PayPal’s Braintree Embraces Bitcoin, One-Touch Payments

[gtraah]

The Bitcoin price is still getting pushed downwards , I am betting its because all of those early adopters spending tens of thousands of dollars on products from overstock, tigerdirect, dell etc as well as those early holders are cashing out every now and then - they have PLENTY of it and have nothing to loose as they are still in heavy profit --  they mined or possibly acquired  thousands @ $5-30,  as time goes by and they spend more and more they will have less to spend and Miners rewards will drop, meaning less minted BTC being sold off daily to pay for mining equipment.

From this point on it is just  going to take time and patience and things will level out.

[collinstar]

Serious question:

If one is engaged in entirely legal activities - no money laundering, no drugs, no illegal weapons, no tax evasion, no slipping around international monetary controls - why would one want to use Bitcoin? With the volatility of Bitcoin's price, transfer costs of traditional payment methods (1-3%) are totally dwarfed by the risk of holding Bitcoins for even a short period of time. Maybe there is some opportunity for arbitrage in currency conversion rates, because of the low daily trading volume? But that doesn't seem like a likely profitable investment when you can lose 4% of your value at 3am because of a cascading margin call on a single exchange. Other than currency speculation and the ease of evading the law, why would anyone want to exchange a reasonably stable national currency for bitcoin?

[AaronCraig]

Yes, everyone wants to accept bitcoin, but that's not news. The real question is why me as a user would want to pay with bitcoin? When I pay with credit card, I get 2% cash back. When I pay with bitcoin I have to pay Coinbase 1% fee and I get zero cash back. In addition, I need to make sure the price of bitcoin hasn't moved between the time I bought them on Coinbase till I make the purchase. It's just a complete no-brainer that I should use my credit card whenever I can, instead of bitcoin.
A
nd just to clarify, the businesses are not really accepting bitcoins, they are only accepting them temporarily so they can immediately convert 100% into dollars.

You're absolutely right. It doesn't make sense right now.
But I will say this...you should be grabbing a piece of pie right now!

[proofofarat]

Yes, everyone wants to accept bitcoin, but that's not news. The real question is why me as a user would want to pay with bitcoin? When I pay with credit card, I get 2% cash back. When I pay with bitcoin I have to pay Coinbase 1% fee and I get zero cash back. In addition, I need to make sure the price of bitcoin hasn't moved between the time I bought them on Coinbase till I make the purchase. It's just a complete no-brainer that I should use my credit card whenever I can, instead of bitcoin.
A
nd just to clarify, the businesses are not really accepting bitcoins, they are only accepting them temporarily so they can immediately convert 100% into dollars.

2% cash back = merchants raise your price by 2% because they get higher fees

[wasserman99]

Serious question:

If one is engaged in entirely legal activities - no money laundering, no drugs, no illegal weapons, no tax evasion, no slipping around international monetary controls - why would one want to use Bitcoin? With the volatility of Bitcoin's price, transfer costs of traditional payment methods (1-3%) are totally dwarfed by the risk of holding Bitcoins for even a short period of time. Maybe there is some opportunity for arbitrage in currency conversion rates, because of the low daily trading volume? But that doesn't seem like a likely profitable investment when you can lose 4% of your value at 3am because of a cascading margin call on a single exchange. Other than currency speculation and the ease of evading the law, why would anyone want to exchange a reasonably stable national currency for bitcoin?

The price is volatile today, however it is less so then it has been in years past. I would predict that volatility will decrease over time.

Traditional payment methods have more costs then 3% as this is just the cost of processing the transaction, however the merchant will have costs associated with charge backs which increase overall costs.

The cost associated with sending a bitcoin transaction is essentially free (at most it will generally be no more then $0.05

[FloodZone]

Yes, everyone wants to accept bitcoin, but that's not news. The real question is why me as a user would want to pay with bitcoin? When I pay with credit card, I get 2% cash back. When I pay with bitcoin I have to pay Coinbase 1% fee and I get zero cash back. In addition, I need to make sure the price of bitcoin hasn't moved between the time I bought them on Coinbase till I make the purchase. It's just a complete no-brainer that I should use my credit card whenever I can, instead of bitcoin.
A
nd just to clarify, the businesses are not really accepting bitcoins, they are only accepting them temporarily so they can immediately convert 100% into dollars.

Not throwing your private key at everyone and having to deal with credit card fraud paper work every 6 months? that seems like a pretty good reason but maybe it's just me...

[Onanula]

Yes, everyone wants to accept bitcoin, but that's not news. The real question is why me as a user would want to pay with bitcoin? When I pay with credit card, I get 2% cash back. When I pay with bitcoin I have to pay Coinbase 1% fee and I get zero cash back. In addition, I need to make sure the price of bitcoin hasn't moved between the time I bought them on Coinbase till I make the purchase. It's just a complete no-brainer that I should use my credit card whenever I can, instead of bitcoin.

And just to clarify, the businesses are not really accepting bitcoins, they are only accepting them temporarily so they can immediately convert 100% into dollars.

Not throwing your private key at everyone and having to deal with credit card fraud paper work every 6 months? that seems like a pretty good reason but maybe it's just me...

Well, with bitcoin you won't have to fill any paperwork, since once they are stolen, they are stolen forever and you can't do much about it. At least with credit cards you can have limits and most credit cards have pretty sophisticated fraud-detection systems that limit the damage.

[haploid23]

I checked out Braintree's website, and I'm a bit confused how everything works. I think it's mainly for developers? What I understand looking around, is that all the services they offer are plugins to existing companies or payment processors?

[DigitalPirateman]

I would wish walmart would accept btc more then paypal they will nerf it somehow. (with fees)

[bornil267645]

Well it's about time they yield to Bitcoin.

[darthcoin]

Serious question:

If one is engaged in entirely legal activities - no money laundering, no drugs, no illegal weapons, no tax evasion, no slipping around international monetary controls - why would one want to use Bitcoin? With the volatility of Bitcoin's price, transfer costs of traditional payment methods (1-3%) are totally dwarfed by the risk of holding Bitcoins for even a short period of time. Maybe there is some opportunity for arbitrage in currency conversion rates, because of the low daily trading volume? But that doesn't seem like a likely profitable investment when you can lose 4% of your value at 3am because of a cascading margin call on a single exchange. Other than currency speculation and the ease of evading the law, why would anyone want to exchange a reasonably stable national currency for bitcoin?

Name me 10 currencies you'd be comfortable holding. It'll probably be very difficult. Fact is, billions use currencies with high inflation rates and with relatively short lifespans. And it's not just places like Zimbabwe that have many problems besides insane inflation the past decade. It's also relatively developed countries like Argentina that suffer from insane inflation. It's also small stable countries with a nice standard of living ($27k GDP PPP) with an educated population like Cyprus where many lost their savings as bank deposits were frozen or seized.

And that's just protection from governmental malfeasance that hundreds of millions have to be aware of. But it's also the fact that billions are unbanked. We at HN know more than anyone that providing a physical service (like mail delivery) is 1 million times more expensive than a digital service (like e-mail). Same for banking, for vaults, for ATMs, for services like lending, payments, remittance or money transfer. A digital version can be much cheaper, as well as more accessible. (for a bank you often need proof of identity, residence and employment. Good luck when you have no birth certificate, when you live in a slum, when you have an off-the-record job like selling fruit on the corner of the street). Digital banking can bring cheap financial services to hundreds of millions who don't have it, yet have (intermittent) access to networks as simple as SMS or radio, which can plug in to gateways to the bitcoin network.
Next up is us, the wealthy who enjoy relatively nice financial services. Bitcoin can save 1-3% in fees on any transaction. Imagine that there's a 1-3% tax on everything, not value added, everything, every transaction, whether B2C or B2B, and you have a way to remove that. That's very significant. Entire industries run on margins of 1-5%. Amazon's 2013 margin was 0.35%, imagine they could shave off even 0.5%.

[darthcoin]

Serious question:

If one is engaged in entirely legal activities - no money laundering, no drugs, no illegal weapons, no tax evasion, no slipping around international monetary controls - why would one want to use Bitcoin? With the volatility of Bitcoin's price, transfer costs of traditional payment methods (1-3%) are totally dwarfed by the risk of holding Bitcoins for even a short period of time. Maybe there is some opportunity for arbitrage in currency conversion rates, because of the low daily trading volume? But that doesn't seem like a likely profitable investment when you can lose 4% of your value at 3am because of a cascading margin call on a single exchange. Other than currency speculation and the ease of evading the law, why would anyone want to exchange a reasonably stable national currency for bitcoin?

Now that doesn't mean we all should actually buy and hold bitcoin. As you say, the volatility dwarfs this percentage. But volatility can be exclusive to investors. For example, Bitreserve (founded by the founder of CNET) lets you lock in the price. That means you can buy $100 of bitcoin, and see $100 on your account, as if it was Paypal. And then you can spend that $100 anytime you want, and it'll always be worth that much. On the backend the service then lets investors create a market to lock in that price, where various investors make short or long bets, a derivatives market can take out the volatility for the customer, thereby allowing people to use bitcoin, save costs, yet be shielded from volatility. That means business to business payments, too.

Besides that there's lots of other things. Like the fact it can be much more secure. Creditcard fraud is rampant as your password is essentially on the card and you have to share it everytime you pay, it's crazy. Chargeback fraud is an issue. Identity theft is therefore an issue. And you can envision crazy things like a Google driverless car paying, on the fly, to another driverless car infront of it, to move away, so that it can take that lane and go faster, because the one in the back is willing to pay extra for speed, and the one in front is okay with arriving a little later. Those kinds of thing can almost only be built on a global, permissionless protocol layer. So indeed none of us may use bitcoin, it may just be a machine to machine currency, it's too early to tell, it can have an impact in many different ways.

[OrientA]

Bitcoin can save 1-3% in fees on any transaction. Imagine that there's a 1-3% tax on everything, not value added, everything, every transaction, whether B2C or B2B, and you have a way to remove that. That's very significant. Entire industries run on margins of 1-5%. Amazon's 2013 margin was 0.35%, imagine they could shave off even 0.5%.

This is one reason that merchants like digital coin. It will increase their margin.