Bitcoin Forum

Here is a video of my presentation this weekend at the Bitcoin Summit in Philadelphia.

If you are looking for talking points and simplified examples to talk to businesses about bitcoin, you will really find value in this video.

http://www.youtube.com/watch?v=hH4rH6wu25U (http://www.youtube.com/watch?v=hH4rH6wu25U)


EDIT: Sources for some of the material:

LexisNexis True Cost of Fraud

2011 http://lexisnexis.com/risk/downloads/whitepaper/tcf_2011.pdf (http://lexisnexis.com/risk/downloads/whitepaper/tcf_2011.pdf)
2009 http://www.lexisnexis.com/risk/newsevents/press-release.aspx?Id=1258571377346174 (http://www.lexisnexis.com/risk/newsevents/press-release.aspx?Id=1258571377346174)
(search Google for other years)


Visa Data center with the moat

http://usatoday30.usatoday.com/tech/news/story/2012-03-25/visa-data-center/53774904/1 (http://usatoday30.usatoday.com/tech/news/story/2012-03-25/visa-data-center/53774904/1)


Apple storing 400,000,000 credit card numbers on file for iTunes users

http://bits.blogs.nytimes.com/2012/06/11/apples-stash-of-credit-card-numbers-is-its-secret-weapon/ (http://bits.blogs.nytimes.com/2012/06/11/apples-stash-of-credit-card-numbers-is-its-secret-weapon/)


Apple transmitting AppleID & passwords in clear text

http://www.zdnet.com/apple-tries-to-block-ios-in-app-purchase-hack-fails-7000000985/


Global Payments leaks 1.5 million credit card numbers

http://money.cnn.com/2012/04/02/technology/global-payments-breach/index.htm (http://money.cnn.com/2012/04/02/technology/global-payments-breach/index.htm)

Watching now....

EDIT:

Done! Amazing!

That right there is the best Bitcoin salesman I've seen so far. I tip my hat to you Tony, you rock.  8)

Pay attention people to his presentation, that's how it's done if we want the general user base onboard.


(I'm going to sticky this thread, at least for a while, that's how good I think the presentation was.. if someone has a problem with that pm me please)

Good stuff.  Shared to my social media streams.

Protip:  bitpay has a twitter feed... use it!  :)  This kind of thing should go out on twitter.

From the video:
- Amazon pays about a billion dollars a year for payment processing (most of that cost would go away if they switch over to bitcoin).
- Amazon's annual profit is also a billion dollars.
- Amazon would double their profit if they could simply switch over to bitcoin.
- oh yeah, and no chargebacks.

No-chargebacks is a selling point for merchants (admittedly the target of the video), but consumers love chargebacks.  And there are ultimately far more consumers than merchants.

Bitcoin can be better-than-cash for any merchant or consumer who already deals in cash, but that is just part of the bigger picture.

They also love lower prices, and Bitcoin acceptance can potentially allow a merchant to share some of the savings in payment processing fees with his customers.

Jeff there is a big difference between a cardholder filing a dispute with a merchant, a cardholder using the dispute process to execute a scam ("friendly fraud"), and a cardholder having their account compromised with unauthorized charges.

To the merchants, all 3 of those scenarios appear the same, in the form of a chargeback.  However the account numbers being compromised are by far the major contributor to the $100B payment fraud.  Friendly fraud is also on the rise as people have learned how to abuse the system to commit shoplifting.

Bitcoin would eliminate both the unauthorized access and the friendly fraud.

The legitimate disputes can be resolved by using an escrow transaction.

No argument.  But again, that is purely the merchant's view.

Consumers, at least here in the US, have been trained by well known consumer advocates such as Consumer Reports (http://www.consumerreports.org/cro/index.htm), Clark Howard (http://www.clarkhoward.com/), NACA (http://www.naca.net/) members and the local news "consumer beat" that credit card purchases, in particular, have a level of consumer insurance built into them.  Every 5-10 years, a new layer of consumer protection regulations (http://www.federalreserve.gov/consumerinfo/wyntk_creditcardrules.htm) are added or updated as well.

The hurdles at the consumer level are twofold, assuming a future world where bitcoins see 1000x consumer and merchant acceptance (hey, 1000x is easily realistic in a few short years, given how small we are right now):

1) Education.  "Use an escrow transaction" is a foreign language, an alien concept to Aunt Tillie.  It is not realistic for average consumer use, unless the software tools and legal system both evolve significantly from where they are today.

2) Rational economic actor choices.  The current credit card system provides significant economic and legal protections to the consumer, while hiding the costs by making the merchants bury merchant fees inside the item price.  Buying an item sans merchant fees is not likely sufficient economic incentive to abandon the legal protections currently available, for average consumers.

Now, please, don't misunderstand.  What BitPay is doing is great -- I retweeted and promoted the video.  And it is a necessary step in bitcoin's evolution.

In an optimistic forecast, one could see bitcoin taking over the majority of hard-cash-like transfers.  I imagine merchants would prefer bitcoin over having to deduce whether or not a $20 bill is counterfeit, even using the latest ink tests and scanners one sees deployed at Wal-Mart, Target, payday loan and pawn shop locations.

But the huge amount of built-in consumer protections -- and associated consumer advocacy at all levels -- is an unquestionable hurdle.

It seems more realistic that bitcoin credit cards will arise, as an optional, supplemental layer on top of the base currency:  credit cards, with standard protections consumers expect, denominated purely in bitcoins.  Much like credit cards are an optional, supplemental layer atop the US Dollar right now.

That would at least be a familiar system to current consumers.

Excellent video! Tony, you are getting better and better! Thanks for sharing.

BitPay FTW!!  8)

Where is a link to the cartoon played in the beginning?

From 1000 merchants in september to 2000 in december, not bad! Thanks for that update.
Anyone in mood for predictions on how many merchants it will be in june 2013? I say 5000 and still growing fast.

http://screwbanks.net

This is absolutely the way bitcoin should be presented. Well done, Tony!

Jeff...all your points are good ones.  I see Bitcoin as a great foundation.

Fantastic talk Tony. BitPay is one of my favorite Bitcoin companies. It's an operation that inspires confidence. I hope that we can get 2-of-3 escrow infrastructure up and running next year so we have a complete answer to the chargeback question.

Thanks guys!

wow over 1000 views already on YouTube.  people are starting to be educated!

One helluva presentation. Bravo!

Tony did an awesome job!

Good vid, nice build up..offcourse also an commercial but nevertheless one of the better ones out there.. ;)

Today I watched a presentation you gave in May to VCs that I had found on youtube. This had special significance to me, as I just created a startup company about 10 months ago and was probably pitching to VCs at the same time you were, asking for similar amounts of money to be invested. It was particularly interesting how all of the VCs had heard of bitcoins already. I think it's a killer time for more bitcoin-based startups... so much opportunity.

Sorry for rambling. Great presentation skills for the win!

Thanks for this :)

Great presentation ! I would just suggest only two points are a bit far fetched:

1. Mag stripe vs EMV i.e the cross border capacity of credit cards: it is not a real weakness of debit cards for Europeans going to the US because EMV cards bear a mag stripe too. Conversely, using a mag stripe only card in Europe is possible at most of the POS. Fees are the real weakness because the bank cards become very expensive as soon as you travel.

2. Do it yourself: it is possible without using a hot wallet. See: www.microbitcoin.fr (http://microbitcoin.fr), a site I developped (ruby on rails) as a proof of concept using only a notification service (Bitping). No private keys are stored on the server. I am not a professional programmer myself: that shows how easy it can be to implement secure bitcoin acceptance.

Again, otherwise, an excellent job promoting bitcoin for merchants.

You are partly correct about the mag stripe, although look at the penalties and extra fees being imposed in Europe for using the mag stripe:

http://cphpost.dk/business/swipe-and-pay-fee-hit-customers (http://cphpost.dk/business/swipe-and-pay-fee-hit-customers)

Also there are some simple DIY approaches for people that just want bitcoins donated into an address.  but for any type of automated workflow where you need to identify who just paid you, what's it for, is it the right amount, etc. the only real option is to write your own RPC calls into a hot wallet.

May i create a hard copy on dvd?

ok with me, just double check with the Bitcoin Summit organizers. 

+1

Why is this list kept secret?

Because we have competitors who like to email all of our merchants, soliciting to "save them 0.1%".

lol

Still, it's not by trying to prevent your customers from knowing your competitors that you'll keep them as customers. Actually, "desperate marketing" like this tends to backfire... it's like people that come to your home to sell you stuff. First thing I think to myself: if your product is really that good, why do you need to knock my door to try to convince me of it? Why isn't your product available at the Carrefour nearby?

Anyways, I'm among those who think you should consider publishing a directory - with the consent of your clients, of course, do not publicly list someone who doesn't want to be listed.

Agreed, we just don't have an efficient way to handle the opt-in and opt-out at the moment, we are just way too busy to try and ask 2000 people.  some day.

A business directory would be a great idea.  An edited business directory, independent of any one business (BitPay or anybody else).

Use trust metrics and pay attention to scam reports, BBB rankings, etc.

This could be a very positive force in the bitcoin community, a reliable website we can point new bitcoin users to, so that they may see all the trusted businesses that accept bitcoins.

I'm sure you all know this video (https://www.youtube.com/watch?v=fW8amMCVAJQ) about the importance of the first follower. If I go to my local store and tell them to jump on the bitcoin band wagon, I'm essentially asking them to be the lone nut without a leader or better first followers to show them.
Make them visible and you will get more. There is no competition. The market is far from being saturated and you know that once bitcoin takes off, nobody will want you as a middle man neither. Not for converting bitcoins to funny money at least.

in regards to the bitpay 2000 businesses. me and a few others have already been thinking along the lines of this.

a website that has a directory of merchants and aids the adoption of new merchants without the troll chat that a forum normally brings with it.

feel free to add idea's to what the website should include and how to handle the idea's
https://bitcointalk.org/index.php?topic=133801.0 (https://bitcointalk.org/index.php?topic=133801.0)

This post does raise a valid point in that if the consumer has a credit card and possibly a debit card attached to a bank account there is a significant incentive for the consumer to use the credit card over Bitcoin for an online payment. In my case I can use a credit card with 1% cash back. At the end of the year I receive a cheque from the credit card company which I promptly use to purchase Bitcoin, and conservatively my last "cash back" Bitcoin purchase has appreciated over 100%. So what is my personal incentive to use Bitcoin here?

The answer is that I am not the target demographic. The real target demographics are:
1) Those that do not have credit cards or debit cards attached to a bank account
2) Those that do not have credit cards.

These are the people that regularly use cash for in person transactions. It is not the myth of the senior living 50 years behind the times, but rather those that are young (teens and tweens), those that are poor, and those that have poor or no credit. I posted a thread on this back in February 2012 https://bitcointalk.org/index.php?topic=63526.0 (https://bitcointalk.org/index.php?topic=63526.0) In the United States we have 29% of adults do not have a credit card and in over 7% of households there is nobody that has a bank account!

I really did enjoy the video and I must add that what was presented in the video is very accurate and well researched; however I still believe that the real incentive for an online merchant to accept Bitcoin is to sell to someone who is either 14 years old or has a FICO score of 350 or thereabouts. By the way this is a huge untapped market which the current banking system simply ignores.

BITCOINS is the fucken future.

However I see a dark cloud that will make people believe that bitcoins is the wild west and we need a central authority to control bitcoin type of innovation.

Why?

PPL are stupid....

Something like The Bitcoin Foundation?

bitpay?