bitcoins to reflect the savings but I will go out on a limb and bet that Joe Sixpack will never make the switch, he's perfectly happy swiping his card.
Posted on 4/3/13 at 2:16 pm to ZereauxSum
quote:
I still find it baffling that people with a merchant account have to pay freaking percentage of the purchase price. It doesn't cost anymore to process a $10K transaction than it does a $10 transaction.
Perhaps a collusive industry like credit card processing is ripe for disruption.
Posted on 4/3/13 at 2:19 pm to foshizzle
quote:
But buyers don't care about this. Sure, if enough merchants were to band together they could offer a slightly lower price in bitcoins to reflect the savings but I will go out on a limb and bet that Joe Sixpack will never make the switch, he's perfectly happy swiping his card.
We might actually see this play out IRL as stores begin adjusting prices due to changes in laws that now allow them to charge different prices for credit card vs. cash purchases.
A 4% Surcharge for Using a Credit Card?! Now Legal — but Not Likely
We'll see if it happens or not. I heard that convenience stores may be some of the first to actually do this since they often make very little on a purchase when a credit card is used.
This post was edited on 4/3/13 at 2:35 pm
Posted on 4/3/13 at 2:20 pm to WikiTiger
quote:
This is where I disagree. As a merchant, if you offer both credit card and bitcoin purchase options, you will end up paying about 3% to the CC processor for the credit card purchase, whereas bitcoin purchases will be free or a US penny or two if you manage the system in house. If you use a bitcoin payment processor like BitPay, your fees will be something like 0.99% of the purchase price. Plus with bitcoin you don't have to worry about chargebacks, which are a benefit to the merchant.
This may be true, but do you expect to see enough merchants offering this discount back to their consumers? As a consumer, if I offer to pay cash for 99.9% of my normal transactions, I am not offered a discount from the merchant.
Posted on 4/3/13 at 2:22 pm to ZereauxSum
quote:The merchant discount is not just to cover the transaction costs.
I still find it baffling that people with a merchant account have to pay freaking percentage of the purchase price. It doesn't cost anymore to process a $10K transaction than it does a $10 transaction.
It also covers the cost of funds advanced to the merchant, the cost of guaranteeing the funds (as opposed to the buyer giving the merchant a check which might bounce and which the merchant then has to collect on) or the risk of having to maintain large cash amounts on premises, and the immediate credit the merchant receives to his bank account with his bank.
Many merchants negotiate a maximum discount $ amount on large purchases or they receive a scaled back discount % on larger purchases.
Posted on 4/3/13 at 2:23 pm to Waffle House
quote:
This may be true, but do you expect to see enough merchants offering this discount back to their consumers? As a consumer, if I offer to pay cash for 99.9% of my normal transactions, I am not offered a discount from the merchant.
I'd assume that a business would make every attempt to be competitive, and if that meant offering consumers a lower price because their operating costs are now lower, then they probably will.
But maybe I'm just a naive free marketer
Posted on 4/3/13 at 2:24 pm to Waffle House
quote:
I am not offered a discount from the merchant.
Yeah the only time cash discount are given are for when the owner is actually conducting the transaction. You have to remember that cash is also ripe for theft... probably just like bit-coins will be by your employees.
Posted on 4/3/13 at 2:25 pm to WikiTiger
quote:
I'd assume that a business would make every attempt to be competitive, and if that meant offering consumers a lower price because their operating costs are now lower, then they probably will.
But maybe I'm just a naive free marketer
My point is they have this opportunity right now, to offer these discounts to customers paying in cash, and yet they don't.
Posted on 4/3/13 at 2:27 pm to C
quote:
You have to remember that cash is also ripe for theft... probably just like bit-coins will be by your employees.
A properly setup bitcoin POS system would not give employees access to the bitcoin private keys, so how would they steal any bitcoins?
This post was edited on 4/3/13 at 2:28 pm
Posted on 4/3/13 at 2:28 pm to Waffle House
quote:
My point is they have this opportunity right now, to offer these discounts to customers paying in cash, and yet they don't.
Actually, according to the article I linked earlier, merchants didn't have that ability until Jan. 27 of this year, and they still don't have that ability in 10 states.
Let's see how this all plays out.
This post was edited on 4/3/13 at 2:29 pm
Posted on 4/3/13 at 2:33 pm to LSURussian
quote:
It also covers the cost of funds advanced to the merchant, the cost of guaranteeing the funds (as opposed to the buyer giving the merchant a check which might bounce and which the merchant then has to collect on) or the risk of having to maintain large cash amounts on premises, and the immediate credit the merchant receives to his bank account with his bank.
That's a good point. I've actually never thought about it that way.
It just sucks that I feel guilty about swiping to pay for a snickers bar at the gas station because I know the merchant is getting hosed. I guess I'd just like to see more innovation when it comes to day-to-day transactions, which is why I find bitcoin so interesting ( even though I'm skeptical of wide-scale adoption).
Posted on 4/3/13 at 2:34 pm to WikiTiger
quote:
so how would they steal any bitcoins?
how does a shop clerk know I've actually paid in bitcoins today?
Posted on 4/3/13 at 2:34 pm to LSURussian
quote:
CPI Inflation Calculator
$ 100.00
in 1990
Has the same buying power as:
$177.63
in 2013
LINK
Not sure wages have kept up with that figure.
I found some other stuff, but it's like 79-2010, rather than 1990. Will keep looking.
Posted on 4/3/13 at 2:36 pm to Meauxjeaux
quote:
Not sure wages have kept up with that figure.
I imagine skilled positions have more than kept up.
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