Will Bitcoin Really Save Money?

[khme88]

I was wondering whether Bitcoin, when adopted en-masse, will really liberate merchants from fees that are currently hurting them. Right now it's definitely cheaper, but won't the same necessary security-costs that are placed on the current system be placed on Bitcoin somehow? All these Bitcoin start-ups will need to make money somehow. That means they have to charge either merchants or customers for their services, no matter how innovative and frictionless they make the cryptocurrency use.

Here's a quote I read (from Goldman Sachs, I believe):

"Much of the cost of the current payment system is attributable to security and legal requirements that Bitcoin providers will eventually need to confront."

I'm an advocate for Bitcoin and crypto in general, but I want to tackle this from all angles and learn as much as I can

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[exocytosis]

"Much of the cost of the current payment system is attributable to security and legal requirements that Bitcoin providers will eventually need to confront."

Yeah, I've been saying that for a while. But the cultists don't like hearing it, so don't expect your post to get any (more) positive replies.

[hilariousandco]

Don't use a service if you don't like its fees. People are always going to want their cut but it's about how much they take. If companies start getting greedy what would the point of using them? People can still send bitcoins amongst themselves freely anyway and that will never change.

[Meuh6879]

goldman sachs ... who have manipulate CDS to generate artificial money on premier supply like orange juice, cereal stock or gold change ?

[RodeoX]

I know businesses that are already saving money using BTC. So, yes.

[khme88]

goldman sachs ... who have manipulate CDS to generate artificial money on premier supply like orange juice, cereal stock or gold change ?

Yeah, them. So what? I just want to debate their particular argument, which seems to hold some sort of truth.

[Meuh6879]

the cost ?
bitcoin is free for everyone ... miner do the security job and transaction verification.

it's like compare :

to this ...

[exocytosis]

goldman sachs ... who have manipulate CDS to generate artificial money on premier supply like orange juice, cereal stock or gold change ?

And how is that relevant to the veracity of that particular quote? Does their immoral behavior make them stupid? Does it make everything they say invalid?
GS just pointed out the obvious. It's obvious to everyone but BTC cultists.

[exocytosis]

BTC will never go mainstream, since there's no will to put in place a reliable, user-friendly, trustworthy infrastructure. Such an infrastructure costs money. It would have to consist of reliable third parties that could be prosecuted if they misbehaved.

[KimNam]

for me it is yes
i bought some stuffs using BTC, cheaper than using paypal

[Baitty]

Bitcoin is the best thing eer invented for some companies the answer to your question has already been answered. YES companies are already saving money by using Bitcoin and it only takes a little looking around to find out this.

[khme88]

So far no comment has addressed the opening quote.

How can Bitcoin stay cheap once the services required to support it are layered on top of it?

All the hundreds, if not thousands, of bitcoin start-ups will need to make money somehow. They aren't altrustic ventures even though many make them up to be.

[calmindifference]

the cost ?
bitcoin is free for everyone ... miner do the security job and transaction verification.

it's like compare :

https://blockchain.info/charts/cost-per-transaction


Bitcoin transactions are far from being free right now. The question is can the network scale to the point where that cost is negligible.

[hilariousandco]

So far no comment has addressed the opening quote.

How can Bitcoin stay cheap once the services required to support it are layered on top of it?

All the hundreds, if not thousands, of bitcoin start-ups will need to make money somehow. They aren't altrustic ventures even though many make them up to be.

I'd let them worry about how they're going to make money. And nobody could give you a specific answer as there are and will be countless different businesses with different business models. Some will make money off adverts; others from commissions etc, but if they become too pricey it'll defeat the actual purpose of using them at all. Also, payment processors like Bitpay seem to be operating just fine at the moment with minimal fees.  

[chennan]

BTC will never go mainstream, since there's no will to put in place a reliable, user-friendly, trustworthy infrastructure. Such an infrastructure costs money. It would have to consist of reliable third parties that could be prosecuted if they misbehaved.

Donot agree with that! Some tech companies build useful,reliable infrastructure for btc application and run for a long time, such as blockchain, coinbase. In spite of the expense for building it, they are still making profit. They donot need to misbehave.I think more and more applications for BTC will come out.

[exocytosis]

How can Bitcoin stay cheap once the services required to support it are layered on top of it?

It can't. Bitcoin use will eventually become just as expensive as credit card use. Maybe even more expensive.

[acoindr]

How can Bitcoin stay cheap once the services required to support it are layered on top of it?

It can't. Bitcoin use will eventually become just as expensive as credit card use. Maybe even more expensive.

That's a laugh.

OP, Bitcoin will in all likelihood become quite cheap, easy and efficient to use as money, more so than it is now even.  Bitcoin is fundamentally technology and that historically happens over time. Look at the television, airplane, car, telephone, cellphone, computer etc. All of these things started out as clunky toys for only the rich. Over time common people gained easy access. It's simply how technology evolves.

Bitcoin is still a baby and is already capable of saving people money and increasing the security of their transactions against fraud (contrasted to 190 billion annual credit card fraud) because spending authorization (like card numbers) is never out in the open, and things like multisignature wallets will make super strong coin security easy.

Banks and credit cards were here before the Internet existed. If you redesigned the entire financial system from scratch you would probably get something that looks more like Bitcoin. Instead all the world's financial infrastructure rests upon that built up, clunky, inefficient, legally hypocritical, fraud and privacy vulnerable system.

Bitcoin is technology built with the benefit of hindsight, entering a space which hasn't seen innovation in over 50 years. If you're someone betting against it (looking at you exocytosis) good luck.

[ranlo]

the cost ?
bitcoin is free for everyone ... miner do the security job and transaction verification.

This is something people keep ignoring. With centralized systems, all of the costs are taken care of by a company spending tens of millions a year. With P2P (BTC, etc.) it is spread out among the users. This is a HUGE cost reduction.

Companies do still pay for legal teams, dealing with compliance with laws, etc., but the mining process cuts back on a LOT of costs otherwise seen. Especially in the fraud department.

[atc1]

the cost ?
bitcoin is free for everyone ... miner do the security job and transaction verification.

This is something people keep ignoring. With centralized systems, all of the costs are taken care of by a company spending tens of millions a year. With P2P (BTC, etc.) it is spread out among the users. This is a HUGE cost reduction.

Companies do still pay for legal teams, dealing with compliance with laws, etc., but the mining process cuts back on a LOT of costs otherwise seen. Especially in the fraud department.

But I feel there might be a problem with the miners themselves. The current trend is that a few entities own a very large amount of the network hashrate. That kind of centralization beats the very idea of decentralization that bitcoin was meant to be. And if you have more and more businesses accepting bitcoin,and there is no government access at all to these entities,they have effectively become the new custodians of your money. I think that's more scary than government control because of the utter lack of accountability.

[exocytosis]

Bitcoin is still a baby and is already capable of saving people money and increasing the security of their transactions against fraud (contrasted to 190 billion annual credit card fraud)

If you're the victim of credit card fraud, you get a refund from the card company. If you're the victim of Bitcoin fraud, you get nothing. And the perpetrator walks away scot-free.

To this you'll reply: "Only stupid people keep their BTC on exchanges or other BTC service providers in the first place! Smart people keep all of their BTC in super-cold storage!"

True. Cold storage is a good solution for the nerds, the geeks and the BTC cultists.
But the Average Joe is stupid. Cold storage isn't user-friendly enough for the Average Joe. That's why BTC never can go mainstream -- unless reliable (and regulated) third parties emerge. And such third parties can only operate at a cost, i.e. basically the same way the banks and credit card companies operate.