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Author Topic: Comparing Square with Bitcoin  (Read 1846 times)
DublinBrian
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July 25, 2012, 07:03:28 PM
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Square Inc., is in the process of closing a $200 million investment by Rizvi Traverse Management LLC, valuing the company at $3.2 billion, according to a report Wednesday by PrivCo, a New York-based research firm that specializes in private companies’ financial data.
http://www.bloomberg.com/news/2012-07-25/twitter-dorsey-becomes-billionaire-as-square-value-soars.html

If Square is valued at $3.2bn, what is bitcoin worth?


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Square has grown dramatically since its prior round of funding, now processing over $500 million of merchant transactions a month,” PrivCo said in its report.
Bitcoin needs to take a slice of that market.


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Square said in June two million people used its smart phone and mobile device payments processing software, double what the company said it had at the start of 2012.
So thats 2 million users per month doing $500 million in transactions. On average $250 per user per month. At a 3% fee, the average Square user is paying $7.50 per month on fees.

The only thing Square has on bitcoin, is that transactions are approved instantly and theres no exchange rate risk.
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matthewh3
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July 25, 2012, 08:06:42 PM
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Yes bitcoins can be difficult and expensive to buy tho the likes of https://bit-pay.com/ may help merchants who want to tap into the bitcoin market.  Maybe if a company offered a way to pay a mercant via your debit/credit card to bitcoins would help even more. 

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July 25, 2012, 08:40:38 PM
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can we really compare square to bitcoin, I mean square just does mobile payments and helps make that easier. Bitcoin is an actual currency. Also square has a lot of seed money and makes a profit. Bitcoin is all user driven. I think it is unfair to even hold bitcoin to square's standards.

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July 25, 2012, 08:57:19 PM
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Well you can't really compare apples to apples but if the market values square at 6x monthly transaction volume the equivelent "analysis" would put Bitcoin at $380M.

250K BTC daily transaction volume * 30 * $8.50 = $63M * 6 = $380M.
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July 25, 2012, 11:24:34 PM
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The only thing Square has on bitcoin, is that transactions are approved instantly and theres no exchange rate risk.

Hahahahah. Bitcoin transactions are also approved instantly and using Paysius or Bit-pay there is no exchange rate risk.

The only REAL thing Square has on bitcoin is that it's "more normal and less innovative" so people understand it more quickly. This is but a temporary advantage.
DublinBrian
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July 26, 2012, 09:49:50 AM
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Bitcoin transactions are also approved instantly
If that is the case, then most people seem unaware of that, and are reluctant to accept zero confirmation transactions. And that includes bitcoin heavy hitters like MtGox who wait for 7 confirmations before allowing me trade the bitcoins I just deposited.
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July 26, 2012, 01:29:51 PM
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You are comparing apples and oranges.

The "confirmed" times for credit card is 120 days (180 days in the case of identity theft).
1 hour vs 120 days.  The "unconfirmed" time for both is measured in seconds.
DublinBrian
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July 26, 2012, 01:47:25 PM
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You are comparing apples and oranges.
Nothing wrong with that. Apples and oranges are competing in the same market. Its useful for orange suppliers to size up their more established competitors.

Although bitcoin is more like an organically grown, genetically modified species of fruit that no one ever tasted before.  Cheesy
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July 26, 2012, 06:51:56 PM
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Square has grown dramatically since its prior round of funding, now processing over $500 million of merchant transactions a month,” PrivCo said in its report.
Bitcoin needs to take a slice of that market.

Take a room with a hundred typical people.  How many in that room have a bitcoin wallet, perhaps as an app on their mobile and then compare that to how many have a credit card that can be swiped.

Every one that does have a card (which is pretty close to everyone in the room, especially since prepaid cards count as well) can make a purchase where a Square register is used, so that makes the merchant's investment in hardware and the expense to change the point-of-sale process be something that can be justified on a per-transaction basis when considering all the transactions that will occur.

Currently, most credit card transactions at retailers occur using dedicated point of sale system or card swipe terminal.   Fortunately, Square register is causing standard iPads to be introduced as a replacement for the legacy systems.   Bitcoin can more easily expand as a payment method accepted by merchants who are already using Square register because the same hardware -- an iPad, can also be used for Bitcoin transactions.  

The problem for now is that Apple has evicted all Bitcoin wallet apps from the App Store.  Web-based EWallets, like Blockchain.info/wallet will still serve the purpose, but it is a crude workaround compared to the improved user experience a mobile app can provide.   But bitcoin doesn't need to have its own point of sale.  The free Square register app has a method to accept cash payments, so non-credit card payments are already supported.  Bitcoin purchases could be treated, as far as Square register is concerned, as cash payments (though a manual end-of-shift or daily reconcile would need to occur).

I gave an example of this dual use of the Square register app here:
 - http://bitcointalk.org/index.php?topic=2732.msg843575#msg843575

Since Bitcoin won't be receiving a couple hundred million in VC financing to build things like Square register, and has no mobile design team or marketing budget, if Bitcoin becomes a better competitor against Square it will be in the category of person-to-person transactions.  The differences against square include Square's 2.75% fee, the delay in access to funds from the charges made through Square, the restrictions as far as what type of transactions Square allows, etc.

There are so many competitors in the payments space that there will be features that will translate well to Bitcoin  (such as Square's able to passively approve payments based on location reported by its mobile-aware app.)  It may cost millions to design, develop and deploy a solution, but the cost to copy the successes are trivial in comparison.

And there is much of the world where Square's approach will never be useful, especially for its mobile-to-mobile payments strategy.  Where much of the world still uses feature phones (even for a large demographic in Square's own target market), there is room for other solutions. Coinapult's SMS wallet might be getting reworked to be available globally (or some other SMS Wallet proivider might arise and offer the same),   That will have a much greater transaction volume potential for Bitcoin than a head-to-head competition against Square ever will.

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July 26, 2012, 08:07:54 PM
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Take a room with a hundred typical people.  How many in that room have a bitcoin wallet, perhaps as an app on their mobile and then compare that to how many have a credit card that can be swiped.

Every one that does have a card (which is pretty close to everyone) can make a purchase where a Square register is used, so that makes the merchant's investment in hardware and the expense to change the point-of-sale process be something that can be justified on a per-sale basis.

Currently, most credit card transactions at retailers occur using dedicated point of sale system or card swipe terminal.   Fortunately, Square register is causing standard iPads to be introduced as a replacement for the legacy systems.   Bitcoin can more easily expand as a payment method accepted by merchants who are already using Square register because the same hardware -- an iPad, can also be used for Bitcoin transactions.  

The problem for now is that Apple has evicted all Bitcoin wallet apps from the App Store.  Web-based EWallets, like Blockchain.info/wallet will still serve the purpose, but it is a crude workaround compared to the improved user experience a mobile app can provide.   But bitcoin doesn't need to have its own point of sale.  The free Square register app has a method to accept cash payments, so non-credit card payments are already supported.  Bitcoin purchases could be treated, as far as Square register is concerned, as cash payments (though a manual end-of-shift or daily reconcile would need to occur).

I gave an example of this dual use of the Square register app here:
 - http://bitcointalk.org/index.php?topic=2732.msg843575#msg843575

Since Bitcoin won't be receiving a couple hundred million in VC financing to build things like Square register, and has no mobile design team or marketing budget, if Bitcoin becomes a better competitor against Square it will be in the category of person-to-person transactions.  The differences against square include Square's 2.75% fee, the delay in access to funds from the charges made through Square, the restrictions as far as what type of transactions Square allows, etc.

There are so many competitors in the payments space that there will be features that will translate well to Bitcoin  (such as Square's able to passively approve payments based on location reported by its mobile-aware app.)  I may cost millions to design, develop and deploy a solution, but the cost to copy the successes are trivial in comparison.

And there is much of the world where Square's approach will never be useful, especially for its mobile-to-mobile payments strategy.  Where much of the world still uses feature phones (even for a large demographic in Square's own target market), there is room for other solutions. Coinapult's SMS wallet might be getting reworked to be available globally (or some other SMS Wallet proivider might arise and offer the same),   That will have a much greater transaction volume potential for Bitcoin than a head-to-head competition against Square ever will.
+1
Stephen Gornick
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September 14, 2012, 06:57:30 AM
 #11

The only REAL thing Square has on bitcoin is that it's "more normal and less innovative" so people understand it more quickly. This is but a temporary advantage.


Jack Dorsey, Twitter, Square founder: "Bitcoin is an amazing movement.."

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If it becomes huge and accepted in the world, Square will accept it.

 - http://bitcointalk.org/index.php?topic=109375.0

Severian
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September 14, 2012, 07:05:22 AM
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I'd bet a bitcoin that Dorsey holds some btc.
Shagnasty
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September 14, 2012, 11:11:28 PM
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I'd bet a bitcoin that Dorsey holds some btc.
I'll take that bet. Now prove it in 5 minutes or I win.
Severian
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September 14, 2012, 11:13:37 PM
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I'll take that bet. Now prove it in 5 minutes or I win.

"I would" doesn't mean "I do", otherwise I would have been married three times more than I have been.

Excellent try, though.
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September 14, 2012, 11:14:56 PM
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I'll take that bet. Now prove it in 5 minutes or I win.

"I would" doesn't mean "I do", otherwise I would have been married three times more than I have been.

Excellent try, though.
So you admit defeat?
Send 1BTC to HhkdLKhgjNk12j3k34k55hbk432kfkss
Or you'll get a scammer tag.
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