Bitcoin Forum

Playing devils advocate here.

It's been bothering me lately, thinking about this. Consumers have absolutely no motivation to use Bitcoin. And because of that, I don't understand how it will ever go global.

All the motivation is for merchants. They avoid merchant fees. They get no chargebacks.  But they're also going to get no sales (aside from enthusiasts), because consumers have no incentive to use it, whatsoever.

Where are the perks for consumers, in a situation where they're buying something with bitcoin?

The only benefit Bitcoin brings to consumers, is money transfers. People who send money Home to their families in other countries. Bitcoin will corner the market that Western Union currently dominates. And probably put it out of business. While that is a huge industry, it's a fraction of how big Bitcoin could become if consumers used it for purchasing.

What incentive do consumers have to use Bitcoin at all? None. And because of that, it's never going to be adopted worldwide. Again, playing devils advocate here. I want to hear people's responses to this. Because in my mind, it seems to be true. And that is depressing.

You may say, it's just like cash, what motivation do people have to use cash. Or it adds a level of privacy. But these aren't significant enough benefits for a worldwide paradigm change. We're talking about adopting a new paradigm here. There needs to be incentive, for people to even bother making a huge change like this. Especially when it's more difficult than cash. More confusing than cash. More ugly than cash, requiring people to understand several decimal place fractions and other complicated things. So not only is there zero incentive to use it, but there are several reasons why they wouldn't.

There needs to be something huge, global, significant, about Bitcoin that will motivate people who buy things to say "Forget this silly cash! Forget my credit cards!"

Tell me why this is wrong. Please.

Because you 'll probably be able to make payments just by clicking a link. No logins, no forms to fill, no need to move money in and out of payment proceross, minimal fees and a lot more.
But for all those things to happen, wider acceptance must be established so that the price can stabilize.

I have been making the same point about lack of real transactions in Bitcoins for a long time and no-one ever has an answer. As has been detailed it simply doesn't work for most normal transactions (too slow/too volatile in price/lack of recourse for buyer) as follows in comparisons:

vs cash/cards in person - too slow, I can pass someone banknotes in a shop and we are done in 5 seconds, I cannot wait 10mins to 2 hours for the BTC to pass

vs credit cards on-line - there is no price-saving and I lose the right to protection I have with cards and on-line is where I need protection most

vs Western Union etc for money transfer - I might be able to save money on fees, but I don't know what the currency will be valued at when it arrives even if only 10 minutes later

I keep searching for stats on real transaction on Bitcoins (ie buying legal goods/services) and guess what where aren't any and no-one wants to dig too deep because the truth is painful. Of course everyone on here is long BTC so needs to keep the story going......

Some arguments (certainly not all):

1) If BTC cuts some costs for merchants, it will for consumers too. In a competitive economy, either BTC businesses will be less expensive or BTC paid merchandise will be discounted.
2) I pay some indirect costs for having access to my traditional bank services, I cannot really send cash at a distance.
3) The value of a BTC is also a bet on the development of the ecology around the bitcoin protocol. For now what exists resembles traditional businesses. But what in the future? I am personally sure that, in the years to come, we will see flourish services that can only be proposed in BTC. Just as an tasty example, in a week, I invested in a BTC gambling site (in a currency different from the one in use in my country), made a profit and took my bitcoins (plus interest) back. I never saw that possible with money.

The main value of Bitcoin is its lack of inflation.
That gives it an extreme desirability, and is what IMO drives its current uphill movement.
People are willing to pay huge sums for it, even if they can't quite spend it directly. That alone proves that it's value doesn't depend on its consumerization ability.

Anyway, merchants of course, will prefer it too over fiat currencies, and will find ways to incentivize customers to make purchases with it.

I'm a consumer and bitcoins really worth for me.

I spend bitcoins for many things like buying domains and servers, paying freelancers for their work, ordering electronics and food.
I'm really glad to realize that everything I buy becomes cheaper and cheaper in time :)

In a lot of ways, you're absolutely right.  

I think merchants can help bitcoin (and in many cases already do) by giving price discounts on bitcoin purchases.  It makes logical sense to do this for the merchant for two reasons: the rising price of bitcoin means they can lower the price significantly and still make a profit, and the transaction fees are substantially lower than credit cards.

That said, most bitcoin merchants are still relatively unknown to mainstream consumers.  Which leaves the obvious question of trust: is it worth the discount to the consumer to forgo the benefits of using credit cards?  I'm not talking about things like credit card points, but zero liability.  If you lose your credit card, with pretty much all credit card issuers, you aren't liable for any purchases made on it.  Ditto if someone hacks steals your credit card number and makes purchases with it.  

None of that is true with bitcoins.  Lose your private key?  You're shit out of luck.  Ditto if you happen to make the mistake of storing your bitcoins in a hot wallet, or keeping them with someone who did, as those of us who invested with Coinlender discovered.  If I get lucky and the price of bitcoin crashes down to roughly where it was when I bought my bitcoins, I may very well buy more as another investment.  But I've learned my lesson from Coinlenders, and if I do that, my only investment will be bitcoin itself, in a cold wallet where they can't easily be stolen.

Could bitcoin become worth it for consumers?  Absolutely, and in some narrow cases, I think it already is: cases like in person transactions where there's no counterparty risk, or online purchases that are small enough where the merchant is willing to accept zero or one confirmations at most.  But it's probably going to be a while for everything else, as a "banking system", bitcoin is about where the US Dollar was in the 1920's, back when no FDIC insurance existed for deposits.  Some people could get very rich off it, and others will lose everything they invested.  As a technology, it's a bit like the internet in the early 1990's.

Same here. Bitcoin is very attractive to me as a consumer. Bitcoin itself is the 'huge, global, significant thing', potentially a bigger technological development than the internet IMO. Its going to change everything, because to most people these days, money is everything.

It`s like you read my mind, Bitt.  In the responses above, what I`m seeing can be summarized into two thoughts:

1. It will bring prices down for merchants, which will trickle down to consumers, which gives everyone an incentive to use it.

This isn`t good enough. I guarantee you consumers will not stand for a payment system which gives them no recourse. Spend 10 minutes in the scam alert section of the forum for an idea of how many people have been burned by bitcoin transactions, and that`s the early adopters, people who generally understand the bitcoin protocol and its inner workings. Once people hear how their friends are getting burned by bitcoin transactions, they will stop using it, which means it can never be used for regular, everyday transactions. All I can think of to resolve something like this is to put a middleman in between the consumer and merchant -- sort of like Bitpay -- but then, there would obviously be some kind of fee involved which defeats the whole purpose of leaving credit cards in the first place.

2. I like to use bitcoin, it`s convenient for me.

That`s great, but you`re in an extremely small minority here. Most -- even amongst the bitcoin community itself -- would rather hold onto their BTC until the value stops surging upwards. I guess there might be some people on here who don`t have credit cards or even debit cards and just need a way to spend money online, so in such cases, bitcoin can work for you.

I agree with Bitt`s `devil`s advocate` writeup in so much that bitcoin could revolutionize the money transfer industry in some ways, but that`s about it. I`m not sure if that alone justifies it`s current value of $850 per coin...

one incentive: BTC is a deflationary currency and, chances are that if you buy at $10, in 1 year that $10 is worth more.. so you have more purchasing power.

another: it's a world currency that can be accepted anywhere with internet access. travelling from europe to china? no problem.. your money is the same everywhere.

Bitcoin is turning into a store of value rather than a medium of exchange. It is behaving like gold. People buy gold not because they want to use it to buy stuff at the corner shop but because they want something that is supposed to be immune to inflation i.e. a store of wealth. In Bitcoin's case if you get in now there's a good chance you will make money too over and above the rate of inflation.

The biggest fear is that Bitcoin is just some elaborate project by the NSA to capture the entire world's wealth. They could enslave us if this is the case.

Not sure if sarcastic or if i have to wear my tinfoil hat   :-X

You haven't kept up with recent world events have you? In case you didn't know the NSA has been spying on the whole planet and is up to no good. Is it that hard to imagine that the a shadowy US secret agency that employs the best cryptographers in the world would want us to store our wealth in crypto currency for it's own nefarious purposes?

Really? A spy agency spies on people? That's a socker  :o
Seriously talking rigged encryption algorithms might be true but the nsa inventing bitcoins is unlikely to say the least, and noone's biggest fear whatsoever.

It's big enough to get at least one of the core developers investigating (or at least wondering):

https://bitcointalk.org/index.php?topic=289795.msg3270483#msg3270483

I agree things need to get better yet, so that bitcoin is easier to spend for the average person.

But people will be happy to pay in any currency the merchant will accept. i dont think it is down to incentives to the consumer.
(I.e i would happily pay my gas bill with potatoes if they would accept them, i need no other incentive.)
There are little incentive to use Visa to pay for anything, other than that is how "the merchant" wants paying (there is consumer protection though, although this is at the expense/forced on the merchant).

I would say, that the more merchants that accept bitcoin, the more consumers will use it to pay for things. So the efforts to get bitcoin adopted more widely, should be focused more towards providing good merchant tools, and less focus on incentivising the consumer to pay  in bitcoin, as that will come anyway...

Ford

I understand most of the responses, but I also agree that there doesn't seem to be anything big enough to power a paradigm change.  At all. There are definitely some minor benefits to the consumer.  

Currently bitcoin has nearly zero consumer protection in place. I raised this issue on the bitcoin foundation forums, and my understanding is that they are working on it. Or rather, it's not even their job to work on it. It's the job of the various companies overlaying the bitcoin protocol, providing services, that should be providing the consumer protections. Something like that.

But if you lined up 100 consumers, and tried to convince them why bitcoin is better than Cash or credit cards, I think you would fail. I don't think they would see the relevance of it, unless they regularly send money home to family in other countries. The ability to use a smart phone to make purchases, might be the only slightly relevant benefit. I don't know if that's significant enough to motivate a worldwide currency change.

this may be true in the US and other countries with stable money systems, but I think it could be really interesting for the rest.   

imo bitcoin is just the beginning. Anything can happen, and I believe it will.
Its not ready for the average, slave mentality, mouse in a wheel kind of consumers. And I don't think it should be just yet.
Getting ahead of our self is just going to hurt development.

When you say consumer protection, you mean protection from shady internet sellers, right? Well, that's not a bitcoin problem.  Merchants already offer consumer protection for digital payments on the internet.

1. Ebay protects buyers by guaranteeing that you'll get what you pay for or your money back.
2. Amazon protects consumers by facilitating trade between online entrepreneurs and shoppers.

Both of these sites do not accept USD directly, they mainly take paypal and credit cards, which are both digital overlay systems with MORE risk than bitcoin, ironically. But by adding significant fees to compensate for fraud, these companies together with credit card and banking industries have found a way to make it work.



 

Speaking as a merchant, I can tell you that the "no consumer protection" is actually a good thing. Businesses spend obscene amounts of money on accounting/fraud departments to insure against chargeback fraud (90%+ of chargebacks are fraud from the customer's side). Therefore if this is not an issue, companies will be able to significantly decrease the price of their items.

So you will end up with something like this:
- Buy an item with credit card, the price is $100
- Buy an item with bitcoin, the price is $75

Legitimate businesses will quickly get a reputation for being honest, for example if you walk into Walmart and buy a new TV, they aren't going to outright scam you simply because you paid in bitcoin. Most people don't buy things on tiny unknown sites anyway, they gravitate towards the big sites, newegg, ebay, etc.

Actually, it takes 6 months to "confirm" credit card transactions, if we are using the word "confirm" to mean the equivalent of a bitcoin transaction receiving confirmations. 6 months is the cutoff point after which credit card fraud is no longer possible, however as merchants we obviously can't tell people "wait 6 months before receiving your item" so we just choose to risk it and let them have it immediately - this is exactly the same as letting a bitcoin user take their items before the transaction has been confirmed. I've already implemented a 25% discount on all of my products for customers who choose to pay with bitcoin.

There's no reason to even worry about mass adoption as bitcoin can't even support that kind of traffic and will break. Therefore,  it can never achieve mass adoption unless the architecture is reworked from the ground up.

Ever actually worked with a company like Bank of America?  Paypal?

Just one taste of how they really treat consumers when there is a problem will let you know why Bitcoin will be adopted.  Once a consumer has an account wrongly frozen or otherwise attacked by one of these companies they will fall in LOVE with Bitcoin.  

I was just reading an article about how the Cover app lets customers pay more quickly for the meals at restaurants.  Here is one link to the article: http://www.dailymail.co.uk/femail/article-2450089/Cover-app-lets-leave-restaurants-waiting-bill.html

I was thinking that with Bitcoin (and there are some rumors of Square working with BTC soon) that this will be even more effective by leaving out Credit Card companies all together and the companies could pass on the savings to consumers.

There will be endless opportunities for Bitcoin to be worth it for consumers to use.  It is just a matter of time.

People are already using smart phones to make purchases, but transactions are linked to phone number or credit card - I dont see why anyone would go to any extra hassle to get and fund a btc wallet.

Then you have Scan Inc also for payments with QR codes.

There are lots of alternatives to bitcoin already. More will be developed also. Not altcoins, but new methods all together. And these do offer consumer protections etc.

You`re looking at this from the wrong angle. Consumers can reasonably expect a smooth transaction when they deal with huge, established retailers such as Amazon or Ebay, but there are thousands of other merchants online, aside from just these two examples. If I`m looking for a specialty item or just hunting for a good price on something, I`ll routinely use other online stores, sometimes sites I`ve never heard of before. I can do this because I know that if something goes wrong and I get scammed, my credit card company is going to perform a chargeback for me. Additionally, the site won`t exist for long if they`re routinely ripping people off, because the chargeback is a deterrent to even try.

If we were all to start using only bitcoin, all these smaller companies will go out of business because people will be scared to death to send money to anyone, in fear that they`re being scammed. There are many bitcoin scam sites out there right now that have been operating for months or even years, essentially with total impunity. They can scam people and there`s nothing anyone can do about it. I don`t want to live in a world where I need to perform in depth research on message boards and blogs before making any purchases to check the reputation of a company, and then just pray that they deliver on the goods.

How you can state that paypal and credit cards are higher risk than bitcoin, I have no idea. No offense, but you must be delusional. If you buy something online with bitcoin and never receive the product, you`re completely at the mercy of the merchant. That`s not a good feeling at all. With a credit card all I need to do is talk to the bank and they`ll mark it as a fraudulent charge.

The incentive is huge when you go deeply into the details of it's construction... you can setup escrow transactions, you can create your own contracts, pay anywhere without giving out information.

In the business world it would be most apparent of course, considering all the checking that has to be done and the restrictions as well... try purchasing something from another country. For most western countries it would be no problem to do so within the country, but if your purchasing something from outside the country, your credit card will be checked, the purchases funds will be moved immediately to another bank account to avoid a chargeback... chargebacks happen both ways, they can be innitiated by consumer or merchant.

I've heard and delt with all the horror stories, having worked retail.

customer gets robed by staff who memorize their credit card number
customer gets no products from online store, has to do a chargeback but did not know it was possible.
international customer has to do a money transfer from England to Canada takes a week to do the wire transfer.
South American customer needs to pay for a item, waits a week to get the funds to go through several banks to get to Canadian bank, because communication system are severely faulty.
Customer gets funds locked on a credit card purchase, customer and merchant can't pay for item because transaction won't go through until the lock is removed automatically 3 days later.
customer has to give out credit card information, personal information to online merchant for subsciption... wastes 10 minutes going through the process to read an article.
Merchant has to do back ground checks on international orders for fear of fraud.
merchandise cannot be shipped until funds have been confirmed into the secondary bank account.
etc

all this fear... all the worrying and hard work required just to do a purchase. Why not just pay in Bitcoin, wait 10 minutes, ship merchandise.
If you want faster transactions the Open Transactions library can be used to create off-chain verified instant transactions and if something goes wrong? Got scammed by a bogus company, server went down, hackers stole the coins, the OT servers can implement a multi-signature system for removing the coins from within OT, your coins will be returned to you since no one else can spend them. And the OT servers have no limit on how many transactions can be made... want to make 1 trillion transactions a day? that's fine

The infrastructure to create truly 100% verifiable instant transactions is there, there is just a bit of work to be done to make it more user friendly, but the technology is there.

and also, on the economics side... if you know about bitcoin and you live in Argentina or Zimbabwe, are you going to stand by while you watch all your money lose value? destroying your way of life, not just of yourself but your whole country? This is a voluntary action you need to take, the government doesn't have to be involved to save your money. Some countries have gone directly to the Euro or the USD. on a world wide scale BTC will be accepted by those who fear losing their way of life the most because of inflation, all these small currencies across the planet losing value, how much are they all worth together in dollars?

If a proper infrastructure is created, Safe transactions, good merchant clients, Trust worthiness ratings for merchant addresses, merchant verification signatures, instant verifications... why would we need banks, when everything that a bank provides can be safely implemented from within your own home?

How much is the Bank infrastructure costing the economy? 10 billion world wide? 100 billion? 4 trillion dollars a year!!  that is massive... just imagine the savings. everything you buy could be half price, more movement for the economy, the speed of money will be 1000's of times faster thanks to removing this banking bottleneck to the economy.

and i'm not even getting into the possibilities of the blockchain, ownership verified products, legal document time stamps, open sourced corporations, Decentralized governments, etc.  All we have to do is just get all the features that people want into the software... It's open source, the best fit for your needs is what you will use.

It won't be the first world that sees the true possibilites of cryptocurrencies it will be the poor countries that no one wants to do business with, provide credit or money services that will start to piece the economic infrastructure together, they will finally be able to be part of the world economy and purchase goods from around the world from the safety of their own homes.

Bitcoin is an extraordinary store of value, a frictionless remittance system, and a niche currency, maybe someday a mainstream currency. There's no reason to try to make it something it's not just because many people have the misconception that Bitcoin is supposed to be a currency; one BTC will soon be worth millions of dollars for its store-of-value function alone.

There are systems that can be built on top of Bitcoin that could enable it to function as a mainstream currency, but who cares? Thinking Fretting about this now is premature, other than for niche uses. There's an entire world of wealth yet to be transferred into Bitcoin. Give it at least a few years.

Agree with all of the above.
Those in 1st world should understand re store of value vs coming hyperinflation.
Those in developing countries have so many more reasons to develop businesses and transactions with bitcoin to offer real economic value to the world.

Source?

If you've ever bought something with bitcoin, it is much easier copy-pasting or scanning an address in than filling out those credit card forms (billing address, shipping address, security code, expiration date). After all that work, you have to trust that company not to share or lose all that information, because anyone can use that information to charge money to your card. If you've had a credit card for any period of time, chances are you've run into fraud before. Every time I use my credit card online I'm struck by how antiquated and dangerous the whole process is - the only way it works is because your bank will (generally) incur the costs of fraud, although it's still a huge PITA when it happens.

Also, traveling abroad is huge. I imagine a day when I don't have to call up my credit cards and banks and ask them what kind of ATM I can use in Prague to avoid massive fees, or incur awful currency exchange rates both when I'm arriving and leaving a country.

imagine it this way in 10 years time. consumers will be using apps connected to payment gateways and shopping services where they deposit small amounts of satoshi's into their 'app' accounts to then use at starbucks, train stations, gas stations. in 10 years the price would be stable the spread of bitcoins reaches millions of individuals, instead of just thousands, meaning less hoards by single minds to cause a noticable swing in price.

so i open my shopping app hosted by bitpay for example, i see i already deposited my weeks wage of satoshi's i received from work. and now i choose starbucks from the menu, order a coffee and the 'offchain' transaction occurs to pay for the coffee and credit starbucks balance inside bitpay. that same instant starbucks accounting department withdraw all of its offchain balance to ONCHAIN bitcoins stored in their own safe.

how is this possible or why would it happen?

analogy time
quickpayservice by bitpay=visa/mastercard
your own safe= bitcoin-qt
sending wages ONCHAIN into bitpay = wire transfer

the difference between the financial FIAT system of today and the bitcoin system of 10 years.
1) visa ultimately has a national bank behind it with accounts which are then divided up into sub accounts for customers. with bitcoin bitpay will be the bank  and payment processor all within one company.
2) visa balance checks require 'processing' times of 10 seconds before then authorising payments. and in most countries the pin number is required. with bitcoin the balance can be checked while the customer is still ordering, reducing those embarrassing moments of 'insufficient funds' after spending 15 minutes making product selections and having them scanned through a cash register.
3) instead of shifting gold or physical bank notes between banks via secure truck, ONCHAIN transactions between services will allow the digital transfer to happen world wide in minutes (10 minute block time) that is on a protocol the whole world then understands (blockchain) is not at risk of double spends due to accidently hitting the button twice or receiving 2 transactions via a data echo. thus removing the 3-5 business delays of traditional banking.
4)by pre-depositing funds into a service allows the funds to be pre-confirmed. this allows them to be used for instant transactions OFFCHAIN.
if your rich and do not want to risk your wealth with these third party services then you can keep your funds in your own safe.

much like the banking system, which then uses a corporation such as visa as a top layer service for faster payments. bitcoin will be the same. the blockchain will be the backbone of the financial system, with businesses offering different financial systems ontop of the blockchain. most people day to day wont touch the block chain as that is a few layers down. much like today most people dont use wire transfers to fill up the car with gas. they use a top layer service such as visa.

if your still not understanding the analogies imagine it this way.

bitcoin=bank of america
bitpay=visa
then read http://en.wikipedia.org/wiki/Visa_Inc.

[1] as BTC goes up they can cut fees to 0.00001 and so on.

[2] BTC is behaving like a store of wealth, though that may mean PPC is the new btc

[3] BTC will be used for things like buying houses, cars, larger items, paying wages, services and perhaps bills etc, where the real money is.

[4] Off chain solutions may arise, though I'm yet to be convinced of how this will work exactly

[5] i can actually touch type now after all theses years as long as I don't think about it while I am doing it.

Zanglebert has hit the nail on the head as I've been thinking about this for many months too.  Bitcoin as a day to day currency has issues still to overcome HOWEVER it is the only store of value not related to a specific country that makes it incredibly useful.  Gold is the next best thing yet that still is miles behind what Bitcoin offers...
The advantages of Bitcoin being easily transferable, requires no storage costs at all, can't be copied or hoaxed, Bitcoin has an easy market anyone can trade with and if the trading platforms were for some reason unreachable the trade can still happen person to person or institution to institution.

This leads itself to a very ironic purpose... for countries to store their wealth to back their currency.  As far as I know, there is no common basis for money between countries... like time has GMT, temperature has Kelvin... it's a way for people anywhere on the planet to talk the same language.

Bitcoin could offer this global common ground where anyone or anything can put their value in there safely knowing more can not be printed to dilute it, safely stored until ever needed and easily transferable to a local currency to facility international trade easily.

One btc now is worth something in every country, pick and choose where and when you want to cash it in for your local currency :)

As a proxy for actual commerce, watch out for data from bitpay on how the usd volume of bitcoin biz done by its customers. Think that number was 6.4m used for sep, growing about 20%mom which is impressive but not stellar in an ecosystem sense...

Agreed.  Purchasing time on bitpay.com automated sites is about the same as a credit card, maybe a little faster. 

Knowing that they do not have my credit card number...... Priceless! 

Until the price of bitcoin hasn't stabilized at a much higher level, the points made by the OP are valid. Which means it has to grow significantly in a rather short time.

I see the future of bitcoin being used for store of wealth and very large purchases (cars, houses, etc), and alt-coins used for everything else, for example a grocery store type of purchases, sort of like copper coins were used in the 19th century to pay for a loaf of bread. Several alt-coins will have their niche as their valuations grow, but their valuations still won't be too high to discourage users from spending them like they will be discouraged from spending their bitcoins for every day routine purchases. Gresham's law. Bitcoin will just be valued too high to be used to buy a beer, not to mention, it alone simply cannot process thousands of transactions per second for all these daily purchases by many people. It will need a lot of help from alt-coins' networks.

I can even imagine companies in the future with services for payments with Bitcoin that includes costumer protection.

- Buy an item with credit card, the price is $100
- Buy an item with bitcoin, the price is $75
- Buy an item with bitcoin, including costumer protection, the price is $90.

The big thing about bitcoin is that enables a new way to send money online everywhere in the world, and peer to peer.

Everything that exists already is posible to do it using bitcoin.

Another good thing in bitcoin it saves your time and money as it was in my case.

Once I paid with credit card for a database server for our new business project. My sysadmins swiftly uploaded all necessary stuff and it went online.
But three days later I found the server offline. I called the datacenter and found they suspended it because they suspected it was unauthorized transaction. To resolve the problem I had to spend half a day printing, signing and scanning shitty papers required by their "risk" department. Finally I lost over $500 which I paid my sysadmin for setting up backup server until suspended one is resolved.


So, fuck Visa and Mastercard dinosaurs! I'm glad I can instantly pay with bitcoin without any hassles and "verifications".

Merchants have been tearing their hair out over credit card fees for the better part of two decades without any recourse until now. If merchants use bitcoin they can pass those savings on to consumers using bitcoin, and you can bet that consumers will follow the money.  Credit card fraud is huge because there is (quite literally) no security - all the information required to process a single transaction can be used to make new transactions. And I also think you underestimate the fact that poorer populations have a difficult time getting a bank account at all, let alone a bank account that doesn't eat away your money with monthly fees and hidden fines.

Sending money across the world in seconds without having to open an account or rely on a third party is not trivial. Being able to secure your own money more completely than any current bank in the world (when implemented properly) is not trivial. I have to agree with the satire thread that opened up here comparing your views to those of the public towards the internet in the early 90's - you just don't get it.

We know from experience that trickle down economics does not work.  Bitcoin is currently good for merchants but terrible for consumers.  Merchants likely won't reduce prices and will jump on Bitcoin as a way to increase their profit margins by paying fewer fees to the CC companies. Consumers won't buy BTC for retail spending because paper bills and CC are WAY easier.  Not to mention, aquiring Bitcoin is a pain in itself and lets not get started on storing them securely.

Much of this can likely be worked out over the coming decade.  The internet was pretty much useless too when it started.  It takes time to build useful infrastructure.  VISA was started in the late 50's, got it's official name in the mid-70's and didn't reach "everywhere you want to be" until the 2000's.  It's going to take a long time so, dig in and if possible, find ways to create services that make Bitcoin and all of the crypto-currency world more useful.

Yea, consumers have absolutely no need and self-interest to use a currency that breaks free from the corruption that is our monetary system right now.
I grant you that most don't care, but that is, hopefully, just ignorance and awareness is changing quickly.

Huh?

What exactly is easy about paper bills and CC? I can't wait for the day that I go out to eat with friends and instead of waiting for a confused waitress to split our bills 6 ways, take our cards individually, print out several copies of each of our bills, and have us all individually sign, we just get an address to pay to and send whatever we owe. Done.

I think you proved my point perfectly.   ;)

bitcoin is simply as stated above a "global local currency" just as ithaca hours is the local currency of ithaca new york

Every single person I know.

Probably every single person you know.

Aside from the 1 to 10 possible Bitcoin enthusiasts we know.

This summarizes my original post perfectly.

Lets hope Gavin has theses issues at the top of his "To Do" list, because the longer they fester, the greater chance the media picks up on them, and this will be the focus of Bitcoin.   The avalanche of media attention pointing out that you can't do chargebacks hasn't happened yet.   Someone better get their sh*t together and fix it before the avalanche comes.   The only response to this I've seen is that consumers and merchants have to work through the problem together.  That of course is an invalid solution which won't fly.  

We need to make adoption not only EASY, but DESIRABLE.   If its only EASY and there's no incentive making it DESIRABLE, then it wont happen.  If its DESIRABLE, but  not easy, then it wont happen.  Currently bitcoin is NOT easy and in many ways NOT desirable to consumers.  

Someone needs to fix both.  Quick.

Non sequitur alert, abandoning conversation...

If you have acquired 100 bitcoins, it does not hurt to spend one coin. So bitcoin is also very useful for consumers, but the difference with fiat money is that you have to first save then spend. And this is a good thing, this will eliminate the financial risk of a loan based consumption model

---> There is no such thing as "INCENTIVE" in using any money at all.. LET ME ASK YOU.. do you get "INCENTIVE" using CASH? The only reason people are using CASH is because EVERYBODY USES it...

Maybe you defined INCENTIVE as CONVENIENCE? Even if you use CONVENIENCE... CASH STILL FALL SHORT to BITCOIN in terms of CONVENIENCE...

HOW ABOUT THIS ----> WHAT GOOD IS YOUR PAPER MONEY IF NOBODY ACCEPTS IT??? Well.. actually MANY BANKS WILL STILL ACCEPT YOUR PAPER MONEY... they have too... they created/printed that money.... and they have to SHOW it is WORTH SOMETHING???

----> but WHAT WILL YOU DO if.. a RESTAURANT DOES NOT ACCEPT PAPER MONEY??? CAN YOU STILL EAT IN THAT RESTAURANT???

You see the situation quoted above? What good is your platinum/Centurion card if they do not ACCEPT IT? Good thing I got the debitcard or me and my wife could have ended washing the dishes the entire day/night...






---> Difficult than cash? My Grandmother is 75 Years old and she has a bitcoin wallet... using it to do CASINO ONLINE... so how hard can it be?

---> Confusing? My Grandmother wasn't confused? She got a few winnings from Online Bitcoin Casino already... and bought us some pizza/chicken from time to time...

---> Ugly? How? bitcoin does not get into dirty hands like cash (literally)... cash can be putt in anybody's BUTT (Sexy stripper or FAT SICK HOMOs) and you still hold that cash in your hands...

Doesn't this just support the OP, position?  Here, maybe this will help.  For the same situation,

What good is your Bitcoin if they do not ACCEPT IT?

Merchants would much rather accept btc than cc, therefore many merchants (like myself) will, at least initially, decrease prices in order to promote btc purchases. Now some merchants may increase them again after awhile but then other smaller merchants will simply continue offering the discounts and the merchants selling above the equilibrium will go out of business.

Many people don't understand just how much merchants love bitcoin. Here are a couple stats from my own business:
- 15% of our capital goes to accounting/fraud department.
- About 1 hour per day spent (wasted) responding to fraudulent chargebacks/disputes.
- 2% of total revenue stolen by Visa/Amex as a result of fraudulent chargebacks, plus the dollar value of those items that were not returned.
- 3% of total revenue immediately deducted for cc transaction fees.

Want to know how easy it is for a consumer to scam with fiat? Sign up for Amex. Buy something. Call Amex and say you didn't buy it. Get money back, and keep the item as well. That's it. Merchants HATE credit cards, we're just forced to accept them because they basically have a monopoly on the fiat market.

Then when you look like a company like Apple they probably have an even bigger amount wasted on fake chargebacks because kids use their parents' cc's to buy apps and stuff and then the parents dispute it. All you need is 1 big company like Apple to start accepting btc and then it's game over for fiat.  

Not really... you have to UNDERSTAND... HOW "NEW" IS BITCOIN COMPARE TO CASH/AMEX/ETC... MY example was... ACCEPTING AMEX BEFORE and NOT ACCEPTING AMEX ANYMORE... This is not bitcoin... bitcoin is the other way around...

People did not start using PAPER money right away... IT TOOK HUNDREDS OF YEARS... before we switch from GOLD/SILVER to PAPER MONEY

How many people uses BITCOIN from last "2 years" ago versus people using bitcoins "TODAY" ???

Rome Wasn't Built in a Day

What happens if you haven't and you will never in your life acquire 100 bitcoins?  ::)

So in short...good for merchants, terrible for consumers.  At least for now.  Got it.

The same could be said about Gold or Silver

First, your caps crap, doesn't emphasis your point any better.  It's just annoying actually.  Second, you quoted the "dining" scenario and are now running from it.  Pick a position and stick with it.

If you read my comments on the subject, you'll see I clearly stated, "likely to be worked out in the coming decade."  So, the rest of your rant was really a waste of my time to read and your time to type.

then stop quoting/replying to me...

my post wasn't for u in the first place... :)

Have a nice day..

Almost nobody is accepting Bitcoins for products that don't have huge markups. Look in "Goods" (https://bitcointalk.org/index.php?board=51.0). It's like reading Craigslist. Keychains, necklaces, old stamps, books, games, and coins, "Fake G-Shock Watches" (Why? Real ones are only about $50), and other garage-sale junk.  Plus various Bitcoin-related items. Also silver and gold, just the thing to buy from an anonymous party using an irrevocable money transfer, and usually being sold at a big markup.

Take a look at BitPay's merchant list. (http://"https://bitpay.com/directory#/") It's mostly stuff that doesn't cost much, if anything, to make, has a huge markup, or is drug-related. T-shirts, stock graphics, web hosting, etc. Bitcoinshop.us (https://www.bitcoinshop.us/) has real products like laptops, but the first product they list, an "ASUS G750JX-DB71 17.3-Inch Laptop (Black)" is ฿2.4559, (times Bitstamp price of $825/BTC = $2026). Amazon offers that at $1,808.98.

That's what Bitcoin retail looks like. Lame.

Bitcoin just isn't being used seriously as a currency.

theoretically the overhead in using Bitcoin is lower, thus you can carry lower prices in real terms.

building all this business structure on top of bitcoin somewhat cancels out this effect however.  Certainly having all this expensive mining structure certainly brings Bitcoins general value proposition into question.

You're forgetting one key property: that is anonymity. Black-market consumers are absolutely motivated for crypto use, and guess what... that's enough for initial healthy rise. Remember, SR was the first one, then came speculators. And it's only just begun. Primary markets are black, until it's big enough to be stable, and when it becomes stable - regular consumers will kick in massively. I give 1 year until we see relatively stable Bitcoin.

Anonymity? Wait, Bitcoin doesn't have that.

Faster transactions? Wait, Bitcoin doesn't have that.

Protection against fraudulent merchants? Wait, Bitcoin doesn't have that.

More merchants because easier to signup? Wait, Bitcoin doesn't have that.

Actually the chargebacks could be accomplished decentralized with Bitcoin's M of N signers capability.

This is something that bothers me. How will it work when bitcoins are accepted everywhere? Will I go to Starbucks, pay and then wait 10 minutes before getting my coffee???

Robert Metcalfe didn't give us google, linked-in and facebook. Neither did Tim Berners-Lee. To suppose that Gavin needs to do it all is folly.

Exactly, I'd rather use MasterCard PayPass or Visa payWave.

If we have to install bitcoin acceptance machines at Starbucks, that's going to add to costs. People forget that and point to the fact that it is cheaper theoretically, but not practically. Add wifi, a terminal and the need to secure the machine and lost business due to people waiting in line for confirmations before they are allowed to leave. You can argue to use off-chain transactions, but why not use cards that are off-chain too? It defeats the purpose of bitcoin, it isn't even using bitcoin to be technically correct. You aren't transferring anything, you are just changing numbers on the screen like the card companies do when you buy something.

Wealth store? Bleh, that's fake. Remember you can only consume more in the future when there is real economic growth. If people start to create less things, you should actually consume now rather than put your money into assets. If no one can buy those assets in the future, your wealth is eroded anyway. The only reason why gold is going up is because people can afford it. If they can't, then it can't go up.

The best solution is to invest in real economic growth. That's why you have the shale industry evolving even though it's short lived. It's so there is more stuff to consume. The fact is we are running out of things to consume, that will destroy wealth. Not the fact that your money or bitcoins are worth less. That's just the symptom. If we all created more things to trade with, we wouldn't be worried about hedging wealth.

You can't store wealth unless you believe that there will be a similar amount of production per capita in the future. Even then it's not really hedged! Climate Change and Famine. That's going to screw us all up.

Thus the only true users of bitcoin are the consumers. People that need to buy drugs without entrapment and more. People that can afford to use it.

How many f. times I have to mention Tor around? F. connect to it and all your anonimity problems are gone. Literally.


Not essentially the problem with this type of transactions...


Good reputable escrow is enough.


Bitpay?

In the olden days -say 40 years ago- world travelers and explorers would buy a Rolex or another gold watch, as it translates into money everywhere. As internet reaches a worldwide spread, accessing bitcoin will be possible everywhere. This goes ofcourse not only for kidnapped adventurers, but the pro's to Bitcoin definitely exceed the lack of transfer fee's for shopkeepers.

TOR isn't safe to use imo. Chances are you will be on every spy agencies radar just because of it. They are likely sitting at/running many exit nodes themselves. Silk Road owner believed to be anonymous as well. Look where it got him.

Bitcoin is not going to be used by consumers at all. In fact, if you did so you must be stupid. Not all that long ago I paid 2000 Dollars for a few riser cables worth 20 bucks. Just glad that was the only thing I ever purchased. I will never ever use bitcoin again to buy anything but fiat. You may not like this idea, but you must be insane otherwise. The only incentive for people to use bitcoin other than to try to buy drugs or guns would be to get products/goods/service 100% tax free. This is not going to happen because of regulation.

If, and this is a big if, any crypto currency will be used for anything besides speculation or money laundering/tax evasion/hedge against inflation, it will be a much less valuable super fast currency. I have my doubts it would be stable enough price wise though.

Exit node does not know where the source node is. It's the chain of proxies. SR has fallen not because they outsmarted Tor, but because DPR had some pretty stupid social-related errors in online behaviour.

At the beginning, no one knew what was going to happen exactly. Who could predict 1k$/btc in 2013. I regret buying 3 ASIC machines now because if I kept all those coins, I would have much more money now, but I'm not regret it too much because that's sort of illogical backward thinking. Bitcoin must get fairly stable over time, so even regular consumers are expected to kick in, not just junkies. All of that is ofc just my opinion...

Well, at least you would know the contents of everything that flows through those exitnodes. And I bet they do.

Well no matter how many time you have to mention Tor there isn't any anonymity in bitcoin. Only pseudonymity.
Every transaction is logged in a public ledger which is the blockchain. Ip addresses have nothing to do with it.

not all transactions of a currency involve every-day consumer purchases. IE sending money to a relative in another country, or paying for a very expensive item.

Still that has nothing to do with uncovering identities.


Plain wrong. IP address identifies a place on Earth, even not identity.

Actually Starbucks is probably a good counterpoint to what you're saying here, if you're okay with not accepting 100% of the customers.  One, a lot of the customers would be accepted pretty easily by just installing an app on their smartphones.  I know not everyone has smartphones, that's why I made the cavet above.  Two, I don't know about all Starbucks, but my local Starbucks has free wifi already.  That means that anyone with a laptop could also pay with bitcoin, regardless of whether or not they have a smartphone.  And having been at Starbucks a lot lately, I can say that customers having a laptop or a smartphone would probably account for 90% of Starbucks' typical customers. 

Sure, it's not as simple as whipping out a credit card to pay, but if they're okay with covering most of their existing customers, rather than all of them, Starbucks wouldn't need any bitcoin acceptance machines.  It doesn't fix the having to wait 10 minutes problem, though.  I suspect if bitcoin goes mainstream enough that retail companies are implementing it, some would make people wait the 10 minutes, and most would probably just accept the (relatively small) risk of a double spend.

it could be that bitcoin won't be used wide spread for small purchases, but that doesn't mean it can't be a success in other areas. 

Nevertheless, it may tell them a lot of stuff on what it is you are doing, and maybe where you doing it. So, you'd have to be extremely cautious when using Tor. Not anything a wide audience will ever be able to safely use.

IPs are not about identity? My provider knows my IP address and will hand over name and address in the blink of an eye if asked by a court. It happens all the time with copyright infringements these days.

Consumers and merchants might end up hating it (https://bitcointalk.org/index.php?topic=346787.0).

"Those are problems for those businesses to solve, not problems with bitcoin itself. These difficulties are to be expected, but they do not make me any less confident in the ultimate success of bitcoin. "

What I find most pathetic about BTC is that making M of N transactions usable from the client and building a professional reliable group of escrow providers has been NOWHERE on anyone's radar, and they are so so needed. 

IF real commerce was something that people cared about then we would see developers put effort their.  But the most developed part of the BTC ecosystem are the Exchanges and the Speculation, that's all you really need to know to judge BTC.

No one in their right mind is going to use BTC as a currency as long as they expect the value to keep rising. Why spend something now that might be worth 100x as much next year... 
You know your cash will be worth less this time next year, thats the incentive to spend it.

Ip address have nothing to do with bitcoin. There isn't a built in thing in bitcoin that logs your ip.
Don't be confused with the ip logs of blockchain.info. Those are the ip's of whoever relayed first the transaction to their node and afaict it is rarely the ip of the guy that actually did the transaction.

Nobody can be sure what the future holds.  If we're lucky, they will skyrocket so high that we will be the richest forum ever to exist.

More greed talking here. Greed eats brains. Everyone is so obsessed with getting rich is giving me the biggest doubts about the future of BTC.

In the 19th century, during the golden standard, there was a constant deflation. So what? Why spend gold and silver, if you can buy more for them next year? Because you need to eat today!

Even now we have a deflation with a lot of things. Why buy a new smartphone now, if in 3 months it's gonna be much cheaper, and in 1 year it will fall to half its price?

If bitcoin users have all their cash in BTC they will have to spend it some time.

well you can, you just replace immediately what you spend, and your were going to spend that anyway, but I do take the point the cost purchase %. However its still cheaper for overseas transactions then interbank rate, or money exchangers

Incorrect.


 ???

What degree of certainty do you ascribe to this assertion, my European friend?
en.wikipedia.org/wiki/Parallel_construction (http://en.wikipedia.org/wiki/Parallel_construction)

I don't think that there are even 10 people with all their money in bitcoin.
And , also many people advise against holding everything in btc.

It doesn't matter how much savings you hold in bitcoin. If you decide to limit your savings in BTC to 1% of all your fortune, fine. Now you can purchase a few more BTC for payments and then actually spend them.

The argument was that nobody would spend bitcoins, because they go up in price. This argument contradicts to the idea of limited savings.

Please quote all the discussion , not what  part you want.
You proposed a scenario:
"If bitcoin users have all their cash in BTC they will have to spend it some time."
I told you that is a SF one.
Nothing more nothing less.

Gladly. I was responding to this initial thesis which you quoted yourself:
Do you now agree or disagree? Will they use it despite deflation?

That's OK while you can go out and earn more to pay for tomorrow, even if it will earn slightly less.  But that's not where Bitcoin is, unless you invest a large $ (or BTC) in a ASIC which will be redundant in a couple of months.  If you dont hold, you are paying increasing amounts to buy, if you hold you are compelled to hold longer to benefit from deflation making your asset worth more.  This is an drawback that pro-deflation advocates ignore.  Once it didn't matter because you could just mine more, I fear the shift to ASIC is actually counter productive.

The merchants don't have to set prices in BTC. They do it in fiat, and BTC rate is applied at the moment of purchase. If I plan to spend $1000 this month, I just buy once 1 BTC from my monthly salary, and I can be sure that it will have at least that purchasing power (and probably more). Why leave it in fiat? Why not spend it, if I need to buy stuff anyway?

How exactly you can be sure about that? Ok everyone here is bullish given the last months meteoric rise but you can't be certain whatsoever.

Please read the whole discussion. We're arguing whether one will use bitcoins or not given its deflationary design.

As far as I'm concerned, I'm gonna stay bullish as long as fiat policies continue same way as now.

All those deflation theories would mean that the Businessmodel of a credit card would never take off.
Because consumers are so wise with their spendings. WRONG consumers are fkin morons that spent their money as long as they have it and take credit if someone can give it to them.

Same goes for electronics, lets take smartphones, with the deflation theory Apples Iphone success would be never possible. because everyone knows that one year later apple will bring a phone twice as good for the same price, thats a HUGE deflation, not some 1-2% and still nobody give a fuck. Consumers camping days in front of the store to get one.

Deflation theory in my opinion an over exaggerated myth, to make sure the tax payer keeps using fiat money and doesn't question status quo.

This is a disadvantage for the consumer specially if the bitcoin value fluctuate. But for merchants they have all the advantage from no chargeback, low transaction fees and no merchant charge.

Best practice of bitcoin is long term saving, not consumption. For consumption you better spend inflative fiat money as much as possible. Of course you can spend bitcoin after a long term saving period, but as long as there are exchanges, no need to directly spend bitcoin

Bitcoin is the most powerful tool in capital virtualization. In future, after bitcoin has established itself as the most credible digital asset, you will never need to spend even a single satoshi of your bitcoin holding, you just need to sign a message with your private key and approve that you are the rightful owner of certain amount of bitcoin, then banks will send truck load of fiat money to you to spend, without interest  ;D

I am reading a book called "The Power of Gold"

It's a history of gold currency throughout the world. The underlying book thesis is that countries that minted
a reliable, precious, and well recognized currency were the most advanced culturally and economically.

Nations that minted gold coins were sought after, because of the stability and reliability of their currency. With this store of wealth they encouraged trading, exploration, the arts and sciences. The bezant, florin, gulden, and ducat were the standards of currency for hundreds of years. As were silver coins.

I think of bitcoin as the precious "gold coins" of today...because it is so innovative with the blockchain concept and open ledger.
And it is very empowering for the individual, possibly it's greatest asset. Bitcoin is barely a decade old, and if not co-opted, could be as revolutionary as the internet.

People who have faith in the bitcoins will never stop the adoption and will continue to use the bitcoins irrespective of the value that bitcoin has to offer and adoption is lower at present due to the price fluctuations and that doesn't attract a newbie who wants to get into bitcoins.

Price fluctuations of Bitcoin attracts people that are looking for opportunity to earn some money. Most of them will realise, that besides investment asset, it has huge potential as a tender. So BTC is in its early age as it is still vulnerable to speculations, but it is not as bad when coin is only 6 years old.

What only worries me, is previously mentioned time delay between sending coins and receiving confirmation. In brick and mortar stores it could be a problem. On the other hand BTC is a great solution for all types of on-line payments (especially fast and micro buys such as music, games DLCs, newspaper access and many more). On that field Bitcoin has many advantages over bank transfers and I am sure it will succeed.   

If you compare Bitcoins with the traditional banking system then it is sure that Bitcoin will win the race and comparatively also win the trust of the people as everyone wants to get rid of the banking system. So holding bitcoin is like owing own's bank and you can make transaction from anywhere and at anytime.

It'll be worth it when the barrier for entry is low or virtually non-existent and retailers are accepting bitcoin en masse. There is currently no incentive to convert to bitcoin and spend, except for the discounts which are rarer.

The incentive can be found when you buy overseas, but not much more. Other than that, people don't "feel" there's something wrong with Paypal or credit cards or whatever. The uses of Bitcoin are much deeper than that and after those are covered, general use of BTC will become a normalized thing, specially in the society we are approaching where there will be no cash anymore.

I think the idea is that merchants can give a discount for using bitcoin just like some do for cash.  I know that Amagi Metals gives people who pay with bitcoin their "cash" price while people who pay with credit cards pay a higher rate.  So the trick is how merchants encourage customers to use, if they do I think many will.

But otherwise you, and many other posters, are correct, there is no intrinsic advantage of bitcoin over other payment systems for consumers.

Bitcoin isn't worth it for people who don't have bitcoin. But if people have some bitcoin, things will be different

People do not become bitcoin consumers over night. They typically first purchase bitcoin, then hold it for years, and then when their bitcoin have raised in value multiple times, they become the bitcoin consumer  ;D

I think bitcoin is really worh for me as a bitcoin's costumer i will adoption bitcoin as a payment i feel free to make payment just by cliking a link,without login, forms to fill and would'nt need my identity,of course minimal fee to and many more, i spend my bitcoin to purchase vps,my intrnet conection and even converted it to the fiat so i feel bitcoin is awesome technology that have a multifuncion for me as a alternative payment.

the problem is that they want it for free, because they see it as a scam, and they dion't want to invest a penny in it

there is no trust in it at all, and this is preventing bitcoin from growing

it is also true that the trust is build from big merchants first, then they will incite customers to use it

The transaction is instant and you will pay the price of the value its worth when you sent it, but most merchants or 'brick and mortar stores' will use a payment processor anyway so they will get the fiat value in their account the moment the coins are sent.

If chip and pin terminals start getting hacked then Bitcoin will have an advantage over debit cards. There are already skimming devices that people attach to ATMs, and these have made me wary of using any ATM outside a bank. If I could choose to use a Bitcoin ATM on the street I would prefer it over a normal cash ATM on the street.

You could just as easily if not easier hack peoples bitcoin wallets too. Most people will have to send their coins over wifi and via aps when they're out and about and both apps your phone and wi-fi are all vulnerable. Most people also don't use very secure passwords so if someone has your log in details the password could be relatively easy to bruteforce.

You are right, I did payments with bitcoins and found it hassle free compared to other payment methods. There is many advantage in Bitcoin money transfer comparing to conventional banking process is secure and reliable, sometime while we buy online ticket through banking transactions, if any error takes place, we have to wait for payback for longer time.

Yeah but people don't want to convert their money into Bitcoin usually because they don't feel a need to do so, at least not in the developed world or exceptional situations. For example if I lived in Greece I sure as hell would put 50% of my wealth into it, but if you live in Germany or something, people aren't going to see a point beyond using it like a Gold investment in most cases.