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Author Topic: Bitcoin Light: solving the “chicken and egg” problem of “brick-and-mortar” shops  (Read 1055 times)
dillpicklechips
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October 08, 2013, 06:49:51 AM
Last edit: October 08, 2013, 06:45:11 PM by dillpicklechips
 #1

The “chicken and egg” problem:
-shops are not motivated to spend the time and money to adopt Bitcoin because very few people use them
-few people are investing the time to get Bitcoins to spend at shops because very few shops accept them

Bitcoin Light:
-merchants can accept Bitcoins with almost no work, money, or understanding of how Bitcoin works
-it would require almost no training to use and does not require the businesses POS systems to be altered at all
-if accepting Bitcoin takes 10 minutes to set up: it makes financial sense to set up even if it’s rarely used if at all
-by making Bitcoin extremely easy to accept as payment more merchants will accept it and the consumers will follow once enough shops are accepting Bitcoin

How it works:
-each merchant gets a sticker, on the sticker is a QR code that is a simple unique shortcut to the payment processor website
-the merchant sticks the sticker somewhere near the register
-the consumer makes their purchase and the merchant verbally gives the total due
-the consumer informs they are paying with Bitcoin and would then scan the QR code
-after the website from the QR code is launched a simple interface appears asking for the total due that the consumer fills in
-the website then displays the amount of Bitcoin to send and an address
-the consumer then sends the Bitcoin
-as soon as the payment processor detects a payment the processor uses an automated telephone service to call the merchant
-the automated voice announces through the phone the amount in local currency that was sent followed by a pin number (the pin is setup by the merchant initially to prevent spoofing)
-if the message announces the correct amount the sale is completed
-the payment processor then sends the merchant the funds as normal

Advantages:
-all that’s needed is a phone!!! No computer to set up or anything to program! Perfect for “brick-and-mortar” shops!
-to set up accepting payments all the merchant has to do is apply a sticker and call a number to initialize where to send funds, what number to call when payments are made, and set up a pin (perhaps all the details for setting up are on the peel off backing)
-each merchant can also use other methods for checking payments: SMS, email, online website. Merchants may want multiple methods of notification.
-almost no effort to set up Bitcoin and little is wasted if no one uses it
-if Bitcoin becomes popular for that merchant they can easily upgrade to a better system with the payment processor

How it can become viral:
-if all that’s needed is a sticker then every Bitcoin fan can become a payment processor salesperson and get more Bitcoins!
-bundles of stickers can be distributed with profit sharing set up for each person getting a pack of stickers (each bundle would be associated with a salesperson)
-Bitcoin fans will want to take the stickers to stores they frequent in hopes they can spend it there
-even if they are the only customer, because it was so simple to set up, the merchant lost very little in resources
-a directory of Bitcoin accepting shops is VERY VERY important. Perhaps coinmap will be this directory? As Bitcoin fans travel and shop they will use this directory and that will help drive Bitcoin success stories fueling more growth

Good idea or not? I'd love to see "Bitcoin Light by BitPay" or "Bitcoin Light by BIPS" one day!

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jedunnigan
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October 08, 2013, 04:08:19 PM
 #2

Quote
-the website then displays the amount of Bitcoin to send and an address
-the consumer then sends the Bitcoin
-as soon as the payment processor detects a payment the processor uses an automated telephone service to call the merchant
-the automated voice announces through the phone the amount in local currency that was sent followed by a pin number (the pin is setup by the merchant initially to prevent spoofing)
-if the message announces the correct amount the sale is completed
-the payment processor then sends the merchant the funds as normal

I wouldn't do it this way exactly, although you are onto something clever.

Let's say I'm a merchant, and I don't have a smartphone or computer handy in my store but I want to accept Bitcoins, what do I do? All I have is a feature (see: dumb) phone. Well, let's say BitPay had a solution for this, what would it look like?

First, I would have to sign up for BitPay when I got home. I enter my cell number and all other relevant details. They would give me a QR code to print out. In that QR code is an extended public key for an HD wallet. I take that QR, stick it on my checkout counter. Now you come into my store, wanting to buy a stick of gum. You scan the QR code in you smartphone's Bitcoin wallet application, and send me whatever amount I told you.

When the transaction has been broadcast to the network and BitPay's nodes successfully recieve it, either an SMS is sent or a USSD connection (depending on the locale, needs GSM) is made to confirm the receipt.
dillpicklechips
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October 08, 2013, 06:44:57 PM
 #3

Quote
-the website then displays the amount of Bitcoin to send and an address
-the consumer then sends the Bitcoin
-as soon as the payment processor detects a payment the processor uses an automated telephone service to call the merchant
-the automated voice announces through the phone the amount in local currency that was sent followed by a pin number (the pin is setup by the merchant initially to prevent spoofing)
-if the message announces the correct amount the sale is completed
-the payment processor then sends the merchant the funds as normal

I wouldn't do it this way exactly, although you are onto something clever.

Let's say I'm a merchant, and I don't have a smartphone or computer handy in my store but I want to accept Bitcoins, what do I do? All I have is a feature (see: dumb) phone. Well, let's say BitPay had a solution for this, what would it look like?

First, I would have to sign up for BitPay when I got home. I enter my cell number and all other relevant details. They would give me a QR code to print out. In that QR code is an extended public key for an HD wallet. I take that QR, stick it on my checkout counter. Now you come into my store, wanting to buy a stick of gum. You scan the QR code in you smartphone's Bitcoin wallet application, and send me whatever amount I told you.

When the transaction has been broadcast to the network and BitPay's nodes successfully recieve it, either an SMS is sent or a USSD connection (depending on the locale, needs GSM) is made to confirm the receipt.
The problem is the conversion rate. The QR code should go to a website so not even the merchant has to convert their currency to BTC. It's done on the purchasers phone on the website. That way when the merchant is notified they are notified of the local currency amount they received.

jedunnigan
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October 08, 2013, 07:41:39 PM
 #4

Quote
-the website then displays the amount of Bitcoin to send and an address
-the consumer then sends the Bitcoin
-as soon as the payment processor detects a payment the processor uses an automated telephone service to call the merchant
-the automated voice announces through the phone the amount in local currency that was sent followed by a pin number (the pin is setup by the merchant initially to prevent spoofing)
-if the message announces the correct amount the sale is completed
-the payment processor then sends the merchant the funds as normal

I wouldn't do it this way exactly, although you are onto something clever.

Let's say I'm a merchant, and I don't have a smartphone or computer handy in my store but I want to accept Bitcoins, what do I do? All I have is a feature (see: dumb) phone. Well, let's say BitPay had a solution for this, what would it look like?

First, I would have to sign up for BitPay when I got home. I enter my cell number and all other relevant details. They would give me a QR code to print out. In that QR code is an extended public key for an HD wallet. I take that QR, stick it on my checkout counter. Now you come into my store, wanting to buy a stick of gum. You scan the QR code in you smartphone's Bitcoin wallet application, and send me whatever amount I told you.

When the transaction has been broadcast to the network and BitPay's nodes successfully recieve it, either an SMS is sent or a USSD connection (depending on the locale, needs GSM) is made to confirm the receipt.
The problem is the conversion rate. The QR code should go to a website so not even the merchant has to convert their currency to BTC. It's done on the purchasers phone on the website. That way when the merchant is notified they are notified of the local currency amount they received.

Perhaps I don't understand what you are trying to accomplish.  Why would you want a customer to have to go to a website in a point of sale scenario exactly? That seems like it wouldn't be very fast. Or are you talking about online merchants only?
dillpicklechips
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October 09, 2013, 03:42:52 AM
 #5

Perhaps I don't understand what you are trying to accomplish.  Why would you want a customer to have to go to a website in a point of sale scenario exactly? That seems like it wouldn't be very fast. Or are you talking about online merchants only?
It's a bare bones form that is used solely to inform the customer how much BTC to send and to where. The customer gets this by inputting the local currency amount. Without this form, there is no way of knowing what the exchange rate should be. 

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