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Author Topic: Bitcoin _is_ more convenient  (Read 1488 times)
DamienBlack
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July 05, 2011, 02:57:32 AM
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I've been a business owner for more than 10 years. I know there is a lot of argument on this issue, but the bottom line is that bitcoin is more convenient to use, at least from a small business owner's perspective.

When I started, I only accepted cash and checks. Cash was alright, but not many people went for that option. And checks cost me literally thousands of dollars in bounces and fraudulent charge backs.

When I first started taking credit cards, I did it through paypal virtual terminal. First I had to "prove" to them that I was a legitimate business, which required me jumping through a bunch of hoops. Once I was in the system I always had to have secure internet access and take a ton of information from the customer, including billing address and the code on the back of the card. The system often gave me cryptic error codes. The most inconvenient part is that it required the customer to trust me completely with all their sensitive information. This cost me $30 a month, 4% of each charge, and 30% had to stay in escrow for three months!

I later moved to a traditional phone line swipe system. This cost me $210 a month (including the extra phone line), and $0.50 + 1.8% for each transaction. As well as the card swiping equipment (about $300). The downside was that I could only do it at my studio, not on the road. Trying to record information to charge later led to far too many "failed" charges, much worse than when I accepted checks.

Bitcoin's costs are similar, when you account for all the various fees and risks you take (minimized by having moving prices and always selling immediately). But the simple fact of the matter is that there is no way on earth I could arrange for my fellow forum members to give me small donations in a simple, quick, and safe way using cash, checks or credit/debit. With bitcoins I can. The is a wholly new and unique feature of bitcoins. It can be easily integrated into anything, and the sender is always 100% safe. They never have to expose sensitive information. Although, it is a little easier to be scammed, as the sender has no chargeback options.

The upshot here, is that there is value in bitcoin that is not reproduced elsewhere. As a small businessman, I could have only wished for something as easy and in my control as bitcoins to have been around when I started. The main problem now is adoption. Once bitcoins start picking up traction, I could see businesses everywhere using it.

The current impracticality of actually walking into a location and transferring bitcoin will probably soon be solved by the market -- most likely by mobile apps and the great idea of firstbits. I really can imagine a future within 10 years where I can walk into a fast food joint and use my phone to pay with bitcoins. It isn't a 100% thing, but to me, it seems plausible. It really is a revolutionary idea that may change the world. But even if bitcoins don't "change the face of currency", and even if no one ever tries to accept bitcoins face to face where traditional currency methods are used, being adopted for even a small percentage of online micro-purchases would still give bitcoins tremendous value.

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muyoso
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July 05, 2011, 03:09:32 AM
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The current impracticality of actually walking into a location and transferring bitcoin will probably soon be solved by the market -- most likely by mobile apps and the great idea of firstbits. I really can imagine a future within 10 years where I can walk into a fast food joint and use my phone to pay with bitcoins. It isn't a 100% thing, but to me, it seems plausible. It really is a revolutionary idea that may change the world. But even if bitcoins don't "change the face of currency", and even if no one ever tries to accept bitcoins face to face where traditional currency methods are used, being adopted for even a small percentage of online micro-purchases would still give bitcoins tremendous value.

That sounds great and all, but the Japanese have been paying with their phones for years not and Google is introducing this summer and starting in earnest next year a mobile phone payment system across America.  Absolutely no need for the consumer to even worry about what a bitcoin is.  It may be slightly more convenient for a seller, even though I doubt it, but it certainly isn't and won't be more convenient for their customers. 

Also, it just doesn't really make any sense for a customer to convert their real money into bitcoins and then pay with bitcoins and then for the seller to convert the bitcoins back into real money.  What a hassle that is completely unnecessary and offers literally no advantages to consumers.

I drink it up!
DamienBlack
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July 05, 2011, 03:13:57 AM
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That sounds great and all, but the Japanese have been paying with their phones for years not and Google is introducing this summer and starting in earnest next year a mobile phone payment system across America.  Absolutely no need for the consumer to even worry about what a bitcoin is.  It may be slightly more convenient for a seller, even though I doubt it, but it certainly isn't and won't be more convenient for their customers.

It is very possible that bitcoin doesn't take off, especially if a competing system dominates the market. An investment in bitcoins should be considered speculative. Can you elaborate on the Japanese? How does such a system function? Is it easy to start taking payments if you are just a regular joe? Could two friends easily send money to each other? And does it require the sender to reveal sensitive information (like a cc number) that you wouldn't give to a stranger? Is there any degree of anonymity to the system? These are all thing bitcoin has going for it that I have not yet seen replicated.

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July 05, 2011, 03:22:33 AM
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Right now I am renting from a landlord who is just a regular person (no company, no cc, nothing)

It is really painful to pay rent.

Options:

1.) Write check, give her check, she goes to her bank, deposit check, (trusts me), (2-3 days)
2.) Pay 20$ regardless of size to have money wired to her (close to instant)
3.) Get cash out and go and hand it to her. (Quick but inconvenient, she lives on the other side of town.)
4.) Pull out cash, drive to her bank, deposit money in her account. (same as 3, but less inconvenient, still a PITA)
5.) Money order, etc
6.) Have wells fargo 'Bill Pay' cut her a check and mail it automatically (takes 3-4 days, this last month I had it scheduled for the 25, which landed on a saturday, they said the check would arrive on the 5th! (plus then the time of the check clearing in her bank.)

Bitcoin beats the pants off of all of these I think. And this is where it shines; person to person transactions (loaning money, paying rent, buying crap)
nazgulnarsil
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July 05, 2011, 03:24:07 AM
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in japan people charge up their phone wallets with prepaid cards and then pay at stores equipped with NFC.
muyoso
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July 05, 2011, 03:25:48 AM
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That sounds great and all, but the Japanese have been paying with their phones for years not and Google is introducing this summer and starting in earnest next year a mobile phone payment system across America.  Absolutely no need for the consumer to even worry about what a bitcoin is.  It may be slightly more convenient for a seller, even though I doubt it, but it certainly isn't and won't be more convenient for their customers.

It is very possible that bitcoin doesn't take off. An investment in bitcoins should be considered speculative. Can you elaborate on the Japanese? How does such a system function? Is it easy to start taking payments if you are just a regular joe? Could two friends easily send money to each other? And does it require the sender to reveal sensitive information (like a cc number) that you wouldn't give to a stranger?

I am not exactly sure the Japanese system as it has evolved a lot since I lived there, but I am pretty sure you can put a set amount on your phone and just pay as if with a debit card.  I do suggest you watch this if you have a chance though:

http://www.youtube.com/watch?v=6tBAB5ls5vM

If you want a much more in depth presentation of the background for both consumers and merchants:

http://www.youtube.com/watch?v=am8t6iZ7up0

I drink it up!
de_bert
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July 05, 2011, 02:08:56 PM
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1.) Write check, give her check, she goes to her bank, deposit check, (trusts me), (2-3 days)
2.) Pay 20$ regardless of size to have money wired to her (close to instant)
3.) Get cash out and go and hand it to her. (Quick but inconvenient, she lives on the other side of town.)
4.) Pull out cash, drive to her bank, deposit money in her account. (same as 3, but less inconvenient, still a PITA)
5.) Money order, etc
6.) Have wells fargo 'Bill Pay' cut her a check and mail it automatically (takes 3-4 days, this last month I had it scheduled for the 25, which landed on a saturday, they said the check would arrive on the 5th! (plus then the time of the check clearing in her bank.)

Whoa, in which 3rd-world-country do you live?
Seriously! Here (Switzerland) she would give me her account number, and I could send it to her via e-Banking. Or I could go to a bank and send it to her there.
Paying by e-Banking is be free, paying at a bank would cost some cents.
BitcoinPorn
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July 05, 2011, 02:56:00 PM
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Finally just popped the lid open on a venture with myself a couple of friends, whom did not know of Bitcoin but just do design.  It sucks though struggling until able to get certain back end costs recouped to make the cost of the item more appealing to spend with a Bitcoin over a dollar.  Established business' though, they need to put aside cash for investment, taking possible some loss or super low gains to ensure more Bitcoin exchange.  The ease of use and other benefits, once established with people, will make them want to keep using it on top of the benefits the business owner like you guys are already seeing.

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July 05, 2011, 03:00:40 PM
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Quote


Also, it just doesn't really make any sense for a customer to convert their real money into bitcoins and then pay with bitcoins and then for the seller to convert the bitcoins back into real money.  What a hassle that is completely unnecessary and offers literally no advantages to consumers.

You are 100% correct. The average customer needs to have a compelling reason to use bitcoin for purchases. Here are few reasons that "could" motivate him:

1. He values the privacy of a bitcoin transaction
2. He prefers to hold his money in his own personal "bank" (wallet) instead of at a traditional (fractional reserve) bank
3. There is a major loss of confidence in his nation's currency
4. He feels that bitcoin is a better store of value than his national currency
5. The vendor offers a discount for customers who pay with bitcoin - (key strategy for vendors who prefer bitcoin!)
6. He likes the "ease of storage" feature of bitcoin
7. He likes the portability feature of bitcoin (especially across national borders)
8. He has philosophical reasons (prefers free-market money over central-planner money)

As noted in the previous post, there doesn't need to be 100% acceptance of bitcoin for everyday exchanges in order for it to be useful. Consider that gold is primarily valued as a "store of value" but that it is not used in everyday exchanges/purchases in any meaningful way. The question then becomes, are bitcoin's features valued enough that people will trade national currencies (and other assets) for them? I think this question has already been answered in the affirmative by the market. The next major question, in my opinion, is how will attacks from nation states effect bitcoin's value? If it is forced into the black market will it's price go up, as is in the case of illegal drugs, or will its value drop due to fear of prosecution?
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July 05, 2011, 03:33:45 PM
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Whoa, in which 3rd-world-country do you live?


USA, while not a 3rd world country just yet, is headed in that direction. I notice this every time I visit somewhere else. It is an antiquated and aging machine, which lost its motive power 80 years ago and has been coasting since.
Bunghole
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July 05, 2011, 06:19:03 PM
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My US bank lets me set up a direct e-payment to anyone's bank account - all I need is the account number and routing number, both of which are on the recipient's check.  The payment usually occurs in one business day and is free.  Once it is set up, it takes 1 minute to make a payment.

Right now I am renting from a landlord who is just a regular person (no company, no cc, nothing)

It is really painful to pay rent.

Options:

1.) Write check, give her check, she goes to her bank, deposit check, (trusts me), (2-3 days)
2.) Pay 20$ regardless of size to have money wired to her (close to instant)
3.) Get cash out and go and hand it to her. (Quick but inconvenient, she lives on the other side of town.)
4.) Pull out cash, drive to her bank, deposit money in her account. (same as 3, but less inconvenient, still a PITA)
5.) Money order, etc
6.) Have wells fargo 'Bill Pay' cut her a check and mail it automatically (takes 3-4 days, this last month I had it scheduled for the 25, which landed on a saturday, they said the check would arrive on the 5th! (plus then the time of the check clearing in her bank.)

Bitcoin beats the pants off of all of these I think. And this is where it shines; person to person transactions (loaning money, paying rent, buying crap)
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