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Posted on 2/12/14 at 1:43 pm to WikiTiger
quote:
“For me, bitcoin is what I want to have if the zombies walk the earth … I don’t really care about day-to-day fluctuations at all.”
Is this guy planning on electricity being available in the zombie apocalypse?
Posted on 2/12/14 at 1:45 pm to WikiTiger
quote:
Spend $1 with Bitcoin, earn triple Points.
Or I can just keep my Amex or Sapphire card... Get 2-5% back depending on the promotion, plus the additional 7% at the end of the year
Also, be guaranteed that if my card is compromised, I am 100% made whole.
I'm not against Bitcoin, just don't see the point of it in my life at this point.
Posted on 2/12/14 at 1:46 pm to WikiTiger
It seems the sellers are setup to make money no matter the current exchange rate at time of purchase. It's the consumer that is taking all the risk while making purchases with bitcoin and its uncontrollable volatility. I nice washer/dryer combo a month ago would have cost 1 coin, today it would be closer to 2 coins....next month it may be 1/2 a coin.
Am I looking at this wrong?
Am I looking at this wrong?
Posted on 2/12/14 at 1:51 pm to StinkBait72
quote:
It seems the sellers are setup to make money no matter the current exchange rate at time of purchase. It's the consumer that is taking all the risk while making purchases with bitcoin and its uncontrollable volatility. I nice washer/dryer combo a month ago would have cost 1 coin, today it would be closer to 2 coins....next month it may be 1/2 a coin.
Am I looking at this wrong?
No, you aren't looking at it wrong. That is the reality of the bitcoin economy at this point in time.
The question to ask is whether or not you think it will be that way forever. What do you think the global economy will determine to be the stable price of bitcoin and when do you think it will make that determination?
I don't begrudge anyone for sitting on the sidelines right now to wait to see how this all plays out, but for those of us willing to get a little dirty, it can be a fun adventure.
Posted on 2/12/14 at 3:21 pm to WikiTiger
Thanks for the answer. I simply do not see the value at this time for merchants since the exchange rate is so volatile, nor do I see the value for consumers when there is no fraud protection or warranties that are implicit with credit cards these days.
Don't get me wrong, I understand the "lower fees" pitch, but it still comes with a significant amount of risk for the merchant.
Don't get me wrong, I understand the "lower fees" pitch, but it still comes with a significant amount of risk for the merchant.
Posted on 2/12/14 at 6:06 pm to LSURussian
quote:
LSURussian
Holy shite, that was known across bitcoin message boards (including being the top thread on r/bitcoin) at the time you posted it.
Conveniently, nothing is said about "double spending" which was included in what you posted that you saw on the Trollbox.
Posted on 2/12/14 at 6:08 pm to slackster
quote:
. I simply do not see the value at this time for merchants since the exchange rate is so volatile
Merchants do not have to worry about exchange rates thanks to companies like BitPay and Coinbase.
There incentive is in marketing to a unique demographic. If you could add to your customer base without taking on any additional cost, would you?
Posted on 2/12/14 at 6:23 pm to joshnorris14
quote:
joshnorris14
Herp derp....
Posted on 2/12/14 at 6:41 pm to joshnorris14
So a company like BitPay or Coinbase will exchange BTC for USD without any spread? No one in the world exchanges currencies without some sort of spread between the bid and ask, so why would they? Either the customer or the merchant is going to pay for that spread, and I don't see why either would want to do so.
Plus, literally in the middle of a transaction, BTC could and often does gain/lose 10% of its value. Why would a merchant exposé itself to such chance?
Now, if a merchant wants to put a BTC to USD ATM in their store, I don't see the problem. That would open up the store to a new demographic without the hassle of "accepting" BTC directly.
Honestly, I don't really see any of this as a "victory" for BTC until merchants are pricing items in BTC, accepting BTC, and storing it as BTC. Until then, BTC is just an unnecessary step for what boils down to a USD transaction.
Plus, literally in the middle of a transaction, BTC could and often does gain/lose 10% of its value. Why would a merchant exposé itself to such chance?
Now, if a merchant wants to put a BTC to USD ATM in their store, I don't see the problem. That would open up the store to a new demographic without the hassle of "accepting" BTC directly.
Honestly, I don't really see any of this as a "victory" for BTC until merchants are pricing items in BTC, accepting BTC, and storing it as BTC. Until then, BTC is just an unnecessary step for what boils down to a USD transaction.
Posted on 2/12/14 at 6:54 pm to slackster
quote:
So a company like BitPay or Coinbase will exchange BTC for USD without any spread? No one in the world exchanges currencies without some sort of spread between the bid and ask, so why would they? Either the customer or the merchant is going to pay for that spread, and I don't see why either would want to do so.
Plus, literally in the middle of a transaction, BTC could and often does gain/lose 10% of its value. Why would a merchant exposé itself to such chance?
BitPay and Coinbase assume that risk.
They both maintain their own exchange rates based on internally developed algorithms that take into account multiple exchanges.
When a purchase is made, the bitcoin price is derived from the USD price set by the merchant and presented to the customer. They will honor that exchange rate for 15 minutes (I think it's 15, will look for verification), after which the calculation will have to be performed again.
Check out page 9 of their API documentation for a description of how they determine their exchange rate: LINK (PDF)
Here's a direct link to the current BitPay exchange rate: https://bitpay.com/api/rates/usd
I understand your concerns, but don't you think that the people involved in these companies, both of which have already received pretty hefty venture capital investments, have done their homework and figured out a way to have a successful business model?
This post was edited on 2/12/14 at 6:55 pm
Posted on 2/12/14 at 6:59 pm to WikiTiger
I think he's challenging the assumption that there is no spread.
This post was edited on 2/12/14 at 7:00 pm
Posted on 2/12/14 at 7:16 pm to slackster
quote:
Honestly, I don't really see any of this as a "victory" for BTC until merchants are pricing items in BTC, accepting BTC, and storing it as BTC. Until then, BTC is just an unnecessary step for what boils down to a USD transaction.
It is a victory. Bitcoin cannot become something that goods are priced in until it develops as a transaction network. If businesses assume no risk (Which is the amount they assume when using BitPay or Coinbase) more and more business will begin to accept bitcoin (even if they immediately exchange for USD).
Once business are capable of B2B transactions in bitcoin then you will start seeing them hold some bitcoin.
Take it a step further and they will start to price in bitcoin.
You can't just jump to the final stage without developing first.
Posted on 2/12/14 at 7:51 pm to joshnorris14
LINK
quote:
Despite all the hype, the Bitcoin community is probably not large. It is hard to tell how many people actually use Bitcoins. Attempts at producing an estimate are decidedly unscientific, because people use multiple addresses for transactions. According to Blockchain.info, more than 140,000 addresses are now in use to process an average of 60,000 transactions per day, roughly the same number as a year ago and about 0.1 percent the number handled by MasterCard.
The current level of Bitcoin activity is low enough that a few thousand "invested" individuals can prop up the exchange rate. For outsiders, however, it looks increasingly as though Bitcoin should be viewed as an experiment, a test case.
Other electronic currencies will rise, and be more widely accepted, after all the regulatory and technical issues are resolved.
Posted on 2/12/14 at 8:02 pm to LSURussian
quote:
roughly the same number as a year ago
Sounds like its dying, but just not quite dead
Posted on 2/12/14 at 8:27 pm to WikiTiger
quote:How much capital do these companies have? Bigger outfits than them have gone belly up when conditions change for the worse. What would have happened if the guy willing to sell his mansion for Bitcoins sold it for 9,000 Bitcoins when Bitcoins were trading for $1,000 per Bitcoin, but BitPay or Coinbase couldn't convert them to dollars until the price collapsed to $500 per Bitcoin? BitPay or Coinbase would have been obligated to pay the mansion seller $9 million in U.S. dollars. They would only have been able to sell the 9,000 Bitcoins for $4.5 million. They would have had to come up with $4.5 million of cash from somewhere to meet their obligation. Could they handle it?
BitPay and Coinbase assume that risk.
I shouldn't have to provide examples of companies that have been in the assumption of risk business who failed when their capital was insufficient to cover losses from unanticipated events.
Posted on 2/12/14 at 10:02 pm to LSURussian
quote:
Despite all the hype, the Bitcoin community is probably not large. It is hard to tell how many people actually use Bitcoins. Attempts at producing an estimate are decidedly unscientific, because people use multiple addresses for transactions. According to Blockchain.info, more than 140,000 addresses are now in use to process an average of 60,000 transactions per day, roughly the same number as a year ago and about 0.1 percent the number handled by MasterCard.
If you understood how bitcoin commerce works right now you'd realize why this isn't very indicative of how many transactions are handled per day.
By far the most popular wallet is Coinbase. Coinbase to Coinbase transactions do not appear on the blockchain.
This post was edited on 2/12/14 at 10:03 pm
Posted on 2/12/14 at 10:10 pm to joshnorris14
If you understood how to comprehend written English you would know I didn't write that paragraph. I linked the article from Bloomberg.
And so you're admitting that the wonderful, futuristic bitcoin network which is touted as removing third parties for buying and selling over the internet actually has to rely on a third party like coinbase to complete a significant % of its transactions?
Seems like circular logic to me.
And so you're admitting that the wonderful, futuristic bitcoin network which is touted as removing third parties for buying and selling over the internet actually has to rely on a third party like coinbase to complete a significant % of its transactions?
Seems like circular logic to me.
This post was edited on 2/12/14 at 10:17 pm
Posted on 2/12/14 at 10:31 pm to joshnorris14
quote:
By far the most popular wallet is Coinbase. Coinbase to Coinbase transactions do not appear on the blockchain.
Is coinbase audited on a regular basis to ensure they aren't creating fake btc?
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