What advantage does a consumer have for using bitcoin vs fiat?

[LordMo]

I understand the argument that companies could save 2-3% on transaction costs by accepting bitcoins vs credit cards and probably a few more percentage points since there are no charge backs with bitcoins. But, what incentives does the average consumer have?

I opened up a coinbase account, it cost 1% to go from USD to Bitcoin and 4 days. Go to back to USD will probably take another 1% (I haven't verified). Why would the average consumer pay 2%?

Is international traveling an advantage? For example, let's say I go to Italy and use an ATM with my US debt card and take Euros out. I have no idea what the fee would be, but maybe that's an advantage?

When sending money to someone instead of using western union, is the 2% bitcoin cost the cheaper than western union?

[tysat]

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

[skooter]

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

Not really a benefit. As a consumer you're not responsible for fraudulent charges on your credit card.

[hilariousandco]

You get to fuck tha banks and tha governments. Fuck da police.

Is international traveling an advantage? For example, let's say I go to Italy and use an ATM with my US debt card and take Euros out. I have no idea what the fee would be, but maybe that's an advantage?

That would be a great benefit. I'm actually hoping this will become a reality in the future. I'd love to go travelling and spend my bitcoins on the way. Using your card abroad the fees are atrocious and exchanging your cash is always costly.

[Brangdon]

But, what incentives does the average consumer have?

Most of the practical benefits are for people who don't have credit cards. Which usually means people in countries other than America. We can also hope that the retailers will pass some of their benefits on, in the form of cheaper prices.

I think a lot of westerners support Bitcoin for ideological reasons. Some see it as an investment and/or a hedge against inflation. Those two combine: they don't want to have to trust the government to inflate its way out of debt. Some think it gives them privacy.

[DannyHamilton]

Is international traveling an advantage? For example, let's say I go to Italy and use an ATM with my US debt card and take Euros out. I have no idea what the fee would be, but maybe that's an advantage?

Some credit cards charge an annual fee, so there is the benefit of avoiding that fee.

When I recently traveled to Europe, I was charged an "international transaction fee" of 3% on every transaction as well, and I had to rely on the credit card bank to determine an exchange rate between USD and EUR.  I have no idea how fair that exchange rate was.

When sending money to someone instead of using western union, is the 2% bitcoin cost the cheaper than western union?

The price estimator at the Western Union website indicates I can send $50 for a $5 fee.  That's 10%!

Furthermore, Western Union has informed me that they are no longer interested in my business and has given me no reason for this decision.

With bitcoin, you can make electronic payments and nobody can freeze or seize your bitcoins for any reason.

If I have cash on hand, I can't encrypt it to protect someone else from stealing it, and I can't back it up in case my house burns down.

If you are paid in bitcoins, then you completely avoid that Coinbase fee that you mentioned, and if the merchant accepts bitcoins as bitcoins (rather than converting them to local currency) and uses them to pay suppliers and employees, then they avoid the exchange fee as well.  That fee isn't a bitcoin fee, its a local currency fee.  You would pay that if you tried to convert between any other currency and your local currency as well.

[jbrnt]

The major advantage bitcoin has over fiat is transfering money over seas. If you want to order something in a foreign country and they don't accept credit card (because of a monthly fee they have to pay), bitcoin can be very useful here.

I personally would not like to give my credit card details over the internet unless it is a trustworthy shop.

[amspir]

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

Not really a benefit. As a consumer you're not responsible for fraudulent charges on your credit card.

Not directly, but who do you think eventually pays for those fraudulent charges?   Does it come out of the personal accounts of credit card company/bank stockholders?   From the personal accounts of credit card company/bank CEOs?

[Meuh6879]

2,5% on 375 000 000 000 Euros are : 937,5 Millions of Euros
http://www.leparisien.fr/economie/votre-argent/mastercard-et-visa-vont-baisser-les-prix-de-leurs-commissions-23-09-2013-3162489.php


1% on this same value of 2010 credit card number transaction : 375 Millions of Euros.



Well, it's a big difference for the speculation.

[Nagle]

None, really. The costs of dealing in Bitcoin are high. Buying and selling Bitcoin is expensive. Exchanges charge fees to trade and fees to withdraw. Bitcoin ATM fees are insanely high. (There's one in Silicon Valley that has a 15% buy/sell spread plus a 5% fee.) All this is far higher than credit card transaction fees. Plus you have all the risks of Bitcoin; volatility, theft, exchanges going broke, merchants not delivering, and slow confirmations.

[twiifm]

The potential of crypto is for replacing wire transfers which currently requires ACH (automatic clearing house).  Because it's treated like cash you don't need a middle man to clear the transaction.

But BTC is not even the best choice for this function.  I think Ripple has the most potential for this type of transaction.  The reason is XRP is supposed to work as a token so the system can function.  It similar to going to a casino and buying poker chips.  You don't store those chips you just buy them when you need to use them. 

It's kind of annoying how people always say BTC vs fiat.  BTC is also a fiat currency.

[amspir]

None, really. The costs of dealing in Bitcoin are high. Buying and selling Bitcoin is expensive. Exchanges charge fees to trade and fees to withdraw. Bitcoin ATM fees are insanely high. (There's one in Silicon Valley that has a 15% buy/sell spread plus a 5% fee.) All this is far higher than credit card transaction fees. Plus you have all the risks of Bitcoin; volatility, theft, exchanges going broke, merchants not delivering, and slow confirmations.

While what you say is true at the present,  this is a result of bitcoin's currently small size compared to other payment systems and global currencies.   The free market will eventually lower those spreads and fees, as bitcoin moves towards a more widespread adoption.   As the market gets bigger, there will be more inertia in the markets for bitcoin price, and a single alleged letter from the Chinese government won't have an effect on the price of bitcoin as it does now.

The slow confirmations that you speak of are much faster than bank check clearing system or even visa/mastercard charge clearing systems.  The merchant is left holding the bag for a much shorter period of time than these other payment systems.

[franky1]

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

Not really a benefit. As a consumer you're not responsible for fraudulent charges on your credit card.

tell that to a guy trying to impress a girl at a romantic restaurant, trying to pay for the lobster and champagne and then being told by a smirking waiter that the card has been declined.... purely because a thief has maxed out his card.

other examples:
thief uses your credit card details to get a hire car, then kidnaps or runs someone down. you get a knock at the door by the cops and interrogated for hours trying to get the cops to believe that you were not the driver, where all information shows you were.

no for some less exadurated scenario's of why bitcoin is better:
1) your sex life is getting boring with your wife, but you wont cheat on her, instead you think that porn will solve the issue, you are worried that she will see the card statement, so you use bitcoin instead
2) you hate having to type in 16 digit credit card number, expiry date, and the 3 digit code on the signature strip. instead you want to just hold your camera phone up to your screen. press only 2 buttons, and get on with your day.
3) you have been the victim of card cloning/ ID theft / pickpockets. and you are tired of having to cancel your cards, and wait days for replacements.
4) your shop buys and sells gold but you start to think that with all the security window shutters at your shopfront, the time to lock up the valuable pieces on display, paying for security vans to take your days 'take' of fiat to the bank, along with the security camera's, alarms, safe's needed and all the building rental and retail costs. you start looking at a cheaper way to buy and sell rare items of value. hmm bitcoins are rare, and it can be traded in your underwear at home.
5)standing at starbucks you wait in queue to have your order taken. you tell them what you want then get your debit card out push it into their machine, type in your pin code and take a seat to wait for your drink. with bitcoin you can take your seat, use an app to make an order and pay for it,... without queuing!

number 5 is an example of the future. along with many others that are:
A) reading a tourist magazine, you see a QRcode that links to their website. you reserve your plane ticket on the website using the phone and press the pay with bitcoin, the price and destination public key ato-fills your phones bitcoin app, and you press send. (no need to type the 16 digits of credit card number, expiry, etc)
B) in the future imagine microsoft office PRODUCT KEY is actually a public key. to buy microsoft office (legitimately) to use after the time trial, you pay bitcoins into their PRODUCT/public key. the software checks blockchain.info and validates you have used a genuine paid for key
C) facebook/zynga get rid of their facebook credits, gets rid of the card processing facility and only show "50 more lives for 0.001btc" and a QR code.

remember bitcoin is in its infansy, many more future examples will come to mind. so think of it as a toddler, still learning to walk. and not an old guy dragging its feet

[fusecavator]

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

Not really a benefit. As a consumer you're not responsible for fraudulent charges on your credit card.

Long term, maybe. But short term it's going to be a bitch sorting out the mess when you realize your credit card cards have been maxed, or you checking account wiped out, and you need to pay your bills.

[skooter]

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

Not really a benefit. As a consumer you're not responsible for fraudulent charges on your credit card.

tell that to a guy trying to impress a girl at a romantic restaurant, trying to pay for the lobster and champagne and then being told by a smirking waiter that the card has been declined.... purely because a thief has maxed out his card.

other examples:
thief uses your credit card details to get a hire car, then kidnaps or runs someone down. you get a knock at the door by the cops and interrogated for hours trying to get the cops to believe that you were not the driver, where all information shows you were.

no for some less exadurated scenario's of why bitcoin is better:
1) your sex life is getting boring with your wife, but you wont cheat on her, instead you think that porn will solve the issue, you are worried that she will see the card statement, so you use bitcoin instead
2) you hate having to type in 16 digit credit card number, expiry date, and the 3 digit code on the signature strip. instead you want to just hold your camera phone up to your screen. press only 2 buttons, and get on with your day.
3) you have been the victim of card cloning/ ID theft / pickpockets. and you are tired of having to cancel your cards, and wait days for replacements.
4) your shop buys and sells gold but you start to think that with all the security window shutters at your shopfront, the time to lock up the valuable pieces on display, paying for security vans to take your days 'take' of fiat to the bank, along with the security camera's, alarms, safe's needed and all the building rental and retail costs. you start looking at a cheaper way to buy and sell rare items of value. hmm bitcoins are rare, and it can be traded in your underwear at home.
5)standing at starbucks you wait in queue to have your order taken. you tell them what you want then get your debit card out push it into their machine, type in your pin code and take a seat to wait for your drink. with bitcoin you can take your seat, use an app to make an order and pay for it,... without queuing!

number 5 is an example of the future. along with many others that are:
A) reading a tourist magazine, you see a QRcode that links to their website. you reserve your plane ticket on the website using the phone and press the pay with bitcoin, the price and destination public key ato-fills your phones bitcoin app, and you press send. (no need to type the 16 digits of credit card number, expiry, etc)
B) in the future imagine microsoft office PRODUCT KEY is actually a public key. to buy microsoft office (legitimately) to use after the time trial, you pay bitcoins into their PRODUCT/public key. the software checks blockchain.info and validates you have used a genuine paid for key
C) facebook/zynga get rid of their facebook credits, gets rid of the card processing facility and only show "50 more lives for 0.001btc" and a QR code.

remember bitcoin is in its infansy, many more future examples will come to mind. so think of it as a toddler, still learning to walk. and not an old guy dragging its feet

I have multiple credit cards, the odds all 3 of them are going to have an issue is slim to none.

LOL @ #1. Yeah, that's a benefit, you can discreetly pay for porno. But if you're trying to buy porn behind your wife's back you probably have bigger things to worry about then the payment method.

I use my credit card so frequently I know the 15 digits (amex), expiry, and 4 digit security code off the top of my head. Takes about 5 seconds to punch it in. And I can use it anytime anywhere without needing to see if the merchant is credible or not. For one, most scam sellers don't take credit cards (since they can be charged back), and if the merchant turns out to be a scam I get my money back with a phone call.

And all the things you mentioned, you can easily have a payment app that stores your credit card details, or other payment method details and lets you buy stuff with 1 click (in fact, amazon has exactly this for credit card purchases), and you get the benefit of knowing with 100% certainty your product will show up, or you get your money back.

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

Not really a benefit. As a consumer you're not responsible for fraudulent charges on your credit card.

Long term, maybe. But short term it's going to be a bitch sorting out the mess when you realize your credit card cards have been maxed, or you checking account wiped out, and you need to pay your bills.

Not really. I've lost my credit card, whoever found it put a bunch of bogus charges on it. Took 1 phone call to fix the problem, and amex sent me a new card that I received the next day.

If I lose my bitcoins then I'm just fucked.

[andyBernard]

bitcoin is digital fiat tbh

[pristontale]

I can't think of much really. I suppose you can use it when you want to buy illegal goods online?

Travelling internationally doesn't really matter much to me. When I go to other countries, I can pay easily with my debit card. When I shop online, I use paypal.

I think Bitcoin's selling point is the fact that it's decentralized and "anonymous." Though when it comes down to it, how many people actually care about those features? At this point, I think more people are in it for the speculation and making quick profits rather than belief in the protocol.

[smooth]

Remember the Target credit card data hack?

Consumers aren't giving their payment info (credit card numbers) when paying with bitcoin, so it's impossible for any new charges to pop up after payment has been made.

Not really a benefit. As a consumer you're not responsible for fraudulent charges on your credit card.

That's the theory, the reality is that it is a major pain, a huge waste of your time, and sometimes expensive to deal with any kind of identity theft.

The other benefit is some degree of discounting that is likely at some point (maybe not right away).

Also, this assumes you even have credit card, or a bank account, and a lot of people don't.

The benefits are probably bigger and faster in less developed countries that both lack a well-functioning financial system and also have a greater dependence on remittence. There may be a leapfrog effect similar to how places without landlines adopted cell phones much faster than cell phones are replacing land lines elsewhere, a slow process that is still ongoing and will likely continue for another decade or two at least.

[twiifm]

I can't think of much really. I suppose you can use it when you want to buy illegal goods online?

Travelling internationally doesn't really matter much to me. When I go to other countries, I can pay easily with my debit card. When I shop online, I use paypal.

I think Bitcoin's selling point is the fact that it's decentralized and "anonymous." Though when it comes down to it, how many people actually care about those features? At this point, I think more people are in it for the speculation and making quick profits rather than belief in the protocol.

I agree.  I think 99% of people who hold BTCs are speculators.  They just try to convince themselves that its not gonna be worthless someday by repeating the propaganda ad nauseum

I crypto has a place in the future of financial transactions b/c theres a way to send cash digitally.  The banks like this cause they don't need to clear the transactions.  However banking is not going away just because of this.  And probably no bank wants to integrate BTC into their infrastructure.  Most likely it'll be Ripple or something that's more business friendly w/o all the politics and bad press

[smooth]

I think 99% of people who hold BTCs are speculators.

Actually 100% of people who hold BTC are speculators. Maybe not by intent, but by holding it you are speculating on it. This is also true for dollars. Dollars have good marketing, so it can attract a lot of speculators.