BTC costs the consumer money

[cafucafucafu]

So its an initial cost of buying Bitcoins that makes it more expensive? Am I understanding this right?

Indeed. If you are mr average and you want to buy a hamburger, you will use a card or cash. If you decide to buy the burger in BTC you need to buy BTC and pay fees for it. Those fees are high for mr average. We keep talking about unbanked people - ever tried a BTC ATM and seen the fees?

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[turvarya]

So its an initial cost of buying Bitcoins that makes it more expensive? Am I understanding this right?

Indeed. If you are mr average and you want to buy a hamburger, you will use a card or cash. If you decide to buy the burger in BTC you need to buy BTC and pay fees for it. Those fees are high for mr average. We keep talking about unbanked people - ever tried a BTC ATM and seen the fees?

So, this unbanked people just use their credit card? I thought we were talking about credit card versus Bitcoin.

[inBitweTrust]

So its an initial cost of buying Bitcoins that makes it more expensive? Am I understanding this right?

Indeed. If you are mr average and you want to buy a hamburger, you will use a card or cash. If you decide to buy the burger in BTC you need to buy BTC and pay fees for it. Those fees are high for mr average. We keep talking about unbanked people - ever tried a BTC ATM and seen the fees?

or.... mr average joe can accept BTC for goods or services for free and than spend the bitcoin for free. With a 3-20% discount with businesses.
or ... mr average joe can get a changetip, deposit it for free into a free wallet, and spend it for free.With  a 3-20% discount with businesses.
or ... mr average joe can get setup a coinbase /circle account in a few minutes, ACH BTC for 1%, and spend it for free.With a 3-20% discount with businesses.


Yes, you could choose to use bitcoin wrong and overpay, but no one needs to.

I further leverage bitcoins volatility against fiat to get bigger discounts. I.E.. Buy Bitcoin at 200, if it is at 180 when I need to spend I use fiat, If it goes to 220 than use bitcoin. This way I always get between a 15-30% discount off of anything I buy on amazon.(Purse.io + leveraging volatility).

Consumers don't have to make an either or choice and can benefit greatly from bitcoin and keep their fiat debit cards/cash.

[jonald_fyookball]

The OP has as a point.  Some credit cards
pay up to 2% unlimited cash back.  How
do the credit companies do this?  Simple,
they're paying you a large portion of the fee
that they are in turn charging merchants.


Merchants will have to be the ones to step
in here and offer Bitcoin discounts.  

3 points of consolation however:

1. Many times these cashback or rewards
cards do come with annual fees.

2. The merchant is incentivized to Bitcoin
not only with zero merchant fees, but
the absense of nearly all other fees and costs,
including the dreaded chargebacks.

3. In an all price out war with merchants
using Bitcoin to complete against credit
cards, the merchants win.

[doof]

If you buy BTC with a credit card, the cost passes from the merchant to the consumer. Do you deny this?

Why would I buy BTC with a credit card?
You didn't answer my question on how this numbers are calculated. Unless you do that, any discussion is pointless.

Most people are not you. Do you really expect most people to go through some lengthy process to get BTC? They will go to Circle.com and the like to buy from. Thus using cards the cost is passed to the consumer.

Please be open minded and think about how the average dud will buy BTC.

Please provide your survey results, where you sampled a reasonable unbaised population.  I buy via Bank transfer to Igot.com or via Bpay to coinjar.com

[bgibso01]

The OP has as a point.  Some credit cards
pay up to 2% unlimited cash back.  How
do the credit companies do this?  Simple,
they're paying you a large portion of the fee
that they are in turn charging merchants.


Merchants will have to be the ones to step
in here and offer Bitcoin discounts.  

3 points of consolation however:

1. Many times these cashback or rewards
cards do come with annual fees.

2. The merchant is incentivized to Bitcoin
not only with zero merchant fees, but
the absense of nearly all other fees and costs,
including the dreaded chargebacks.

3. In an all price out war with merchants
using Bitcoin to complete against credit
cards, the merchants win.

This is exactly it.  From the OP's point of view, I understand that if I have not mined btc, I would have to purchase btc.  That in itself comes with a transaction fee on most exchanges.  I must pay that and miss out on my 2% cash back.  Therefore as a consumer, I'm out more than just using either cash or credit. BTW, most cards with cash back don't require annual fees if you have good credit

Merchants are the ones that need to see the benefit and reduce the price for btc transactions.  Although personal experience has shown only American Express with their 2.35% fee charge us more than around 1.7%.  So as a merchant, if I set up a coinbase account or bitpay, the best I would be saving using btc would be around .7%.  That's not going to get very many folks on board for a new technology that seems to have on going issues with security. Not that the credit card companies don't have security issues, but there are safeguards for the merchants and cardholders.

So let's fix btc's problem with it not being the clear cut choice for transactions.

[jonald_fyookball]

if Bitcoin really gains traction , some merchants may refuse credit cards altogether. 

[GrandmaJean]

The OP has as a point.  Some credit cards
pay up to 2% unlimited cash back.  How
do the credit companies do this?  Simple,
they're paying you a large portion of the fee
that they are in turn charging merchants.

Well the thing is that credit card companies are ultimately in business to make money. They are obviously not going to give back more money they receive from either fees charged to the customer or from fees charged to the merchant. IMO all the rewards points, cash back offers, ect. are really misleading and cause there to be less transparency as to how much things really cost.

It should also be noted that merchants are going to have to build in the cost of paying their credit card fees to their prices.

If a merchant were to receive bitcoin for a sale then they would effectively have lower costs and will want to give incentives to their customers to pay in bitcoin (usually via lower prices)

[promojo]

I thought that was the best presentation of the TNABC show (that I saw).  Gave some sanity checks there.

[Q7]

Yeah, you can say it's correct but credit card levy an unnecessary cost to the business owner who passes the extra cost back to the customer. Thus in effect customer is paying more for the purchase. Whereas for bitcoin, there is no additional cost, which means business owner can charge less for the purchase of the same item.

So what do ya think? Which one is better?

[turvarya]

To clear that up, yet again:
You guys have a really US-centric view on things. Here in Austria, you often have to pay as a customer, if you want to use a credit card.
We just don't use them as often as you guys. (in fact, I haven't used one in years).
As far as I know, the merchants just put some extra on your prices, so they can pay the fees. Sure, that means, that stupid people, who don't want to see it, don't know, that they are paying more for using a credit card(sure the people who don't use a credit card also pay for it, but that is just more absurd, if you look at it from outside the USA).

[phillipsjk]

I think I have to agree with the OP. The last two times I bought Bitcoin, I paid a ~12% premium over the spot price. Verification with the exchange (which would involve a smaller premium) took months. That said, Bitcoin pays you a nice bonus when the price is rising (more than 1.5% sometimes).

Also, if Bitcoin gains mass-adoption, it will not be cheap to send Bitcoin anymore. At $400,000 per coin, that 0.1mBTC transaction fee will cost $40 (about the same as a wire transfer: only faster and more reliable).

[Q7]

Another option is they can charge the same price applies to all customers for the product but for those paying exclusively with bitcoin, will get back some refund. That refund is equivalent to the fee charged by credit cards to the business owner. If you guys get what I mean.

[Lauda]

Exactly how?
If you buy from someone directly, there are often 0% fees. So it's just the pennies worth from the transaction fee.

I think I have to agree with the OP. The last two times I bought Bitcoin, I paid a ~12% premium over the spot price. Verification with the exchange (which would involve a smaller premium) took months. That said, Bitcoin pays you a nice bonus when the price is rising (more than 1.5% sometimes).

Also, if Bitcoin gains mass-adoption, it will not be cheap to send Bitcoin anymore. At $400,000 per coin, that 0.1mBTC transaction fee will cost $40 (about the same as a wire transfer: only faster and more reliable).

What exchange is this? Took me a few days to verify myself. 1 week to withdraw money and charged me $15.

[phillipsjk]

Exactly how?
If you buy from someone directly, there are often 0% fees. So it's just the pennies worth from the transaction fee.

Bitcoin ATM and local Gold dealer. (First time I bought Bitcoin, I bought from somebody directly.... took a week)

I think I have to agree with the OP. The last two times I bought Bitcoin, I paid a ~12% premium over the spot price. Verification with the exchange (which would involve a smaller premium) took months. That said, Bitcoin pays you a nice bonus when the price is rising (more than 1.5% sometimes).

What exchange is this? Took me a few days to verify myself. 1 week to withdraw money and charged me $15.

CAVirtex. They insist on a bank statement (or utility bill I assume) as "proof of address" for some reason (specifically mentioning they do not accept credit card statements). I do not pay utilities, and had most my mail directed to another address. They used to say a (poorly defined) "bank letter" was preferred. They did not accept a letter from my bank saying my account was closed, or Pre-authorized debit forms as "proof-of-address". This was after getting around to actually changing my Driver's License to actually match my current residence.

My concern with both utility bills and bank statements is that they "leak" information other than my current residence. Information such as my day-to day expenses, or my room-mate's name.

PS: LaudaM, you are on my ignore list due to obnoxious signature spam. I temporarily unignored you because you often have something constructive to say.

[botany]

Fiat is VERY bad and expensive for consumers.

The inflation bit barely pinches consumers in most countries.
Credit cards are bad and fees are significant.
They do offer a service - the ability to pay at a later date.
I guess when Bitcoin credit cards are offered, they would have such fees built into them as well.

[Lauda]

Exactly how?
If you buy from someone directly, there are often 0% fees. So it's just the pennies worth from the transaction fee.

Bitcoin ATM and local Gold dealer. (First time I bought Bitcoin, I bought from somebody directly.... took a week)

I think I have to agree with the OP. The last two times I bought Bitcoin, I paid a ~12% premium over the spot price. Verification with the exchange (which would involve a smaller premium) took months. That said, Bitcoin pays you a nice bonus when the price is rising (more than 1.5% sometimes).

What exchange is this? Took me a few days to verify myself. 1 week to withdraw money and charged me $15.

CAVirtex. They insist on a bank statement (or utility bill I assume) as "proof of address" for some reason (specifically mentioning they do not accept credit card statements). I do not pay utilities, and had most my mail directed to another address. They used to say a (poorly defined) "bank letter" was preferred. They did not accept a letter from my bank saying my account was closed, or Pre-authorized debit forms as "proof-of-address". This was after getting around to actually changing my Driver's License to actually match my current residence.

My concern with both utility bills and bank statements is that they "leak" information other than my current residence. Information such as my day-to day expenses, or my room-mate's name.

PS: LaudaM, you are on my ignore list due to obnoxious signature spam. I temporarily unignored you because you often have something constructive to say.

Oh yes, thank you for refreshing my memory. I've completely forgot about that, didn't even take it into consideration.
I haven't used that exchange. I've used mostly Bistamp and the verification process was quick and smooth for me. They asked for some documents, but you could pick what you wanted to send so I've avoided the bank statement.

Note: Sorry, I try to not spam and have been gradually improving my posting habit over the last few months. But, thank you.

[DannyHamilton]

Note: Sorry, I try to not spam and have been gradually improving my posting habit over the last few months. But, thank you.

I've noticed improvements in the quality of your posts lately when others include your posts in their quotes.  As such, I've recently removed you from my ignore list.  Thank you for making the effort to be a valuable contributor to the forum instead of a spamming troll.  It is appreciated and doesn't go unnoticed.

[cyberpinoy]

It costs the consumer to buy BTC and the merchant usually offers no discounts.

Wow I have to say this is a all time low for the intelligence of someone in bitcoin You sir have made my Number 1 position in the stupidest posts on BTT.

First credit cards in absolutely NO WAY pay the consumer EVER. It costs the cr5edit card holder interest every single month, and there are 2 kinds of interest on the card. ( I bet a lot of people dont know that)

Secondly it costs the business who uses the credit card 1.5% to 2% of each transaction to even accept the use of that creditcard in thier establishment. They call this yet another transaction fee.


Now it costs nothing more to use bitcoins but tell me sir, what happens when you buy 1 BTC for a transaction, then find out you dont want to make the purchase yet and next week you go to make the purchase BUT WAIT you paid 200 bucks for the bitcoin last week and now its worth 280 bucks. How much did you lose now? Oh you didnt you actually made a huge profit by using bitcoins for the purchase didnt you?

[Lauda]

Note: Sorry, I try to not spam and have been gradually improving my posting habit over the last few months. But, thank you.

I've noticed improvements in the quality of your posts lately when others include your posts in their quotes.  As such, I've recently removed you from my ignore list.  Thank you for making the effort to be a valuable contributor to the forum instead of a spamming troll.  It is appreciated and doesn't go unnoticed.

Wow, thank you. I did not even realize that you even had me on ignore. I'm guessing then more people do..
Sometimes some things get the hang of me, thus the variation in posting habit. I've been trying to improve for the sake of everyone.
Anyhow I'd rather not continue with the off-topic posting in this thread although I've already stated my opinion on this.

Also sites often tend to give discounts when you pay with Bitcoin, thus even more gain for the consumer.