BitPay is not Bitcoin....persistent foreign exchange risk costlier than CC.

[Manticore]

Main point...

You guys are missing the point here.

It's a tall order to make someone become an investor by exposing them to large foreign exchange risk (currency fluctuation risk) simply because they want to save money on wire fees and credit card fees, which seems to be what many champion when discussing Bitcoin. There is no point in highlighting the fact that BTC can save any money on fees because it likely can't.

It is simply a tool for investors to make purchases with their investment. It doesn't offer the public a cheaper transactional fee structure. It forces them to become investors by making them take on enormous currency exchange risk (USD/BTC) in order to, under perfect circumstances, save maybe 1% in various transactional fees because:

A) 99.9% of online purchases are through BitPay and their 1% charge
B) Spread is 0.5% - 1% (or 5%+ during high volatility) and must be accounted into sale price through BitPay
C) Foreign exchange risk (USD/BTC fluctuations) are greater than any CC or wire fee
D) Paypal offers free intra-border money transfer, so this does not help people who aren't already invested in BTC
E) Paypal offers low cost international money transfer, ditto.

So champion it for what it is, an investment that allows investors to make purchases with their investment. Only with a great deal of luck will it save anyone else anything on transaction fees.

Because only investors are incentivized to make purchases with BTC, and because there is an incentive for investors to hoard, I see this as something that limits BTC online transactions (and BitPay because 99.9% of merchants will only accept through them).

And If people begin making substantial online purchases with BTC, because these purchases will likely be made by investors who already hold substantial coins, the market will likely trend lower because there will be no off-setting transaction for the BTC to USD (or whichever currency) conversion that happens through BitPay.....again, because almost all merchants accept Bitcoin through BitPay.

Lower fees....debatable. We just moved from from $166+ to $157 in no time. That transaction just became 5%+ more expensive if I purchased @ $166, not including spread and BitPay transaction fees. Actually, while I'm writing this we are now at $153.....so much more expensive than any CC fee. This is the foreign exchange risk I'm talking about. $166 - $153 is almost 8% in a matter of minutes.....plus 1% for BitPay and 1% for the spread (now at 1.5% due to volatility).

So if I had bought a few minutes ago at $166 BTC for a transaction that just occurred, it would have cost 10%.......way higher than any credit card fee.

All of these merchants that are 'accepting Bitcoin' are really accepting USD through BitPay. 99.9% of Merchants will likely never accept Bitcoin directly due to extreme foreign exchange risk.

Other than for very niche privacy related applications that are likely international, there is no reason to go USD-BTC-USD by converting USD to BTC to purchase something with bitcoins that will be converted immediately back into USD.....unless one already holds BTC as an investment.

And the people that invest are hoarding, for the most part, so I see this as something that will stunt BitPay's growth. And if BitPay does grow tremendously, the market would likely trend down because A) USD-BTC-USD (mainly for gambling and niche privacy related uses) would be an offsetting transaction that should not move the market and B) investors that have been holding bitcoins are very likely the main consumers transacting, so if they began making a huge number of online purchases the market would, if anything, trend lower because 99.9% of merchants must use BitPay and immediately convert to USD.

I see Bitcoin's utility in transnational transactions, albeit with high foreign exchange risk. For intra-border (within the US) transactions, the only reason to transact is if you are already an investor. It's a tall order to ask the general public to invest in Bitcoin or for merchants to accept it directly simply to save, at best, 1% on transaction fees. BitPay charges 1% and the BTC spread is usually 0.5% - 1% (or 5%+ during high volatility), and merchants must account for the spread when pricing through BitPay, so at a minimum the fees are still 1.5% - 2% split by the purchaser and the merchant. This doesn't include the extreme foreign exchange risk assumed by the purchaser (or merchant if they chose to accept Bitcoin and not BitPay), which can easily dwarf CC fees in a very short time.

And as much as I dislike Paypal, they offer completely free money transfers (non-purchase related, free for sender & receiver) that are certainly as easy if not easier than purchasing Bitcoin. They also offer very low international transfer rates (0.5% - 2%).

[naphto]

Huh. Who cares about US?

[Manticore]

Most of the new merchants that are now accepting Bitpay are US-based.

[warpio]

Merchants that accept only credit card payments are technically not accepting USD...

[naphto]

Then, who cares about BitPay? Huh.


People who believe in bitcoins (ah ah ah ah ), are buying bitcoins and use them as a currency.
People who don't believe in bitcoins are trading and trying to make some profits.

[oakpacific]

So "Speculation" certainly seems like the most suitable place to post this, Aha?

[Gordonium]

Who cares?  If merchants accept Bitcoin via BitPay it means that people can buy goods and services with Bitcoin. And that's what matters.

[Kazu]

BitPay is using Bitcoins. It may be USD -> BTC -> USD, but there is still a BTC link in there.

I think of the currency war like netscape thought about the browser war. They needed navigator on the machine first even though they were offering it for free so they could then extend netscape's influence on the machine slowly. Its a lot easier to get somebody to not exchange a currency they already use rather than telling them to switch to a currency they have never heard about.

[DiThi]

They accept:

• Lower fees
• No chargebacks
• More potential clients
• Exposure to a huge community

[2weiX]

I am a merchant in Germany and I do accept BTC and I use BitPay for Settlement.

From customers all over the globe.

[adamstgBit]

BitPay is using Bitcoins. It may be USD -> BTC -> USD, but there is still a BTC link in there.

I think of the currency war like netscape thought about the browser war. They needed navigator on the machine first even though they were offering it for free so they could then extend netscape's influence on the machine slowly. Its a lot easier to get somebody to not exchange a currency they already use rather than telling them to switch to a currency they have never heard about.

the term  "currency wars" has nothing to do with bitcoin, all it means is countries around the world are racing to find excuses to print & borrow  as much money as they can b4 its over... its almost over  

[jaime]

Then, who cares about BitPay? Huh.


People who believe in bitcoins (ah ah ah ah ), are buying bitcoins and use them as a currency.
People who don't believe in bitcoins are trading and trying to make some profits.

That's right!  Exchanges are now a necessary evil.

[mccorvic]

I am a merchant in Germany and I do accept BTC and I use BitPay for Settlement.

From customers all over the globe.

This ends the thread. 

Manticore, please stop posting. You're really really bad at it.

[Manticore]

Then, who cares about BitPay? Huh.


People who believe in bitcoins (ah ah ah ah ), are buying bitcoins and use them as a currency.
People who don't believe in bitcoins are trading and trying to make some profits.

How do they use it as a currency? Do they buy things online? Ok, well 99.9% of merchants will only accept BitPay and not Bitcoins due to extreme foreign exchange risk. So most anything these Bitcoin believers will be purchasing will likely go through BitPay where it will be converted immediately into USD.

The other point is that 'people who believe in bitcoin' are really investors and are not incentivized to use bitcoins as currency very much (hence the hoarding). One has to be an investor to make transactions with Bitcoin.

There is no reason to purchase BTC to make intra-border transactions. So the utility here is mainly for investors, niche privacy related transactions, and international transactions (still with great risk of currency fluctuation). Otherwise, for someone in the US, for instance, to go USD-BTC-USD simply to make a transaction.....it's like being required to purchase shares of Paypal to use as a currency for online transactions. You must take on exchange risk and be a true-believer/investor to use the protocol.

How is adding an extreme level of foreign exchange risk (requiring an investment, basically) making anything easier for the vast majority of people transacting within the borders of the US (or any country), where nearly all of these new BitPay merchants are accepting orders? Hopefully this is boosting their international sales because I don't see much of a boost in domestic sales....even with international sales, the currency exchange risk is still possibly higher than any potential savings on wire or CC fees. Really, foreign exchange risk negates intra and inter-border utility.

[Ozymandias]

I don't understand the significance of bitpay and the whole "not accepting bitcoin" argument. I don't care if the merchant accepts bitcoin, usd, or live chickens; I only care that I am able to send bitcoins to that merchant and receive a product or service in return - what the merchant does with those bitcoins (keep them, exchange them to fiat, purchase chickens, etc.) is entirely irrelevant to me. Is there an obvious flaw in my logic that I'm not seeing?

[Technomage]

One can also accept bitcoins through BitPay and take bitcoins, either fully or a portion of the sales. Our company is an integrator partner with them, and we know that not all merchants do the fiat conversion. But it's true that only true Bitcoin believers do that. It should change through time though, since it's quite beneficial for companies to simply hold as much bitcoins as humanly possible.

[Manticore]

I am a merchant in Germany and I do accept BTC and I use BitPay for Settlement.

From customers all over the globe.

So this boosting your international sales? That makes sense....

[2weiX]

I am a merchant in Germany and I do accept BTC and I use BitPay for Settlement.

From customers all over the globe.

So this boosting your international sales? That makes sense....

actually, I'd say my largest customer bases are

The UK
Netherlands
The US
Germany

in equal parts.
Then, the rest of the world.

[Manticore]

The level of foreign exchange risk applies to intra and inter-border customers. Still, I can see some utility in international transactions if customers are willing to risk a large fluctuation in Bitcoin to save on wire fees, etc.

[Gordonium]

One can also accept bitcoins through BitPay and take bitcoins, either fully or a portion of the sales. Our company is an integrator partner with them, and we know that not all merchants do the fiat conversion. But it's true that only true Bitcoin believers do that. It should change through time though, since it's quite beneficial for companies to simply hold as much bitcoins as humanly possible.

+1