Bitcoin isn't worth it for consumers. And that will stop adoption.

[501]

Speaking as a merchant, I can tell you that the "no consumer protection" is actually a good thing. Businesses spend obscene amounts of money on accounting/fraud departments to insure against chargeback fraud (90%+ of chargebacks are fraud from the customer's side). Therefore if this is not an issue, companies will be able to significantly decrease the price of their items.

So you will end up with something like this:
- Buy an item with credit card, the price is $100
- Buy an item with bitcoin, the price is $75

Legitimate businesses will quickly get a reputation for being honest, for example if you walk into Walmart and buy a new TV, they aren't going to outright scam you simply because you paid in bitcoin. Most people don't buy things on tiny unknown sites anyway, they gravitate towards the big sites, newegg, ebay, etc.

Actually, it takes 6 months to "confirm" credit card transactions, if we are using the word "confirm" to mean the equivalent of a bitcoin transaction receiving confirmations. 6 months is the cutoff point after which credit card fraud is no longer possible, however as merchants we obviously can't tell people "wait 6 months before receiving your item" so we just choose to risk it and let them have it immediately - this is exactly the same as letting a bitcoin user take their items before the transaction has been confirmed. I've already implemented a 25% discount on all of my products for customers who choose to pay with bitcoin.

[MikeyVeez]

There's no reason to even worry about mass adoption as bitcoin can't even support that kind of traffic and will break. Therefore,  it can never achieve mass adoption unless the architecture is reworked from the ground up.

[Littleshop]

Playing devils advocate here.

It's been bothering me lately, thinking about this. Consumers have absolutely no motivation to use Bitcoin. And because of that, I don't understand how it will ever go global.
........
........
........
Tell me why this is wrong. Please.

Ever actually worked with a company like Bank of America?  Paypal?

Just one taste of how they really treat consumers when there is a problem will let you know why Bitcoin will be adopted.  Once a consumer has an account wrongly frozen or otherwise attacked by one of these companies they will fall in LOVE with Bitcoin.  

[BitChick]

I was just reading an article about how the Cover app lets customers pay more quickly for the meals at restaurants.  Here is one link to the article: http://www.dailymail.co.uk/femail/article-2450089/Cover-app-lets-leave-restaurants-waiting-bill.html

I was thinking that with Bitcoin (and there are some rumors of Square working with BTC soon) that this will be even more effective by leaving out Credit Card companies all together and the companies could pass on the savings to consumers.

There will be endless opportunities for Bitcoin to be worth it for consumers to use.  It is just a matter of time.

[goose20]

The ability to use a smart phone to make purchases, might be the only slightly relevant benefit. I don't know if that's significant enough to motivate a worldwide currency change.

People are already using smart phones to make purchases, but transactions are linked to phone number or credit card - I dont see why anyone would go to any extra hassle to get and fund a btc wallet.

Then you have Scan Inc also for payments with QR codes.

There are lots of alternatives to bitcoin already. More will be developed also. Not altcoins, but new methods all together. And these do offer consumer protections etc.

[kireinaha]

When you say consumer protection, you mean protection from shady internet sellers, right? Well, that's not a bitcoin problem.  Merchants already offer consumer protection for digital payments on the internet.

1. Ebay protects buyers by guaranteeing that you'll get what you pay for or your money back.
2. Amazon protects consumers by facilitating trade between online entrepreneurs and shoppers.

Both of these sites do not accept USD directly, they mainly take paypal and credit cards, which are both digital overlay systems with MORE risk than bitcoin, ironically. But by adding significant fees to compensate for fraud, these companies together with credit card and banking industries have found a way to make it work.

You`re looking at this from the wrong angle. Consumers can reasonably expect a smooth transaction when they deal with huge, established retailers such as Amazon or Ebay, but there are thousands of other merchants online, aside from just these two examples. If I`m looking for a specialty item or just hunting for a good price on something, I`ll routinely use other online stores, sometimes sites I`ve never heard of before. I can do this because I know that if something goes wrong and I get scammed, my credit card company is going to perform a chargeback for me. Additionally, the site won`t exist for long if they`re routinely ripping people off, because the chargeback is a deterrent to even try.

If we were all to start using only bitcoin, all these smaller companies will go out of business because people will be scared to death to send money to anyone, in fear that they`re being scammed. There are many bitcoin scam sites out there right now that have been operating for months or even years, essentially with total impunity. They can scam people and there`s nothing anyone can do about it. I don`t want to live in a world where I need to perform in depth research on message boards and blogs before making any purchases to check the reputation of a company, and then just pray that they deliver on the goods.

How you can state that paypal and credit cards are higher risk than bitcoin, I have no idea. No offense, but you must be delusional. If you buy something online with bitcoin and never receive the product, you`re completely at the mercy of the merchant. That`s not a good feeling at all. With a credit card all I need to do is talk to the bank and they`ll mark it as a fraudulent charge.

[jdbtracker]

The incentive is huge when you go deeply into the details of it's construction... you can setup escrow transactions, you can create your own contracts, pay anywhere without giving out information.

In the business world it would be most apparent of course, considering all the checking that has to be done and the restrictions as well... try purchasing something from another country. For most western countries it would be no problem to do so within the country, but if your purchasing something from outside the country, your credit card will be checked, the purchases funds will be moved immediately to another bank account to avoid a chargeback... chargebacks happen both ways, they can be innitiated by consumer or merchant.

I've heard and delt with all the horror stories, having worked retail.

customer gets robed by staff who memorize their credit card number
customer gets no products from online store, has to do a chargeback but did not know it was possible.
international customer has to do a money transfer from England to Canada takes a week to do the wire transfer.
South American customer needs to pay for a item, waits a week to get the funds to go through several banks to get to Canadian bank, because communication system are severely faulty.
Customer gets funds locked on a credit card purchase, customer and merchant can't pay for item because transaction won't go through until the lock is removed automatically 3 days later.
customer has to give out credit card information, personal information to online merchant for subsciption... wastes 10 minutes going through the process to read an article.
Merchant has to do back ground checks on international orders for fear of fraud.
merchandise cannot be shipped until funds have been confirmed into the secondary bank account.
etc

all this fear... all the worrying and hard work required just to do a purchase. Why not just pay in Bitcoin, wait 10 minutes, ship merchandise.
If you want faster transactions the Open Transactions library can be used to create off-chain verified instant transactions and if something goes wrong? Got scammed by a bogus company, server went down, hackers stole the coins, the OT servers can implement a multi-signature system for removing the coins from within OT, your coins will be returned to you since no one else can spend them. And the OT servers have no limit on how many transactions can be made... want to make 1 trillion transactions a day? that's fine

The infrastructure to create truly 100% verifiable instant transactions is there, there is just a bit of work to be done to make it more user friendly, but the technology is there.

and also, on the economics side... if you know about bitcoin and you live in Argentina or Zimbabwe, are you going to stand by while you watch all your money lose value? destroying your way of life, not just of yourself but your whole country? This is a voluntary action you need to take, the government doesn't have to be involved to save your money. Some countries have gone directly to the Euro or the USD. on a world wide scale BTC will be accepted by those who fear losing their way of life the most because of inflation, all these small currencies across the planet losing value, how much are they all worth together in dollars?

If a proper infrastructure is created, Safe transactions, good merchant clients, Trust worthiness ratings for merchant addresses, merchant verification signatures, instant verifications... why would we need banks, when everything that a bank provides can be safely implemented from within your own home?

How much is the Bank infrastructure costing the economy? 10 billion world wide? 100 billion? 4 trillion dollars a year!!  that is massive... just imagine the savings. everything you buy could be half price, more movement for the economy, the speed of money will be 1000's of times faster thanks to removing this banking bottleneck to the economy.

and i'm not even getting into the possibilities of the blockchain, ownership verified products, legal document time stamps, open sourced corporations, Decentralized governments, etc.  All we have to do is just get all the features that people want into the software... It's open source, the best fit for your needs is what you will use.

It won't be the first world that sees the true possibilites of cryptocurrencies it will be the poor countries that no one wants to do business with, provide credit or money services that will start to piece the economic infrastructure together, they will finally be able to be part of the world economy and purchase goods from around the world from the safety of their own homes.

[Zangelbert Bingledack]

Bitcoin is an extraordinary store of value, a frictionless remittance system, and a niche currency, maybe someday a mainstream currency. There's no reason to try to make it something it's not just because many people have the misconception that Bitcoin is supposed to be a currency; one BTC will soon be worth millions of dollars for its store-of-value function alone.

There are systems that can be built on top of Bitcoin that could enable it to function as a mainstream currency, but who cares? Thinking Fretting about this now is premature, other than for niche uses. There's an entire world of wealth yet to be transferred into Bitcoin. Give it at least a few years.

[zachcope]

and also, on the economics side... if you know about bitcoin and you live in Argentina or Zimbabwe, are you going to stand by while you watch all your money lose value? destroying your way of life, not just of yourself but your whole country? This is a voluntary action you need to take, the government doesn't have to be involved to save your money. Some countries have gone directly to the Euro or the USD. on a world wide scale BTC will be accepted by those who fear losing their way of life the most because of inflation, all these small currencies across the planet losing value, how much are they all worth together in dollars?

If a proper infrastructure is created, Safe transactions, good merchant clients, Trust worthiness ratings for merchant addresses, merchant verification signatures, instant verifications... why would we need banks, when everything that a bank provides can be safely implemented from within your own home?

How much is the Bank infrastructure costing the economy? 10 billion world wide? 100 billion? 4 trillion dollars a year!!  that is massive... just imagine the savings. everything you buy could be half price, more movement for the economy, the speed of money will be 1000's of times faster thanks to removing this banking bottleneck to the economy.

and i'm not even getting into the possibilities of the blockchain, ownership verified products, legal document time stamps, open sourced corporations, Decentralized governments, etc.  All we have to do is just get all the features that people want into the software... It's open source, the best fit for your needs is what you will use.

It won't be the first world that sees the true possibilites of cryptocurrencies it will be the poor countries that no one wants to do business with, provide credit or money services that will start to piece the economic infrastructure together, they will finally be able to be part of the world economy and purchase goods from around the world from the safety of their own homes.

Agree with all of the above.
Those in 1st world should understand re store of value vs coming hyperinflation.
Those in developing countries have so many more reasons to develop businesses and transactions with bitcoin to offer real economic value to the world.

[Elwar]

Consumers have absolutely no motivation to use Bitcoin. 

Source?

[ixne]

If you've ever bought something with bitcoin, it is much easier copy-pasting or scanning an address in than filling out those credit card forms (billing address, shipping address, security code, expiration date). After all that work, you have to trust that company not to share or lose all that information, because anyone can use that information to charge money to your card. If you've had a credit card for any period of time, chances are you've run into fraud before. Every time I use my credit card online I'm struck by how antiquated and dangerous the whole process is - the only way it works is because your bank will (generally) incur the costs of fraud, although it's still a huge PITA when it happens.

Also, traveling abroad is huge. I imagine a day when I don't have to call up my credit cards and banks and ask them what kind of ATM I can use in Prague to avoid massive fees, or incur awful currency exchange rates both when I'm arriving and leaving a country.

[franky1]

Playing devils advocate here.

It's been bothering me lately, thinking about this. Consumers have absolutely no motivation to use Bitcoin. And because of that, I don't understand how it will ever go global.

All the motivation is for merchants. They avoid merchant fees. They get no chargebacks.  But they're also going to get no sales (aside from enthusiasts), because consumers have no incentive to use it, whatsoever.

Where are the perks for consumers, in a situation where they're buying something with bitcoin?

The only benefit Bitcoin brings to consumers, is money transfers. People who send money Home to their families in other countries. Bitcoin will corner the market that Western Union currently dominates. And probably put it out of business. While that is a huge industry, it's a fraction of how big Bitcoin could become if consumers used it for purchasing.

What incentive do consumers have to use Bitcoin at all? None. And because of that, it's never going to be adopted worldwide. Again, playing devils advocate here. I want to hear people's responses to this. Because in my mind, it seems to be true. And that is depressing.

You may say, it's just like cash, what motivation do people have to use cash. Or it adds a level of privacy. But these aren't significant enough benefits for a worldwide paradigm change. We're talking about adopting a new paradigm here. There needs to be incentive, for people to even bother making a huge change like this. Especially when it's more difficult than cash. More confusing than cash. More ugly than cash, requiring people to understand several decimal place fractions and other complicated things. So not only is there zero incentive to use it, but there are several reasons why they wouldn't.

There needs to be something huge, global, significant, about Bitcoin that will motivate people who buy things to say "Forget this silly cash! Forget my credit cards!"

Tell me why this is wrong. Please.

imagine it this way in 10 years time. consumers will be using apps connected to payment gateways and shopping services where they deposit small amounts of satoshi's into their 'app' accounts to then use at starbucks, train stations, gas stations. in 10 years the price would be stable the spread of bitcoins reaches millions of individuals, instead of just thousands, meaning less hoards by single minds to cause a noticable swing in price.

so i open my shopping app hosted by bitpay for example, i see i already deposited my weeks wage of satoshi's i received from work. and now i choose starbucks from the menu, order a coffee and the 'offchain' transaction occurs to pay for the coffee and credit starbucks balance inside bitpay. that same instant starbucks accounting department withdraw all of its offchain balance to ONCHAIN bitcoins stored in their own safe.

how is this possible or why would it happen?

analogy time
quickpayservice by bitpay=visa/mastercard
your own safe= bitcoin-qt
sending wages ONCHAIN into bitpay = wire transfer

the difference between the financial FIAT system of today and the bitcoin system of 10 years.
1) visa ultimately has a national bank behind it with accounts which are then divided up into sub accounts for customers. with bitcoin bitpay will be the bank  and payment processor all within one company.
2) visa balance checks require 'processing' times of 10 seconds before then authorising payments. and in most countries the pin number is required. with bitcoin the balance can be checked while the customer is still ordering, reducing those embarrassing moments of 'insufficient funds' after spending 15 minutes making product selections and having them scanned through a cash register.
3) instead of shifting gold or physical bank notes between banks via secure truck, ONCHAIN transactions between services will allow the digital transfer to happen world wide in minutes (10 minute block time) that is on a protocol the whole world then understands (blockchain) is not at risk of double spends due to accidently hitting the button twice or receiving 2 transactions via a data echo. thus removing the 3-5 business delays of traditional banking.
4)by pre-depositing funds into a service allows the funds to be pre-confirmed. this allows them to be used for instant transactions OFFCHAIN.
if your rich and do not want to risk your wealth with these third party services then you can keep your funds in your own safe.

much like the banking system, which then uses a corporation such as visa as a top layer service for faster payments. bitcoin will be the same. the blockchain will be the backbone of the financial system, with businesses offering different financial systems ontop of the blockchain. most people day to day wont touch the block chain as that is a few layers down. much like today most people dont use wire transfers to fill up the car with gas. they use a top layer service such as visa.

if your still not understanding the analogies imagine it this way.

bitcoin=bank of america
bitpay=visa
then read http://en.wikipedia.org/wiki/Visa_Inc.

[jubalix]

[1] as BTC goes up they can cut fees to 0.00001 and so on.

[2] BTC is behaving like a store of wealth, though that may mean PPC is the new btc

[3] BTC will be used for things like buying houses, cars, larger items, paying wages, services and perhaps bills etc, where the real money is.

[4] Off chain solutions may arise, though I'm yet to be convinced of how this will work exactly

[5] i can actually touch type now after all theses years as long as I don't think about it while I am doing it.

[s2]

Zanglebert has hit the nail on the head as I've been thinking about this for many months too.  Bitcoin as a day to day currency has issues still to overcome HOWEVER it is the only store of value not related to a specific country that makes it incredibly useful.  Gold is the next best thing yet that still is miles behind what Bitcoin offers...
The advantages of Bitcoin being easily transferable, requires no storage costs at all, can't be copied or hoaxed, Bitcoin has an easy market anyone can trade with and if the trading platforms were for some reason unreachable the trade can still happen person to person or institution to institution.

This leads itself to a very ironic purpose... for countries to store their wealth to back their currency.  As far as I know, there is no common basis for money between countries... like time has GMT, temperature has Kelvin... it's a way for people anywhere on the planet to talk the same language.

Bitcoin could offer this global common ground where anyone or anything can put their value in there safely knowing more can not be printed to dilute it, safely stored until ever needed and easily transferable to a local currency to facility international trade easily.

One btc now is worth something in every country, pick and choose where and when you want to cash it in for your local currency

[Sindelar1938]

As a proxy for actual commerce, watch out for data from bitpay on how the usd volume of bitcoin biz done by its customers. Think that number was 6.4m used for sep, growing about 20%mom which is impressive but not stellar in an ecosystem sense...

[Littleshop]

If you've ever bought something with bitcoin, it is much easier copy-pasting or scanning an address in than filling out those credit card forms (billing address, shipping address, security code, expiration date). After all that work, you have to trust that company not to share or lose all that information, because anyone can use that information to charge money to your card. If you've had a credit card for any period of time, chances are you've run into fraud before. Every time I use my credit card online I'm struck by how antiquated and dangerous the whole process is - the only way it works is because your bank will (generally) incur the costs of fraud, although it's still a huge PITA when it happens.

Also, traveling abroad is huge. I imagine a day when I don't have to call up my credit cards and banks and ask them what kind of ATM I can use in Prague to avoid massive fees, or incur awful currency exchange rates both when I'm arriving and leaving a country.

Agreed.  Purchasing time on bitpay.com automated sites is about the same as a credit card, maybe a little faster. 

Knowing that they do not have my credit card number...... Priceless! 

[laowai80]

Until the price of bitcoin hasn't stabilized at a much higher level, the points made by the OP are valid. Which means it has to grow significantly in a rather short time.

I see the future of bitcoin being used for store of wealth and very large purchases (cars, houses, etc), and alt-coins used for everything else, for example a grocery store type of purchases, sort of like copper coins were used in the 19th century to pay for a loaf of bread. Several alt-coins will have their niche as their valuations grow, but their valuations still won't be too high to discourage users from spending them like they will be discouraged from spending their bitcoins for every day routine purchases. Gresham's law. Bitcoin will just be valued too high to be used to buy a beer, not to mention, it alone simply cannot process thousands of transactions per second for all these daily purchases by many people. It will need a lot of help from alt-coins' networks.

[jaspita]

Speaking as a merchant, I can tell you that the "no consumer protection" is actually a good thing. Businesses spend obscene amounts of money on accounting/fraud departments to insure against chargeback fraud (90%+ of chargebacks are fraud from the customer's side). Therefore if this is not an issue, companies will be able to significantly decrease the price of their items.

So you will end up with something like this:
- Buy an item with credit card, the price is $100
- Buy an item with bitcoin, the price is $75

Legitimate businesses will quickly get a reputation for being honest, for example if you walk into Walmart and buy a new TV, they aren't going to outright scam you simply because you paid in bitcoin. Most people don't buy things on tiny unknown sites anyway, they gravitate towards the big sites, newegg, ebay, etc.

Actually, it takes 6 months to "confirm" credit card transactions, if we are using the word "confirm" to mean the equivalent of a bitcoin transaction receiving confirmations. 6 months is the cutoff point after which credit card fraud is no longer possible, however as merchants we obviously can't tell people "wait 6 months before receiving your item" so we just choose to risk it and let them have it immediately - this is exactly the same as letting a bitcoin user take their items before the transaction has been confirmed. I've already implemented a 25% discount on all of my products for customers who choose to pay with bitcoin.

I can even imagine companies in the future with services for payments with Bitcoin that includes costumer protection.

- Buy an item with credit card, the price is $100
- Buy an item with bitcoin, the price is $75
- Buy an item with bitcoin, including costumer protection, the price is $90.

The big thing about bitcoin is that enables a new way to send money online everywhere in the world, and peer to peer.

Everything that exists already is posible to do it using bitcoin.

[zeroday]

Another good thing in bitcoin it saves your time and money as it was in my case.

Once I paid with credit card for a database server for our new business project. My sysadmins swiftly uploaded all necessary stuff and it went online.
But three days later I found the server offline. I called the datacenter and found they suspended it because they suspected it was unauthorized transaction. To resolve the problem I had to spend half a day printing, signing and scanning shitty papers required by their "risk" department. Finally I lost over $500 which I paid my sysadmin for setting up backup server until suspended one is resolved.


So, fuck Visa and Mastercard dinosaurs! I'm glad I can instantly pay with bitcoin without any hassles and "verifications".

[ixne]

I understand most of the responses, but I also agree that there doesn't seem to be anything big enough to power a paradigm change.  At all. There are definitely some minor benefits to the consumer.

Merchants have been tearing their hair out over credit card fees for the better part of two decades without any recourse until now. If merchants use bitcoin they can pass those savings on to consumers using bitcoin, and you can bet that consumers will follow the money.  Credit card fraud is huge because there is (quite literally) no security - all the information required to process a single transaction can be used to make new transactions. And I also think you underestimate the fact that poorer populations have a difficult time getting a bank account at all, let alone a bank account that doesn't eat away your money with monthly fees and hidden fines.

Sending money across the world in seconds without having to open an account or rely on a third party is not trivial. Being able to secure your own money more completely than any current bank in the world (when implemented properly) is not trivial. I have to agree with the satire thread that opened up here comparing your views to those of the public towards the internet in the early 90's - you just don't get it.