jimbobway (OP)
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August 20, 2012, 04:02:16 PM |
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Suppose my credit card bill is around $1000 a month. That means if I get a BitInstant Credit Card I will be buying $1000 worth of bitcoins a month.
If 1000 people have the same amount of credit card bills and use the same credit card then that's $100,000 added to the bitcoin economy a month. That's $1,200,000 a year. Imagine if 10,000 use the card or 100,000. That's a lot of money.
Could this make the price of bitcoin skyrocket? Maybe. Bitinstant will probably convert the bitcoins to dollars when a purchase is made.
Most likely, this could further stabilize bitcoin prices but I imagine it may make bitcoin prices go up. I am thinking about loading up a significant amount of bitcoins in preparation for this card. But them coins when its cheap.
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556j
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August 20, 2012, 04:07:40 PM |
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Why would you buy bitcoins for a fee so you could sell them for fee? That's ridiculous. Literally throwing money away. The debit cards (not credit) will be for merchant and miners who have bitcoin income and would like an easy way to convert to fiat. The people doing what you mention would be very low because it makes no sense to do that.
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jimbobway (OP)
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August 20, 2012, 04:14:58 PM |
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Why would you buy bitcoins for a fee so you could sell them for fee? That's ridiculous. Literally throwing money away. The debit cards (not credit) will be for merchant and miners who have bitcoin income and would like an easy way to convert to fiat. The people doing what you mention would be very low because it makes no sense to do that.
I had a feeling you would ask that. Well, I believe in bitcoins so I'm just doing my part to support the bitcoin economy. Also, I am betting that bitcoins will increase in value so if I buy early then the fees will be negligible. If the value of bitcoins go up 1% then I'm covered.
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556j
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August 20, 2012, 04:21:24 PM |
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Well it'll be more than 1%. You have to add at the very least the exchange fees of trading fiat to BTC. Along with any other fees you encountered getting the money to exchange. At best it's another 0.6% on average. But very few people will have your mentality. So I don't think it'll have much effect. It can be useful to make online purchases if you have no other debit or credit card as well. But again I think the number of people that applies to will be very low.
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DeathAndTaxes
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August 20, 2012, 04:23:48 PM |
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Could this make the price of bitcoin skyrocket? Maybe. Bitinstant will probably convert the bitcoins to dollars when a purchase is made. There is no probably about it. You deposit BTC, they sell them and put the funds on your card. So it isn't a giant BTC sink which will cause the value to skyrocket. Now there is always friction in any financial transaction. Take SR for example. If their volume doubles would the price of BTC rise? Everything else being equal? Yes. Why? There is a lag (friction) in the double conversion. Customer buys BTC, customer sends BTC to SR, SR sells BTC. The process isn't instananeous. Thus some amount of BTC are required to float that cycle. If the volume increases the amount of float increases and those coins become unavailable for other purposes. Totally out of my ass example numbers to illustrate the effect. SR does 100,000 BTC worth of tx per month. The time from USD -> BTC -> USD is roughly 3 days. That means ~10,000 BTC are "unavailable" for other purposes. Less supply, more demand, price rises. BitInstant offering will likely have a similar (although probably smaller) effect. A miner may hold BTC longer simply because he can sell if/when he needs funds. Any merchant or service (even those selling back to USD) creates the same effect. Hopefully someday thousands or merchants and service providers and millions of years create enough demand for "float" that prices are higher and more stable.
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ArticMine
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August 20, 2012, 04:24:17 PM |
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Why would you buy bitcoins for a fee so you could sell them for fee? That's ridiculous. Literally throwing money away. The debit cards (not credit) will be for merchant and miners who have bitcoin income and would like an easy way to convert to fiat. The people doing what you mention would be very low because it makes no sense to do that.
This assumes of course that the person buying Bitcoin, loading Bitcoin on the card and then spending it can get a debit card in that particular currency at a lower cost. The success of this will come down to that fees when compared to a competitive debit card using only fiat. It is also very useful for someone who has some significant BTC holdings and wants to be able to access these funds easily when traveling for example. For someone in Canada traveling to Europe having a Euro denominated debit card funded by Bitcoin may turn out to be very useful.
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dancupid
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August 20, 2012, 04:27:21 PM Last edit: August 20, 2012, 04:39:20 PM by dancupid |
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It could be competitive with travel type top up cards, and with people who wish to move funds internationally (to relatives). There are many competing cards used in this way - I use caxtonfx.com card for traveling. It could potentially compete with that type of service. Have your relative in Somalia apply for a card and as long as they can access an ATM you can transfer money to them.
Edit - what makes this powerful is that the owner of the card need not be the person funding it.
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ArticMine
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August 20, 2012, 04:31:43 PM |
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... Have your relative in Somalia apply for a card and as long as they can access an ATM you can transfer money to them.
Of course using this for small amount international money transfers is a huge market worldwide since the real competitor is not other credit cards and debit cards but Western Union.
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dancupid
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August 20, 2012, 04:44:19 PM |
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... Have your relative in Somalia apply for a card and as long as they can access an ATM you can transfer money to them.
Of course using this for small amount international money transfers is a huge market worldwide since the real competitor is not other credit cards and debit cards but Western Union. And the way Bitinstant works, it means that you can effectively pay cash at Walmart directly to someone living on the other side of the world.
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robocoin
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August 20, 2012, 04:54:18 PM |
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Is it anyways possible to buy BTC with Credit Card? Not seen this.
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556j
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August 20, 2012, 05:06:38 PM |
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Is it anyways possible to buy BTC with Credit Card? Not seen this.
Yah but convoluted process with high fees and low limits. You have to deposit on VirWox then buy SLL and exchange those for BTC. Fees are USD 0.49 + 3.5% CC/SLL then SLL 50 + 2.9% for SLL/BTC then a handling fee of 0.02 BTC per bitcoin withdrawal.
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robocoin
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August 20, 2012, 05:15:17 PM |
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Is it anyways possible to buy BTC with Credit Card? Not seen this.
Yah but convoluted process with high fees and low limits. You have to deposit on VirWox then buy SLL and exchange those for BTC. Fees are USD 0.49 + 3.5% CC/SLL then SLL 50 + 2.9% for SLL/BTC then a handling fee of 0.02 BTC per bitcoin withdrawal. Thx. Well, this would be pretty idiotic.
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DeathAndTaxes
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August 20, 2012, 05:18:33 PM |
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Is it anyways possible to buy BTC with Credit Card? Not seen this.
Yah but convoluted process with high fees and low limits. You have to deposit on VirWox then buy SLL and exchange those for BTC. Fees are USD 0.49 + 3.5% CC/SLL then SLL 50 + 2.9% for SLL/BTC then a handling fee of 0.02 BTC per bitcoin withdrawal. Thx. Well, this would be pretty idiotic. Alternatively take a cash advance against your credit/debit card at any Bank of America or Wells Fargo location and then deposit the cash using BitcoinsDirect.
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dissipate
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August 20, 2012, 05:21:36 PM |
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I see this as being useful for people doing international remittances, but for people who are just using their money domestically from a checking account, it is probably not worth the fees (unless you want to support the Bitcoin economy or something like that). Even though it isn't really worth the expense for me, I think I will get one for the novelty factor and just in case I want to convert my BTC to something I can spend right away.
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zby
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August 20, 2012, 05:44:52 PM |
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I see it as a gimmick - another thing that legitimizes the bitcoin operation in the eyes of the mainstream - as such it can have significant effect.
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Piper67
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August 20, 2012, 05:46:37 PM |
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It's more than that. Just think of the thousands who can't have access to a regular credit card (bad or no credit history, refusal to go into debt, etc). This is a truly awesome development.
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Vladimir
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August 20, 2012, 05:49:48 PM |
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We are definitely getting some of those for Bitcoin Magazine. Thus all our expenses except for large payments will be BTC denominated.
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Piper67
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August 20, 2012, 05:51:18 PM |
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We are definitely getting some of those for Bitcoin Magazine. Thus all our expenses except for large payments will be BTC denominated.
Vlad, include a Bitinstant credit card with each subscription and I'll happily subscribe for a year!
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Vladimir
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August 20, 2012, 05:55:32 PM |
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We are definitely getting some of those for Bitcoin Magazine. Thus all our expenses except for large payments will be BTC denominated.
Vlad, include a Bitinstant credit card with each subscription and I'll happily subscribe for a year! Good idea, I'll check what it takes. But subscribe anyway Bitcoin Magazine is getting better with every issue and we are much closer to stable monthly schedule and decent delivery times.
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enmaku
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August 20, 2012, 06:03:59 PM |
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I have been saying for ages that one of the biggest hurdles to getting Bitcoin in every 7-11 and WalMart is the "can't pay my electric bill with it" factor. Now you can pay almost any costs you have with Bitcoin you receive from sales. This opens up the ability of merchants to use Bitcoin like a real currency, which maybe reduces volatility a little.
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