How Much Does It Save You To Buy/Sell Using Bitcoins

[Kazu]

Bitcoin
3.99% deposit fee + 0.6% gox fee = 4.6% fee to get bitcoins.
OR
~$45 (bank wire fee) + 0.6% gox fee


Fees associated with Debit/Credit:
~2.5% per transaction

Bank Wire:
~$45 per transaction

Thus we can see that Bitcoin only is cheaper than credit if transacted at least 2 times between every exchange (i.e, two of the transactions are "free)
Bitcoin is cheaper than Bank Wires assuming number of transactions between every exchange exceeds  0.6% of the amount of transaction / $45.

My point is that the advantage of cheap transactions doesn't happen unless there are at least a few transactions "between" the exchange. What I mean by between the exchange is that one person who received bitcoins, exchanges his bitcoins to another merchant, and this second merchant will not go to an exchange himself.

I don't think that merchants (or at least not all of them) are not accepting bitcoin because of inertia alone. I think that they know that these "between" transactions won't happen and thus bitcoins are actually much more expensive than credit. Thus, Bitcoin will not 'take off' truly until between transactions happen at least as much as exchange transactions, i.e, transactions to and from exchangers make up only 1/3rd of all bitcoin transactions.

When/How do you think this will happen?

[theta]

 or if exchange competition brings fees down to closer to zero, as it should.

[granolageek]

Bitcoin


Bank Wire:
~$45 per transaction

That is very much a worst case number. US domestic, and I believe SEPA, bank wires are half that. Cash deposits range from zero to a few percent using a service.

I do grant the convenience factor. Credit cards "just work", for a known percentage. Bank wires and cash deposits are more work with unpredictable delays.

I agree with the OP that the requirement for mass adoption is vendors selling for Bitcoin being able to spend the Bitcoin on rather than having to convert it back to fiat.

[nebulus]

... merchants (or at least not all of them) are not accepting bitcoin because of inertia alone

1) Inventory is frozen when it is sold for BTC because not many people want to part with BTC still
2) The goods market is very tiny so you have to exit in fiat rather that continue dealing in BTC
3) Lack of e-commerce infrastructure

But Bitcoin future lies through commerce at least that's my opinion...

[W-M]

Bitcoin


Bank Wire:
~$45 per transaction

That is very much a worst case number. US domestic, and I believe SEPA, bank wires are half that. Cash deposits range from zero to a few percent using a service.

I do grant the convenience factor. Credit cards "just work", for a known percentage. Bank wires and cash deposits are more work with unpredictable delays.

I agree with the OP that the requirement for mass adoption is vendors selling for Bitcoin being able to spend the Bitcoin on rather than having to convert it back to fiat.

Yes, in this sense it is kind of stuck in a self-sustaining loop. Basically we need merchants to get Bitcoin more widely adopted, but we'll only get more merchants when the Bitcoin price is stable. And this will if course only happen when more people use Bitcoin. Which only happens when we have more merchants. Repeat ad infinitum.


I think that we'll really see the Bitcoin become stable when actually producing stuff can be done in Bitcoin. i.e., If you want to sell bread for Bitcoin, it is much more viable if you can buy the wheat and eggs you need to create it in Bitcoin as well, as this means that the price of the product doesn't need to fluctuate with the exchange rates of another currency.

the Avalon ASIC is one of the first devices that I know of that seems to work that way.

[Ekaros]

SEPA transfers can even be free in best case. Thus leaving only the monthly cost of account and internet banking. In some cases there isn't even these costs...

That is quite hard to compete with. Though for transfers outside certain zones the fees are bad...

[Kazu]

... merchants (or at least not all of them) are not accepting bitcoin because of inertia alone

1) Inventory is frozen when it is sold for BTC because not many people want to part with BTC still

Not really, they can still sell in other currencies.

2) The goods market is very tiny so you have to exit in fiat rather that continue dealing in BTC

This is the main problem.

3) Lack of e-commerce infrastructure

There is a lot, TBH.