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821
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Bitcoin / Bitcoin Discussion / Re: Easiest way to explain Bitcoin
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on: June 20, 2013, 07:41:00 AM
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and it will remain a niche currency that isn't useful for most purchases.
Bitcoin doesn't have to be useful in every situation for it to grow. If bitcoin were used just for online gambling, or just for remittance payments, or certain other specific uses, that would be enough. But since Bitcoin can serve all these plus more expect it to permeate other areas as well. But if your Nascar fan never knows of nor cares about Bitcoin a few years from now, that's not failure. As far as credit cards giving protection, that's correct and something not available currently (without using escrow). But you as a consumer are paying for that. The difference is that when a merchant includes the cost of the payment card fee into the price, every customer pays the higher price regardless of payment method used. So currently, credit card customers are being subsidized by customers paying cash. But certain types of business that are considered high risk already pay a higher rate, and they will be among the first to have an incentive to accept bitcoin and pass along the savings to the customer. High Risk Merchant Accounts - http://bitcointalk.org/index.php?topic=73694.0 So when you pay for an airline ticket with credit card the fare is several percent higher than it should be. So if your ticket is $400 with credit card or the equivalent of $388 with Bitcoin, and it is a non-refundable ticket anyway, what payment method are you going to choose? So then those that still choose to pay with credit card do so because they plan to use the customer protection -- thus the cost of fraud on a per-dollar basis rises and the merchant fees have to rise. It's a self-reinforcing trend. A larger share of the remaining credit card transactions will be fraudulent, allowing the cash/bitcoin discount to become larger, which pushes more of the non-fraudulent activity over to the cash/bitcoin method. Additionally, at the restaurant that has "Cash only", I don't get the option to say that I prefer credit card. If that's the only payment method they accept then that's how I pay. So when Nascar Bob wants tickets to a sold-out race and the seller only accepts Bitcoin payment, Bob will follow whatever instructions he needs to do to get his tickets. Today, those instructions could be as simple as: "go to Seven Eleven, pay the cashier exactly NNN.NN dollars for a Moneygram bill payment transaction". Boom. Done. Bob just made a purchase using Bitcoin and still doesn't have to know a thing about Bitcoin. |
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822
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Bitcoin / Bitcoin Discussion / Re: Easiest way to explain Bitcoin
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on: June 20, 2013, 06:30:27 AM
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layman's explanation of Bitcoin These videos are good: - http://vimeo.com/63502573 - http://www.youtube.com/watch?v=Y-w7SnQWwVA - http://www.youtube.com/watch?v=EA0LkCkvUeUand why the average consumer should care. That will be very specific to each business and each consumer. A person who likes to play poker online will care about bitcoin different from the next person. Plus, many of the advantages that should be here now with Bitcoin are still out of reach. For instance, merchants can pass along their savings when accepting Bitcoin by offering a discount for that payment method and gain a competitive advantage. But few do this today. But if a customer was offered a 3% discount on the bill if paid using bitcoins, that alone might be enough to cause the average consumer to want to use Bitcoin. But today the cost to acquire coins (via exchange) offsets that gain and thus offers no economic incentive. The Bitcoin Education Project might be a resource that will help in this area: - http://btcedproject.org |
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824
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Economy / Service Discussion / Re: BitSpend Business Indefinitely Closed Because Their Bank Doesn't Like Bitcoins
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on: June 20, 2013, 04:34:18 AM
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Where before we were using as a regular business, we'll instead form distributed informal networks. We'll focus all our efforts on meeting the needs of our customers and resisting your efforts to shut us down and none of our efforts on compliance.
That's a key point. BitSpend only needed a bank account to restock the dollars on the payment cards they use for making the purchases as part of their service. If they used a bank account debit card, then obviously that was at risk of the bank taking an action like this. But if instead they had a credit card or prepaid debit card even which could be reloaded as needed, they simply only need a way to convert bitcoins to the funds for reloading. One labor-intensive approach is to convert bitcoins to cash and use the cash to buy Moneypak, which is then used to reload the card. No bank account is necessary. This whole process would be unnecessary if the merchants were to accept Bitcoin for payment though, cutting the payment card (and their bank issuers) out of the picture completely. |
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826
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Economy / Economics / Re: Bitcoin - we have a problem.
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on: June 19, 2013, 07:58:29 PM
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If another big mining pool goes down we may be looking at 40 mins between blocks maybe even longer - transactions are not processed if no blocks are solved.
Statistically, even if hashing is at the target rate then once every 48 hours there will be at least one block that took an hour to solve. Can you remember even one time that this was a significant problem for you? And if one pool suffers technical issues those miners will just switch to another pool. As far as this being a problem if hashing capacity drops below target and that persists for a couple weeks ... there is little difference between six confirmations taking an hour versus six confirmations taking two hours. With most of the costs for ASIC mining being fixed (i.e., for the purchase of the equipment), there is little reason why hashing capacity would suddenly drop dramatically. |
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833
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Bitcoin / Bitcoin Discussion / Re: The Bitcoin Arms race
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on: June 18, 2013, 02:48:20 AM
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I guess it only makes fiscal sense to mine on an industrial scale. Who would be interested in colocating bitcoin miner arrays in a datacenter?  No, that's not correct. GPU mining is done for, permanently. It doesn't matter how much you are scaling, it is now unprofitable (or rapidly nearing that point) to mine on GPUs. But even the small ASIC device (e.g., Jalapeno) is competitive against larger operations ... meaning the cost per Ghash/s for hardware is not that much different whether you are buying a 5.5 Ghash/s Jalapeno or some 1 Thash/s monster, and they are not dramatically different on power consumption (when compared to the value of the bitcoins that are the result). |
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834
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Bitcoin / Project Development / Re: ICBIT Derivatives Market (USD/BTC futures trading) - LIVE
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on: June 18, 2013, 12:44:35 AM
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Now, along with minor visual improvements, this page is going to require a one time password to be entered for any withdrawal operation, if you have tied Google Authenticator to your account.
I notice that simply doing a password reset through e-mail can successfully bypass two-factor authentication (2FA) protection as I can withdraw funds without 2FA after resetting the password. Shouldn't the 2FA code be required to request a password reset (when 2FA is enabled)? |
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840
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Bitcoin / Press / 2013-06-13 Techliberation.com - Mr. Bitcoin goes to Washington
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on: June 13, 2013, 11:19:41 PM
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Mr. Bitcoin goes to Washington by Jerry Brito On my panel were representatives from the Bitcoin Foundation, the Tor Project, and the DOJ, and we had a lively discussion about how these technologies can potentially be used by criminals and what these open source communities might be able to do to mitigate that risk.
[...]
I was therefore interested in the keynote remarks delivered by Jennifer Shasky Calvery, the Director of the Treasury Department’s Financial Crimes Enforcement Network. [In particular, she addressed the fact that since there have been several enforcement actions against virtual currency exchangers and providers, the traditional banking sector has been wary of doing business with companies in the virtual currency space.
[...]
It would be a shame if [banks] felt they couldn’t do business with an innovative new kind of start-up simply because that start-up has not been (and may never be) adequately defined by a regulator.
[...]
Hopefully FinCEN will revisit its guidance now that the conversation has begun, and as other regulators consider new rules, they will hopefully engage the Bitcoin community early in order to avoid ambiguity and uncertainty. - http://techliberation.com/2013/06/13/mr-bitcoin-goes-to-washington |
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