How will bitcoin make inroads into the super market?

[notig]

Do you think it will? I guess first there has to be a reason why people would use it rather than current means. So here is what I can think of:

People use bitcoin in the supermarket with their smartphone because it's cheaper than using a credit card. 3% less or some amount than a credit card. Now that businesses are free to charge more for credit card purchases they might opt for something different.

But why would a regular consumer use bitcoin rather than say.. a debit card linked to their bank account?

The one reason I can think of is because they would rather hold their value in bitcoins instead of dollars before they are spent.

[sublime5447]

This is a common topic, but I always see it phrased in reference to the customer. As a business owner who sell merchandise I can tell you that it is not an issue about why customers would like to use it. The issue is if merchants would be willing to accept it. The answer is NO. I wont and they wont, because there is no price stability.   

[Phinnaeus Gage]

This is a common topic, but I always see it phrased in reference to the customer. As a business owner who sell merchandise I can tell you that it is not an issue about why customers would like to use it. The issue is if merchants would be willing to accept it. The answer is NO. I wont and they wont, because there is no price stability.   

If not already, can't BitPay resolve the price stability aspect? Immediately after a purchase, the bitcoins are in BitPays possession, crediting the merchant with the exact exchange rate. At the end of the daily billing cycle, the exchanged currency is deposited into the merchant's bank account, sans the 0.99% fee.

How hard can it be to set up such a system if not already implemented by BitPay?

~Bruno K~

[sublime5447]

This is a common topic, but I always see it phrased in reference to the customer. As a business owner who sell merchandise I can tell you that it is not an issue about why customers would like to use it. The issue is if merchants would be willing to accept it. The answer is NO. I wont and they wont, because there is no price stability.   

If not already, can't BitPay resolve the price stability aspect? Immediately after a purchase, the bitcoins are in BitPays possession, crediting the merchant with the exact exchange rate. At the end of the daily billing cycle, the exchanged currency is deposited into the merchant's bank account, sans the 0.99% fee.

How hard can it be to set up such a system if not already implemented by BitPay?

~Bruno K~

They cant do it with the wild price fluctuations. This is the problem that coinbase is having right now, they are having to cancel orders. I had a discussion about this the other day about SR. The way that they protect against instability is to offer hedged accounts. I personally believe that if it were to be tested it would fail if their was a repeat of 2011 crash I doubt that they would be able to cover the losses. (just speculation on my part). Same issue with bitpay. Every one is at the mercy of the price.

[xavier]

1 - cost/benefit

Is there consumer demand for the technology. Is it going to be worth the cost of installation / set up vs. the benefit the business will receive.

Ie. if <1% of consumers will utilise the technology, probably its not going to be worth the business investing in supporting it

2 - legality

No retailer or established business in a western jurisdiction will accept this as a mainstream payment option until a legal precedent is set by an established name, so that they know it is legal

Business is not going to risk its reputation by harbouring a technology that may be illegal


These are two barriers bitcoin has to overcome to obtain mainstream adoption

[notig]

1 - cost/benefit

Is there consumer demand for the technology. Is it going to be worth the cost of installation / set up vs. the benefit the business will receive.

Ie. if <1% of consumers will utilise the technology, probably its not going to be worth the business investing in supporting it

2 - legality

No retailer or established business in a western jurisdiction will accept this as a mainstream payment option until a legal precedent is set by an established name, so that they know it is legal

Business is not going to risk its reputation by harbouring a technology that may be illegal


These are two barriers bitcoin has to overcome to obtain mainstream adoption

As for the legality.......... if they treat bitcoin as any other money and you pay taxes on it is there still a legal problem with that? Even if the government is still getting the same amount in taxes they would otherwise? Wouldn't saying they couldn't accept bitcoin be like saying they couldn't accept cash?

[cbeast]

There is nothing stopping a business from accepting yen or euro if they are willing. They are only required to accept legal tender if it is presented. Bitcoin is just another currency from a merchant's view.

[sublime5447]

There is nothing stopping a business from accepting yen or euro if they are willing. They are only required to accept legal tender if it is presented. Bitcoin is just another currency from a merchant's view.

exactly. That is why they wont take it. It is just another currency that is not as good as what they have at the moment. Business like to know what to expect and you cant do that with BTC. Markets and merchants dont like volatility.

[Bit_Happy]

...
They cant do it with the wild price fluctuations. This is the problem that coinbase is having right now...

Bitpay does not have that problem. If the item costs $10 USD then the merchant will receive $10 (minus a small fee) even if the customer used Bitcoins.

[sublime5447]

Okay I get that but bitpay takes ownership of the coin right? So if they take a coin valued at 20 and it drop to 2. You have an issue.

[Gestas]

Spoiler: It wont.

[kwukduck]

Spoiler: It wont.

-offtopic-
You must be really bored to hang around at a forum discussing something dislike so much.
If you don't have anything to add to the discussion, how about you just don't..?
40+ hate/troll posts an still a bitcoin address in your sig..?


-ontopic-
I think it will take a while before, if ever, bitcoin will be accepted in the super markets. Just informing people about what bitcoin is and why it was invented will have to do it in the end.

[bb113]

I thought this discussion would be about solutions for the confirmation waiting period.

[Kupsi]

Okay I get that but bitpay takes ownership of the coin right? So if they take a coin valued at 20 and it drop to 2. You have an issue.

Not if they sell the coin at Gox immediately.

[prezbo]

Okay I get that but bitpay takes ownership of the coin right? So if they take a coin valued at 20 and it drop to 2. You have an issue.

Bitpay takes that risk. In the long run (for them), price fluctuations don't make much (if any) difference. The only difference for you as a merchant is you pay a 2.5% fee to bitpay instead of a 3% fee to visa.

Okay I get that but bitpay takes ownership of the coin right? So if they take a coin valued at 20 and it drop to 2. You have an issue.

Not if they sell the coin at Gox immediately.

There is always a little bit of a discrepancy in price between the time the purchase is made and the time bitpay can sell the coins, but this risk is on bitpay in this instance anyway.

[DeathAndTaxes]

The supermarket is likely the last place Bitcoin will make inroads.

Bitcoin main advantages are high speed global transactions, irreversibility, low tx costs, and psuedo-anonymity.

None of those are really applicable at the supermarket.   Credit card interchange rates vary ...  A LOT.  An online high risk merchant (porn) can have a rate that is more than 10%.  Add to it high chargeback fees, high fraud screening costs (both technology and labor), higher reserves, and high monthly gateway fees and the real cost can be 20% to 30% of purchase price or more.

Low risk, physical world merchants can have a discount rate of <1% (0.89% isn't that hard to get and Walmart recently reported negotiating a 5 basis point reduction in their discount rate to something like 0.79%).  Fraud is almost nonexistent and consumer non-fraud chargebacks are unheard of.   Using something like Bitpay (no offense to that awesome company) would RAISE the cost of doing business.

Now is 20-30 years if the Bitcoin user base is much much much (think hundreds of millions of global users) larger many shops will accept it simply because consumers will demand it but "supermarkets" aren't the low hanging fruit for the Bitcoin economy.

[xxjs]

I thought this discussion would be about solutions for the confirmation waiting period.

That is easy, use a new company just like bitpay, only that it pays bitcoins to the merchant instead.

[DeathAndTaxes]

I thought this discussion would be about solutions for the confirmation waiting period.

That is easy, use a new company just like bitpay, only that it pays bitcoins to the merchant instead.

How does that solve the confirmation wait time?  You do realize that bitpay doesn't pay merchants until the payment to bitpay has been confirmed right?

[sublime5447]

Okay I get that but bitpay takes ownership of the coin right? So if they take a coin valued at 20 and it drop to 2. You have an issue.

Not if they sell the coin at Gox immediately.

The point is it doesnt matter who you pass the buck to. Someone is going to get fucked. Whether it is the store, bitpay, or the customer. Everyone is at the mercy of price instability. If the price changes from the time you buy the coin to the time you make it to the store you lose, if the prices changes before the store transfers to bit pay they lose, same thing for bitpay.

[DeathAndTaxes]

So for everyone who bought coins in 2010 and sold them today they "lost"?

We hedge our risk of volatility very easily.  The intrahour volatility is pretty low most days and we keep a large enough reserve to ensure it doesn't affect our operations.  I am sure bitpay does the same thing too.

Did you every think that maybe you just aren't "good" at currency exchange?  I mean rather than accept reality and build systems which function with Bitcoin as is it seems pretty much on an hourly basis you just spread FUD.

Please don't take it the wrong way but maybe, just maybe you suck at being a currency exchanger.  Maybe the problem isn't Bitcoin it is just your lack of skill.