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Author Topic: Stop saying Bitcoin is good for money transfer. It isn't.  (Read 9961 times)
gurcani
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September 13, 2013, 01:33:48 AM
 #41

...
Just post one of your public keys, and I'll show you how easy it is to use bitcoins to transfer wealth.

lol, true.
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DannyHamilton
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September 13, 2013, 01:37:24 AM
 #42

LocalBitcoins rates are very fair, 1% off of the top for escrow,
- snip -

Avoid Localbitcoins for the next 24 hours.

They are dealing with a potential security issue and have temporarily disabled all bitcoin withdrawals.

The extent of the issue is not yet clear.  Hopefully it will not destroy them, but until the dust settles you don't want to be transferring any additional bitcoins to their service.

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September 13, 2013, 01:38:37 AM
 #43

...
Just post one of your public keys, and I'll show you how easy it is to use bitcoins to transfer wealth.

I assume you mean private keys?

Or were you planning on making a donation to them?

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September 13, 2013, 05:10:12 AM
 #44

...
Just post one of your public keys, and I'll show you how easy it is to use bitcoins to transfer wealth.

I assume you mean private keys?

Or were you planning on making a donation to them?


The only donation he will be making, would be to himself LOL  Cheesy
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September 13, 2013, 05:45:09 AM
 #45

But the prophets peddling the idea

seemed to be perfect for BTC according to the prophets.

I'm just glad to see prophets are prophesying about Bitcoin profits :-)

Check out the first physical bitcoin at http://CoinedBits.com
Paladin69
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September 13, 2013, 05:56:44 AM
 #46

The sad truth is that Bitcoin is a dream for scammers.  No chargebacks is great for the seller, it is absolutely horrible for the buyer.  No recourse sucks.  It's the price we pay for something decentralized with no Government ties.

People need the nanny-state to wipe their ass.  Mass acceptance will not be achieved unless recourse is implemented...somehow...I don't know how that is possible.
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September 13, 2013, 06:29:20 AM
 #47

The sad truth is that Bitcoin is a dream for scammers.  No chargebacks is great for the seller, it is absolutely horrible for the buyer.  No recourse sucks.  It's the price we pay for something decentralized with no Government ties.

That doesn't come for free.  You pay a minimum 3% in higher prices for that ability to chargeback.   For every $1,000 in charges you'ld need to do chargebacks of $30 to make that 3% fee justified.    For some types of purchases (e.g., Travel), the fee is an even greater percent.   Tell me the last time you disputed your room charge from a hotel stay?   Chances are never.   So I trust some merchants and don't need that protection.   Other vendors, I wouldn't order from unless I knew I had the ability to do a chargeback if the item never ships.   

So if Bitcoin (and Dwolla or other cash-based competitors) causes credit cards to end up being used less for the Wal-Marts, hotels, etc. (where there are low fraud rates) but still used for the transactions with a higher fraudulent ratio, the credit card companies need to raise their rate above 3% as they lost their most profitable revenues.  Then that higher rate pushes more merchants towards preferring Bitcoin (and Dwolla, etc), and it becomes a self-reinforcing trend.

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September 13, 2013, 09:59:01 AM
 #48

Why? lol

This simply reflects that bitcoin is still in its infancy.  There will be many more options for converting bitcoin to fiat and vice versa once people get comfortable with what bitcoin is and how it works (i.e. including regulators).  There is no getting around the fact that you want to swap BTC for fiat - that's where the bottleneck happens.

That said, $50K is not a problem.  There are plenty of traders on localbitcoins.com who can deal with large amounts (though admittedly that requires you to go out and sell your coins).

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September 13, 2013, 10:27:20 AM
 #49

Interesting post, thank your for sharing your experiences.

But one point I have to correct: You say bitcoin.de doesn't accept users outside germany. This is not true.

Bitcoin.de accepts users from the whole EU and some other european countries (e. G. swiss, norway).

To perform large international transactions you need liquid exchanges and a secure environment. Secure high volume means by nature high regulation resp high legal consumer rights. The cooperation with the fidor bank has the potential to make bitcoin.de a strong part of the chain. That this goes along with higher verifcation standards is a naturall part of the process.

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September 13, 2013, 10:31:36 AM
 #50

I assume you mean private keys?

Or were you planning on making a donation to them?

No, no, I meant public...
Transfering wealth from one party to another is much easier using bitcoins than bank wires or western union or whatever, and that was a semi-trollish way to make this point.

The OP title is misleading.
His problem is actually the difficulty to acquire BTC by spending FIAT.


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September 13, 2013, 12:48:29 PM
 #51

I assume you mean private keys?

Or were you planning on making a donation to them?

No, no, I meant public...
- snip -

Well you said:

- snip -
and I'll show you how easy it is to use bitcoins to transfer wealth.

So, does that mean that if he posts his public key, you'll send him some bitcoin?

Transfering wealth from one party to another is much easier using bitcoins than bank wires or western union or whatever

Definitely.
Easier and cheaper.

The OP title is misleading.
His problem is actually the difficulty to acquire BTC by spending FIAT.

Yes, most people who complain about the difficulty they are having in obtaining bitcoin assume that it is because bitcoin is difficult.  What they don't seem to realize is that it is the FIAT side of their transaction that is causing the issue.  They are finding it difficult to get FIAT to the bitcoin providing entity in a fast and non-reversible way.  If they could solve their FIAT problem, then they wouldn't have such difficulties in acquiring bitcoin.  Of course if they could solve their FIAT problem, we wouldn't really have a need for bitcoin any longer either.

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September 13, 2013, 01:49:58 PM
 #52

If they could solve their FIAT problem, then they wouldn't have such difficulties in acquiring bitcoin.  Of course if they could solve their FIAT problem, we wouldn't really have a need for bitcoin any longer either.

You were doing so well there but this is where I have to disagree.

Fiat problems won't ever go away as their fundamental problems are set in stone.

The problems with getting fiat into Bitcoin would go away in an instant if we could get rid of the overbearing overregulations that are being erected to be obstructionist in nature.
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September 13, 2013, 02:27:59 PM
 #53

I think that Bitcoin itself is a brilliant way to transmit money but the exchange services Fiat/ BTC are not good enough yet. If you do some research you will find that the Fidor Bank is planing to implement a bank account which can do the exchange in real time. This would make Bitcoin a really nice tool for conducting transactions as an alternative to Western Union and similar money transfer services.

On top of that it could easily replace paysafe cards since you could just change the Fiat given into bitcoin and print out a paper wallet. If you can change that into Fiat in real time then paysafe card and similar trashy services would be obsolete...


How would you have any free of charge exchanger?

Whenever you make money, by speculating or whatsoever, you have to pay taxes. So, unless you never sell your btc for fiat money, you will have huge fees, people to pay, and some regulation.



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September 13, 2013, 03:56:28 PM
 #54

- snip -
and I'll show you how easy it is to use bitcoins to transfer wealth.

So, does that mean that if he posts his public key, you'll send him some bitcoin?

Yeah, I would have sent a tip and asked him 20 minutes later, when the BTC would have been confirmed on his side, to send back the same amout to me in FIAT, in the same time frame, with the same ease it was for me. 
Then would have asked him to edit this completely false title. Grin

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September 13, 2013, 09:09:38 PM
 #55

I sympathize with the OP. Especially if you were an early adopter, had the BTC available and was unable to do a family transaction in a timely manner, that would indeed be bad. If it's a time issue, it may be better to use your fiat, then slowly cash BTC to replenish your savings.

On the aspect of small payments however, I went camping in Uganda for two weeks last January. My cousin has been a missionary/veterinarian there for 22 years. She got married, I went to play music for her wedding. We were in the Karamoja area (northeast Uganda, not far from Kenya).

Where we were was amazingly primitive. The Karamojong do not really have currency, other than cattle. One of the things that impressed me greatly, was the wide use of cellphones in Uganda (not among the Karamojong, but on the way there). There was widespread use of "Mobile Money", an SMS protocol to facilitate peer to peer money. People that lived in cardboard boxes have old candy bar phones, and there are plenty of street kiosks to sell air time, charging, and give cash for the mobile money.

This is one of the things that got me interested in Bitcoin. Bringing currency and payments to the otherwise unbankable. I am an IT guy, but it was amazing and humbling to see technology change living standards that have not changed for hundreds of years.

I asked someone what happens when they lose their phone. They said it's all based on their password, and that the money is "out there" (waving hands in the air) and not on their phone. I guess "the cloud" buzzword has not made it to the small villages yet. Although in the Ugandan capital, Kampala, English is widely spoken, in Uganda there are 40 dialects (much a variation of Swahili). English letters and numbers on phones are alien, but they learn to use them.

Many governments in Africa are very corrupt as well, I don't know how well a truly decentralized currency would be accepted. I live in the USA, and have the same thoughts about BTC here.

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September 13, 2013, 09:55:16 PM
 #56

I have a family member in the US that is part owner of company. A majority owner was leaving and so that presented an opportunity for me, in the EU, to send them $50k to invest. I could take profits from BTC as an early adopter or I could dip into FIAT savings. The former seemed ideal and seemed to be perfect for BTC according to the prophets. So I started looking into how to do it. On the US end MtGox can be used but with a long delay for 4 to 8 weeks and some marginal fees (0.5% exchange fee, $10 transfer fee). A bit ridiculous. But the other exchanges are worse, in a different way. For example Coinbase has 2 to 3 day transfer but a daily limit of 50BTC. That means it would take at least 9 days to sell enough BTC to convert into $50k. Assuming all these abstraction layers work out it would take 2 weeks to get the money with some fees for exchange (1%). CampBx doesnt really state their BTC sell limits clearly but do state a $1000k per day withdrawl limit. 50 days is nuts. Guess there is a wire transfer option but not knowing the BTC limits its just not clear if this would work. A p2p exchange such as #bitcoin-otc would have a 5% margin from my experience so this also seems a bit much. Localbitcoins and in fact most of the other exchanges have such low volume this also has to be considered.

I hate to break it to you, but your argument is totally bogus, and the headline is downright misleading.  If you want to replace it with "Stop saying Fiat is good for money transfer.  It isn't."  then, I will happily agree with you.  Because in all these different examples, you are talking about transferring from Bitcoin -> Fiat -> Fiat, which is not at all the same as Bitcoin -> Bitcoin like in the traditional way this money transfer argument works. 

The argument that bitcoin is good for money transfer is still intact, and valid, even if you are using exchanges like in your example.  Want to transfer $50,000 worth of bitcoins from Coinbase?  Go right ahead, I just looked this up on Coinbase, there's no limit on the amount of bitcoins you can send from your account.  As long as you have that many bitcoins, you can send them.  I could do the same from Armory and send any amount of money I like to anyone else in the world and they'll get it within an hour, most of the time.  Even if it's Sunday.  Try doing that with a Bank. 

That isn't what you're talking about here.  You're talking about Bitcoin, but all you mention here are exchanges which means you'd be getting your fiat money out.  So what you're really talking about is cashing out and transferring money in Fiat.  That's always been a pain, and there's nothing Bitcoin can do to change that.  Even if Coinbase had an unlimited withdrawal, keep in mind that your bank might flag the transaction because you're talking about an amount of $50,000 and (at least in the United States) by law Banks have to report any transfer of money that's over $10,000.

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September 14, 2013, 12:31:59 AM
 #57

Bitcoin is only used to transfer money by people who have no other choice. Like everything in life people are only into it if it benefits them.

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September 14, 2013, 05:36:26 AM
 #58

The problems with getting fiat into Bitcoin would go away in an instant if we could get rid of the overbearing overregulations that are being erected to be obstructionist in nature.
That's not the only way to make the problems go away. You can also build systems which the regulators are unable to affect in practise.

We could have decentralized exchanges which would be effectively unregulatable if a method existed for creating a distributed, P2P fiat interface so that the exchange would not need to deal with a bank.

In order to create such an interface though you need some kind of cross-border contract enforcement and dispute resolution system that does not require any assistance from the existing legal systems in order to function (because one or more parties might be located in incompatible legal jurisdictions, or be anonymous, or be located where there is no functioning legal system).

Once the problem of creating a stateless private law system is solved, then we can build the other pieces.
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September 16, 2013, 10:43:26 AM
 #59

That said, $50K is not a problem.  There are plenty of traders on localbitcoins.com who can deal with large amounts (though admittedly that requires you to go out and sell your coins).

No, there aren't. I checked. It'd be nice if one could sort localbitcoins listings by volume limits. Instead I checked major cities and everything is too low. Sure, if I contact them directly perhaps they will tell me that they have higher limits than they list. But on the surface, for $50k localbitcoins will not work.

And I agree, Bitcoin is still in its infancy and the issue of FIAT exchange will improve.

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September 16, 2013, 10:53:54 AM
 #60

We could have decentralized exchanges which would be effectively unregulatable if a method existed for creating a distributed, P2P fiat interface so that the exchange would not need to deal with a bank.

In order to create such an interface though you need some kind of cross-border contract enforcement and dispute resolution system that does not require any assistance from the existing legal systems in order to function (because one or more parties might be located in incompatible legal jurisdictions, or be anonymous, or be located where there is no functioning legal system).

I agree. What p2p does very well is reputation systems. but these are not enough in themselves to provide similar levels of trust that a regulated exchange with AML/KYM'ed users can provide. I would be up for a network that combines a p2p network exchange with reputation that has optional physical anchoring. Where one builds their reputation through successful virtual transactions while also having the option of using physical gatherings to share notarised ID/papers.

I also agree with everyone that the problems I am experiencing are due to FIAT, not Bitcoin. But this problem is here to stay. If anything, it should solidify that argument that governments have nothing to fear. Their monopoly on finance is safe, for the most part.

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