How to Turn Bitcoin Into the Top Payment Network and the Currency of the Future

[Jon]

Step 1: Make a Bitcoin web portal that is the easiest way to pay and get paid.

How does money work for most people online?

1. They find an item or service they like.
2. They click purchase.
3. They enter their credit card or Paypal information.
4. The item/service is on its way.

That's it. They don't have to wait for the network to finish downloading the blockchain. They don't have to enter a couple of passwords and validate the purchase an extra time. It just works.

Make Bitcoin easier than this and give people incentive to switch to Bitcoin from their current methods, then Bitcoin will be a step closer to being mainstream.

Non-existent fees and a decentralized network aren't going to sell most people on Bitcoin. The key thing is user experience.

You have to make it easy for people to get Bitcoins and send them. We're nowhere close.

Step 2: Make a Bitcoin card and make it compatible with current credit card machines.

How do most people purchase things in store?

1. They bring their item(s) to checkout, they are priced and they are given a total.
2. They scan their credit card.
3. They bring their items to the car and go about their lives.

They don't want to pull out their phone, type in how much they want to spend, point it at a QR code and wait for the network to register it. That's not innovation. It's pure stupidity. If this is the future of Bitcoin, then Bitcoin is going nowhere for ordinary people.

[CAUTION: YOU ARE ABOUT TO TAKE A LOOK INTO THE FUTURE]

There's a simpler solution: You give consumers credit cards with the Bitcoins (or private key) encoded on the magnetic strip, with a Bitcoin wallet address on the outside of the card.

You give merchants software for their credit card machines that hook directly to the Bitcoin network and directly transfer from Bitcoin private keys on customer's cards.

Consumers load up their cards at home through the public wallet address on the front of their cards. They go shopping, pick their items and scan the cards without a sweat when they want to purchase.

What if they are afraid their Bitcoin credit card has had its information stolen? They empty the card out and use another one. It's very simple.

If they are paranoid enough, they can tie the Bitcoin cards to two private keys and the card can't be emptied without a PIN number or approval from a mobile phone.

However, most consumers will be fine with just using plain cards. An extra complicated step is not the best solution for most people.

In fact, cards can be made into a cash/credit hybrid. A card won't have to carry more than $20 at any given time. Such a card won't have to have tight security.

You won't have to put more on a card than you are willing to lose.

In summary, follow these two steps and Bitcoin will be the currency of the future.

You're welcome.

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[vuce]

Maybe someone could hack one of those credit card terminals to decrypt the aes encrypted private key using pin as input. That'd be pretty awesome.

[Jon]

Maybe someone could hack one of those credit card terminals to decrypt the aes encrypted private key using pin as input. That'd be pretty awesome.

That's a great idea.

It doesn't need to be hacked. Most credit card terminals have an open plugin development process. What you have stated is very feasible and relatively easy to develop.

[BusmasterDMA]

There's a simpler solution: You give consumers credit cards with the Bitcoins (or private key) encoded on the magnetic strip, with a Bitcoin wallet address on the outside of the card.

In this situation a customer would be sharing their private key with everyone that handles the card.  An unscrupulous merchant or employee could then transfer funds from that account whenever desired.  And since transaction are non-reversable the consumer would have no recourse, no 1-800 number to call to have the funds reinstated. 

That is how you loose the average person to the concept of bitcoin, by telling them that all they need to know is that it functions identically to a concept with which they are already familiar, such as a credit card.  Then reality strikes and the consumer is forced to discover the nuances that they couldn't be troubled to learn in the first place.

[Jon]

There's a simpler solution: You give consumers credit cards with the Bitcoins (or private key) encoded on the magnetic strip, with a Bitcoin wallet address on the outside of the card.

In this situation a customer would be sharing their private key with everyone that handles the card.  An unscrupulous merchant or employee could then transfer funds from that account whenever desired.  And since transaction are non-reversable the consumer would have no recourse, no 1-800 number to call to have the funds reinstated.  

I've already listed a solution to this. So has vuce. It's a non-issue and merchants already store credit card information today.

Besides, cards could easily be limited in how much you put on them. If somebody compromises one card, you could limit how much you lose. You simply use a new card when you can. With there being several cards per person, the incentive to steal card information is extremely low; even lower than credit cards.

So, again, it's a non-issue.

Then reality strikes and the consumer is forced to discover the nuances that they couldn't be troubled to learn in the first place.

Not when the nuance is insignificant.

[stcupp]

Step 1: Make a Bitcoin web portal that is the easiest way to pay and get paid.

How does money work for most people online?

1. They find an item or service they like.
2. They click purchase.
3. They enter their credit card or Paypal information.
4. The item/service is on its way.

That's it. They don't have to wait for the network to finish downloading the blockchain. They don't have to enter a couple of passwords and validate the purchase an extra time. It just works.

Use an alternative client and you wont have to wait for the blockchain to download.
Use an alternative client with the new URI scheme and payment is as easy as clicking a link and hitting send.
That is alot easier than credit cards.....

Even with the default client and the new URI scheme its as easy as letting the blockchain download, clicking a link and hitting send.
It only takes me 2 hours to download the whole blockchain.
and it takes like 3 seconds to hit a link and hit send

What is so hard about that?

[Jon]

Step 1: Make a Bitcoin web portal that is the easiest way to pay and get paid.

How does money work for most people online?

1. They find an item or service they like.
2. They click purchase.
3. They enter their credit card or Paypal information.
4. The item/service is on its way.

That's it. They don't have to wait for the network to finish downloading the blockchain. They don't have to enter a couple of passwords and validate the purchase an extra time. It just works.

Use an alternative client and you wont have to wait for the blockchain to download.
Use an alternative client with the new URI scheme and payment is as easy as clicking a link and hitting send.
That is alot easier than credit cards.....

Even with the default client and the new URI scheme its as easy as letting the blockchain download, clicking a link and hitting send.
It only takes me 2 hours to download the whole blockchain.
and it takes like 3 seconds to hit a link and hit send

What is so hard about that?

Tell this to a person who doesn't even know what a client is. Tell me how that goes.

This is about introducing ordinary people to Bitcoin.

[kiba]

Do...or offer up a bounty for something concrete. That is all.

[Matthew N. Wright]

[CAUTION: YOU ARE ABOUT TO TAKE A LOOK INTO THE FUTURE]

Goddamnit, I clicked the thread header because I thought the overly-sure sounding tone of title would surely be coming from someone who had experience making things happen.

Son, I am disappoint. Moving along.

You're welcome.

*grimace*

[Timo Y]

How does money work for most people online?

1. They find an item or service they like.
2. They click purchase.
3. They enter their credit card or Paypal information.
4. The item/service is on its way.

In practice, for non-tech savvy users, it often works a little bit more like this:

1. Find product you like
2. Click purchase
3. Get up and fumble for your wallet somewhere in one of your jackets.
4. Return to your desk 5 minutes later.
5. Spend 3 minutes typing lots of redundant information such as address and date of birth.
6. Click ‘next’ => ‘Session expired!’
7. Repeat the whole process of selecting product and type lots of redundant information a second time.
8. Click ‘next’ => ‘Please enable popups!’
9. Spend 5 minutes looking for ‘disable popups’ button in browser settings.
10. Click ‘next’ => ‘Session expired!’
11. Repeat the whole process a third time.
12. Mistype credit card number because of growing impatience, causing error message and emptying of fields.
13.  Type lots of redundant information a fourth time.
14.  3D-Secure windows pops up, prompting for password.
15. Can’t remember password. Click ‘forgot password’
16. Wait 5 minutes for confirmation email to arrive
18. Choose new password.
19. ‘Session expired!’
20. Type in lots of redundant information  a 5th time.
21. Wait 2 minutes for ‘processing payment’ window to clear
22. ‘Your card has been declined!’
22. Try another credit card. Type in lots of redundant information a 6th time.
23. Product is on its way!
24. Have sleepless nights over auto-renewals sneaking their way into your cc bill.



Using the Android Bitcoin client:

1. Get out phone.
2. Tap app symbol.
3. Scan QR code on website
4. Enter amount
5. Tap send.
6. Product is on its way!

That's it.

Don't worry. We are getting there.

[Matthew N. Wright]

How does money work for most people online?

1. They find an item or service they like.
2. They click purchase.
3. They enter their credit card or Paypal information.
4. The item/service is on its way.

In practice, for non-tech savvy users, it often works a little bit more like this:

1. Find product you like
2. Click purchase
3. Get up and fumble for your wallet somewhere in one of your jackets.
4. Return to your desk 5 minutes later.
5. Spend 3 minutes typing lots of redundant information such as address and date of birth.
6. Click ‘next’ => ‘Session expired!’
7. Repeat the whole process of selecting product and type lots of redundant information a second time.
8. Click ‘next’ => ‘Please enable popups!’
9. Spend 5 minutes looking for ‘disable popups’ button in browser settings.
10. Click ‘next’ => ‘Session expired!’
11. Repeat the whole process a third time.
12. Mistype credit card number because of growing impatience, causing error message and emptying of fields.
13.  Type lots of redundant information a fourth time.
14.  3D-Secure windows pops up, prompting for password.
15. Can’t remember password. Click ‘forgot password’
16. Wait 5 minutes for confirmation email to arrive
18. Choose new password.
19. ‘Session expired!’
20. Type in lots of redundant information  a 5th time.
21. Wait 2 minutes for ‘processing payment’ window to clear
22. ‘Your card has been declined!’
22. Try another credit card. Type in lots of redundant information a 6th time.
23. Product is on its way!
24. Have sleepless nights over auto-renewals sneaking their way into your cc bill.



Using the Android Bitcoin client:

1. Get out phone.
2. Tap app symbol.
3. Scan QR code on website
4. Enter amount
5. Tap send.
6. Product never arrives and there is no way to get your money back!

That's it.

Don't worry. We are getting there.

FTFY.

[istar]

You should need to enter the amount. The amount should be in the QR code and I think its a suggested bip for the URI.
Or maybe its allready here in some clients.

[BusmasterDMA]

I've already listed a solution to this. So has vuce. It's a non-issue and merchants already store credit card information today.

Encrypting the private key with a PIN wouldn't solve it since the merchant would still see the decrypted key. That would prevent middlemen from picking up the card and emptying the balance though.  

Merchants storing credit card numbers is very different than storing private keys.  Firstly merchants are reluctant to attempt anything fishy with credit card numbers because they have to answer to the payment processor, who could cancel their merchant account.  

To allow merchants to "pull" funds properly would seem to need a similar banking infrastructure to what is in place now. Banks or credit card companies would simply denominate and store funds in BTC instead of USD.  Fees would of course still be involved to facilitate to banks as intermediaries.

The alternative, if users are to control their own funds, is to have the user "push" the transaction, likely with the use of a smartphone as you describe.  You are right, this can be a clumsy process, scanning QR codes.  There is room for improvement and perhaps NFC adoption will help smooth the process.  

Besides, cards could easily be limited in how much you put on them. If somebody compromises one card, you could limit how much you lose. You simply use a new card when you can. With there being several cards per person, the incentive to steal card information is extremely low; even lower than credit cards.

Right, the loss would be reduced.  It's just something that consumers would need to fully understand.

[stcupp]

Step 1: Make a Bitcoin web portal that is the easiest way to pay and get paid.

How does money work for most people online?

1. They find an item or service they like.
2. They click purchase.
3. They enter their credit card or Paypal information.
4. The item/service is on its way.

That's it. They don't have to wait for the network to finish downloading the blockchain. They don't have to enter a couple of passwords and validate the purchase an extra time. It just works.

Use an alternative client and you wont have to wait for the blockchain to download.
Use an alternative client with the new URI scheme and payment is as easy as clicking a link and hitting send.
That is alot easier than credit cards.....

Even with the default client and the new URI scheme its as easy as letting the blockchain download, clicking a link and hitting send.
It only takes me 2 hours to download the whole blockchain.
and it takes like 3 seconds to hit a link and hit send

What is so hard about that?

Tell this to a person who doesn't even know what a client is. Tell me how that goes.

This is about introducing ordinary people to Bitcoin.

1. download and install the client
2. run the client
3. wait for the bar at the bottom to fully load could be a couple hours but it will only take awhile to load your first time
4. load your wallet with some bitcoins
5.click a payment link
6.click send

easy enough right?

And for people that really have no clue what theyre doing:
1. go to mtgox.com
2. make a account and load it with some money
3. buy bitcoins
4. send your payment to the payment address provided by seller

[Jon]

Right, the loss would be reduced.  It's just something that consumers would need to fully understand.

The loss would be significantly reduced. Don't keep more than $20 on a card and you have little to worry about.

Crooks would be out of business since cards would be spent before they could even use stolen private keys.

To allow merchants to "pull" funds properly would seem to need a similar banking infrastructure to what is in place now.

It won't. It will only require a modified bitcoin client and a connection to the network. The private keys would load like they normally do.

Fees would of course still be involved to facilitate to banks as intermediaries.

There would only be miner fees which are highly competitive. They are dirt cheap at the moment.

[Jon]

Step 1: Make a Bitcoin web portal that is the easiest way to pay and get paid.

How does money work for most people online?

1. They find an item or service they like.
2. They click purchase.
3. They enter their credit card or Paypal information.
4. The item/service is on its way.

That's it. They don't have to wait for the network to finish downloading the blockchain. They don't have to enter a couple of passwords and validate the purchase an extra time. It just works.

Use an alternative client and you wont have to wait for the blockchain to download.
Use an alternative client with the new URI scheme and payment is as easy as clicking a link and hitting send.
That is alot easier than credit cards.....

Even with the default client and the new URI scheme its as easy as letting the blockchain download, clicking a link and hitting send.
It only takes me 2 hours to download the whole blockchain.
and it takes like 3 seconds to hit a link and hit send

What is so hard about that?

Tell this to a person who doesn't even know what a client is. Tell me how that goes.

This is about introducing ordinary people to Bitcoin.

1. download and install the client
2. run the client
3. wait for the bar at the bottom to fully load could be a couple hours but it will only take awhile to load your first time
4. load your wallet with some bitcoins
5.click a payment link
6.click send

easy enough right?

And for people that really have no clue what theyre doing:
1. go to mtgox.com
2. make a account and load it with some money
3. buy bitcoins
4. send your payment to the payment address provided by seller

It's easy in theory but ordinary people are still turned off by the current interface. Again, it works like this in theory but the user still can't easily understand the process.

Also, Mt. Gox. holds your funds for you. There's no need for that. There's no need to require ID in order to use Bitcoins.

[stcupp]

It's easy in theory but ordinary people are still turned off by the current interface. Again, it works like this in theory but the user still can't easily understand the process.

Also, Mt. Gox. holds your funds for you. There's no need for that. There's no need to require ID in order to use Bitcoins.

ordinary people will never understand what is actually going on with private keys and public keys and all that.
just like ordinary people don't understand what goes on with credit cards...

I don't use mtgox but I thought they only require ID on values over 1000 USD or 10000 USD a month???
and this isn't just a mtgox rule its a rule with any exchange that operates legally with AML compliance

[Rassah]

The only way to fully secure something like this is to use two keys to sign transactions, and have every card swipe verified and confirmed by phone. But if you are carrying a phone with a Bitcoin app anyway, might as well just use that by itself.
Making Bitcoin work with just a plastic card may be impossible.

[Jon]

ordinary people will never understand what is actually going on with private keys and public keys and all that.
just like ordinary people don't understand what goes on with credit cards...

I am glad we agree. I just want to see things as seamless as possible. I just want people to feel like they are handing cash to each other with no hurdles in between. I want the software to completely serve the people.

I don't use mtgox but I thought they only require ID on values over 1000 USD or 10000 USD a month???
and this isn't just a mtgox rule its a rule with any exchange that operates legally with AML compliance

A wallet can be made that deals directly and nearly exclusively with the Bitcoin network on the web. Blockchain.info comes close.

Yeah, the ID discussion is moot at this point in time.

[Jon]

The only way to fully secure something like this is to use two keys to sign transactions, and have every card swipe verified and confirmed by phone. But if you are carrying a phone with a Bitcoin app anyway, might as well just use that by itself.
Making Bitcoin work with just a plastic card may be impossible.

The cards can be made disposable. A cash/credit hybrid, if you will. The whole security paradigm disappears once a single card doesn't have to be made fully secure.

What I mean is that people won't have to put more than say $20 on a card.

You won't have to carry more than you can afford to lose.