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Author Topic: We should care less about offline stores/restaurants accepting bitcoin  (Read 2314 times)
Killdozer
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September 17, 2011, 10:28:07 AM
 #1

While it is maybe "feels cool" when an offline restaurant chain, or a gas station or some other store starts accepting bitcoins, I think we should not forget that bitcoin is an *online* currency. I even think of it as "liberty reserve, but much better".

Basically, there are these reasons:
1. Bitcoin is not meant to be used offline, in stores, not even so much on mobile devices (which would work, but not as good as on PCs). It *is* however, a great and unique online currency, with some great qualities, like speed, low transaction fees, anonymity (sort of). This is what it should be used as. And instead of putting our time on trying to make it something it's not, and trying to get offline retailers to use it, we should spend more time on promoting it online, where it is at its best. Are there any stores that use Liberty Reserve offline? No, because it wasn't meant for that!

2. Using bitcoin in offline locations is very problematic technically. If you go to buy lunch, they don't want to wait for 10 minutes until your transaction confirms. They don't either want to check the market price all the time and adjust their prices, which, as opposed to online shops can be printed on papers and boards. Do you reprint them all the time then?
Most of "normal" shops don't have secure enough setups anyway, and wallet stealings and such things would be a great problem if you could pay by bitcoin in every restaurant.
The only thing we will achieve by accepting bitcoins offline is people starting to believe that bitcoin is slow, unsecure and plain pain in the ass. Which it is, when used offline!

3. There is no inherent *reason* to use bitcoin offline. Are you trying to achieve anonymity when paying for your lunch? Pay with cash, much easier. Transaction fees? Pay with cash. Or maybe are you trying to eat lunch in a restaurant that's on the other side of the globe? Well then you've got bigger problems Tongue
So while by promoting bitcoin online we are actually making the world better and simpler, by promoting it in offline stores, we are just doing so because "bitcoin is cool".

So I say, stick to online businesses, and put all the effort into promoting it there! Like discounts for bitcoin payments, bitcoins for charity, and such and such!

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September 17, 2011, 10:37:03 AM
 #2

The expression is "we shouldn't care less". As in we already care as little as possible and hence should not be able to care even less. I don't know why people get this backwards.

As for your post, well, Bitcoin can and will be used wherever people want to use it.
I don't see any reason to limit it. With the right mobile front end it can work just as well as online. Why not? It sounds totally workable to me. Your idea of what Bitcoin is meant to be is just, well,  limited when it need not be.

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September 17, 2011, 10:41:32 AM
 #3

The expression is "we shouldn't care less". As in we already care as little as possible and hence should not be able to care even less. I don't know why people get this backwards.

no, he has this the right way around. he's saying we should care less, because we currently care too much.

he's saying "please lower your level of caring about offline stores".

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September 17, 2011, 10:47:50 AM
 #4

3. There is no inherent *reason* to use bitcoin offline. Are you trying to achieve anonymity when paying for your lunch? Pay with cash, much easier. Transaction fees? Pay with cash.

no, i'm trying to eat my lunch without my bank balance dropping in value by way of reserve bank theft (quantitative easing).

the more people use bitcoin offline, and the less people use government money, the better.
Vitalik Buterin
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September 17, 2011, 10:55:12 AM
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2. Using bitcoin in offline locations is very problematic technically. If you go to buy lunch, they don't want to wait for 10 minutes until your transaction confirms.

Waiting for 1 confirmation is safe enough for the real world. If you're caught double spending, there's no way to pass it off as an accident, mistake or anything but premediated fraud, and it's so hard to pull off it's less risky to just shoplift. And aside from that you got MtGox codes and the Instawallet green address.

They don't either want to check the market price all the time and adjust their prices, which, as opposed to online shops can be printed on papers and boards. Do you reprint them all the time then?

Modern (as in a few weeks old and newer) Bitcoin offline merchant solutions adjust prices automatically. There are people working on this - see bit-pay.com

As for cash, I hate coins. If people were decent enough to include sales tax in the price of the product and make all the prices end in multiples of .25 (even .49 and .99 are acceptable) it would be different, but most stores don't do that. That's reason enough to use Bitcoin for me.

Argumentum ad lunam: the fallacy that because Bitcoin's price is rising really fast the currency must be a speculative bubble and/or Ponzi scheme.
Killdozer
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September 17, 2011, 10:57:16 AM
 #6

That's right, payb.tc Smiley

Also, let me clarify about the use of bitcoin on mobile devices, the problems:
- Downloading the block chain. Now it's what, 500 megs? Do you download that with 3g and pay all charges? Also, just keeping a 500 meg file on your mobile device is not very good, they have limited memory which must also be used for other things. And in *near* future this file seems to be growing exponentially.0
- Processing power. First there is the checking of the whole block chain upon initialization of a new installation. Right now it takes hours even on a PC! imagine battery usage and time it would take on a phone! Also, even to run the client takes a lot of power, because it constantly checks transactions and blocks.
- Internet access all the time. Not everybody has free traffic on their phones, and bitcoin uses a lot. Also, not everybody is always in the coverage zone...
- How do you keep the wallet file secure on a phone? I mean, phones could even be stolen pretty easily. You would have to have another wallet on your phone, and transfer money to that in small amounts to minimize risks. Like I said, a PITA Smiley

Some of these problems could be battled with some technological advancements in the client, but only to a certain extent. I mean, the block chain size is going to be even a problem on PCs soon, and nobody really has any solution yet.
And none of the advancements have been implemented yet, not sure even if somebody works on them, let alone the mobile client problems.

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September 17, 2011, 10:59:29 AM
 #7

Also, let me clarify about the use of bitcoin on mobile devices, the problems:
- Downloading the block chain. Now it's what, 500 megs? Do you download that with 3g and pay all charges? Also, just keeping a 500 meg file on your mobile device is not very good, they have limited memory which must also be used for other things. And in *near* future this file seems to be growing exponentially.0

have you personally tried one? i use an awesome bitcoin client on android and it doesn't use a 500mb block chain. it's perfectly fine using it's own ~16mb version.
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September 17, 2011, 11:19:51 AM
 #8

I think we should care a lot about offline stores/restaurants accepting Bitcoin. I wouldn't call them offline though because they are connected to the Internet, the right word is physical.

Seems the OP doesn't know anything regarding the current state of mobile payments. The security concern has merit, but it's no less secure than your physical wallet. This means that as a rule don't have more coins in the digital wallet than you can afford to lose, which is a rule people should follow for their physical wallets as well.

In the future I think the security of mobile wallets will be better, but for now it's a good idea to limit the risk by smart usage. The mobile wallets and the numerous possibilities, lately shown by the Bit-Pay mobile payment system for example (which enables instantaneous transactions), are some of the most promising and important things for Bitcoin.

So to summarize, the physical stores/restaurants are very important. They will also bring credibility to Bitcoin, which is good.

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Killdozer
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September 17, 2011, 11:28:58 AM
 #9

Also, let me clarify about the use of bitcoin on mobile devices, the problems:
- Downloading the block chain. Now it's what, 500 megs? Do you download that with 3g and pay all charges? Also, just keeping a 500 meg file on your mobile device is not very good, they have limited memory which must also be used for other things. And in *near* future this file seems to be growing exponentially.0

have you personally tried one? i use an awesome bitcoin client on android and it doesn't use a 500mb block chain. it's perfectly fine using it's own ~16mb version.


Well sounds like it's not a full fledged client, that is able to fully participate in the network activity. Still, makes sense to use the lite version on the mobile phones, it's probably also the only way.
However, the rest of my points still stand.

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September 17, 2011, 11:34:53 AM
 #10

Also, let me clarify about the use of bitcoin on mobile devices, the problems:
- Downloading the block chain. Now it's what, 500 megs? Do you download that with 3g and pay all charges? Also, just keeping a 500 meg file on your mobile device is not very good, they have limited memory which must also be used for other things. And in *near* future this file seems to be growing exponentially.0

have you personally tried one? i use an awesome bitcoin client on android and it doesn't use a 500mb block chain. it's perfectly fine using it's own ~16mb version.


Well sounds like it's not a full fledged client, that is able to fully participate in the network activity.

well, it sends and receives okay, doesn't do any mining though Tongue
btcbaby
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September 17, 2011, 01:01:22 PM
 #11

That's right, payb.tc Smiley

Also, let me clarify about the use of bitcoin on mobile devices, the problems:
- Downloading the block chain. Now it's what, 500 megs? Do you download that with 3g and pay all charges? Also, just keeping a 500 meg file on your mobile device is not very good, they have limited memory which must also be used for other things. And in *near* future this file seems to be growing exponentially.0
- Processing power. First there is the checking of the whole block chain upon initialization of a new installation. Right now it takes hours even on a PC! imagine battery usage and time it would take on a phone! Also, even to run the client takes a lot of power, because it constantly checks transactions and blocks.
- Internet access all the time. Not everybody has free traffic on their phones, and bitcoin uses a lot. Also, not everybody is always in the coverage zone...
- How do you keep the wallet file secure on a phone? I mean, phones could even be stolen pretty easily. You would have to have another wallet on your phone, and transfer money to that in small amounts to minimize risks. Like I said, a PITA Smiley

Some of these problems could be battled with some technological advancements in the client, but only to a certain extent. I mean, the block chain size is going to be even a problem on PCs soon, and nobody really has any solution yet.
And none of the advancements have been implemented yet, not sure even if somebody works on them, let alone the mobile client problems.


Mobile usually involves a server.  The blockchain is shared (checkout webcoin.ch)  and the wallet is on a server.  Access to the Internet to pay; yes that's an issue but the same issue exists for credit cards.  They don't do the manual credit card impressions much at stores when the access from the card reader goes down.


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cypherdoc
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September 17, 2011, 01:26:45 PM
 #12

as long as the block chain stays secure, Bitcoin could simply act as a store of wealth, much like gold.  in that sense, does it really need an economy built around it?

clearly it would be better if it did as it would stimulate more awareness and demand for the coins.  Bit-pay is a great way to do this.

Steve and Tony; have you tried to take this to Kenya?  if Bitcoin and Bit-Pay could take away market share from M Pesa it would be great.
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September 17, 2011, 01:53:50 PM
 #13

You are too late. Easy POS payments are here and are being used.

Quote
1. Bitcoin is not meant to be used offline, in stores, not even so much on mobile devices (which would work, but not as good as on PCs).

Too bad, because it is set up for mobile devices. And it does work.

Quote
2. Using bitcoin in offline locations is very problematic technically. If you go to buy lunch, they don't want to wait for 10 minutes until your transaction confirms. They don't either want to check the market price all the time and adjust their prices, which, as opposed to online shops can be printed on papers and boards. Do you reprint them all the time then?
Most of "normal" shops don't have secure enough setups anyway, and wallet stealings and such things would be a great problem if you could pay by bitcoin in every restaurant.
The only thing we will achieve by accepting bitcoins offline is people starting to believe that bitcoin is slow, unsecure and plain pain in the ass. Which it is, when used offline!

A couple of seconds is not a long wait. I can do a Bitcoin transaction at my wife's shop faster than running a credit card. And get confirmation by the time I put the clothes in the bag.

Quote
3. There is no inherent *reason* to use bitcoin offline. Are you trying to achieve anonymity when paying for your lunch? Pay with cash, much easier. Transaction fees? Pay with cash. Or maybe are you trying to eat lunch in a restaurant that's on the other side of the globe? Well then you've got bigger problems Tongue
So while by promoting bitcoin online we are actually making the world better and simpler, by promoting it in offline stores, we are just doing so because "bitcoin is cool".

The *reason* is that it is easier than cash. Everyone carries their phone. No running to the ATM, no counting out your cash, no worry about getting robbed (most smart phones have code security for accessing the phone)


POS transactions are here, they are easy and simple for merchants to set up and use. No changing of prices, the price is calculated in Bitcoins simply through the bit-pay.com app. My wife's shop accepts them and I will be helping other stores in her strip get set up (a convenience/sandwich store and a tire shop) They can even get paid in cash and never need to know anything about Bitcoins.

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September 17, 2011, 02:06:35 PM
 #14

I don't understand this fixation with confirmations in an IRL payment situation. You need to wait, at most 10 seconds to listen for a race attack, and only 2-3 if you have a well connected client. Who in their right mind would spend millions of dollars on making a 51% attack and then use it to get out of paying for dinner? Its much easier, cheaper, and simpler to just dine and dash then it its to create a race attack, must less a 51% attack. Confirmations are only needed for transactions large enough to warrant a 51% attack. Otherwise you can accept an unconfirmed transaction as a-ok if you have a well connected client designed to listen and warn of a race attack.     

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September 17, 2011, 02:09:36 PM
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no, i'm trying to eat my lunch without my bank balance dropping in value by way of reserve bank theft (quantitative easing).

the more people use bitcoin offline, and the less people use government money, the better.

That may make sense to you, but the recent trend has been that bitcoin has been losing buying power much faster than most government-issued currencies do.

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September 17, 2011, 02:22:07 PM
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I disagree with the OP's argument that because Bitcoin resides online it should he treated as such. First and foremost, before it is an ONLINE currency it is an ALTERNATIVE currency. As a currency it shouod represent an economy and most of what you can buy, or what people currently buy, is offline. However current electronc payment methods are adopted so we don't have to carry coins and notes with us.

As for using it as a store of value, this is true theoretically, but who determines what the value of a Bitcoin is? The truth is we all do in some huge inknowing collaboration, but rather than a value democraticaoly agreed by people, it is agreed by every single unit of wealth, and who it's master is.

BTC price is on a current trend downward it seems and fluctuates alot, making it hardly the ideal vehicle for an investment. There needs to be a transitional phase first from various worldwide currencies to Bitcoin. Before, they managed to transition from gold to paper money, by pegging the value of tge paper to x amount of gold. But since everybody is the issuer, pegging is far more difficult. Hence the jumpstart will also be difficult. Bitcoin should be used as a payment processor where prices are set in particular local currencies but the BTC taken off is in terms of current market price. I think bit pay already does this, but I wonder if it's done the other way round? Ie. where somebody pays for something in local currency, it gets swapped over to BTC sent to the merchant and converted back to local currency. A bit complicated, true, but surely cheaper than Mastercard VISA fees?

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September 17, 2011, 02:55:30 PM
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Ie. where somebody pays for something in local currency, it gets swapped over to BTC sent to the merchant and converted back to local currency. A bit complicated, true, but surely cheaper than Mastercard VISA fees?

Currently the price comes up as dollars just like any other transaction. You put the price into the bit-pay app on your phone and it converts it to Bitcoin with a QR code for the consumer to scan. The consumer scans the code and pays the Bitcoin amount.

The Bitcoin is then sent to the merchant's bit-pay account where it can either be sent to your BTC wallet or sent to your bank account in dollars. It is your choice as a merchant.

You are charged .99% to get paid in Bitcoins and 2.99% to get it out as cash.

I have a very low rate on my credit card transactions because I set up my laptop to swipe cards so the per swipe fee is under 2% for VISA/MASTERCARD. American Express fees are usually 3-5%. Plus you usually have a monthly fee of around $25 for the service plus a minimum of $25 in transaction fees.

Then there is the equipment. A cheap system will run about $250. A receipt printer can run from $250 to $600.

With bit-pay, I set up an app for my smart phone (which I already have, otherwise it cost me $150 plus a monthly cost of $50).

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defxor
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September 17, 2011, 03:03:08 PM
 #18

Well sounds like it's not a full fledged client, that is able to fully participate in the network activity.

When someone tells you that you're wrong, it's good etiquette to educate yourself before posting again. The Bitcoin Wallet several of us are using on Android is indeed a network participating client. It's based on BitcoinJ, an Android Bitcoin library.

https://market.android.com/details?id=de.schildbach.wallet

http://code.google.com/p/bitcoinj/

To the actual point of your post, I would agree. For the short term Bitcoin proponents should focus on the usecases where Bitcoin really shines, like international wire transfers (competing with Western Union etc), while building an infrastructure (which Bit-Pay is doing in a wonderful way) where it later can create the same consumer easy of use as credit card payments but with lower merchant fees.

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September 17, 2011, 03:13:24 PM
 #19


where it later can create the same consumer easy of use as credit card payments but with lower merchant fees.


Paying in Bitcoin is easier than using a credit card. Scanning a QR code and clicking "Pay" is easier than paying with your credit card then having them print out a receipt for you to then sign, or a debit card where you swipe it and enter your PIN.

And why wait? Like there are people out there with stores that need to hold off on implementing an easier payment method so that other people can work on the online aspect of Bitcoin? Do we only have 2 people working on Bitcoin that efforts cannot be spread out?

Should I stop accepting Bitcoins in person and tell people that they can only pay on my website? Or do both?

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Links and Reviews of useful every day places to spend bitcoins: https://bitcointalk.org/index.php?topic=943143.0
defxor
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September 17, 2011, 03:26:00 PM
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where it later can create the same consumer easy of use as credit card payments but with lower merchant fees.

Paying in Bitcoin is easier than using a credit card.

You have to get the bitcoins first. Until there's a (much) simpler way for the consumers to, as hassle-free as possible, pay using Bitcoin without actually having to have two wallets (their regular currency as well as bitcoins) credit cards will be much easier to use.

Paying using your mobile with NFC is going to become huge during next year. Mobile Bitcoin payments will be no easier than mobile VISA/Mastercard payments.

http://www.google.com/wallet/
http://usa.visa.com/personal/cards/paywave/index.html
http://www.paypass.com/

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