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It has been clear for a while now that Bitcoin is an inferior payment system for the consumer: * The fees are higher. * The risk to the consumer is higher. *

by briatx 8y ago

It has been clear for a while now that Bitcoin is an inferior payment system for the consumer: * The fees are higher. * The risk to the consumer is higher. * The difficulty of use is higher. * It is accepted at an extremely low amount of vendors and even that is falling. So you really how to wonder why people ever thought consumers would use it en masse.

wycs 8y ago
Also, money works pretty well. Bitcoin is not 10x better. Maybe 0.1x. Bitcoin is not even useful for illicit transactions anymore.
- keymone 8y ago
  By money you mean what exactly? Anything in a bank account is not money but promise of money that can be taken away without your knowledge. Any specific currency is subject to whim of corresponding central bank. Sure, some are safer than others but still. Even the right to participate is not a given as you can be banned from opening a bank account. Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there.
  - cortesoft 8y ago
    Yes, there are risks with banks, central banks, and government backed currencies. These risks are well known and commonly hedged against, which is why currency trading is a thing. Bitcoin also has risks; it could also collapse, have security vulnerabilities, you could lose access to your keys or if you choose to use an exchange it could be compromised or seized by authorities. Now, it is true that the risks are different than for other currencies, but you can’t just act like bitcoin doesn’t have risks or that they are a priori less risky than other currencies.
  - Swizec 8y ago
    > in every aspect except convenience And yet convenience is the only aspect 99.9999% of consumers care about because they never have and never will experience any of the other problems you mention.
  - ashelmire 8y ago
    >Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there. Firstly, if you think money exists for any reason other than convenience, you fundamentally misunderstand why money exists. Its whole purpose is convenience, to make trade easier. Secondly, the points above are more than just convenience. You have no recourse in cases of fraud or crime when it comes to bitcoin. It costs more to use. And it can be used in much fewer businesses. Those aren't just conveniences; those are fundamental issues of interest to consumers.
    - keymone 8y ago
      Convenience is a matter of development effort. Things like control over ownership, transparency, censorship and oppression resistance are not, they must be the fundamentals the system is built on. That Bitcoin is used for shady stuff and is harder to track is a red herring for all 10 years of its existence. Come back when Bitcoin’s usage for said stuff is within order of magnitude of USD’s market share.
      - dmoy 8y ago
        GP was not talking about using Bitcoin for crime, but rather the (extremely common) crime of having your money stolen via fraud or whatever. In USD you have recourse there to be made whole. In btc, you do not.
        keymone 8y ago
        You have no recourse when your cash is stolen unless you’re insured against that. You have some recourse when stuff from your bank account is stolen because you’re paying the insurance in bank fees and taxes. Those are products you’re paying for. Similar products (and much more flexible/advanced) can be built for bitcoin.
    - mortdeus 8y ago
      Fiat currency is not convenient when it comes to international trade. And it is not convenient as a method of storing large masses of wealth. The fact is, if you were once super rich in Venezuela and you had all your wealth in stacks of Venezuelan money, now you are no longer rich. Which is why most rich people in other countries like to exchange their tangible money for other nation's currency. Because in the event that their country's economy goes belly up then at least not all of their money has become worthless. The problem is that not everybody might be willing to exchange your country's currency for theirs. Which is why the US dollar is the international standard for currency exchange. The big problem the designer of bitcoin saw is the fact that when one country has the ability to make money that everybody wants, we end up in a situation where that country has an unfair advantage to strong arm other nations into a mode of compliance. Like all the US has to do is say that nobody from the US is allowed to exchange their money for Venezuela's money, nor are they allowed to exchange their money for somebody else's money when said person has a history of exchanging currency with Venezuela. The fact that a few countries can get away with such behavior, means in the end that countries are placed into an economic ladder and nobody is allowed to take a step up if that comes at the expense of somebody higher up on the rung having to take a step down. In other words, the US has become a monopoly on all other countries when our dollar is in the middle of international trade. Bitcoin in theory is supposed to replace the dollar role in this sense where no one nation gains the ability to strong arm other nations into behaving in a way that might be contrary to their best interest.
  - telaport 8y ago
    It's becoming clear that people who say what you just said sound more like the loons parroting Sovereign Citizen manifestos than rational individuals who actually understand international monetary policies. Instead of screaming about flags with yellow fringes, and "Am I being detained?", you will be screaming about how POW works and "Is BTC illegal?!". Whether you want to believe it or not, enough people are not having their money "stolen", "without their knowledge" in the real world that anything you said after that would make sense to them. In fact, you gloss over how the one thing everyone fears in crypto is - having their money taken away without their knowledge! I mean hot storage, cold storage, private keys, public keys... your online trading company being hacked... Do you honestly think that anything in crypto is safer or 10X better or easier than a regular bank that everyone in America or the modern western world, has access to?
    - keymone 8y ago
      you lost me at ad hominem.
    - salawat 8y ago
      His point is the fundamental principles of fractional reserve are flawed, and the system will alwayssuffer from the looming threat of a bank run. It's rather disingenuous to say that people having money stolen from them isn't a problem when you have a system that cyclically chucks out an Enron or Sub-Prime mortgage crisis every ten years or so that typically ends up getting resolved on the taxpayer's dime. The definition of insanity is doing the same thing over and over again and expecting a different result. If you're going to downvote someone, prove them wrong. Ad hominem let's you nowhere. Also, you are right on Bitcoin though. It has a higher chance of someone just taking your the ball and going home, something any nationally backed currency has measures in place to prevent.
      - Sangermaine 8y ago
        >His point is the fundamental principles of fractional reserve are flawed, and the system will alwayssuffer from the looming threat of a bank run. What? Are you posting from the 1930s? In the US at least this is not an issue for the average person because of the FDIC. There is no "looming threat of a bank run" anywhere in the developed world, precisely because governments and regulations prevent it. This is exactly the kind of lunacy the parent was talking about. It's near-religious ideological ranting.
raverbashing 8y ago
And the BTC people made darn sure to make it harder and more expensive to use. Not a surprise commerce will turn to other coins, including BCH
chrismorgan 8y ago
One of your points is of dubious validity: fees may not be higher. Fees went very high when the network became congested; but when it’s not congested, they’re much lower than credit card systems are for normal businesses. https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/ suggests that right now, what equates to about nine US cents is sufficient for a basic transaction. And if you’re happy to wait an hour, then two cents ought to do you fine. I’m not sure whether this is a typical rate; I haven’t been keeping an eye on it, and https://core.jochen-hoenicke.de/queue/#30d https://core.jochen-hoenicke.de/queue/#30d is hard to read casually. But by the looks of it, a very substantial fraction of transactions have been going through at what will be under ten cents if they’re simple transactions. Your standard sorts of base rates for accepting credit card transactions are 30¢ + 1.75–2.9%, depending on certain conditions like country and card type.
- ttoinou 8y ago
  Yes. But don't forget credit cards offer others services, such as charge refund and fraud protection
  - chrismorgan 8y ago
    I am only quibbling on the statement about fees, not the rest.
    - oopsman88 8y ago
      The point is that credit cards offer very valuable services in exchange for fees. Bitcoin offers nothing for a higher fee.
      - keymone 8y ago
        really? nothing? do you even know what bitcoin is? the ignorance in this thread is baffling sometimes.
    - mrlala 8y ago
      You can't talk about credit card fees without recognizing WHY there are fees and what advantage they have...
cromulent 8y ago
And the maximum transaction rate is 7 per second, so en masse is impossible. https://en.wikipedia.org/wiki/Bitcoin_scalability_problem https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
- keymone 8y ago
  no longer the case since payment channels and routing between them are the option. p2p channel payments is only limited by network bandwidth and cpu power between participants. routed channel payments are limited by routing network connectivity and capacity, which is not amazing yet but far better than 7tps.
  - dboreham 8y ago
    It would be helpful if you could cite one payment channel service that is up and running today and has there properties.
    - keymone 8y ago
      Lightning Network.
udfalkso 8y ago
Yes, right now this is true (for those with easy access to credit cards and bank accounts at least). But the same criticisms could have been made about pretty much any technology in the early days of its adoption. A lot of smart, well funded, groups of people are working hard on these problems. It will only get better.
vit05 8y ago
All of your points are problems that can, and will eventually be, solved by engineering. The main problem is to believe that Bitcoin will be the solution for markets that have their banking system and governments functioning perfectly. The reality is that most of the world does not have this efficiency found in the US and Europe. Opening a bank account is not a trivial task in every corner of the world. Acquiring a loan, importing or exporting a product, sending values to a person, organization or company in another country. All these activities are extremely difficult to do for more than 80% of the world's population. Not being centralized is an advantage that entails enormous difficulties. But none of them kills the initial purpose.
lawn 8y ago
Fees are only higher in Bitcoin which the developers have crippled. Look at Bitcoin Cash or other cryptocurrencies for much lower fees. Here are some reasons why cryptocurrencies is a superior payment system, even for the consumer: * The fees are lower (VISA and PayPal fees are priced into the cost, and they are much higher) * It's anonymous (see Monero for example) * You can send money easily to anywhere in the world (lookup EatBCH which is a charity providing food in Venezuela) * You don't need a bank's permission. There are many unbanked people in the world. Here are some reasons why it's a superior payment system for the merchant: * Eliminates credit charge back fraud, which is a very big problem * The fees are lower, especially important for low margin businesses * Nobody can freeze your accounts, like PayPal has done on numerous occasions * Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards A permissionless and trustless digital payment system has so obvious benefits I really wonder why people have trouble seeing them. Is it ready yet? No. Are there problems? Yes. But the benefits are there.
- tyree731 8y ago
  Some counterpoints: * You don't need a bank's permission. There are many unbanked people in the world. Do we imagine those unbanked people being likely to have bitcoin wallets? * Eliminates credit charge back fraud, which is a very big problem That a problem, for sure, but in exchange consumers have no recourse if they legitimately need to chargeback a vendor. This is an anti-consumer feature of bitcoin. * Nobody can freeze your accounts, like PayPal has done on numerous occasions Unless you can somehow always keep your money in bitcoin until you exchange it for goods and services, you'll need an exchange to your currency of choice, at which point governments have all the ability in the world to effectively freeze your assets. * Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards There isn't any technical reason that websites can't accept bitcoin today, and yet the number of websites that are offering bitcoin payments is shrinking, for well discussed reasons. I feel it's fair to say that that business have had more (and different) problems accepting bitcoins.
  - lawn 8y ago

by briatx 8y ago

wycs 8y ago

Also, money works pretty well. Bitcoin is not 10x better. Maybe 0.1x. Bitcoin is not even useful for illicit transactions anymore.

keymone 8y ago
By money you mean what exactly? Anything in a bank account is not money but promise of money that can be taken away without your knowledge. Any specific currency is subject to whim of corresponding central bank. Sure, some are safer than others but still. Even the right to participate is not a given as you can be banned from opening a bank account. Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there.
- cortesoft 8y ago
  Yes, there are risks with banks, central banks, and government backed currencies. These risks are well known and commonly hedged against, which is why currency trading is a thing. Bitcoin also has risks; it could also collapse, have security vulnerabilities, you could lose access to your keys or if you choose to use an exchange it could be compromised or seized by authorities. Now, it is true that the risks are different than for other currencies, but you can’t just act like bitcoin doesn’t have risks or that they are a priori less risky than other currencies.
- Swizec 8y ago
  > in every aspect except convenience And yet convenience is the only aspect 99.9999% of consumers care about because they never have and never will experience any of the other problems you mention.
- ashelmire 8y ago
  >Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there. Firstly, if you think money exists for any reason other than convenience, you fundamentally misunderstand why money exists. Its whole purpose is convenience, to make trade easier. Secondly, the points above are more than just convenience. You have no recourse in cases of fraud or crime when it comes to bitcoin. It costs more to use. And it can be used in much fewer businesses. Those aren't just conveniences; those are fundamental issues of interest to consumers.
  - keymone 8y ago
    Convenience is a matter of development effort. Things like control over ownership, transparency, censorship and oppression resistance are not, they must be the fundamentals the system is built on. That Bitcoin is used for shady stuff and is harder to track is a red herring for all 10 years of its existence. Come back when Bitcoin’s usage for said stuff is within order of magnitude of USD’s market share.
    - dmoy 8y ago
      GP was not talking about using Bitcoin for crime, but rather the (extremely common) crime of having your money stolen via fraud or whatever. In USD you have recourse there to be made whole. In btc, you do not.
      - keymone 8y ago
        You have no recourse when your cash is stolen unless you’re insured against that. You have some recourse when stuff from your bank account is stolen because you’re paying the insurance in bank fees and taxes. Those are products you’re paying for. Similar products (and much more flexible/advanced) can be built for bitcoin.
  - mortdeus 8y ago
    Fiat currency is not convenient when it comes to international trade. And it is not convenient as a method of storing large masses of wealth. The fact is, if you were once super rich in Venezuela and you had all your wealth in stacks of Venezuelan money, now you are no longer rich. Which is why most rich people in other countries like to exchange their tangible money for other nation's currency. Because in the event that their country's economy goes belly up then at least not all of their money has become worthless. The problem is that not everybody might be willing to exchange your country's currency for theirs. Which is why the US dollar is the international standard for currency exchange. The big problem the designer of bitcoin saw is the fact that when one country has the ability to make money that everybody wants, we end up in a situation where that country has an unfair advantage to strong arm other nations into a mode of compliance. Like all the US has to do is say that nobody from the US is allowed to exchange their money for Venezuela's money, nor are they allowed to exchange their money for somebody else's money when said person has a history of exchanging currency with Venezuela. The fact that a few countries can get away with such behavior, means in the end that countries are placed into an economic ladder and nobody is allowed to take a step up if that comes at the expense of somebody higher up on the rung having to take a step down. In other words, the US has become a monopoly on all other countries when our dollar is in the middle of international trade. Bitcoin in theory is supposed to replace the dollar role in this sense where no one nation gains the ability to strong arm other nations into behaving in a way that might be contrary to their best interest.
- telaport 8y ago
  It's becoming clear that people who say what you just said sound more like the loons parroting Sovereign Citizen manifestos than rational individuals who actually understand international monetary policies. Instead of screaming about flags with yellow fringes, and "Am I being detained?", you will be screaming about how POW works and "Is BTC illegal?!". Whether you want to believe it or not, enough people are not having their money "stolen", "without their knowledge" in the real world that anything you said after that would make sense to them. In fact, you gloss over how the one thing everyone fears in crypto is - having their money taken away without their knowledge! I mean hot storage, cold storage, private keys, public keys... your online trading company being hacked... Do you honestly think that anything in crypto is safer or 10X better or easier than a regular bank that everyone in America or the modern western world, has access to?
  - keymone 8y ago
    you lost me at ad hominem.
  - salawat 8y ago
    His point is the fundamental principles of fractional reserve are flawed, and the system will alwayssuffer from the looming threat of a bank run. It's rather disingenuous to say that people having money stolen from them isn't a problem when you have a system that cyclically chucks out an Enron or Sub-Prime mortgage crisis every ten years or so that typically ends up getting resolved on the taxpayer's dime. The definition of insanity is doing the same thing over and over again and expecting a different result. If you're going to downvote someone, prove them wrong. Ad hominem let's you nowhere. Also, you are right on Bitcoin though. It has a higher chance of someone just taking your the ball and going home, something any nationally backed currency has measures in place to prevent.
    - Sangermaine 8y ago
      >His point is the fundamental principles of fractional reserve are flawed, and the system will alwayssuffer from the looming threat of a bank run. What? Are you posting from the 1930s? In the US at least this is not an issue for the average person because of the FDIC. There is no "looming threat of a bank run" anywhere in the developed world, precisely because governments and regulations prevent it. This is exactly the kind of lunacy the parent was talking about. It's near-religious ideological ranting.

raverbashing 8y ago

And the BTC people made darn sure to make it harder and more expensive to use. Not a surprise commerce will turn to other coins, including BCH

chrismorgan 8y ago

One of your points is of dubious validity: fees may not be higher. Fees went very high when the network became congested; but when it’s not congested, they’re much lower than credit card systems are for normal businesses. https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/ suggests that right now, what equates to about nine US cents is sufficient for a basic transaction. And if you’re happy to wait an hour, then two cents ought to do you fine. I’m not sure whether this is a typical rate; I haven’t been keeping an eye on it, and https://core.jochen-hoenicke.de/queue/#30d https://core.jochen-hoenicke.de/queue/#30d is hard to read casually. But by the looks of it, a very substantial fraction of transactions have been going through at what will be under ten cents if they’re simple transactions. Your standard sorts of base rates for accepting credit card transactions are 30¢ + 1.75–2.9%, depending on certain conditions like country and card type.

ttoinou 8y ago
Yes. But don't forget credit cards offer others services, such as charge refund and fraud protection
- chrismorgan 8y ago
  I am only quibbling on the statement about fees, not the rest.
  - oopsman88 8y ago
    The point is that credit cards offer very valuable services in exchange for fees. Bitcoin offers nothing for a higher fee.
    - keymone 8y ago
      really? nothing? do you even know what bitcoin is? the ignorance in this thread is baffling sometimes.
  - mrlala 8y ago
    You can't talk about credit card fees without recognizing WHY there are fees and what advantage they have...

cromulent 8y ago

And the maximum transaction rate is 7 per second, so en masse is impossible. https://en.wikipedia.org/wiki/Bitcoin_scalability_problem https://en.wikipedia.org/wiki/Bitcoin_scalability_problem

keymone 8y ago
no longer the case since payment channels and routing between them are the option. p2p channel payments is only limited by network bandwidth and cpu power between participants. routed channel payments are limited by routing network connectivity and capacity, which is not amazing yet but far better than 7tps.
- dboreham 8y ago
  It would be helpful if you could cite one payment channel service that is up and running today and has there properties.
  - keymone 8y ago
    Lightning Network.

udfalkso 8y ago

Yes, right now this is true (for those with easy access to credit cards and bank accounts at least). But the same criticisms could have been made about pretty much any technology in the early days of its adoption. A lot of smart, well funded, groups of people are working hard on these problems. It will only get better.

vit05 8y ago

All of your points are problems that can, and will eventually be, solved by engineering. The main problem is to believe that Bitcoin will be the solution for markets that have their banking system and governments functioning perfectly. The reality is that most of the world does not have this efficiency found in the US and Europe. Opening a bank account is not a trivial task in every corner of the world. Acquiring a loan, importing or exporting a product, sending values to a person, organization or company in another country. All these activities are extremely difficult to do for more than 80% of the world's population. Not being centralized is an advantage that entails enormous difficulties. But none of them kills the initial purpose.

lawn 8y ago

Fees are only higher in Bitcoin which the developers have crippled. Look at Bitcoin Cash or other cryptocurrencies for much lower fees. Here are some reasons why cryptocurrencies is a superior payment system, even for the consumer: * The fees are lower (VISA and PayPal fees are priced into the cost, and they are much higher) * It's anonymous (see Monero for example) * You can send money easily to anywhere in the world (lookup EatBCH which is a charity providing food in Venezuela) * You don't need a bank's permission. There are many unbanked people in the world. Here are some reasons why it's a superior payment system for the merchant: * Eliminates credit charge back fraud, which is a very big problem * The fees are lower, especially important for low margin businesses * Nobody can freeze your accounts, like PayPal has done on numerous occasions * Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards A permissionless and trustless digital payment system has so obvious benefits I really wonder why people have trouble seeing them. Is it ready yet? No. Are there problems? Yes. But the benefits are there.

tyree731 8y ago
Some counterpoints: * You don't need a bank's permission. There are many unbanked people in the world. Do we imagine those unbanked people being likely to have bitcoin wallets? * Eliminates credit charge back fraud, which is a very big problem That a problem, for sure, but in exchange consumers have no recourse if they legitimately need to chargeback a vendor. This is an anti-consumer feature of bitcoin. * Nobody can freeze your accounts, like PayPal has done on numerous occasions Unless you can somehow always keep your money in bitcoin until you exchange it for goods and services, you'll need an exchange to your currency of choice, at which point governments have all the ability in the world to effectively freeze your assets. * Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards There isn't any technical reason that websites can't accept bitcoin today, and yet the number of websites that are offering bitcoin payments is shrinking, for well discussed reasons. I feel it's fair to say that that business have had more (and different) problems accepting bitcoins.
- lawn 8y ago