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Author Topic: In order for bitcoin to appeal to the masses, there needs to be a 3rd party  (Read 1715 times)
skooter
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March 29, 2014, 09:23:22 PM
 #1

Here's the issue with bitcoin.

No chargebacks, and you need to store/protect your private keys.

That's a BAD thing.

When I buy things online, I buy with a credit card. I don't have to do any research into whether a merchant is reputable or not. If it doesn't show up or is not as advertised, I make a phone call and get my money back. I don't have to worry about protecting my information, because if it's stolen, I make a phone call, get my money back, and get a new card issued.

For fiat, it by itself has no protection, but banks, a trusted 3rd party, and the FDIC protect it. If your bank account is hacked, you get your money back. If there's fraud of some kind involved, you get your money back. If your bank goes bankrupt, the FDIC covers up to 250K of it, which is sufficient protection for most people.

In order for bitcoin to appeal to the masses, there needs to be a trusted 3rd party who can offer a payment solution that includes dispute resolution and chargebacks, 100% protection for your account being hacked, basically removing any kind of responsibility or liability from the end user. And I'm not talking about a "trusted" 3rd party like coinbase, or bitstamp. The service would have to be offered by an organization like bank of america.

To the average person, there's no appeal of bitcoin. It puts the onus on YOU to protect your money and making sure the merchant is reliable. I've lost one of my credit cards while on vacation, didn't even worry about it till I got back. If that were bitcoin then I'd be panicking about losing a ton of money if I didn't resolve it immediately.
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March 29, 2014, 09:25:28 PM
 #2

Taking responsibility is so haard.

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March 29, 2014, 09:37:59 PM
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What happens if your identity is stolen along with your credit card information. Bitcoin offers merchant and user protection, if due diligence is used.

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March 29, 2014, 09:50:05 PM
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Taking responsibility is so haard.

Yeah, you have to take responsibility and get nothing in return. That sounds stupid to me.

For example, tigerdirect accepts bitcoin, but why would you?

For one, if you're unhappy with anything, you have to deal with their customer service only, and if you're unhappy with the results, too bad. If you use a credit card, you have recourse by going to the credit card company (which generally sides with the cardholder).

And you pay the same amount of money, actually more money when you consider the fact that a lot of times you get cash back or reward points with credit cards.

No chargebacks benefits the MERCHANT, NOT the user. I've had issues with merchants before (big companies too), and it was either spend hours on the phone trying to get it resolved, or take 5 minutes, do a chargeback, and let things work themselves out on their end (they eventually contacted me about it).

What happens if your identity is stolen along with your credit card information. Bitcoin offers merchant and user protection, if due diligence is used.

Identity theft is a whole separate issue. The information you give when making a credit card tx is nowhere close to what someone needs to steal your identity. All you're giving with a credit card tx is the account #, expiration date, CVV code (and all those 3 can be changed instantly by the card issuer), your name and billing address (which is information you can find on public records).

Bitcoin only offers merchant protection when it comes to most things (if you're ordering something you need to give your name and address anyway). With credit cards, there is no due diligence required by the consumer. You're not liable for any fraud, only the merchants are.

The only time bitcoin protects the user is when you're doing something you want to keep anonymous.
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March 29, 2014, 09:55:30 PM
 #5

what people need to learn is to hoard 90% of their wealth in THEIR OWN control.
this means supplying easy to follow information on how to do this.

the other 10% is what most would call disposable income or pocket money amounts that they would use with third parties.

i think once people use a dedicated machine thats not filled up with randomly downloaded programs (risk of trojans) such as a clean PC, a raspberry PI, a phone or hardware wallet, even a paperwallet. they can then once a day or once a week, transfer funds to third party wallets, for daily use.

Example of real world FIAT scenario: dedicated machine= bank, 3rd party service=mastercard/bank note

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Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
skooter
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March 29, 2014, 10:03:19 PM
 #6

what people need to learn is to hoard 90% of their wealth in THEIR OWN control.
this means supplying easy to follow information on how to do this.

the other 10% is what most would call disposable income or pocket money amounts that they would use with third parties.

i think once people use a dedicated machine thats not filled up with randomly downloaded programs (risk of trojans) such as a clean PC, a raspberry PI, a phone or hardware wallet, even a paperwallet. they can then once a day or once a week, transfer funds to third party wallets, for daily use.

Example of real world FIAT scenario: dedicated machine= bank, 3rd party service=mastercard/bank note

Except the bank gives you full protection on your money.

Your example would be more like: dedicated machine = your mattress, 3rd party service = money you have in your pocket

What happens if you lose your wallet(s)? Or if you screw something up and lose the private keys somehow, or send money to the wrong account? There needs to be a 3rd party that manages security and gives you full protection against anything that happens.

Yes, there ARE people who don't trust banks and keep money in their mattress, or hold onto a bunch of gold coins, but those are a very small minority. The typical person keeps their money in a bank.


Taking responsibility is so haard.

Yeah, you have to take responsibility and get nothing in return. That sounds stupid to me.

You get plenty in return. Just because you don't care about those benefits does not mean they do not exist.

Ok, so if you're buying physical goods from an online merchant, what benefit exactly do you get by paying with bitcoin over a credit card?
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March 29, 2014, 10:06:37 PM
 #7


Yes, there ARE people who don't trust banks and keep money in their mattress, or hold onto a bunch of gold coins, but those are a very small minority. The typical person keeps their money in a bank.


when people invest in bitcoin its because the banks are not as good. for those that want 3rd party trust. stick with FIAT. for those that want to OWN their wealth because they know that banks are not as good. then just like investing in gold. they would buy themselves a safe and write the combination down multiple times in different places, should they forget the combination.

its all about teaching basic self security, self management and self control.

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
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March 29, 2014, 10:06:47 PM
 #8

Who said bitcoin would appeal to the masses?

80% of the western population is completely dense, expecting someone to hold their hand from cradle to grave. Over a couple of hundred years we have been made into a stupid, greedy, self righteous mass of coward apes. And believe me, the establishments count on it by now.

Just get over it and feel the fresh air of revolution
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March 29, 2014, 10:15:26 PM
 #9

Here's the issue with bitcoin.

No chargebacks, and you need to store/protect your private keys.

That's a BAD thing.

I don't think you get bitcoin.   There are solutions for chargebacks by using escrow.   However, bitcoin is very similar to cash.  With cash, you must physically protect it against theft.   With bitcoin, you must prevent your private keys from be stolen.   Most of my BTC is on paper wallets (with no possible online access to the private keys) that reside in my safe, along side my cash.

If you don't trust yourself to insure the protection of your private keys, then using a bank might be your solution.   Ask bank account holders in Cyprus, or gold holders in the United States that kept gold in safety deposit boxes during the US gold seizure of 1933, if that method is the most secure.

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March 29, 2014, 10:29:19 PM
 #10

OP you should really consider the differences between the two systems.

The only reason charge backs are necessary with legacy financial systems is that your money can be authorized by someone other than yourself. Somebody can hack into a merchant database (Target) and gain access to your card information. From your card information they can access your name, address, phone number; then other private information becomes easily accessible from the information stored within the credit system, social security number, identity as a whole. That person can use those numbers to buy whatever they want in your name.

Charge backs do nothing to deter crime; they hurt everybody else involved. Charge backs can bankrupt a small business, lay off the employees, cause a tremendous amount of collateral damage. The only person unaffected in a charge back is the criminal.

With Bitcoin that is not the case. Nobody can spend your coins, your public address is encrypted to where it can't be used to identify your private address. Unless you give somebody the private address to your bitcoin wallet and your password they won't get your coins.

If somebody installs a key logger on your computer they have access to everything you do on your computer. Your bank accounts, email, social networking, identity, etc... It takes more than a key logger to steal your Bitcoins; they will also need to steal your wallet file from your computer.

When a merchant doesn't deliver the product you paid for you have a legal recourse, the criminal (merchant) is affected, and the criminal is punished. Why do you need a charge back with Bitcoin where nobody else can spend your money for you?

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skooter
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March 29, 2014, 10:48:00 PM
 #11

Here's the issue with bitcoin.

No chargebacks, and you need to store/protect your private keys.

That's a BAD thing.

I don't think you get bitcoin.   There are solutions for chargebacks by using escrow.   However, bitcoin is very similar to cash.  With cash, you must physically protect it against theft.   With bitcoin, you must prevent your private keys from be stolen.   Most of my BTC is on paper wallets (with no possible online access to the private keys) that reside in my safe, along side my cash.

If you don't trust yourself to insure the protection of your private keys, then using a bank might be your solution.   Ask bank account holders in Cyprus, or gold holders in the United States that kept gold in safety deposit boxes during the US gold seizure of 1933, if that method is the most secure.



Escrow = Trusted 3rd party.

With cash, it must be protected against theft, but that's the bank's responsibility, not the end user's.

OP you should really consider the differences between the two systems.

The only reason charge backs are necessary with legacy financial systems is that your money can be authorized by someone other than yourself. Somebody can hack into a merchant database (Target) and gain access to your card information. From your card information they can access your name, address, phone number; then other private information becomes easily accessible from the information stored within the credit system, social security number, identity as a whole. That person can use those numbers to buy whatever they want in your name.

Charge backs do nothing to deter crime; they hurt everybody else involved. Charge backs can bankrupt a small business, lay off the employees, cause a tremendous amount of collateral damage. The only person unaffected in a charge back is the criminal.

With Bitcoin that is not the case. Nobody can spend your coins, your public address is encrypted to where it can't be used to identify your private address. Unless you give somebody the private address to your bitcoin wallet and your password they won't get your coins.

If somebody installs a key logger on your computer they have access to everything you do on your computer. Your bank accounts, email, social networking, identity, etc... It takes more than a key logger to steal your Bitcoins; they will also need to steal your wallet file from your computer.

When a merchant doesn't deliver the product you paid for you have a legal recourse, the criminal (merchant) is affected, and the criminal is punished. Why do you need a charge back with Bitcoin where nobody else can spend your money for you?

Someone hacking into a merchant database does NOT get info in the credit system, like SSN. All they can get is the info you provide to the merchant. Name, Address, information about that specific card (which can be cancelled and reissued). Chargebacks are for more then reversing unauthorized transactions. I've done chargebacks because I was unhappy with the way a merchant handled something, and no longer wanted to deal with the merchant. And if a merchant doesn't deliver, with bitcoin you have to go to court to sue them to get your money back. With a credit card or bank payment, it's a 5 minute phone call to get your money back. Good luck suing someone for a few hundred bucks.

Taking responsibility is so haard.

Yeah, you have to take responsibility and get nothing in return. That sounds stupid to me.

You get plenty in return. Just because you don't care about those benefits does not mean they do not exist.

Ok, so if you're buying physical goods from an online merchant, what benefit exactly do you get by paying with bitcoin over a credit card?

I don't hold the opinion that Bitcoin's best use case is as a daily spending currency.

But, since you asked, there are a few.

In order to get a merchant to accept a credit card, you must provide all the information required to actually use the credit card (billing address, name, credit card number, expiration date and card security code). Bitcoin is much more secure, you don't need to provide any information in order to make a payment.

Bitcoin is like cash. Merchants can offer a discount for payments with Bitcoin since they don't have to pay a processing fee or worry about charge backs.

I don't need to pass a credit check to obtains bitcoins. I need to pass a credit check to obtain a credit card.

Credit card companies can block payments at their discretion. No one can block a bitcoin payment.

Ok...

Name and billing address (assuming you live at your billing address, most people do) you have to give the merchant regardless if you want to receive what you paid for. The card information has zero security implications. If that gets stolen you have exactly zero liability as a result. (The time I lost my card -- totally my fault btw, I didn't bother to report it stolen until a week later -- it took me 5 minutes on the phone before all the txes were reversed and a new card was on it's way).

Merchants can offer a discount. True, but currently the big ones that I'm aware of charge the same amount in btc. Also, offering different prices for credit card users vs other payment method users often violates the terms of the merchant account with the credit card company, and they're subject to have that terminated. Merchants giving up all their credit card business to give btc users a discount? Doubtful. I don't know if you remembered, but gas stations had to go through a huge fight to be able to charge cash and credit users different prices.

Credit check. Valid point. Not everyone can get a credit card. Debit cards offer the same protection as credit cards though and only the lowliest of the low can't get a bank account.

Credit card companies CAN indeed block payments at their discretion. But the majority of those cases are when something illegal is involved. In this case, I would agree, bitcoin is a great currency when dealing with anything illegal, and is far superior to anything cash based in any way. But for legitimate uses? I don't see the incentive for the consumer to choose bitcoin.

Bitcoin is great for online gambling, buying drugs, laundering money, or payment for other illegal products/services.
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March 29, 2014, 10:49:02 PM
 #12

No 3rd party is needed.
BTC does need to be easier to use, and that is coming.

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March 29, 2014, 10:51:26 PM
 #13

bitcoin does not need mass adoption of 50% population+.

7 billion people. and bitcoin stands at under 0.1% adoption.

if bitcoin was only useful for 1% of people (70m people) and those people did not invest their life savings. but only £/$/Euro 1000.

then bitcoin value would be worth over £/$/Euro 5000 with only 13mill coins mined (rounded figures)

so 1% is an achievable number, with a low investment amount of 1 month salary.

ill leave you to do the maths if 10% of population invested just one months wage into bitcoin
ill leave you to do the maths if 1% of population invested just their entire retirement fund into bitcoin
ill leave you to do the maths if 10% of population invested just their entire retirement fund into bitcoin

mass adoption would be 1%-20% not 50-100%

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Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
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March 29, 2014, 10:55:42 PM
 #14

In order for bitcoin to appeal to the masses, there needs to be a 3rd party. Really?


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March 29, 2014, 11:05:26 PM
 #15

OP you should really consider the differences between the two systems.

The only reason charge backs are necessary with legacy financial systems is that your money can be authorized by someone other than yourself. Somebody can hack into a merchant database (Target) and gain access to your card information. From your card information they can access your name, address, phone number; then other private information becomes easily accessible from the information stored within the credit system, social security number, identity as a whole. That person can use those numbers to buy whatever they want in your name.

Charge backs do nothing to deter crime; they hurt everybody else involved. Charge backs can bankrupt a small business, lay off the employees, cause a tremendous amount of collateral damage. The only person unaffected in a charge back is the criminal.

With Bitcoin that is not the case. Nobody can spend your coins, your public address is encrypted to where it can't be used to identify your private address. Unless you give somebody the private address to your bitcoin wallet and your password they won't get your coins.

If somebody installs a key logger on your computer they have access to everything you do on your computer. Your bank accounts, email, social networking, identity, etc... It takes more than a key logger to steal your Bitcoins; they will also need to steal your wallet file from your computer.

When a merchant doesn't deliver the product you paid for you have a legal recourse, the criminal (merchant) is affected, and the criminal is punished. Why do you need a charge back with Bitcoin where nobody else can spend your money for you?

Someone hacking into a merchant database does NOT get info in the credit system, like SSN. All they can get is the info you provide to the merchant. Name, Address, information about that specific card (which can be cancelled and reissued). Chargebacks are for more then reversing unauthorized transactions. I've done chargebacks because I was unhappy with the way a merchant handled something, and no longer wanted to deal with the merchant. And if a merchant doesn't deliver, with bitcoin you have to go to court to sue them to get your money back. With a credit card or bank payment, it's a 5 minute phone call to get your money back. Good luck suing someone for a few hundred bucks.

When you have a persons name, address, phone number, and credit card number, you have all of the information you need to claim that persons identity. I'm not going to post the process but I'll send you a message explaining how it's possible (I don't want to encourage that type of thing here.)

The court system was invented to serve that purpose of resolving disputes. The court system is a non-biased party to the transaction and even though you may not be "happy" with the merchant that isn't necessarily a reason for your money to be refunded. The charge back system is completely skewed. I operated a small auto repair shop for 4 years and serviced thousands of customers in that time. I can tell you that it's impossible to make everybody happy. When I closed I had a 4.9 star rating on Google, and I can count on one hand the number of customers who left dis-satisfied. Customer satisfaction isn't always related to the way a merchant handles a situation. Some times the customer is just unreasonable or doesn't understand the reasons behind why their expectations can't be met...

I had 2 charge backs and a few cancelled checks in my time of business. Both of the charge backs were nonsense but it makes no difference. Send in the signed work order, receipts, signed card slip, then watch the money leave your account anyways...

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March 29, 2014, 11:25:42 PM
 #16

Here's the issue with bitcoin.

No chargebacks, and you need to store/protect your private keys.

That's a BAD thing.

When I buy things online, I buy with a credit card. I don't have to do any research into whether a merchant is reputable or not. If it doesn't show up or is not as advertised, I make a phone call and get my money back. I don't have to worry about protecting my information, because if it's stolen, I make a phone call, get my money back, and get a new card issued.

For fiat, it by itself has no protection, but banks, a trusted 3rd party, and the FDIC protect it. If your bank account is hacked, you get your money back. If there's fraud of some kind involved, you get your money back. If your bank goes bankrupt, the FDIC covers up to 250K of it, which is sufficient protection for most people.

In order for bitcoin to appeal to the masses, there needs to be a trusted 3rd party who can offer a payment solution that includes dispute resolution and chargebacks, 100% protection for your account being hacked, basically removing any kind of responsibility or liability from the end user. And I'm not talking about a "trusted" 3rd party like coinbase, or bitstamp. The service would have to be offered by an organization like bank of america.

To the average person, there's no appeal of bitcoin. It puts the onus on YOU to protect your money and making sure the merchant is reliable. I've lost one of my credit cards while on vacation, didn't even worry about it till I got back. If that were bitcoin then I'd be panicking about losing a ton of money if I didn't resolve it immediately.

I think you're confusing the currency vs the payment method.  If i pay for something in cash, I can't get my money back either.
In the future, I think bitcion based credit cards will probably exist just like dollar based credit cards, for the same reason--
that they add value for consumers.


skooter
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March 29, 2014, 11:27:24 PM
 #17

Here's the issue with bitcoin.

No chargebacks, and you need to store/protect your private keys.

That's a BAD thing.

When I buy things online, I buy with a credit card. I don't have to do any research into whether a merchant is reputable or not. If it doesn't show up or is not as advertised, I make a phone call and get my money back. I don't have to worry about protecting my information, because if it's stolen, I make a phone call, get my money back, and get a new card issued.

For fiat, it by itself has no protection, but banks, a trusted 3rd party, and the FDIC protect it. If your bank account is hacked, you get your money back. If there's fraud of some kind involved, you get your money back. If your bank goes bankrupt, the FDIC covers up to 250K of it, which is sufficient protection for most people.

In order for bitcoin to appeal to the masses, there needs to be a trusted 3rd party who can offer a payment solution that includes dispute resolution and chargebacks, 100% protection for your account being hacked, basically removing any kind of responsibility or liability from the end user. And I'm not talking about a "trusted" 3rd party like coinbase, or bitstamp. The service would have to be offered by an organization like bank of america.

To the average person, there's no appeal of bitcoin. It puts the onus on YOU to protect your money and making sure the merchant is reliable. I've lost one of my credit cards while on vacation, didn't even worry about it till I got back. If that were bitcoin then I'd be panicking about losing a ton of money if I didn't resolve it immediately.

I think you're confusing the currency vs the payment method.  If i pay for something in cash, I can't get my money back either.
In the future, I think bitcion based credit cards will probably exist just like dollar based credit cards, for the same reason--
that they add value for consumers.



No, I'm not confusing anything. This is exactly what I'm saying. There has to be a platform on top of bitcoin, that includes things like security, chargebacks, etc in order for it to appeal to the common person.
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March 29, 2014, 11:31:37 PM
 #18

Here's the issue with bitcoin.

No chargebacks, and you need to store/protect your private keys.

That's a BAD thing.

When I buy things online, I buy with a credit card. I don't have to do any research into whether a merchant is reputable or not. If it doesn't show up or is not as advertised, I make a phone call and get my money back. I don't have to worry about protecting my information, because if it's stolen, I make a phone call, get my money back, and get a new card issued.

For fiat, it by itself has no protection, but banks, a trusted 3rd party, and the FDIC protect it. If your bank account is hacked, you get your money back. If there's fraud of some kind involved, you get your money back. If your bank goes bankrupt, the FDIC covers up to 250K of it, which is sufficient protection for most people.

In order for bitcoin to appeal to the masses, there needs to be a trusted 3rd party who can offer a payment solution that includes dispute resolution and chargebacks, 100% protection for your account being hacked, basically removing any kind of responsibility or liability from the end user. And I'm not talking about a "trusted" 3rd party like coinbase, or bitstamp. The service would have to be offered by an organization like bank of america.

To the average person, there's no appeal of bitcoin. It puts the onus on YOU to protect your money and making sure the merchant is reliable. I've lost one of my credit cards while on vacation, didn't even worry about it till I got back. If that were bitcoin then I'd be panicking about losing a ton of money if I didn't resolve it immediately.

I think you're confusing the currency vs the payment method.  If i pay for something in cash, I can't get my money back either.
In the future, I think bitcion based credit cards will probably exist just like dollar based credit cards, for the same reason--
that they add value for consumers.



No, I'm not confusing anything. This is exactly what I'm saying. There has to be a platform on top of bitcoin, that includes things like security, chargebacks, etc in order for it to appeal to the common person.

I agree it will help adoption.  To what extent its vital, is certainly debatable, and I would say its unknown.

chufchuf
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March 30, 2014, 12:41:17 AM
 #19

You want an escrow service imposed onto bitcoin, then stay in paypal, with huge fees, ''regulation'', and where you ultimately pay for the chargeback fraud merchants pass onto you.
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March 30, 2014, 01:09:43 AM
 #20

This is a non-issue, since people who want hand-holding companies to hold their hands for them will use credit cards or debit cards or similar off-blockchain transaction processing services, they will not deal directly with bitcoins. If they chose to have accounts denominated in bitcoins with such services those services will deal with the blockchain, or maybe even they will act at a degree of remove such as by dealing with ETFs or somesuch.

This whole thread is like complaining back in the days of the gold standard that no one would use dollars because no one wants to have to live in Fort Knox and scratch  their name on which bars in Fort Knox are theirs and make sure no one scratches their name off a bar and replaces it with their own name.

-MarkM-

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