[ANN] Introducing LoveBitcoins.org – Driving 1 MILLION Bitcoin Users in 2012

[DeepBit]

@DeepBit:
Do you seriously suggest that the difficulty will even compare? Who breaks into people's houses in the first place, and even then, good luck finding the valuables.

According to the internets, more than 2 100 000 people do this each year in USA.
This is not related to bitcoins, but I just can't leave the "Who breaks into people's houses in the first place" part unanswered :)

But almost everyone either fails to backup or leaves ridiculously huge security holes open on their computers!
The average person will lose money if you put this to the test.

Why they wouldn't lose their online wallet password/key then ?

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[Vandroiy]

A lot of homes may be broken into, but does this exceed the amount of infections of computers? I care a lot for my security, yet it has been breached three times already. The house I live in, though, has never been broken into. I doubt this is a rare and exceptional case.

They may lose their wallet password, but the provider can then go the usual recovery way and silently watch whether nobody else claims to be the owner (or the owner's personal information is known), then refund. On hacked accounts, withdraw limits and sanity checks help prevent disaster. But there is no helping someone whose private keys for BTC have leaked.

I know the "personal identity" thing is not a geek's preferred way, but the average person actually likes this. Sure, everybody should be free to store the coins himself, but I wouldn't try to force it onto people.

[BitPay Business Solutions]

Take a good look at BitcoinSpinner. It has exactly what you are asking for, including easy backup/restore using QR codes. The app has the private key, server does the heavy lifting of managing the block chain.

Jan - I have added Bitcoin Spinner to the wallet list!  Since it deals with bitcoins only, its still an advanced wallet (like instawallet)  But I will start recommending it.  Good idea on the backup/restore!

[Jan]

Take a good look at BitcoinSpinner. It has exactly what you are asking for, including easy backup/restore using QR codes. The app has the private key, server does the heavy lifting of managing the block chain.

Jan - I have added Bitcoin Spinner to the wallet list!  Since it deals with bitcoins only, its still an advanced wallet (like instawallet)  But I will start recommending it.  Good idea on the backup/restore!

Great!

I would argue that it should go in the Intermediate section rather than Advanced. It is so simple that anyone who knows how to scan a QR code can use it. You can Send/Receive, Backup/Restore. There is no pin/password, email or other kind of registration. Install and you are good to go right away. It's even simpler than the MtGox Mobile, which is in the Intermediate section.

I guess I don't understand why you would regard a simple Bitcoin wallet that deals with Bitcoin only as an advanced Bitcoin application.

By the way its "BitcoinSpinner" and not "Bitcoin Spinner"

[BitPay Business Solutions]

I guess I don't understand why you would regard a simple Bitcoin wallet that deals with Bitcoin only as an advanced Bitcoin application.

By the way its "BitcoinSpinner" and not "Bitcoin Spinner"

I'm still trying to define the categories.  I was thinking that anything Bitcoin-only would subject the user to currency volatility.  so instawallet and BitcoinSpinner, while simple to use, would expose the user to 100% volatility.  At least with MtGox you can store a USD balance, to preserve your purchasing power.  I was thinking along the lines of currency risk, not complexity of the app.

[jav]

Cool project!

good point.  I guess technically it's never holding any bitcoins, as opposed to not displaying them.  Meaning, deposit $100 in fiat and let it sit there in the wallet as $100.  Don't buy any Bitcoins because if the value drops by 20%, suddenly you only have $80 worth of buying power for your $100.  That will piss off new users more than anything!

The idea is to get people to start using bitcoin wallets, without any volatility risk or understanding how bitcoin works.  When they need to send bitcoins, just have the wallet buy them at market price at the moment they need to be sent.  The Bitcoin price becomes irrelevant at that point.

I have also started to think that this will be necessary for the foreseeable future: Convenient tools that allow to _transfer_ using Bitcoins, but to _store_ using fiat (which requires a third party). Bitcoin's volatility isn't going to decrease anytime soon. For that we need a lot of volume, but as soon as we have that, it will probably just ignite Bitcoin bubble #2. So I don't see it calming down anytime soon.

The whole "lower fees for customers" argument is pretty meaningless, if you keep things in Bitcoin. What does the 0.0005 BTC transaction fee help you, if a 10% price swing between buying Bitcoins and using them makes your cappuccino much more expensive?

So we need to engineer around it: Keep things in fiat and exchange for Bitcoin just in the moment you pay. The receiving side will probably do the same thing and convert back to fiat. Bitcoin is then just a neutral mechanism to exchange money digitally. I am a little worried about the overhead cost though. To make this feasible we need efficient exchanges that have both low fees and low spread.

I played around a little bit with Mt.Gox to see what the typical total cost would be if you pick a random time and want to buy Bitcoins at the current exchange rate. So I compared a "lossless" conversion at the current exchange rate to what you would actually get if you take Mt.Gox's fees and the spread into account. Mt.Gox's fee is 0.6% (if you don't have any discounts) and the spread usually adds another 0.25% to 1%. So let's go with 1.5%. Keep in mind though, that you probably have to do this on both sides of the transaction: Customer with USD -> Bitcoin -> Bitcoin transfer -> Bitcoin -> Merchant with USD. You are already at 3% there - not a lot of room to work with. Hopefully this can be improved by more competition between exchanges (lower fees) and more day traders (lower spread) over time.

[BitPay Business Solutions]

Cool project!

So let's go with 1.5%. Keep in mind though, that you probably have to do this on both sides of the transaction: Customer with USD -> Bitcoin -> Bitcoin transfer -> Bitcoin -> Merchant with USD. You are already at 3% there - not a lot of room to work with. Hopefully this can be improved by more competition between exchanges (lower fees) and more day traders (lower spread) over time.

Jan,  the problem is the Buyer is always paying this 1.5% fee anyway to pay with bitcoins.  He can put $100 into gox, but he will pay the same percentage whether he buys all at once, or in small increments as he needs them.  the cost to the buyer is the same.  By keeping FIAT, the buyer at least maintains his purchasing power.  

I should add that https://intersango.com charges NO fees to buy or sell.  ACH and SEPA are also free for deposits and withdrawals.

This will get better as the spreads tighten and volume improves.  One thing that is badly needed is a consolidated Level II market depth, to put all the exchanges into one table, and route the order to get the best price.

[DeepBit]

They may lose their wallet password, but the provider can then go the usual recovery way and silently watch whether nobody else claims to be the owner (or the owner's personal information is known), then refund.

1) If such online wallet can provide password/key recovery then it can control user's bitcoins. Those bitcoins may be stolen if site is hacked.
2) Also this implies that site can do fractional reserve banking, which is not funny.

[BitPay Business Solutions]

Here is a short video of Max Keiser, announcing his support for our initiative.  The full, professional video will be up soon.

http://www.youtube.com/watch?v=sFSbj-MidPw

[Atheros]

It was my impression that Bitcoin, the software, technology, or network had a capital B, while bitcoins, the units of exchange, had a lowercase B just like dollars or euros.

[cunicula]

Promoting bitcoin meets paypal-wallet services. Yes. Promoting bitcoin itself. Not really.

 

[BitPay Business Solutions]

Promoting bitcoin meets paypal-wallet services. Yes. Promoting bitcoin itself. Not really.

 

Millions of people use PayPal.  Let's get them to try our thing.

[julz]

Promoting bitcoin meets paypal-wallet services. Yes. Promoting bitcoin itself. Not really.

  

Millions of people use PayPal.  Let's get them to try our thing.

I've only dabbled with PayPal a while ago - but as I see it, for the average consumer, Bitcoin can't compete on Fees yet.
(paypal you pay each transaction, but getting your money into paypal is cheap..  
whereas bitcoin you easily pay 5% or more depending on where you are to get your money into it in the first place)

Also - I hear paypal allows person to person payments.

So..unless they sell things for bitcoins or earn in bitcoins, they're effectively paying more to use bitcoins than they would using PayPal - so what exactly is the angle here that will sell the idea of Bitcoin to the average person?  

That they can send amounts equivalent to a few cents?
The 'political' aspects of avoiding banks or corporations which could freeze your money? (A valid concern - but 'occupy' crowd aside, it's probably not high on the agenda of most people)


edit: It rather seems to me that this is the 'elephant in the room' when it comes to Bitcoin. It's nice and all as far as easy setup for merchants & people who want to set up donations - but the *effective* Fees when you consider getting it in and out of your local currency are very high with Bitcoin.   
Sure -if you do a very large deposit via wire-transfer etc, the fee becomes a small percentage - but then you're holding a large amount of BTC and can get screwed by the volatility.

[edd]

Promoting bitcoin meets paypal-wallet services. Yes. Promoting bitcoin itself. Not really.

 

Millions of people use PayPal.  Let's get them to try our thing.

I've only dabbled with PayPal a while ago - but as I see it, for the average consumer, Bitcoin can't compete on Fees yet.
(paypal you pay each transaction, but getting your money into paypal is cheap.. 
whereas bitcoin you easily pay 5% or more depending on where you are to get your money into it in the first place)

Also - I hear paypal allows person to person payments.

So..unless they sell things for bitcoins or earn in bitcoins, they're effectively paying more to use bitcoins than they would using PayPal - so what exactly is the angle here that will sell the idea of Bitcoin to the average person? 

That they can send amounts equivalent to a few cents?
The 'political' aspects of avoiding banks or corporations which could freeze your money? (A valid concern - but 'occupy' crowd aside, it's probably not high on the agenda of most people)

PayPal's fee structure.

PayPal charges fees for every transaction except deposits into your PayPal account and some withdrawals.

Sending money to anyone via PayPal incurs a fee, the only question is who pays it.

[julz]

Promoting bitcoin meets paypal-wallet services. Yes. Promoting bitcoin itself. Not really.

  

Millions of people use PayPal.  Let's get them to try our thing.

I've only dabbled with PayPal a while ago - but as I see it, for the average consumer, Bitcoin can't compete on Fees yet.
(paypal you pay each transaction, but getting your money into paypal is cheap..  
whereas bitcoin you easily pay 5% or more depending on where you are to get your money into it in the first place)

Also - I hear paypal allows person to person payments.

So..unless they sell things for bitcoins or earn in bitcoins, they're effectively paying more to use bitcoins than they would using PayPal - so what exactly is the angle here that will sell the idea of Bitcoin to the average person?  

That they can send amounts equivalent to a few cents?
The 'political' aspects of avoiding banks or corporations which could freeze your money? (A valid concern - but 'occupy' crowd aside, it's probably not high on the agenda of most people)

PayPal's fee structure.

PayPal charges fees for every transaction except deposits into your PayPal account and some withdrawals.

Sending money to anyone via PayPal incurs a fee, the only question is who pays it.

But if I lose 5% for my initial Bitcoin purchase (I've paid more than that in the past by the way!) - what's the difference between being hit up front like that, or getting free initial deposit with PayPal and then hit with a fee for every purchase?  Actually.. the difference is you come out ahead with paypal because it's less than 5% right?

I also pay another 5% or more if I want to get my Bitcoins out.

edit: Note, I'm a bitcoin supporter - but let's be honest about it's advantages and not bullshit about it's weaknesses. I'm not saying Bitcoin won't have an advantage over paypal down the track - I just don't see it right now in terms of cost, so I'm wondering why the average consumer will see it.

[BitPay Business Solutions]

But if I lose 5% for my initial Bitcoin purchase (I've paid more than that in the past by the way!) - what's the difference between being hit up front like that, or getting free initial deposit with PayPal and then hit with a fee for every purchase?  Actually.. the difference is you come out ahead with paypal because it's less than 5% right?

I also pay another 5% or more if I want to get my Bitcoins out.

You could use an exchange called https://intersango.com which has zero fees to buy or sell.  and deposits and withdrawals are also free, unless its a wire transfer.  there is no need to pay 5% in or out.

[edd]

But if I lose 5% for my initial Bitcoin purchase (I've paid more than that in the past by the way!) - what's the difference between being hit up front like that, or getting free initial deposit with PayPal and then hit with a fee for every purchase?  Actually.. the difference is you come out ahead with paypal because it's less than 5% right?

I also pay another 5% or more if I want to get my Bitcoins out.

You could use an exchange called https://intersango.com which has zero fees to buy or sell.  and deposits and withdrawals are also free, unless its a wire transfer.  there is no need to pay 5% in or out.

Took the words right out of my mouth.

If you don't want to pay a 5% fee to use bitcoins, find another method of obtaining them.

[julz]

But if I lose 5% for my initial Bitcoin purchase (I've paid more than that in the past by the way!) - what's the difference between being hit up front like that, or getting free initial deposit with PayPal and then hit with a fee for every purchase?  Actually.. the difference is you come out ahead with paypal because it's less than 5% right?

I also pay another 5% or more if I want to get my Bitcoins out.

You could use an exchange called https://intersango.com which has zero fees to buy or sell.  and deposits and withdrawals are also free, unless its a wire transfer.  there is no need to pay 5% in or out.

If that's the case for a large slice of users then great - but I don't believe that's the case here in Australia.
I'll pay $15 if I use cryptoxchange, Mtgox only has a wire option at the moment - so that'll hit me with $22, how would I get money from Aus into intersango? Wire again I suspect.
(By the way - now that there are quite a few exchanges - I strongly recommend exchanges make it obvious how deposits/withdrawals work for various countries *before* requiring register/sign in. Most people are not willing to sign up to them all in order to compare deposit options and fees)

Judging by many of the forum posts about hurdles getting money to exchanges, I strongly suspect free deposits are not going to be the case for the majority of people either.

Once free deposits or face-to-face bitcoin exchanges are commonplace - sure, the advantage will shift to Bitcoin.. but can we really push it with a straight face as an alternative for most PayPal users right now?   (Even with the vastly smaller number of places you can use bitcoin for purchases compared to bitcoin this is an uphill sell)

[julz]

But if I lose 5% for my initial Bitcoin purchase (I've paid more than that in the past by the way!) - what's the difference between being hit up front like that, or getting free initial deposit with PayPal and then hit with a fee for every purchase?  Actually.. the difference is you come out ahead with paypal because it's less than 5% right?

I also pay another 5% or more if I want to get my Bitcoins out.

You could use an exchange called https://intersango.com which has zero fees to buy or sell.  and deposits and withdrawals are also free, unless its a wire transfer.  there is no need to pay 5% in or out.

Took the words right out of my mouth.

If you don't want to pay a 5% fee to use bitcoins, find another method of obtaining them.

Looks like the cheapest intersango option for Australians would be wire in Eur, losing some small fee on exchange, plus wire fee (in my case $22) + 2.56EUR intersango charge.

edit: Americans cop a $15USD wire fee... so we're back to requiring all these other intermediaries like dwolla, paxum.  Not exactly simple compared to paypal.

What are these other methods that these millions of PayPal users are going to find?

[finway]

Thank you for your contribution to the bitcoin community.