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Author Topic: Barriers to entry?  (Read 509 times)
la contessa
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April 07, 2013, 08:44:26 PM
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Hello -- Newbie here. I'm wondering about Bitcoin's barriers to entry and how they might possibly be being used to help jack up the price. Are there any other newbies here wondering the same thing?

I've been curious about Bitcoin for awhile, but decided to plunge in a couple of days ago, give it some attention, sign up with exchanges, and see if I could buy my first coin.

Signing up with BitStamp and MtGox were relatively easy although my goodness, I'm surprised MtGox doesn't also want you to send them fingernail clippings....  I also got a computer wallet and one for my Android phone.  I've read all the security cautions and I'm super cautious anyway so everything seemed to be falling into place.

But then I wanted to fund my exchange accounts with US Dollars.  I've been looping around since Friday simply trying to figure out how to transfer enough money to buy one Bitcoin.  I understand about the chargeback concerns with PayPal and Visa, but I could also easily link a bank account or authorize an ACH transfer.  The problem with bank wires is that they cost $25-35 and that is much too high of a premium when the goal is to buy just one Bitcoin.  Escrow.com also charges a minimum of $25 to perform an escrow function.

Obviously an intermediary is the way to go -- someone who takes PayPal, Visa, cash, or who links to bank accounts, but also someone who the exchanges trust to relay the money when the coin is released.

BitInstant looks like a fantastic IDEA -- but after three days of trying to enter a cash transfer (CVS is just across the street from me, I can easily walk there with a deposit ticket and give cash), I have had no success. Their system just keeps booting me back to an empty transaction page and I get no confirming email, no deposit slip, nothing.  On this forum I then discovered that they're buried and that some people are waiting weeks for their transaction requests to be processed.  Hello, BitInstant -- perhaps your website should not promise a one-hour turnaround if your system is not actually ready???

I also looked at Dwolla which looked really promising -- until it asked for my Social Security number. I'm sorry, I simply don't enter that online, ever. The damage would be too great if it ever got loose. At least with a credit card you can cancel it. A social security number is attached to you for your whole life and the harm compromising it would produce would be lifelong.

Coinbase looks promising, they are local too. They *do* connect to bank accounts, but it's currently unclear to me if users are required to keep their Bitcoins in their Coinbase online wallet or whether a Bitcoin-to-email option is available.

Anyway, back to the primary question -- about barriers to entry.  Consider -- on Amazon and eBay a seller can set up a policy that says "no refunds" and even if the payment is made using PayPal or Visa, no refund will be given.  It does not actually seem that difficult to simply set a policy of no refunds and go ahead and accept PayPal or Visa. Am I wrong?

Barriers to entry would actually serve the purposes of people wanting the price to rise.... And when ease of access is established it would seem to me that the price would go down.  From a strictly incentive perspective, maybe newcomers are not all that wanted. I, and my money, certainly don't feel wanted with how much trouble and extra expense there is to simply buy one Bitcoin.


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April 07, 2013, 08:56:22 PM
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that's quite right. one way may be local bitcoin, but makes sense in large cities mostly.
over time, access to btc will become less of a hassle.
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April 07, 2013, 11:18:56 PM
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You think it's hard trying to buy with US $, you want to try living in UK and buying BTC, sellers with UK banking options are as rare as hen's teeth.
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April 07, 2013, 11:20:12 PM
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You think it's hard trying to buy with US $, you want to try living in UK and buying BTC, sellers with UK banking options are as rare as hen's teeth.

...because the banksters keep freezing their accounts.

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April 07, 2013, 11:29:52 PM
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Well...

Soon the Bitcoin ATM will arrive and slowly become more commonplace.

That will solve a lot of issues with attaining BTC.

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April 07, 2013, 11:40:27 PM
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Selling is much harder than buying...

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April 08, 2013, 01:18:05 AM
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Selling is much harder than buying...

Really? How so?
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April 08, 2013, 01:26:51 AM
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If you're in the USA and close to a Bank of America, you can use Bitfloor.com to get into quite painless-ly.

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April 08, 2013, 01:32:02 AM
 #9

Hello -- Newbie here. I'm wondering about Bitcoin's barriers to entry and how they might possibly be being used to help jack up the price. Are there any other newbies here wondering the same thing?

I've been curious about Bitcoin for awhile, but decided to plunge in a couple of days ago, give it some attention, sign up with exchanges, and see if I could buy my first coin.

Signing up with BitStamp and MtGox were relatively easy although my goodness, I'm surprised MtGox doesn't also want you to send them fingernail clippings....  I also got a computer wallet and one for my Android phone.  I've read all the security cautions and I'm super cautious anyway so everything seemed to be falling into place.

But then I wanted to fund my exchange accounts with US Dollars.  I've been looping around since Friday simply trying to figure out how to transfer enough money to buy one Bitcoin.  I understand about the chargeback concerns with PayPal and Visa, but I could also easily link a bank account or authorize an ACH transfer.  The problem with bank wires is that they cost $25-35 and that is much too high of a premium when the goal is to buy just one Bitcoin.  Escrow.com also charges a minimum of $25 to perform an escrow function.

Obviously an intermediary is the way to go -- someone who takes PayPal, Visa, cash, or who links to bank accounts, but also someone who the exchanges trust to relay the money when the coin is released.

BitInstant looks like a fantastic IDEA -- but after three days of trying to enter a cash transfer (CVS is just across the street from me, I can easily walk there with a deposit ticket and give cash), I have had no success. Their system just keeps booting me back to an empty transaction page and I get no confirming email, no deposit slip, nothing.  On this forum I then discovered that they're buried and that some people are waiting weeks for their transaction requests to be processed.  Hello, BitInstant -- perhaps your website should not promise a one-hour turnaround if your system is not actually ready???

I also looked at Dwolla which looked really promising -- until it asked for my Social Security number. I'm sorry, I simply don't enter that online, ever. The damage would be too great if it ever got loose. At least with a credit card you can cancel it. A social security number is attached to you for your whole life and the harm compromising it would produce would be lifelong.

Coinbase looks promising, they are local too. They *do* connect to bank accounts, but it's currently unclear to me if users are required to keep their Bitcoins in their Coinbase online wallet or whether a Bitcoin-to-email option is available.

Anyway, back to the primary question -- about barriers to entry.  Consider -- on Amazon and eBay a seller can set up a policy that says "no refunds" and even if the payment is made using PayPal or Visa, no refund will be given.  It does not actually seem that difficult to simply set a policy of no refunds and go ahead and accept PayPal or Visa. Am I wrong?

Barriers to entry would actually serve the purposes of people wanting the price to rise.... And when ease of access is established it would seem to me that the price would go down.  From a strictly incentive perspective, maybe newcomers are not all that wanted. I, and my money, certainly don't feel wanted with how much trouble and extra expense there is to simply buy one Bitcoin.




I feel the same way.
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April 08, 2013, 05:03:58 AM
 #10

What you are describing are problems with the conventional banking system, which Bitcoin solves. You are simply encountering the usual difficulty of moving your dollars from one place to another (which Bitcoin obviously can't help you with, since Bitcoin has nothing to do with dollars and has no control over your dollars). I guarantee you won't have such difficulty moving your bitcoins around (once you manage to obtain them, of course).

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April 08, 2013, 05:35:47 AM
 #11

You have two adversarial systems...  what can we expect?  Grin
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