Bitcoin Forum

One of the problems I see with bitcoin for every day use is that you have to have the funds always available to pay for things. Unlike a credit card where you have the convenience of a credit limit potentially much higher than what you would be comfortable carrying with you. So, credit cards offer purchasing power without the risks associated with actually holding the same amount of cash.

For example, if I'm thinking of buying some awesome flat screen TV, or just have a large repair bill for my car, I want to be able to walk in the store and pay for it without having to transfer those funds to my phone in advance.

Is there a concept or startup out there anywhere offering credit based bitcoin purchasing? The credit could be prepaid funds, or verified deposits, or verified funds available, or just based on credit ratings similar to what credit card companies use today.

Point of sale payment would still be a funds push like any other bitcoin payment, but you would have access to funds for reasonably large purchases without having to carry those funds on your phone, tablet, computer, etc. Then, later you just settle up, much like paying off your credit card bill every month. This approach negates the fraud risk of credit cards, while retaining their convenience.

I'm definitely a fan of bitcoin, but I don't see it taking off if its usage remains strictly like cash.

Thoughts?

Just keep the wallet on your phone, but password or fingerprint protect it. Its the same thing as a credit card. If someone gets your credit card they could get the pin and then take your money, same with bitcoin on a phone on blockchain wallet or something. You don't need to transfer to your phone if its already there.

If I lose my credit card, I just report it, flag any fraudulent transactions and owe nothing. The cost of that fraud is baked into the system - we all pay for it all the time. It's 2-3% of the cost of everything we buy.

So, let's say I compromise and keep $2000 in BTC on my phone. That's probably enough for 99% of any single purchase I'm likely to make on a normal basis. Although it's still nowhere near the credit limit on any of my cards. If I lose my phone, or the private key is somehow stolen from it - I potentially eat that entire cost. I'm likely to have that private key backed up if I'm smart, so maybe I can get the funds before the thief, but maybe not.

I'm looking for a better solution.

I see what you mean. Xapo could be GREAT for this. Your vault which is stored offline and takes 24 hours to retrieve from it, and its done manually through 2 email replies (almost no chance of a hacker getting it out), so using your vault as your "bank account", and then your hot wallet (which is connected to xapos card as well) would be your quick spend "cash", but you can reach into your vault if you would like a big purchase.

Get a hardware wallet like a Trezor and back up the keys on a paper wallet.

You can take the Hardware wallet like dwdoc said or buy a Bitcoin debit card since It's a lot cheaper https://coinkite.com/faq/card

Credit Cards (not debit cards) offer you the convenience to buy things you cannot really afford at that moment. It's nothing more than an instant loan.

If you're talking about convenience of paying, there are already bitcoin debit cards, such as Xapo and others.

Being like cash is one of the main benefits of bitcoin. You can truly own your coins, with all the benefits and risks associated with it.

But yes, you can build all kinds of 3rd party financial services on top of bitcoin, including ones like CC, not sure is anything similar already available, as it's not something I'm interested in.

I don't really see the disadvantage about: I have to know that I want to make a big purchase before I walk into the shop.

Are you casually walking into a shop and buy spontaneously a $ 2000 item?

The problem is bitcoins payments are not reversible. If your account in some credit organisation hacked, you loose all your funds and your credit limit. The idea of bitcoin is you and only you control your funds. Use encrypted phone hot wallet with a small amount for everyday payments.

You're onto something here dude. I'd say venture out and put something together - make a company. I Really think making BTC easy is an important key to broader acceptance. The number one problem I run into speaking about bitcoin to people is: "So how do I buy some?" "Go to Circle and fill out the info." "Oh that's too hard."

Transaction with physical cash are also irreversible.
It is perfectly possible to build a service on top of bitcoin that would act in a way CC companies do (as OP wishes). But it would involve trust in the 3rd party, so I don't know whether there is enough demand for such services.


Agree, but how CC company operating with BTC would be a solution to the problem? You would need to provide far more info than with Circle.

I don't use bitcoin as cash, but use it for a lot of other things. It allows you to do illegal things :)
And, is also great for transferring it to other countries, with a click of a mouse and almost zero fees.

Use a deterministic wallet which practically carries all the bitcoin you need to spend with it. Password protect the spend feature. If you lose your wallet, the thief would take some time to crack the password giving you enough time to transfer out the btc to another wallet. Either way either you carry a credit card or bitcoin  wallet it still comes back to how you much precautions you put in to protect your fund.

No, definitely not. But I was once surprised by a car repair costing over $1000. I admit that's not worth changing habits to accommodate, but there is definitely some freedom aspect to using credit and not having to think ahead.

If you want to buy lets say a TV, huge deal, you weren't planning to buy it today but you wanted to buy a new one, you don't want to have to process a transfer

Its unlikely it ever will replace FIAT. Specially, because that people wont be comfortabe with the voltatility. I am not either, which is why I buy just a small amount.

You have to wait for the bitcoin ecosystem to develop.
Credit cards didn't come about as soon as fiat was introduced.
You first need banks which accept bitcoins, credit cards will come later.

Stop right there, the whole point of Bitcoin is that the total currency supply can't be changed and that you can't spend money you don't have and people using credit cards etc. as if they had more money they actually had is the whole reason we have ended up in this financial mess in the first place.

There is absolutely no point in doing this to Bitcoin, the reason you can spend 'more' on a credit card is because you don't actually own the money you're spending and companies are counting on you getting yourself into debt. Why for instance do you think there are those horrible overdraft fees in banks? I love the fact that when I enter in an amount that's higher than what I have in my wallet there's a little message that comes up preventing me from doing so which just proves to me how badly the banks want to get me into debt and scam me.

While I do agree we need to make Bitcoin easier to use and more accessible, I don't agree with the idea of making it 'convenient' in the way you seem to have put it. Credit and debt is exceptionally dangerous in the wrong hands and Bitcoin has a lot of built in measures that I've seen to prevent stupid people from using it in the ways we're used to.

I'm not going to lie down and let another generation corrupt the next generations future with debt yet again, having a finite supply is not a problem, it's a security measure for the entire network to prevent fraudulent spending.

I think your idea is great and you should look to run with it. I'm sure people with the means to develop and have the investors could already be working on something like this. 

This would go along way for bitcoin adoption as well

This isn't a realistic idea.  The reason it works with Fiat is because their are penalties(harsh) that make sure you are accountable for the things you purchased. 

If you take one look at the lending form, you will see that people will try and rip any amount they can because their is no punishment for not paying back.

If you can come up with a system where people can be held financially responsible I would love to hear it, I just don't see it happening.

It seems to me that the OP is really talking about bitcoin financial services that he wants (or wishes they exist) moreso than talking about the nature of bitcoin.  The CC companies that do the things you're mentioning (loan you money, look out for fraud, etc), they do those things for a fee.  There's really nothing which stops someone from making a bitcoin based CC company, but perhaps it'd be a little strange in the current environment where bitcoin is seen as a kind of individualistic alternative to money-management.