Bitcoin can replace the credit card today

[Automatic]

The blockchain is already 15 GiB. Bitcoin can't replace credit cards if we don't solve this problem.

Why is this a problem?   Consumer flash memory devices that can hold 16G can be found for less than $10.  This eventually gets cheaper.   Mass produced devices can hold a ROM of the current history of the blockchain for even cheaper.

That's $0.625 per GB, that's insane. I buy at ~ $0.05 per GB, and, that's insanely expensive for just long-term storage of data that can easily be reacquired, most low-end hard-drives you can buy for ~ $0.03 per GB.

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[IrishFutbol]

Points you left out:

1. Credit card companies make money on interest, and can provide rewards programs to customers.  Bitcoins can't.  Advantage - Credit Cards.
You are paying for those rewards (and more!) indirectly i.e. the payment processing costs charged to the merchant and reflected in prices.  CC companies make money on interest but they also spend an enormous amount on infrastructure, staff, etc.  I think you're overestimating the value of the "rewards".

2. Credit cards allow someone to know how much money they can spend.  Bitcoin prices are volatile, and need to be converted back to USD to determine their value.  Advantage - credit cards.
True, but Bitcoin is still in its infancy.  The price will stabilise over time.  Agree that it's a chicken and egg scenario though.

3. Theft and fraud - Someone steals my credit card, and the bank is SOL as long as I report it when I notice it.  Someone steals BitCoins, the owner is SOL.  Advantage - credit cards.
There is a justice system, you know?  Go get your coins back.  Don't want to risk it, then only trade with reputable merchants or merchants that use escrow or indeed arrange your own escrow or insurance.  Your costs don't need to be added to my bill.

Points you're taking an awfully biased approach on.

...

2. Time of transaction - A pending transaction with a bank is slightly more reliable than a pending transaction with a random person.  For online purchases (excluding instantaneous downloads), it may not be an issue, but this would never work in retail stores, or for online products that people would instantly receive.
Double-spending is very difficult. I suspect most merchants will happily proceed with zero confirms for all but high value transactions if they can be certain an appropriate tx fee was paid).

My thoughts.

I'd add one very simple point: the CC companies make billions of dollars every year.  Think about how they do that.  They are ruthless.  Clue: it's by tricking you into thinking you get a good deal.

I remember in the UK a year or two ago we had CC companies intentionally changing the monthly due date for repayments to catch people out that had set up standing orders to pay their bills on time!

- Credit card companies have two types of consumers.  Those who have money and can pay off their bill monthly.  These people will earn rewards and do not pay interest.  It is better for them to use credit cards.  The other type is those that don't have money.  As they're using credit cards to borrow, they won't have any bitcoins to spend.  Either way, people will use credit over bitcoins.
 
- The price will never stabilize to the point where companies will not base the price of a good off of the dollar.  Maybe decades from now at the earliest.  Retailers will always base BTC off of stable government backed money.  Businesses aren't stupid.  They'll look at how the unstable, non-regulated, currencies of the pre-1900s, utterly destroyed businesses with massive value swings, and always seek to have their money in a currency that is regulated and has a predictable inflation rate.

- Good luck tracking someone down from across the country (or even out of the country) because of a $500 - $1,000 theft.  Or at least good luck in a way that won't cost you far more than that to get your money back.

- There's still two major problems with stopping double spending.  First, it's much easier to attempt than normal theft, and there would be plenty of people willing to try it.  Second, it would be near impossible to stop.  Similar to how some shoplifters "accidentally" forget about that last item in their cart, thieves could always claim they forgot that they had already moved their BTC in an earlier transaction.

Credit card companies are greedy and evil, but for the forseeable future, they're going to provide a much better option for paying for items.

[Lauda]

Seems ppl don't undestand blockchain size issue. The problem is bandwidth, not storage space. VISA processing volume (10'000 tps) requires 10'000 transaction/s * 200 bytes/transaction * 8 bit/byte = 15 Mbps connection, assuming 200 bytes per transaction, average transaction requires more bytes.

These complaints are pretty much useless. To solve this, we need a new way of compressing either the whole block chain or making a single transaction smaller. Neither of these 2 would be hard to do if our development was more active, which sadly is not.

[amspir]

Bitcoin wouldn't replace the credit card because no merchant in their right mind would forgo payments in USD for BTC with BITC's price volatility.  Are you guys serious?  BTC behaves more like a commodity or store of value than a currency.  Everyone hoards it.

True under current conditions.  Speculators buy it because it is believed that it will be useful as a currency in the future.  As more bitcoin is used as currency rather than commodity, then the price will stabilize, or be more predictable, IMHO.

[Ekaros]

The blockchain is already 15 GiB. Bitcoin can't replace credit cards if we don't solve this problem.

Why is this a problem?   Consumer flash memory devices that can hold 16G can be found for less than $10.  This eventually gets cheaper.   Mass produced devices can hold a ROM of the current history of the blockchain for even cheaper.

That's $0.625 per GB, that's insane. I buy at ~ $0.05 per GB, and, that's insanely expensive for just long-term storage of data that can easily be reacquired, most low-end hard-drives you can buy for ~ $0.03 per GB.

Easily is relative term...

The current state is 15GB, but if this grows much larger the full nodes will probably come rather rare... Which might cause some other issues.
But these full nodes need to boostrap the new nodes at times and that uses bandwith in addition to the current network traffic. In worst cases some new nodes might be unable to ever catchup...

[~Coinseeker~]

Something in the digital currency space will eventually replace the debit card, I'm not sure it will be bitcoins though.  Too slow and transaction limits that simply can't handle the world's transactional volume.  Bitcoin is better suited as a store of value and IMO, shouldn't try to involve itself in micro-transactions because it's simply not good at it.  

Bitcoin + Ripple....now that's a different story and a viable solution that should seriously concern payment processors.  

[Come-from-Beyond]

Seems ppl don't undestand blockchain size issue. The problem is bandwidth, not storage space. VISA processing volume (10'000 tps) requires 10'000 transaction/s * 200 bytes/transaction * 8 bit/byte = 15 Mbps connection, assuming 200 bytes per transaction, average transaction requires more bytes.

These complaints are pretty much useless. To solve this, we need a new way of compressing either the whole block chain or making a single transaction smaller. Neither of these 2 would be hard to do if our development was more active, which sadly is not.

U can't compress blockchain much, nor u can make a single transaction smaller.

[S4VV4S]

Something in the digital currency space will eventually replace the debit card, I'm not sure it will be bitcoins though.  Too slow and transaction limits that simply can't handle the world's transactional volume.  Bitcoin is better suited as a store of value and IMO, shouldn't try to involve itself in micro-transactions because it's simply not good at it.  

Bitcoin + Ripple....now that's a different story and a viable solution that should seriously concern payment processors.  

I don't understand we you keep hanging on the fact that it requires 10+ minutes for a transaction WHEN if you have already deposited your coins in a card wallet the transaction goes automatically from your card wallet to the merchant wallet.
All you need is something like a bank that say: Yes this guy has coins so we get it from him and give it to the merchant.

You know somehow NEO-BEE comes to my mind

EDIT: Same as credit card, the money is not moved from your account immediately. When you swipe your cards the service checks if you have enough balance and holds it, but doesn't send it to the merchant immediately. This is much better. If you have the coins the merchant gets it in 10 minutes or something. So if you were a merchant what would you choose considering the transaction fees as well?

[jayson001]

I do not think the btc will replace credit card, but complimentary to it, which is a good to the consumer. For instant transaction, btc is not the right choice.

[kactech]

Mutual mircopayment channels chains(net) would give Visa's throughput:

Alice <==> Bank/ProxyServiceA [<==> Bank/ProxyServiceB, ...] <==> Bob

or

Customer ---> Bank/ProxyServiceA [<==> Bank/ProxyServiceB, ...] ---> Merchant

where
<==>: long term(monthly, yearly?) mutual micropayment channel
--->: long term one way micropayment channel


requires malleability fix

[Lauda]

U can't compress blockchain much, nor u can make a single transaction smaller.

Nothing is impossible, the word itself says 'I'm possible'!
Audrey Hepburn

[mprep]

U can't compress blockchain much, nor u can make a single transaction smaller.

Nothing is impossible, the word itself says 'I'm possible'!
Audrey Hepburn

Guess so. We could rewrite the protocol and include a function that would rewrite the blockchain into a more memory effcient variant.

[IrishFutbol]

Bitcoin wouldn't replace the credit card because no merchant in their right mind would forgo payments in USD for BTC with BITC's price volatility.  Are you guys serious?  BTC behaves more like a commodity or store of value than a currency.  Everyone hoards it.

True under current conditions.  Speculators buy it because it is believed that it will be useful as a currency in the future.  As more bitcoin is used as currency rather than commodity, then the price will stabilize, or be more predictable, IMHO.

Speculators buy it because they believe the value will go up...big difference from believing it'll be used in the future.

There's some famous quotes from major institutions and investors from the real estate crash in 2008 and the tech crash of the late 90s about how they knew what they were buying was overvalued, but they bought it anyway because they thought they would be smart enough to sell before the bubble burst.

[Come-from-Beyond]

U can't compress blockchain much, nor u can make a single transaction smaller.

Nothing is impossible, the word itself says 'I'm possible'!
Audrey Hepburn

Guess so. We could rewrite the protocol and include a function that would rewrite the blockchain into a more memory effcient variant.

U can't win fighting against entropy.

[pening]

It seems to me this issue always ignores the glaringly obvious - the benefits of credit cards to the purchaser.  Namely:
1. Credit.  Pay at the end of the month, defer over the next few months
2. Protection. goods or services sub-standard, not delivered, etc.  

When does Bitcoin offer a replacement service to these?

From the article:

The only thing that needs to be done to put Visa out of business is adoption and regulation.

There is no real hope of regulation (no central authority, resistance from most of community to the idea) and adoption from the general consumer is unlikely while we have no resolution of the above points.  

[amspir]

It seems to me this issue always ignores the glaringly obvious - the benefits of credit cards to the purchaser.  Namely:
1. Credit.  Pay at the end of the month, defer over the next few months
2. Protection. goods or services sub-standard, not delivered, etc.  

1) Credit doesn't have to be coupled with a payment system.  Credit cards have higher rates than a line of secured credit at a bank.
2) This comes at a cost.  Merchants are usually prohibited by contract from passing along the cost of lost funds and fees from CC transactions to just CC users. 

[~Coinseeker~]

I don't understand we you keep hanging on the fact that it requires 10+ minutes for a transaction WHEN if you have already deposited your coins in a card wallet the transaction goes automatically from your card wallet to the merchant wallet.
All you need is something like a bank that say: Yes this guy has coins so we get it from him and give it to the merchant.

You know somehow NEO-BEE comes to my mind

EDIT: Same as credit card, the money is not moved from your account immediately. When you swipe your cards the service checks if you have enough balance and holds it, but doesn't send it to the merchant immediately. This is much better. If you have the coins the merchant gets it in 10 minutes or something. So if you were a merchant what would you choose considering the transaction fees as well?

Right, they are called central clearing houses.  Ripple eliminates the need for central clearing houses, but if it's more centralization you like, that's fine with me.  To each his/her own.    Me, I like transactions confirmed in seconds instead of minutes, without a central clearing house and all for a fraction of a penny.  I'm betting the general public is going to like that better too. Time will tell.

[Hawker]

I wrote an article about why Bitcoin and Cryptocurrency is so much better than the current system.

http://thedailycrypto.com/post/cryptocurrency-can-replace-credit-cards/

Let me know what you think.

Until a way to reverse fraudulent transactions is built into bitcoin, it can't replace credit cards.  People will not accept that if someone scams them or hacks their credentials, the transaction can't be reversed as it can with a bank transfer or credit card.

[Lauda]

Nothing is impossible, the word itself says 'I'm possible'!
Audrey Hepburn

Guess so. We could rewrite the protocol and include a function that would rewrite the blockchain into a more memory effcient variant.

U can't win fighting against entropy.

“You’re not obligated to win. You’re obligated to keep trying. To the best you can do everyday.”
― Jason Mraz

[Nagle]

But it was about 2GB a year ago. At this rate, it will require a NAS with several dozen 4TB hard drives in RAID by the end of 2016.

No, we hit the 7 transactions per second limit first.

Bitcoin really does have a scaling problem. There are potential technical solutions, but nobody has implemented anything ready for deployment yet.

(Keeping Bitcoins in an "online wallet" and doing transfers within the remote system is not a solution.)