What is better about BTC than USD for typical person?

[JollyGreen]

Not trying to start an argument, just trying to understand all the benefits of BTC.  What are the benefits of BTC over USD?  All I've been told about or thought about is basically having a level of anonymity and possible money laundering, which are only benefits for certain types of people.

What are the benefits for the typical person just trying to save for the future or buy some goods online or in typical day to day use?

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[SmokeTooMuch]

Online payment without chargebacks maybe.

[Dude65535]

Because a merchant accepting bitcoins does not have to worry about reversals they can charge a lower rate for people who pay in bitcoins.

All fees for transferring bitcoins between accounts are voluntary and may never be necessary if you are willing to wait longer for processing.

[ribuck]

"Chargebacks are the consumer's last line of defense against unscrupulous merchants...

And chargebacks can be a fraudster's first line of offence against unsuspecting merchants...

Obviously it works both ways, which is why the payment mechanism itself should be chargeback-free. The most appropriate protection can be layered on top of the payment mechanism, according to the needs of the parties to the transaction.

[SmokeTooMuch]

What about for the identity theft portion?  What if someone hacks your computer and steals your BTC wallet?  Seems like it would be possible I could prove I was hacked and wallet was stolen, so under the current system the bank would refund my money.  I guess we would create this with BTC through some sort of wallet insurance business?

With Bitcoin you are your own bank, so it is your responsibility to keep the money safe.

[Gavin Andresen]

What are the benefits for the typical person just trying to save for the future or buy some goods online or in typical day to day use?

Saving for the future:  bitcoins are designed to be like gold: durable, only a limited supply.  They have some advantages over gold-- they're much easier to store safely (you don't have to buy a bank vault or hire guards or trust a storage company) and, because they're electronic, they can be backed up.  And when it is time to sell them the transaction costs are very, very low.

Buy some goods online:  I don't think bitcoins have any significant advantage... yet.  Transaction fees are lower once you get bitcoins, but the transaction fees to get bitcoins probably eliminate that advantage.

I think Bitcoin's real, hidden advantage is the fact that you don't have to ask anybody's permission or fill out any paperwork to start doing creative, innovative things with them.  Lots of people are doing lots of innovative things with bitcoins, and while most of those innovative things will probably fail (most startups fail), I'm optimistic that some will succeed and in 5 years we'll be using bitcoins in some way we haven't even imagined yet.  I'm not going to pretend to know which market niches bitcoin will fill-- maybe it will be migrant workers using bitcoin to send money back home and avoiding international wire transfer and currency conversion fees.

Maybe teenagers in China will use them to buy stuff online because they can't get a credit card.

Maybe big multinational corporations will decide to use bitcoins to pay their supply chain to avoid currency exchange risk and save 0.1% on their transactions.  Who knows?  Even if bitcoin turns out to be just "a better store of value than gold" it will be hugely successful.

[freetx]

What about for the identity theft portion?  What if someone hacks your computer and steals your BTC wallet?  Seems like it would be possible I could prove I was hacked and wallet was stolen, so under the current system the bank would refund my money.  I guess we would create this with BTC through some sort of wallet insurance business?

I think you are perhaps confusing USD as a "currency" with all the financial services that have built-up around it.

As a "currency",  USD (FRN's technically) has no protections of any kind - whether its an unscrupulous merchants or someone mugging you and stealing your wallet.

BTC itself is just a currency, as said elsewhere, if/when those additional financial services are desired, there will be a market for them.

Like all forms of cash currency, the primary utility of BTC can be summed up in 3 main areas: (a) no middlemen, (b) semi-anonimity, (c) universality / convenience.  As a bonus, BTC offers itself up as inflation proof, which will ultimately encourage saving / long-term capital investment, thus a healthier BTC ecosystem.

[Gavin Andresen]

I think you are perhaps confusing USD as a "currency" with all the financial services that have built-up around it.

JollyGreen was asking about 'typical people'.  And I think he was asking about "right now".

Typical people aren't going to distinguish the currency from all of the financial services that make the currency safe, convenient, etc.  And I think we should be honest-- bitcoin-the-currency needs more mature financial services before bitcoin-the-system makes sense as a payment solution for typical people.

[markm]

Typical people typically need to actually acquire currency before using it to save for the future or to buy things online, in fact one might even suggest that as long as the unemployment rate is not too sky-high their typical day to day use of money is as an argument in favour of getting out of bed and going to work instead of taking the day off. So possibly its primary day to use for typical people, 40 hours a week, five days a week and so on, is as someone else's carrot or stick by means of which someone else controls their time and maybe thereby their life.

Possibly USD might prove far superior to bitcoin for that day to day use.

For typical businesses though, well, gee, is it true that typically businesses are small? Thus that typical businesses are typically actually small business owners, their employees if any being preferably not actually part of the business at all because it might well be better not to get into the whole problem of trying to control other people's time and possibly thereby their lives?

A "typical business that buys things on the net"'s day to day use might well turn out to include selling things on the net. (How many businesses typically buy on the net to sell off the net? Is it more typical they'd also sell on the net?)

Do typical people who don't own their own businesses but do work for businesses work for small businesses or large businesses?

Could it be that there is a distinction here whereby trying to take control of other people's time and possibly thereby their lives, and possibly acceptance of the carrots and sticks best suited to that purpose, is good for big business (and possibly also big government) whereas trying not to take control of other people's time and possibly thereby their lives, and possibly acceptance of carrots without sticks as best suited to that purpose, is good for small business (and possibly also small government)?

For the big business typical person and the big government typical person maybe what is better about BTC than USD is they don't have to read headlines about BTC involvement in war violence bribery and economic disasters whereas one often encounters such news involving USD.

So basically USD puts in their face all kinds of bad news they maybe would rather not have to hear about. Whereas bitcoin might actually help the kinds of activities they don't want to see to not be seen by them.

-MarkM-

[freetx]

JollyGreen was asking about 'typical people'.  And I think he was asking about "right now".

Typical people aren't going to distinguish the currency from all of the financial services that make the currency safe, convenient, etc.  And I think we should be honest-- bitcoin-the-currency needs more mature financial services before bitcoin-the-system makes sense as a payment solution for typical people.

I agree with 100% of what you are saying, except maybe for the implication that this is something that "bitcoin.org" (ie. developers of the bitcoin-system) should solve.

I'm not meaning to imply that we shouldn't discuss these things or brainstorm about how fixes could work -- I'm simply saying that we need to be clear of what the objectives of "bitcoin.org" are. In my mind, that is to perfect the "bitcoin currency", not the "bitcoin ecology".

I think its a slippery slope for us to go down....trying to incorporate things outside of the currency realm into the official project....for once we stray into that area, I fear we will find our selves becoming little more than a digital central bank, which is something that I know we all would loathe to see.

[Anonymous]

JollyGreen was asking about 'typical people'.  And I think he was asking about "right now".

Typical people aren't going to distinguish the currency from all of the financial services that make the currency safe, convenient, etc.  And I think we should be honest-- bitcoin-the-currency needs more mature financial services before bitcoin-the-system makes sense as a payment solution for typical people.

I agree with 100% of what you are saying, except maybe for the implication that this is something that "bitcoin.org" (ie. developers of the bitcoin-system) should solve.

I'm not meaning to imply that we shouldn't discuss these things or brainstorm about how fixes could work -- I'm simply saying that we need to be clear of what the objectives of "bitcoin.org" are. In my mind, that is to perfect the "bitcoin currency", not the "bitcoin ecology".

I think its a slippery slope for us to go down....trying to incorporate things outside of the currency realm into the official project....for once we stray into that area, I fear we will find our selves becoming little more than a digital central bank, which is something that I know we all would loathe to see.

bitcoin.org doesnt have to do anything but focus on the protocol itself. There are companies already starting to emerge or in development stages that will take care of the market need. Thats how a true free market works by sending signals to entrepeneurs letting them judge the best way to use their resources.

[Timo Y]

It seems chargebacks were developed to help balance the power?  It seems pretty easy for the merchant to go down the road of more money for them for less customer support.

With a decentralised, non-revocable payment method, you have more choice as a customer and thus more power.

You have the choice to decide which merchants to trust, and how much risk you are prepared to take with the ones you don't trust so much.

You have the choice NOT to be protected by "non-delivery insurance", and pay a lower price because you might not need it with merchants you trust a lot.

With other merchants who you don't know well you can still get this type of insurance, for instance by using an escrow service.  

When you use a chargeback-able method such as VISA, you are giving up control and letting VISA make those choices for you.  And this large overhead will cost you in the end, whether you want it or not.  


I don't agree with your concern that merchants would become more dishonest if chargeback wasn't possible. The biggest asset of any online merchant is their reputation, if they want to stay in business long term.   Why would a well established merchant be so stupid as to damage their hard won reputation, just to squeeze out a little bit more short term profit?

[ribuck]

I don't agree with your concern that merchants would become more dishonest if chargeback wasn't possible.

The lack of chargeback forces merchants to be more honest, in the long run anyway.

With chargeback, there's no incentive for the merchant to differentiate themselves as being more trustworthy than other merchants, because the customer's ability to chargeback is identical for every merchant.

Without chargeback, customers will eventually get used to thinking about trustworthiness, and merchants will have to cultivate their trustworthiness to survive.

In the short term it will be a rocky road, as consumers learn (the hard way) about the new way of doing things.

[SmokeTooMuch]

The lack of chargeback forces merchants to be more honest, in the long run anyway.

With chargeback, there's no incentive for the merchant to differentiate themselves as being more trustworthy than other merchants, because the customer's ability to chargeback is identical for every merchant.

Without chargeback, customers will eventually get used to thinking about trustworthiness, and merchants will have to cultivate their trustworthiness to survive.

In the short term it will be a rocky road, as consumers learn (the hard way) about the new way of doing things.

I like your point of view, ribuck.

[gusti]

I don't agree with your concern that merchants would become more dishonest if chargeback wasn't possible.

The lack of chargeback forces merchants to be more honest, in the long run anyway.

With chargeback, there's no incentive for the merchant to differentiate themselves as being more trustworthy than other merchants, because the customer's ability to chargeback is identical for every merchant.

Without chargeback, customers will eventually get used to thinking about trustworthiness, and merchants will have to cultivate their trustworthiness to survive.

In the short term it will be a rocky road, as consumers learn (the hard way) about the new way of doing things.

I agree that lack of chargebacks is a necessary feature.

However, e.g. Western Union receives a lot of bad press for that, like this :
http://reviews.ebay.com/Western-Union-FRAUD-SCAMS_W0QQugidZ10000000002283720

Eventually, BTC will receive a lot of badmouth for the same reason.

[MoonShadow]

I don't agree with your concern that merchants would become more dishonest if chargeback wasn't possible.

The lack of chargeback forces merchants to be more honest, in the long run anyway.

With chargeback, there's no incentive for the merchant to differentiate themselves as being more trustworthy than other merchants, because the customer's ability to chargeback is identical for every merchant.

Without chargeback, customers will eventually get used to thinking about trustworthiness, and merchants will have to cultivate their trustworthiness to survive.

In the short term it will be a rocky road, as consumers learn (the hard way) about the new way of doing things.

I agree that lack of chargebacks is a necessary feature.

However, e.g. Western Union receives a lot of bad press for that, like this :
http://reviews.ebay.com/Western-Union-FRAUD-SCAMS_W0QQugidZ10000000002283720

Eventually, BTC will receive a lot of badmouth for the same reason.

Notice, if you will, that WU still does business this way, and people still accept WU.

[gusti]

I don't agree with your concern that merchants would become more dishonest if chargeback wasn't possible.

The lack of chargeback forces merchants to be more honest, in the long run anyway.

With chargeback, there's no incentive for the merchant to differentiate themselves as being more trustworthy than other merchants, because the customer's ability to chargeback is identical for every merchant.

Without chargeback, customers will eventually get used to thinking about trustworthiness, and merchants will have to cultivate their trustworthiness to survive.

In the short term it will be a rocky road, as consumers learn (the hard way) about the new way of doing things.

I agree that lack of chargebacks is a necessary feature.

However, e.g. Western Union receives a lot of bad press for that, like this :
http://reviews.ebay.com/Western-Union-FRAUD-SCAMS_W0QQugidZ10000000002283720

Eventually, BTC will receive a lot of badmouth for the same reason.

Notice, if you will, that WU still does business this way, and people still accept WU.

Sure, and I will prefer WU over Paypal all the time.

[breandan81]

A lot of people don't use western union for that very reason, and it's a common one to use for scams for that reason too.  This is not a bug, it's a feature, just for specific things.  Bitcoin has a lot of the advantages of western union, with less hassle and WAY less cost.   The whole point of bitcoin is to be digital cash.  Cash is fungible, and if it is stolen, you have no practical recourse, since you aren't likely to be able to prove anything in court.  When using a system based on cash, like western union, people just need to be careful.  If you are dealing with an untrusted merchant, don't do a transaction so large that the risk is out of proportion with the benefit.  This should be pretty basic thinking, since nearly everyone has a debit card, and a small amount of cash on them, for the very same reason.  The bitcoin "banks" for lack of a better word, such as mybitcoin, are still in their infancy, and for the amount of money I have in btc, I'd rather store my own coins, but you can assess the risk any way you want.  The primary benefit of bitcoin for the everyday person is that it enables peer to peer transactions with almost no processing cost, no middlemen, internationally, and without needing to even expose one's true name.  This means if you meet someone in IRC and they say "Hey, I'll do that XYZ you've been wanting for 50 coins" you can say "ok, half now, half later" and no one has to worry about paypal freezing accounts, banking regulations, FICO scores, or any other nonsense that makes the normal banking system so complex that you need a CPA to feel safe.  The risk is fairly high, but it's understandable, it's just like meeting someone at a bar and they say "give me 50 bucks in cash and I'll do XYZ".  It's a currency made for internet commerce, and I'm pretty confident it's going to gain acceptance for that purpose.  After it's proven it's value for that, maybe it will work it's way into the world of brick and mortar businesses. 

[Dude65535]

A lot of people don't use western union for that very reason, and it's a common one to use for scams for that reason too.  This is not a bug, it's a feature, just for specific things.

Bitcoin has a lot of the advantages of western union, with less hassle and WAY less cost.   

The whole point of bitcoin is to be digital cash.  Cash is fungible, and if it is stolen, you have no practical recourse, since you aren't likely to be able to prove anything in court. 

When using a system based on cash, like western union, people just need to be careful.  If you are dealing with an untrusted merchant, don't do a transaction so large that the risk is out of proportion with the benefit.  This should be pretty basic thinking, since nearly everyone has a debit card, and a small amount of cash on them, for the very same reason. 

The bitcoin "banks" for lack of a better word, such as mybitcoin, are still in their infancy, and for the amount of money I have in btc, I'd rather store my own coins, but you can assess the risk any way you want. 

The primary benefit of bitcoin for the everyday person is that it enables peer to peer transactions with almost no processing cost, no middlemen, internationally, and without needing to even expose one's true name.  This means if you meet someone in IRC and they say "Hey, I'll do that XYZ you've been wanting for 50 coins" you can say "ok, half now, half later" and no one has to worry about paypal freezing accounts, banking regulations, FICO scores, or any other nonsense that makes the normal banking system so complex that you need a CPA to feel safe. The risk is fairly high, but it's understandable, it's just like meeting someone at a bar and they say "give me 50 bucks in cash and I'll do XYZ". 

It's a currency made for internet commerce, and I'm pretty confident it's going to gain acceptance for that purpose.  After it's proven it's value for that, maybe it will work it's way into the world of brick and mortar businesses. 

Good post but it needed paragraphs.

[SmokeTooMuch]

Good post but it needed paragraphs.

+1 interwebs for you, sir.