Bitcoin Forum

[rant warning]

Well, everywhere you see bitcoin promoted or advertised, they'll give you the selling points - rapid transactions (hours instead of days), pseudonymous, secure, inflation-proof, and, not least, near-zero transaction fees.

This last, the near-zero fees, might be true of the protocol, but it is absolutely not true for all the services that have sprung up.  There are, to my knowledge, very few services that offer less than 0.5% fee, most would be around 2-3% - roughly a credit card transaction fee.

What got me started on this was TorWallet's announcement of a mixing service https://bitcointalk.org/index.php?topic=87387.0 (https://bitcointalk.org/index.php?topic=87387.0).  Now, that seems like a wonderful service, but it charges 3% for mixing your coins, while a similar competing service, BitcoinFog, charges 2%.  Let's think about that.  BitcoinFog says he gets "thousands of bitcoins per day" moving through his service (see above thread, msg 17).  2% of thousands is, let's say, 50 bitcoins per day or about $300 per day, or $9000 per month.  Now that is way more than anything you might need to run the server.  A low-cost server might be $10 per month, a high-end might be, what, $50 per month?  So, assuming a high-end server (BTC 0.2 per day) handling 3000 bitcoins per day and an admin costing BTC 4 per day on average, a reasonable fee might be 0.2/3000 ~ 0.005% for server costs, 4/3000 ~ 0.1% for admin.

Now you might well say, STFU, go do your own.  Well, I would.  But let me tell you another story.  Where I live, the govt built a nice new bridge over the river.  It cost a lot of money, so there was a toll to go over it.  Now, 30 years or so later, the bridge has gathered enough tolls to be fully paid off many many times over, but the toll keeps getting more and more expensive.  I realise that there are maintenance costs, but they'd be far less than the tolls.

Same with bitcoin services - the devs have to be paid for the initial investment.  But if that were all, then you'd expect the fee for a service to reduce over time, and to reduce as more people use the service.  That hasn't happened with any bitcoin service that I'm aware of yet, leading me to think that service ops just want to milk the pundits as much as possible.

So - is it possible to use bitcoins with "near-zero" fees?  I don't think so.

[/rant]

Coin-mixing services and Fiat conversion services are not "Bitcoin transaction fees." They are fees for other services.

Fees for making transactions in Bitcoin are extremely low.

First as others have rightly pointed out those are the cost of services which USE Bitcoin not the cost of Bitcoin itself.

Still if you feel fees are too high on service "x" start a competing service obviously there is lots of profit to just scoop up with very little work right?  It is called the free market.  Either there is less profit than you think and one or more entities leave the market or the competition drives prices down to a more realistic margin.  Personally I seriously doubt BitcoinFog gets thousands of Bitcoins a day through the service.  Not sure why you are breaking down the cost of a service.  Price is the intersection of supply & demand.  The cost of production is immaterial (other than on how it affects public perception of the supply curve).

Yeah, when promoting it, people need to be very careful about how they approach fees. The network itself charges a fee that is on the order of one fourth of a US cent or thereabouts, but service providers that have to deal with fiat are going to charge more. The inbred banking system doesn't know how to do it any other way, and exchangers suffer for that. Additionally, the network itself doesn't need a corporation or people to run it as such, so there are no salaries or wages to pay, and no investors to spend money on. This isn't true of a service provider that interfaces with the outside world.

If it really does make as much as you say it does, it will be inundated by competition and the prices will have to be reduced.


As for your toll bridge. Had it been privatized, those tolls would have decreased.

That's true, but the fees to get into and out of bitcoin aren't insignificant and, I think, sort of work against the claim that bitcoin's transaction fees are low.  I think when people laud bitcoin's transaction fees they sometimes make use of the ambiguity between the transaction fees of a bitcoin to bitcoin transaction versus traditional currency to bitcoin and bitcoin to traditional currency.  For example, I see people write, or say in interviews, something like this:

"Bitcoin is the cheapest way to send somebody money"

Whether that's true depends on what 'money' is understood to mean.  If 'money' just refers to bitcoins, then, yeah, that's probably true.  But if what's meant is that it's the cheapest way to send somebody, say, USD, then no, it's very unlikely to be true considering the fees to transfer money to an exchange, then buy the bitcoins on the exchange for a fee, then send the bitcoins, then have the other person convert back to traditional currency.  I haven't done the math, but I'm willing to bet that for most transactions, that whole process is a lot more expensive, and probably not that much quicker, than sending somebody money through a bank.

Sheesh. I don't buy 99.9999% of things on offer in the world because I think the price isn't worth it.

The services you mention are pretty dumb. So you get different coins with a 'bad' history, big deal. There are tons of sites that let you hold balance and get your money back for free and it's not likely to be the same coins and you can check.

But if you feel like being outraged some more I offer to do it for 10%.

People keep telling me that there are no fees to use US Dollars. But then I need to PAY for my Comcast bill for internet. Then the corner stores wants me to PAY for a bag of M&Ms. The audacity!


FTFY!

Also it's silly to think that the right way to price is at (or even in some fixed relation to) cost. The main determinant of good pricing strategy is what substitutes are selling for. There usually isn't a good alternative to a specific bridge, ergo higher enough price for you to bitch about.

Yeah no fees for using cash my ass, everything I buy costs money!

Maybe not if they had monoploy, ie the only bridge across that river and if the market for two bridges would be too small.
You would get a situation where the owners would pump up the fees as high as possible.

It was.

I disagree.  An exchange which holds peoples' (e.g.) USD and BTC balances does not pay any external service (e.g. a bank) when two people trade with one another.  They just move numbers around within their own database.  Of course, this has to be done in a clever way so as not do annoy your users and that requires paying good devs and admins.

I realise that.

Not a dev. :-(

Indeed.  When the price of mixing services comes down (alot), then, I suppose, yes, I will start mixing my coins.  Right now, like I say, this "free market" seems to consist of greedy suppliers and, in any case, is too expensive for me.

How about this: I'll open a bank and I'll lend out depositors' monies at interest. I'll charge depositors a fee to keep their money safe.  I'll charge depositors every time they conduct an operation in the bank - I'll charge fees for them to put their money IN the bank, and I'll charge them fees to take their money out.  With ATM bank machines, I can reduce my costs-per-operation to almost zero, but WTF, I'll charge depositors the same amount anyway 'cos, really, all the banks do that anyway and I wanna be part of the BigBankersClub. Now THAT would be fees for using cash.

Really, guys, what's the point of a revolutionary new currency if nothing really changes? We'll just get a different cartel of geek bankers? I was hoping for better.

For having 200 posts on this forum, you sure don't know much about da bitcoins.  I thought about going posting more about why bitcoin is different, but it's been spelled out very clearly by those more eloquent than myself on these very forums.

They do have to pay en external service in the form of fees for deposit and withdrawal. Take for instance a wire transfer - often the sender and the receiver pay a fee. And paying devs and admins is why internal trade fees are levied. Not to mention the cost of a set of high performance servers if you have any kind of trade volume to worry about. What are you expecting, a non-for-profit charity exchange? Have you considered the cost of licensing fees and lawyers too?

It's a free market. If you want something cheaper, do it yourself and take their business.

If you want 0% transaction fees, mine them into your own blocks.

+1

Free market doesn't mean access to it is free, or that you don't get charged to use it. It means that you are free to implement your own service in it however you want to.

A lot of people aren't going to set up a Bitcoin service in the first place unless it's going to provide them with a decent income stream, especially given that providing such services comes with some legal risk.

How much do you think it would cost you to anonymise physical currency - a service which was available long before the digital age made tracking transactions easier than ever before?

The fee that we charge is not a transaction fee, it is a service fee. You are welcome to use us like any other wallet, deposit coins and never click the mix button. The only transaction fee that is charged is the standard 0.0005 BTC which we have to include because of the number of competing transactions produced by satoshidice. If you leave your coins on TORwallet for a while, there is a good chance that the coins will be mixed for free, but you can't know for sure. Clicking the button and paying a small fee  guarantees that your coins will be immediately mixed.

+1
it could be that in the future they can offer 0% fees for a coin mixing service, thanks to advertisement


you see its already started

Rather that make yourself the same as SD spam I would include a fee of 0.00050001 BTC to gain higher priority. :)

So the most popular response is: if you don't like it, do it yourself. Maybe it's just me, but that response just that seems so... childish. [sarcasm]Oh yeah, and unpredictable[/sarcasm]. Reminds me of "It MY ball, so if you don't play the way I say, I'm taking my ball back." What, do I have to learn how to do everything? Ever heard of specialisation of labour? I've already chosen my career and it wasn't software dev. Does that mean I have to be a slave to the software devs, or is there not some better method? Is the bitcoin revolution really going to just make *everyone* selfish, as is seems so far, or can we not hope for better?

Many people in this forum complain of government protection of the banking monopoly allowing the banks to charge outrageous fees with impunity.  Well look here - all hail the free market - where the fees are just as high.

You still don't get it. Transaction fees != fees for using services (btc mixing, exchange, stock ex etc..)

That's true.  But good luck getting around fees for using services to use bitcoin.  It's not that easy.  For most people, they're going to transfer money from their bank to a service then to a bitcoin exchange.  Then they've got to buy bitcoins.  If they want traditional back, then they've got to do the same thing the other way.  And the service fees to use bitcoin in this way are probably higher than the transaction fees in the traditional system.  Bitcoin to bitcoin transactions are low cost.  But, the bitcoin economy isn't isolated, and as a practical matter most everyone will have to pay service fees to use bitcoin, and in so doing will probably pay more to use bitcoin than if they had used a traditional currency.

The day bitcoin is truly mature is when there are enough services accepting them so that you would never have to convert to and from official currencies. Paypal sucks in many ways, but I love the fact that I can sell one thing for paypal and then spend it in various places without ever having to meddle with bank accounts and credit cards. When bitcoin is there, third party fees are irrelevant, because you wouldn't have to use any.

FTFY

And saying that people will "probably" or "maybe" pay more fees != will pay more.

I feel that you're stating one position (bitcoins have high fees) and then providing arguments for a totally different position (bitcoin services cost too much)

You might have something to discuss on the latter, but you're not doin' a good job.

If bitcoin is what it's cracked up to be ( and it probably is ) then soon we won't be using fiat at all. Goods and services for fiat will move to bitcoin one by one. Every time a new business accepts bitcoins, bitcoins become more attractive, more business are encouraged to accept bitcoins.

Once this happens, all transactions will be bitcon transactions with 1/2 cent fees. Services converting between fiat will be redundant.

Bitcoin is still quite a small market (in terms of the user base) - it is probably only the size of a small (European) town of users at the moment. This makes fees higher than they will be in the future when bitcoin is larger.


I was doing my monthly accounts today and also looking at the number of MultiBit downloads. MultiBit will always be free but I worked out how much it would actually cost per user per month if it were to "wash its face" on purely commercial terms. By this I mean generate enough cash to cover somebody's living costs.  The cost breakdown gives an idea of where all these services get their fee percentages from.

Here are the numbers:
Say I need euro1000 a month to pay my bills. Europeans have a term for this - 'Euromillista'. It is a living but not a terribly glamourous one.

At the moment there are somewhere around 2500 downloads of MultiBit. Let's pretend every one of those downloads is an active user. If it was a commercially run subscription service you would need, net, 40 cents per user per month to total euro1000 per month. Gross - before tax, running costs etc - you probably need 1 euro per user per month.

You can see how a commercial organisation starts having to charge 1% of transaction volume to raise that amount.

Fortunately, if and when Bitcoin grows in terms of users, I would expect the rates people need to charge to go down. A website serving 1000 downloads a day does not cost ten times one that serves 100 a day.

He clearly isn't talking about transaction fees. A lot of you need to go back and read what he actually is talking about.

He makes some good points. I agree that sombunall ( 'some but not all' ) new Bitcoin businesses are missing a great
opportunity by seeming to go after the quick buck rather than having a more long term vision which would help not
only their own business but Bitcoin as a whole.  

I stated a similar view when I saw how much money some people were asking for their music on the coindl site.  

What is the incentive for someone to buy something with this weird bitcoin stuff on some dodgy
and ugly(imo) website if they can get something just as good, or better, for the same price at itunes?  

A lot of newbie Bitcoiner merchants seemingly can't see how they may make more money by selling a song
hundreds of times for nickels and dimes rather than a few songs for a $1.  

Bitcoin is perfect for microtransactions because all the profit doesn't get eaten up in paypal or CC fees...
and everyone here no doubt knows of the other advantages for consumers and merchants.

A lot of people still don't get that average people don't give a crap about the advanced crypto tech
or egalitarian philosophy of bitcoin, but if they can save a significant amount of money then they
surely would consider using it.

You're right.  I'm suggesting that the fees to use bitcoin are more because you have to pay the service fees for traditional currency services plus service fees demanded by bitcoin exchanges.

It's a combination of cost and convenience.  $4 per month gets me unlimited transactions on my bank account, I can transfer small amounts, and the charge for overseas transactions is trivial (I used my debit Mastercard to pay Amazon $27 last month and my bank charged me a whole 6 cents for making an international transaction).  I'm willing to pay $4 per month for that level of convenience.

Bingo.  Getting in and out of bitcoin is actually comparatively really expensive, I think.

don't forget that you're dealing in a currency whose price is going UP.

Okay Fergalish, we need to have a talk.

You seem to be upset that people who provide you with services charge a fee and retain profit from that fee. Tell me, what is it you do for work? Are you charging your employer anything more than the cost of your food and shelter? If so, you are profiting from your employer in the same way these service providers (such as the Tor mixing service) are doing. Complaining about it is hypocritical. Profit is not bad, it is good. I want there to be more profit in Bitcoin... I hope tomorrow there are twice as many Bitcoin services earning profit.

Now, if you're simply upset because bitcoin is promoted as "without fee" then you are misunderstanding how this works. Bitcoin itself, as a payment system peer-to-peer has no fee (or the very tiny voluntary fee). You can send money without fee right now, go give it a try. However, if you want MORE services than simple money transfer (like coin washing, for example), then you'll be asked by the provider to pay for it.

Any value-added service above and beyond the core money transfer system of Bitcoin is going to require payment (costs + profit). If you find a service provider's fee to be too high, then don't use them. Simple simple!

Ahhhhhh, thank you.

So, Proudhon, and others, argue that the service fees are, in part, due to transferring wealth in and out of bitcoin-dom (e.g. €1 SEPA transfer etc).  If that were the case, then (and I choose MtGox only as a representative example) MtGox would have smaller fees for changing a USD MtGox balance into a BTC MtGox balance - no external bank transactions necessary.  But the fee is 1.2%.  Is 1.2% of some 50,000 bitcoins per day a reasonalbe amount?  Or, again only a representative example, look at TorWallet.  It exists only in bitcoin-dom with no external bank involvement.  Nobody has refuted my estimate for server and admin costs which would be much smaller than the actual fee.

Therefore, Proudhon and others, I reject the claim that bitcoin service fees are related to moving money in and out of the bitcoin economy.  If that were so, then, not only would TorWallet have lower fees (or I've grossly underestimated their costs), but also asdf's hypothesis will come to pass, but I'm not so hopeful:


You're oversimplifying.  It's not a black-and-white situation.  If my food and shelter costs were $1000 per month, then it's not like charging $1500 or $2000 is grossly unreasonable.  But suppose I were one of the usual cronies milking the system for what it's worth - a doctor, a lawyer, a politicial, a banker, etc.  And I ask for $10000 per day (think about bankers with $5M yearly bonuses, on top of their salary), is that still reasonable?  Is it reasonable to insist on being paid an enormous amount just because people are willing to pay?  Does it never become "greed"?

I've had a similar argument on this forum about the cost of digital goods, e.g. an mp3. My argument was similar to Portnoy's - should I pay $1 for an mp3 because I consider it worth that much to me, or should I pay $0.001 because if 1,000,000 people buy it, then the author will have been abundantly well paid?  Why is it that big-name musicians earn tens of millions of dollars per year, while less known musicians, often of a much superior quality, barely scrape a living?  I am fully aware that this is the free market, but, bearing in mind the root causes of the current economic mess, can't any of you capitalists stop for a moment to thiink: is it fair?  Really - try to think if greed is truly the best way for humanity to shine.  Think about whether rewarding people with fabulous wealth is the best way to attract the best people for a job (be that politician, or banker, etc), or if it's the best way to attract the greediest people.

Then why does an e-book, or an mp3 on itunes, have a price which is comparable to the physical book or CD on high-street?  I agree, in an ideal world prices would come down, but I'm just a born sceptic.

Even if you're not exchanging to USD on either end, it's still probably going to be more expensive in practice because of the higher prices of buying items in Bitcoins as opposed to USD. If you think about it, pretty much all the commercial sellers offering goods for Bitcoins have to immediately exchange for USD since that's what they paid for the goods in, and they'll want to take an extra cut on top of that to compensate for exchange rate risk, plus Bitcoin is a small market with not much competition, etc...

Centralized services do tend to accumulate fees and policies, those actors then often try and raise barriers to entry. It's one of the reasons banking is so messed up today. So I don't think the original complaint is meritless.

The solution to many of these problems is to design entirely decentralized P2P equivalents of popular services like exchanges.

Without any service fees to fund them, we must first solve the problem of creating public goods via assurance contracts. That would let people easily pledge, Kickstarter style, to the development of new P2P systems to replace popular services.

The limiting factors today are:

• Lack of a solid Kickstarter style system. Of course, somebody could throw up a website and make one very easy, but then we're back to having a centralized service that would charge fees ;) A decentralized assurance contract protocol is possible (see the wiki), but hasn't been built yet.
• Lack of enough people with the credibility, skills, passion and time to do an excellent job of fulfilling the assurance contracts. Building these systems is not easy, in fact it's almost always much harder than doing a centralized service. So a huge bottleneck is insufficient skilled engineers in the community.
• Lack of documentation, libraries, examples and experience to make building Satoshi-style decentralized services easy.

I think all these will get resolved with time as the community grows. I have the interest and ability to tackle many of these problems, but right now I'm pretty happy with my current job, and it's unclear how much money could really be raised to develop P2P solutions for all these markets. Also, I'm busy ensuring that mobile wallets can work purely P2P (and therefore fee-less). That's a 2 year project already, but it lays the groundwork for many other things.

I sell wireless airtime (which I pay for in dollars) for 2% to 6% off and still have a profit margins.  Something which is impossible in your analysis.  My processing costs (including currency risk) is still much lower than credit card costs plus fraud.

Agreed...  a bitcoin-denominated kickstarter seemed like a natural early-stage service.  Surprised it has not appeared.

Personally I never used a mixing service, because I never had the need for it. Thus I've paid 0 fees for a bitcoin mixing service. I suppose however that those paying for having their coins mixed is ready to pay a fee for this service. If they're not, they simply won't use that service.

As for the fee structure itself..

There are usually one or more coders behind a website, and coders need money to pay for food, housing, bills etc.. If the fees are too high, then the market will adjust fees as more competitors enter.

One might think that a website runs itself all by itself, and the only thing you'd need to do is to do the initial coding and then just let it run all by itself, never doing anything more.

Well, what about os updates, security updates, bitcoind updates, feature updates, suppport, marketing, affiliates, and fixing any odd problem that may occur, ddos attacks, hackers, various service failures etc.

Fact is, if you want to run a web based service, and you want to run it well, there's a lot of work involved, of course depending on the complexity and how much effort you want to put into it.

I agree the "Well, then do it yourself" is a very childish response. Anyone should be allowed to give critism without actually doing something themselves, however, until you actually made a similar service yourself, then you don't know all the work involved to have it running, and I think this is one of the reasons why people give this response.

Many non-coders think that making a website is very easy, and don't look at it as actual work, but usually what the visitor sees when visiting a web site is just the top of the iceberg, and there's a lot of code behind it which someone has typed on their keyboard and spent a lot of hours doing.

In my view, anyone should be allowed to take any fee they seem fit for any service they create, and if the fee is too high, then the free market will adjust this itself.

For instance, some fixed rate exhanges and bitcoin exchanges may seem to take very high fees, however, what the average user does not take into account when he complain about that is that most such services are hit hard with fraudulent transactions. And these needs to be covered by the legit users.

Lastly, bitcoin transactions itself has very low transaction fees, however exhanging from fiat money into bitcoin may have a conversion fee, and services where you use bitcoin may have a fee as well. We are all free to use or not to use these services.

It is natural, moral, legitimate, efficient, and productive to seek the highest profit one can obtain, so long as one doesn't resort to fraud, deception, trickery, or theft in order to obtain it. It is by the mechanism of each individual seeking to maximize profit (so long as it's done honestly) by which proper market price discovery occurs, and resources are allocated most effectively. If you charge below what you can otherwise obtain, you are sending a signal that the service you're providing is less valuable than otherwise, meaning production of that service will be lower than otherwise, meaning other market participants will be misled by a price signal that was distorted.

Indeed, one could make the argument that charging less than you can, while being good for the person on the other side of the transaction, is in fact harmful in aggregate to those around you.

Are you saying that it's not possible to be greedy?  Is there never a point at which an asking price is unfair?

How about this.  I could agree with you and say profiteering is legitimate.  I could then go further and say that profiteering through fraud and deception is also legitimate.  Well, why not?  If I can convince someone to part with their money, could I not then put that money to better use in the market?  Give me a really good reason why dishonesty shouldn't be allowed and yet profiteering should.  No appeal to morals, please, nor to "the greater good" or "market efficiency" etc, please, as these are statements about a theoretical markets.  After all, if it's a free market, my dishonesty will soon be discovered and my customers will go elsewhere. What's the problem? In fact, by dishonestly trading, I'd even be helping the economy - think about it, my defrauded customers will become much more careful and discriminating in their future purchases and the economy as a whole will be more resilient and less susceptible to fraudsters..... Can you *logically* refute that and *still* claim that profiteering is natural, moral, legitimate, efficient, and productive?

I've realized that there is an analogy to the Non Agression Pact of Libertarianism, and have started a thread apropos: https://bitcointalk.org/index.php?topic=88184.0 (https://bitcointalk.org/index.php?topic=88184.0)

Decades, if not centuries, of standard economic theory says demand is a decreasing function of price. Are you saying all that is wrong now? If your product is good value, the shouldn't the free market (eventually) select it even if it's much cheaper than the competition? Wouldn't your customers spread the word about what a great guy with a great product you are?

That doesn't have to mean trying to extract as much material profit as one can from every person, situation, and environment one encounters in life.

I don't see anyone trying to deny you or anyone a fair return on your efforts. If you were paying attention you may have noticed that both fergalish  
and I provided an example where one could get even greater profits while at the same time serving ones customers in the best possible way at
fair prices.

I too am disappointed at the way you seem to often want to reduce things to a simplistic level in discussions like this, as if it is only possible to see
profit in terms of a choice between the two absolutes of "good" and "bad".  

I see it as more of a choice between the exercise of creativity and a more long term, wider and deeper vision, or the more lazy and shortsighted ways
of trying to grab a quick buck.  


Sounds like little more than justifications to me. There are many examples of things like generosity and philanthropy resulting in great good for businesses which embrace such ways.  


I find this a disappointing attitude coming from a business man as well.  Take it or leave it?  I would suggest it makes for a better business to treat customers, and potential customers, with greater respect. The best businesses I have known, and been lucky enough to be a part of at times, encourage feedback, even if it is negative.  I see such businesses thrive which do the best job of cultivating open discussions and two-way relationships with their customers.  

And that is the point I feel. There is I feel new and better ways ( actually very old ways ) of doing business than a lot of what I have witnessed in many modern corporations and initiatives etc.  It is about thinking a little bit less, just a little, about what one can personally gain and just a little more about how one can serve not only ones customers but ones communities and the greater economies we are all a part of.

There is a sweet spot ( maybe more than one... maybe several... )  between the relative goods and bads, where ones most optimal result is obtained by helping the other
find theirs. Where customers are excellently served and merchants are amply rewarded.

And it seems to me that it is the seeking of that ideal which brings the greatest reward, not only in material terms, and makes for not only better business but more harmonious relations among people in general.  

I see Bitcoin as being a potentially helpful tool in moving us in these directions and am just disappointed when I see so many new Bitcoin businesses fail to see such potentials and instead resort to the usual money grubbing ways which seem common for our time.  

I see fergalish has posted a response while I have been typing this, but I will post this anyway even though I am sure he already did a good job.  Besides I spent too much time on this just to throw it away...  :)

Profiteering can rarely occur in free markets.  Cornerstone of free markets is low barriers to entry and lack of govt interference.  Without those profiteering can't occur.  someone charging 20,000% markup will be replaced by someone charging 100% and him replaced by someone charging 50%, 20% etc.  Until prices are driven down to a fair compensation of risk, and value.

Sadly such markets don't exist :(

I feel exactly the same way.  I admire bitcoin very much, and the opportunities for an equitable society are plain for all to see; pity it's being usurped by the money-makers.

To all those that say "do it yourself", well, if I could, I would. I would cover costs and take no profits, but I would ask for donations.

Okay check out the website in my sig then because this is exactly the way I work :) [Sorry for the shameless advertizing but I couldn't resist]

Welcome to freedom! Enjoy your stay.

BTW, if you can't do something, you are also free to hire someone that can. But then you would be forced to charge your customers more in order to pay that someone. See how it works?

Take for instance Bitinstant: They charge one of the largest premiums I have seen around here, but for convenience. Because no one else has stepped up to provide an equivalent service, they are the only game in town, and because they are successful it is obvious that customers don't mind paying a premium to use their service. Sure, the customers could deposit cash to Bitfloor for no fee at all, but most of them want the convenience of depositing at Wal-mart, CVS, 7-Eleven, and many other locations.

The customers are even calling for Bitfloor to have Bitinstant integration, even though they know they they would be paying up to a 4% fee! This is indeed supply and demand at work - the demand is high, and the price is high to match. Eventually there would be a crossing point, but the market would have to find out where that point is, and it hasn't yet apparently, according to the success of Bitinstant.

Insofar as a monopoly can occur in a free market, then so can profiteering.  I can't wait for the alternative lower-cost bitcoin services to spring up.  Given that first-movers have the advantage, and second and third-movers will probably just maintain the status quo, well, I'm not so hopeful.  Let me ask you a question.  Do you suppose there are any price-fixing cartels in bitcoin-dom yet?

One form of "cost" is risk.  It is entirely possible that in our instance we could be double spent, or have funds wrongly held hostage by an exchange, we have already had withdrawals delay 18 days before clearing.  The largest risk is in currency movement.  While Bitcoin was pretty stable last month volatility (hmm someone should maybe a VIX like indicator for BTC) has increased lately.  Trying to run a business at "cost" (which is likely more than you think) is naive.  One catastrophic event and your cashflow liquidity is gone.    Doing that with everything in life means eventually you are going bankrupt.  You can only be lucky for so long.  Eventually the law of averages catches up.  You will take loses due to fraud, you will have unexpected costs/failures, you will have funds stolen.  Those have to be planned for to ensure your capital can survive and expand.

Risk is a cost and margin is a method to partially mitigate that risk.  If you would be willing to put up $50K capital and take upon yourself all currency risk we face with no compensation (i.e. you profit or lose one any currency move between time we buys coins and we are able to sell them) we would be happy to remove that cost (~0.5% in our estimate) from the retail price.  

I have a feeling we aren't going to find any takers to absorb that risk for free as such that risk is passed on to the consumers.

One thing I would point out is sell wireless airtime at a discount and offer quick sales of BTC at a premium (no different IMHO than an ATM service fee).  Personally I think the former is far more valuable however to date our revenue has been about 95% from the later so it would seem consumers care very little about fees.   I am still optimistic this will change.  I will be very happy the day we generate more revenue by selling goods and services than by buying/selling BTC. 

Monopolies (with the exception of natural monopolies) generally require the assistance to maintain their monopolistic position.

There certainly may be "cartels" which attempt to manipulate the exchange rate (I assume that is what you mean by price fixing) but that isn't a monopoly.  As long as the cartels are competing for profits a free market* is taking place.  


* free markets tend to be impossible.  We can however strive for free[er] markets.  The lack of govt control and manipulation makes me believe BTC/USD is a freeer market than say the price of oil or EUR/USD forex market.

I agree with all you say and, while I would very much like to be the good philanthropist and put up the $50K you require, well firstly, I don't have it and secondly if I did, there are plenty of other things I'd do with it first.

How come you're afraid of being double-spent? Bitcoins don't permit double spending, unless you're doing something specifically to re-expose that risk, such as offering wealth on foot of zero-confirmation bitcoin receipts...? Exchange rate risk... yes, but then, when volatility goes down, you'll be able to (nearly) eliminate the fee for that risk, right?

Certainly one should have a buffer of capital to cover for unlikely events, but once you've put enough capital aside to do that, then the fees should come down, right?  i.e. you need $50K to cover for unlucky exchange rates.  So how long, at 0.5% fee, will it take you to put $50K aside?  A few months?  A couple of years?  So do that, then put a big banner on your site saying how you're now able to reduce fees by 0.5% due to the excellent risk management strategy devised by the managerial team.

Don't get me wrong - read my OP again. I'm all for a fair price and a fair profit. Seems to me, though, that the "Great Bitcoin Opportunity To Give Economic Power Back To The People" is being abused by some players (and, again, I mentioned some specific websites only as representative examples).


I mean price-fixing monopoly cartels. Like OPEC, right? (though maybe their monopoly is dwindling). A powerful monopoly needs no assistance. It can purchase its own violence without requiring the state to provide any.

The 51% attack is always a risk.  Currency exchangers are a likely and lucrative target in the event of a 51% attack.  Our pricing does take into consideration the current volatility by comparing the differences between the last trade, the 24 hour weighted average, and 60 minute price velocity.  The margin adjusts based on the projected 60 min forward volatility. Of course that introduces another form of risk.  Our model could be flawed and we haven't mitigated anything.  That puts a lower limit on how comfortable we are in reducing the margin.

While eventually the profits from the margin spread will grow the capital it is very likely (hopeful) that daily volume will continue to grow requiring more capital.  We do hope to improve our price spreads and will continually re-evaluate it.  The larger point is that what an outsider looking in may consider "excessive" may be the minimum margin suppliers are willing to risk their capital at.   

You either believe in free markets or you don't.   If the profit is truly excessive (which given not a single investor has receive a penny in dividends I don't think it is) then competition will drive those margins down as other greedy business seek to gain marketshare.  On the other hand if the profit margin isn't excessive those who attempt to do so will find themselves bankrupt. 

If the market is free then given enough supply and demand the price reached IS the fair price.

I stand by the assertion that monopolies (except in the rare instances of natural monopolies) are simply not sustainable without the assistance and coercion of the state.  If you feel banks are predatory your can't form a "fair bank" or at least your ability to is significantly hampered by the State.  If you feel Bitcoin businesses are predatory you don't have those artificial higher barriers to entry which allows monopolies to exist.

what is "fair"? If you don't like the price. Don't buy.

Besides, don't you see the symmetry of the situation. Any argument you apply to the sale of goods can be applied to your labor. How many raises will you demand before it's "unfair"? Supply and demand meet at the fair price (as long as there is no monopoly or special privileges, enforced with violence).


Fraud is illegitimate. It's an orthogonal argument.


That's the beauty of capitalism. The money ends up in the hands of the people who are best at efficiently allocating resources.


What good is defrauding you customers with the end of making them better able to identify a fraudster? Let them get defrauded if they will and the end will be the same, except your guaranteeing fraud rather than leaving it to chance. This doesn't help the economy.

Imagine there is a flood and the roads are blocked. The corner store can't get new deliveries of milk so they raise the price. This is profiteering. Now less people will buy milk because some will decide that it's not worth the extra cost. Those that really need milk can still get it.

Now, if the store is prevented through force to keep his prices stable. All the milk will be bought by regular customers and quickly run out. Now the people who especially need the milk will be unable to get it. Resources have not been efficiently allocated. This is a called a shortage and it is a result of the price fixing.

Please read the previous posts.  I said it's not a black and white situation.  It's not like $99 is fair, but $100 is unfair - there's no sudden line that you cross.  If something costs $10 to produce, then is $10,000,000 a fair price (suppose you own the only squieegligook mine, and people want squieegligooks)?  Answer my question - is it possible to be greedy when setting a price?

Is that your best argument as to why fraud is illegitimate?  Just "because"?  I'm hypothesising a truly free market, where there are absolutely no regulations.  Buyer beware, is the order of the day.

Great! Do we agree then, that if I can separate a fool and his money, it matters not how I do that?

Wouldn't it be great if all consumers were perfectly good at spotting and avoiding fraudsters? My question remains:
Personally I am of the opinion that profiteering is immoral, illegitimate, inefficient and unproductive, and nothing other than a fraudulent misrepresentation of the value of a product or service. It just seems to me that the pro-free-market position is untenable. Why is profiteering considered ok, yet fraud is not? Don't ignore the question by saying it's "orthogonal" like as though that means something.

You're equating "those who especially need milk" with "those with the resources to pay elevated prices".  If your corner store raises prices, it won't be the needy that can still buy milk, but the wealthy. These two groups will be almost mutually exclusive (i.e. the needy will probably be poor, and the wealthy will probably not be needy).

An individual's primary moral obligation is to achieve his own well-being—it is for his life and his self-interest that an individual ought to adhere to a moral code.


"I swear—by my life and my love of it—that I will never live for the sake of another man, nor ask another man to live for mine." -Ayn Rand

Can't you see how in many ways ones own well-being is dependent on the well-being of others?
Greed is only good for isolating oneself from the world and perpetuating social pathologies.  


This quote, which some other forum member uses as a sig, I find much better:

"There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs." - John Rogers

/edit
Here are also some other interesting articles on that person:

http://www.guardian.co.uk/commentisfree/2012/mar/05/new-right-ayn-rand-marx

---

http://www.firstthings.com/onthesquare/2011/06/the-fountainhead-of-satanism

You can replace the pentagrams of LeVayian Satanism with the dollar sign of the Objectivists
without changing much of the substance separating the two. The ideas are largely the same,
though the movements’ aesthetics are different...


:)

/edit 2
I am not a Christian btw...  but that second article does speak to a certain hypocrisy. 

Well, maybe (s)he does. This philosophy is quite compatible with anything really - if you happen to think that your well-being is best served by a tyrannical despotic ruler, well, that'll work for you. If you think it's best served by complete lawless anarchy, well, that's what you think. The point is that, when you have sufficiently achieved your own well-being, you can afford to dedicate some of your productive capacity to the well-being of others; the question that arises is whether there exists a moral obligation to do so. Personally, I don't think there is any such a moral obligation, but I do think that it's a sign of greed when people take more cake than they can eat.

edit: the real problem with Elwar's statement is that it says nothing about what to do when two people's ideals conflict.

It is called the non-initiation of force.

If two people's ideals conflict. The moral person will be the one who does not initiate force upon the other.


You could love communism and I could love liberty. As soon as you see me make money and attempt to take that money, then you have committed the immoral act.

If I see you spread your wealth equally among your commune and I come in and force you to keep it all and not give it away, then that is the point of immorality.


And if everyone lived their lives with the goal of being self reliant, then there would be no one that would need society to take care of.

And to stifle one's self reliance is an act of stifling one's ability to live. You are basically attacking life and embracing death with every shot at anyone trying to get ahead. And in many ways, a lot of people just yearn for death and an end to human existence. That is their choice. That is something for you to deal with on your own, if you do not like life then embrace death on your own instead of trying to take everyone else down with you.

As for Ayn Rand...better to attack the person than the philosophy right?

And I do see how one's own well-being is dependent on the well-being of others. All boats rise with the tide. So if one person is able to make a buttload on a Bitcoin service and I start my own service and that person's buttload of Bitcoins gets others to use Bitcoin then I benefit. It would also encourage others to start their own Bitcoin businesses in order to prosper as well. And with that comes competition and better/cheaper services. So yes, someone making huge profits does contribute to my well-being.

Greed does not isolate, it leads us all to prosperity.

To not be greedy would mean that we do not work for reward. If you do not work for reward you will avoid work. If nobody works, we all die.

Oh come on!  Those links were all about criticizing her "philosophy." It isn't like it is name calling and suggesting we should reject her views because the writers think she is ugly, stinks and talks with a funny accent.  One of the few places it even touches on her personal life is where it points out how she can't even live up to her own convictions:
"I wonder how many would continue to worship at the shrine of Ayn Rand if they knew that towards the end of her life she signed on for both Medicare and social security."

Which surely tells us something about her philosophy and not just her since such hypocrisy seems not uncommon among Randians.  

How do you explain how so many who follow Any Rand also call themselves Christians? How does one reconcile Atlas Shrugged with the Sermon on the Mount for example?

But nevermind... if this thread is going to get into discussions of Any Rand's ideas I will bow out... I think I would rather debate evolution with fundamentalists...


It seems that idea has been expressed more than once already.  Fergalish, in answer to that it seems, has some other great questions. Why don't any of you greedsters have a go at answering those?

 

I read through this thread and saw plenty talking about why charging higher prices is good, but little about why lower prices are bad. So, to answer that question:

Bitcoin services charging lower, more "fair" fees, would be VERY bad, because that would mean everyone who is using their service would be satisfied with what they are getting. There would be no incentive for anyone to come up with a better system, since what works already works, and anyone inventing a new system will likely have development costs that exceed the artificially low "fair" prices charged by the first movers. It will also mean that we will be limited to the few first-movers that joined the field to begin with, and no one else will bother to join, since they won't be able to compete or make any money. We'll have centralization of services and monopolies. Fees being high as they are now means that there is plenty of room for others to come in and try to compete with those first-movers, meaning we'll have more choices, and that there is extra money in the profits that can be spent above the base costs on developing new things that may improve service.

We have a pretty good real world example of this problem btw. Currently, gas prices in the US are about $3.30 per gallon. This is not the free market price, but a MUCH lower "fair" price that is supported by oil subsidies, government cleanup of spills, and US military fighting to defend oil fields around the world. The benefit is we get cheap, "fairly" priced, gas, and Joe Everyman can afford to drive his car just like the rich folks. The downsides are: almost no choices regarding what type of energy source we use for transportation, very little choice in whom we buy gas from, and externalities like oil spills, smog, wars, and contribution to global warming. The alternative is a free market price, i.e. "unfair, greedy, profiteering" price. Without those subsidies, the price of gas would likely be around $5 to $6 per gallon. At that price, suddenly things like ethanol, natural gas, and even solar, wind, and hydrogen fuel cell based energy systems become competitive. With the free market price, filling your car up with gas will cost a lot more, and poor people will suffer at first, but companies will see huge profit potential in actually competing with gasoline (something they can't do now), meaning they will dump lots of money into research to get electric and alternative fuel cars out to the market. Rich folks will buy the new models (like they do with Tesla cars now), the produced number of those cars will greatly increase, and before long the new technology will be just a common thing everyone can afford. The result will be that you can either still buy a gasoline car, or have the option to buy something else, including something you charge or generate hydrogen for at home, and can actually become cheaper than gasoline. And the externalities will greatly decrease as well. Right now, if there is an oil spill or some oil related war, we have to grin and bear it, since we have no choice but to keep using that oil. Under the free market system, if there is an oil spill, or some oil companies decide to have a war in some country, we can actually chose to go with something else. Same for polution: if someone decides to drive something that pollutes the air around me, I can actually take them to court without being laughed out of it, since NOT to pollute will be a viable choice, and buying something that creates smog will be a conscious, specific decision.

And Karl Marx most likely bought a sandwich and earned money by producing a good or service. Was he a hypocrite?

Or did he pay more for goods if the person's need was greater?

So Ayn Rand using Medicare and social security is not a case of hypocrisy because... ? 

Because she believed she has paid into it, and thus it was her money, or the service she paid for. Which is technically true.

It is still hypocrisy and this also shows how easy it is for Randians to justify anything they do, whether it fits with their
stated principles or not.

She could also say it is in her best interest to be a hypocrite. It is alright to have others pay for her to get medical care
etc. while she rails on against having to pay anything to help others herself. Just like it is okay for Palin to attack such
things as socialized medicine while admitting that she and her family used to travel across the border to get services
at the expense of Canadian tax payers. 

The great thing about Rands philosophy, as well as Straussian neoconservatism, is that one doesn't have
to follow oneself the religious and other dogmas that one demands of those one rules over.
Lies and hypocrisy are justified when dealing with lower and weaker people if it enhances oneself.     

Vorhees did bring that up and it was replied to...

B forcefully takes from A.  B willingly gives to C.  It is possible to fault B, but not C.

Belief that a service should not be provided through force does not equal a condoning of the act of acceptance itself.  Those doing the taking in order to provide the service, (B) and those willingly receiving (C) are two parties engaged in two separate actions.  Belonging to the latter party while condemning the former does not necessarily make one a hypocrite.  It USUALLY leads one to hypocrisy because one tends to support policies which perpetuate the handout, thus supporting the initial action that one supposedly was against.

For example, let us suppose drunk driving laws really make the highways safer.  And let us suppose that I, a non-driver with an ideological stance opposed to such laws, but with nothing to lose from such laws myself, am regularly a passenger on those highways.  Every time I get into the car, I am willingly accepting the benefit of a law I am ideologically opposed to.  This does not make me a hypocrite.  What WOULD make me a hypocrite would be the realization that the law is benefiting me personally, and a resultant shift to supporting the law, even though it goes against my underlying principles.

Accepting social security would not make Rand a hypocrite.  Switching her viewpoint and suddenly saying, "oh, well, actually we SHOULD pay social security taxes," in order to perpetuate the system and benefit herself, even though such a saying was inconsistent with her philosophy, would be hypocritical.

Those few individuals who consistently advocate against the very programs they benefit from, knowing full well the cost should they succeed, are not the hypocrites.  They are the few people with a demonstrated ability to resist the forces that lead to hypocritical behavior.

You could still argue that Rand was against the very act of accepting a service at below cost, and was thus a hypocrite. (not an easy contention to prove) But that hasn't been the argument implied so far.

I hope not to see you bow out over this Portnoy, as I consider this primarily a discussion on logic and the nature of hypocrisy, rather than Rand's ideas.

Sorry, but either way it is no doubt getting off topic. 

Ayn Rand had force initiated against her. She was forced to pay into medicare and social security. Once force has been initiated against you, you have the moral right to both defend yourself and punish, or be justly compensated by, the aggressor.

And if you read Atlas Shrugged, the fall of the country to be re-built by those who actually produce was a major point.

There are many in the libertarian community that believe that pushing the government over the cliff sooner is the better strategy as opposed to the long slow crash. Letting the socialist movement take its course leads to the same thing each time, it is up to us to prepare for that fall so that we may come out on top afterwards.

I, for one, do not support sitting back as liberals and socialists steal from the productive and distribute it among themselves. I am all for getting as much of that stolen loot into the hands of libertarians who will then go on to use that money to fight the very theft that is occurring. To sit idly by and allow the looters to prosper and grow at the expense of the productive is akin to the extermination of productivity.

Bitcoin provides one small piece in fighting the thieves. Those who use FRNs are getting wealth stolen every day, most people do not even realize it. A few services that are transparently showing you the fees that you are charged is nothing compared to what the Federal Reserve does. And you have the choice of using those services or not.

Again, how often did Karl Marx purchase a product at a free market rate? Did he pay more for a sandwich because the owner's child needed money for the hospital? Did he distribute the money he earned equally to those who needed it the most? Did he live every day of his life strictly confined to the principles of his communist manifesto? Or was he a hypocrite? Or is it not hypocritical to work toward an ideal while still dealing with the imperfect world you are fighting against?

And the innocent lives that will be harmed and lost don't count for anything.  The end justifies the means.
Thanks for confirming my views on them.   


And don't for a second imagine that I am some kind of Marxist or Communist. I probably have as
many problems with their philosophies and hypocrisies as I do with the objectivists and neocons
and fundamentalists and other groups dissociated from reality and lost in their own ideologies.   

So do you want to get back on track and deal with the questions and points fergalish raised? 

It is never hypocrisy to live in the real world, while trying to change it.

It's also not hypocrisy to receive a tiny refund out of a fund you've been paying into (at gunpoint) your entire life. It doesn't undermine your protest against the initial theft.

I agree with that, and you can probably tell from my name I have sympathy for anarchists ideas, but I don't think the right action is (to paraphrase something written earlier) to push government over the cliff as soon as possible.  Portnoy is right, I think, to point out that that would do a tremendous amount of harm to a enormous number of people.

I think, as a society, we should march toward greater individual responsibility and liberty, but that has to be balanced along the way, and it will always be a messy balancing act.  Maybe 1000 years on our collective level of intelligence and sense of right social behavior will be advanced enough to practically dispense with government as we know it - if anything, I think the technological advances of today our pointing us in that direction.  Nevertheless, it would immoral to try to bring that future about prematurely for simple practical reasons.

My current view is essentially that some type of anarchism is ultimately how we ought to live, but that the only way to ethically achieve that end is by education and by slowly and carefully auditing ourselves along the way.

There's my two bitcents.

That is very close to way I see things.  The type of anarchism I tend to favor is not so much about trying to fight
and bring down governments ( that is a type of hypocrisy itself since anarchism is supposed to be about not imposing
ones views and ways on others ) but rather living ones life 'despite' governments.  Things like Bitcoin help make the
type of statist governments we have today more and more irrelevant. They don't need to be fought and conquered...
they are rotting from within and will fall under their own weight. ( sure defend yourself if outright attacked, but one
can usually avoid that as they [ these current systems of mass control ] become more ineffectual and impotent )  
The better course, as I see it, to go along with what proudhon mentions, is to make the transition smoother by
providing better alternatives.  

I would agree with that if with discernment and reflection one can recognize
ones errors and can bring themselves to revise their principles when it becomes
clear they are at odds with how they actually come to live their lives.  Somewhat
like proudon's 'auditing ourselves along the way' or R.A. Wilson's 'not getting trapped
in our own reality tunnels'...   

lol...by "pushing the government over the cliff" they mean that they would get out of the way of those who are currently destroying it, like allowing a child to touch the hot stove instead of interfering. Some would say that it is best for the child to learn his lesson and get burned, others would rather the child not get burned and point out the danger instead. It gets tiring telling the child over and over that it will really hurt if he touches it.

Yes, I think that revolutionary and violent anarchism is, in many ways, to misunderstand philosophical anarchism.  As I said, I think technology can help facilitate a smoothish transition along humanity's long path to anarchist society.  I don't see anything very close to a practical anarchist society being a reality for a long time to come, but I don't think it's implausible.  And, actually, with all their flaws, I think a lot of democratic societies are a good way there.  I don't think things are quite so grim as lots of people make them out to be.  There's certainly an enormous amount of room for improvement, but by and large it's absolutely incredible the amount of progress that's been made in the past 200 years or so toward better and more peaceful society.

Which point? I was addressing his opinion that profiteering is immoral.

And I pointed out that others believe it is moral, and the reasoning behind it.

The fact that fees are high for some Bitcoin services after such a short period is understandable.

After the invention of the telephone, AT&T had a monopoly on telephone technology for 20 years and could charge whatever fee they wanted. At the end of that 20 year monopoly, prices dropped dramatically and choices skyrocketed as competition moved in.

A company that creates a new service should expect to do well for a while (at least a few months!), otherwise...why create the service?

Lives WILL be harmed. The only choice is whether it'll be soon, and quick, or a while from now, and drawn out. Greece is an example of innocent lives being harmed by continuing the socialist policies. There's still harm.





What I find extremely ironic is that you are insulting Ayn Rand, while at the same time saying you are for the EXACT SAME THING Atlas Shrugged and her ideas were about. She, and the characters in her book, were not for joining the government and destroying it from within, or even for fighting it. Her whole point in the book was to just stop supporting it and make it irrelevant. The characters didn't fight, and didn't impose their views on others, they simply casually avoided it and allowed it to rot from within.

eloquent

Also and I can't speak for any companies but ours but I doubt many bitcoin startups are taking money OUT at this point.  Those fees and margins are simply being used to expand the company, strengthen the balance sheet, and unlock bigger doors.

I wouldn't say it is an irony but a superficial appearance...

Let me qualify my words then by saying that I would, and do, support different things about the government, if it is in the
best interest of society. I do support, like a majority of Canadians, things like medicare and the various 'social safety nets'
we have here, and which we continue to vote for ( it is not something imposed on us, and things like medicare can be
opted out of in many jurisdictions; it is a provincial area not federal ). I would not automatically let all rot in the way
things are at present, but only those non-democratic, antiquated hierarchies etc., which keeps democracy from operating
fairly.  It is all part of the balancing act proudhon mentioned.  

And there is a great difference I feel between my views and hers in terms of self-interest.  I don't feel "greed is good"*
but that my well being is greatly linked to that of all of humanity... and it is not just an idea but, I feel, an authentic
impulse that I find within me. I know nothing of her real inner reality and so only criticize her views as she expresses
them in her words.

( *has her views been misrepresented in terms of quotes like that? Do you feel the example of pushing
or letting fall over a cliff that was presented is unfair? )

But there are indeed parts of what she says that I do agree with, just as there is much overlap in the type of
anarchism I like, and general libertarian views.  I try not to think in terms of absolutes; "this way is all bad" or
"this other philosophy is all good".... but more like, "I can somewhat agree with these parts but am turned off
by these other areas."

While she does often portray the idea that "greed is good," she seems to only support it from the perspective of people with the drive to create being greedy about wanting to improve their own lives and those of the world around them, by pursuing their own goals in a healthy competition or collaboration with others. The characters of Atlas Shrugged are greedy for friendly competition among their rivals, for making something great that the world and their friends can look up to them, and for pure knowledge and invention. Examples are pretty much all of the "good" characters working together, talking, collaborating, competing, and even through competition supporting each other, with the goal of making themselves and the world better off.
The greater irony is that a lot of her supporters miss that a HUGE part of the book is an admonition of pure "unfair" greed as well. Specifically, many of her supporters will often point out the "bad" characters as being greedy government bureaucrats, politicians, and regulators who try to skim off money or set up government controls "for the sake of the people," but then TOTALLY miss, or forget, all the other "bad" characters she described (such as the heads of the railroads), that did things like collude with each other to drive out competitors, stifle innovation, and collude with the government to kill competition and increase their own profit margins. Basically, I've noticed too many Randians (tea party especially) use her to attack government, while completely ignoring her admonission of corruptly greedy businesses and corporations.
So if you think self-interest and greed for discovery, innovation, improving your own life through your own work, and for building recognition and respect through your works is good, while greed for money by controlling others, stealing, manipulating, setting up unfair regulations that only apply to everyone else but you, and getting recognition through authority only is bad, then at least with regards to self-interest and greed you probably have the same opinions.

Is it reasonable to insist on being paid an enormous amount just because people are willing to pay?

Most all physical products have a manufacturing cost of between 10% to 50% of the suggested retail price. That includes gadgets, clothes, paper, matches, meat, fruits and vegetables. Jewelry is usually at the very low end.

Stuff that you buy in the mall or department store were made at 50% to 70% off the retail price, maybe even lower. So the marketing company still makes a little money even if they discount the item.

But they got other stuff to pay in between the manufacturer and the retailer, like all the distributors and wholesalers in between.

Yeah, sometimes it's possible to buy stuff at a lower price than what most stores sell them for, look for fabric sales, and larger stores that avoid much of the support chain. Great bargains.

There is no such thing as enormous amounts.  In a free market is the prices are too high competitors will join and drive down prices or the demand will be reduced as potential customers are turned off by the high prices.  Entities looking to maximize their return is what leads to price discovery.

If a price is too low show a buyer avoid it and offer to pay more?  That is the reverse of a company lowering their price despite demand at the current price.

Consumer looks for the lowest price for the goods/service and company seeks the highest price.  That dynamic leads to more participants.  With lots of buyers and sellers you get a better price discovery, a clearer view of what "the market" in aggregate considers an acceptable price.

Thought I might reply to this, to close the thread. The bottom line is that many here view profiteering as a "natural right" even going to far as to suggest it is better for everyone if the first-mover in a new market deliberately profiteers in order to make space for more efficient competing services at a lower profitability. This is almost logical, but I could reply that I should therefore whip you with a cat o'nine tails, so when you get whipped with a normal whip it won't hurt so much. And it (deliberate first-mover profiteering) would seem to support, though its author would disagree, that fraudsters could benefit the market by rendering consumers more skeptical and therefore resilient to future fraudsters. This was my suggestion: fraud can be legitimized for the same reasons profiteering can be legitimized.

Certainly, given recent events (pirate and others), bitcoin-dom seems to be learning some hard lessons. Thanks pirate et al?

I haven't seen anyone conclusively answer the question if it's ever possible to be *greedy*. That is, if people really need or want your widgets, is there any upper limit to a fair price?

Lastly, I mentioned that if I were to operate any bitcoin service, I would charge minimum fees to cover costs, but also ask for donations. One user replied to say that's exactly how he operates; kudos. Nobody answered to say that they were deliberately profiteering. This can mean one of two things:

1. I underestimate the costs involved in providing the services, and actually nobody is profiteering but instead operating at a bare margin, or less (as some suggested).
2. People are profiteering but are ashamed or unwilling to say so. This would be somewhat at odds with the moral posit that profiteering is legitimate.

Hmmm. Thanks to all that participated.

I think you misunderstand a couple of ideas.  It is certainly possible to be "too greedy".  If your prices are too high you are more likely to face more competition.  So keeping prices lower makes the market less attractive to potential competitors.  Generally late movers will have to compete on price.  The first mover can attempt to make it very difficult for competitors by keeping margins relatively low.  Take MtGox for example.  There prices aren't excessively high.  Actually they are so low that a smaller exchange trying to compete on price will find themselves in a position where they are taking a huge risk for a tiny amount of net profit ($10K or so a year).   Now if MtGox charged 5% per trade it would be much easier for viable, cash flow positive competitors to emerge and the high margins would allow them to pay for improvements, security, and support staff even with small margin.

Essentially a high margin is a low barrier for entry.  Competitors need to risk less capital and the return on that capital is more attractive.  So it is possible to be too greedy.  That being said business is all about calculated risks.  Margin too high?  More risk of competition.  Margin too low?  More risk of buisiness failure.  Remember any startup has capital and early employees are either working only for equity or are taking a reduced salary to improve the financial outlook of the company.   The perfect margin is one where it is neither too high nor too low.  Of course that is somewhat subject and varies from enterprise to enterprise.

There are substantial risks to this too.  What happens if you have a major loss?  You just close up shop? Dig into your own pocket?  What happens if you reach a point where expansion requires real capital (say hundreds of thousands or millions of dollars) by pricing your product/service so low you make it unattractive to potential investors?  Worse what happens if you underestimate the cost and have to raise prices later (generally it is less disruptive to start with higher prices and offer better deals over time than the reverse)?

Profiteers are doing us a favor, it would seem. Again, thanks pirate?

Good questions, to which I have no answers - feel free to treat me just as an ignorant disgruntled consumer. Let me rephrase myself: "I would *try to* charge minimum fees to cover costs".  I'll let you know how it goes if ever I try it out (and I'm trying to try it out, but I'm just not such a good coder - apache2, sql, json-rpc... wtf does json-rpc stand for?).