11 ms·

As a consumer, why would I choose Bitcoin when it gives me less protection than Visa/MC?

sparkie 8y ago
Because it allows you to save money without it losing value in the long term. That is, bad government policy cannot reduce the value of your Bitcoin by printing more of it.
- mythrwy 8y ago
  Unless you buy at the wrong time, then it loses a lot of value quickly. The international decentralized non-government issued aspects of cryptocurrencies are cool though. As many scams as are in the space, there really is a seed of a neat idea.
  - sparkie 8y ago
    I made the point of specifying long term (by this, I mean say 5 years). Bitcoin is unpredictable short-term because demand can change significantly on a day to day basis, where supply is predictable. If you take any point in the bitcoin history, and check its value compared to 3 years earlier, there is no point where value was lost over a 3 year period. Also, another way to look at it, is that your Bitcoin will be worth exactly the same in Bitcoin in three years. The bitcoin you own as a proportion of the total supply is fixed. Compared to fiat markets, the proportion you own to what is printed is declining year on year. Bitcoin will eventually become not less volatile, but involatile. This is because you won't be measuring its value in USD, but you will be measuring the value of USD in Bitcoins.
    - blotter_paper 8y ago
      >Bitcoin will eventually become not less volatile, but involatile. This is because you won't be measuring its value in USD, but you will be measuring the value of USD in Bitcoins. Accepting a hypothetical future where other currencies are generally compared against bitcoins, bitcoins would still not be "involatile." While markets tend to use one currency as a reference point for another, there are other reference points available. Economists often use a basket of staple goods, like milk and eggs, to get a sense of how much the dollar has fluctuated in value. As you're aware Bitcoin was designed to be deflationary. If we expect human population to rise, and bitcoins to be stagnant in number while remaining a cornerstone of the economy, our hypothetical future should see the value of bitcoins continuing to grow in the long term.
    - nradov 8y ago
      Past performance is no guarantee of future returns.
- khuey 8y ago
  Even assuming that's all true, that's only a reason to use it as a store of value. The comment you responded to is asking why use it as a medium of exchange?
  - swift532 8y ago
    If it's truly more useful for businesses, you might get a discount. Or maybe just because you like freedom.
    - sparkie 8y ago
      As a good example of getting a discount, I've made several purchases through purse.io and saved plenty of money. A proper immediate and legal use-case, that people can exchange their otherwise illiquid Amazon credits for Bitcoin by taking a small loss.
      - patio11 8y ago
        Purse still offers 15%+ spreads on their homepage. Do you know who is willing to sell a cash equivalent for a 15% discount to face value? A carder. The 15% is their payment for services rendered.
  - Karunamon 8y ago
    - Privacy. Yes the blockchain might be public, but good luck tying transactions to identities for selling my purchasing habits, or most other purposes outside of state actor law enforcement. (And even that is arguable with attention to opsec) - Uncensorability. I can pay whoever I want whatever I want, with no third party able to insert themselves between me and the recipient (or dictate who can send or receive money) for any purpose. - Irreversibility. Yes, often held up as a weakness, but has its uses. Not all transactions are physical merchandise where a third party enforcing refunds is useful.
    - nradov 8y ago
      The government is perfectly capable of sending men with guns to forcibly censor or reverse your transactions. Blockchain technology can't stop that.
- MereInterest 8y ago
  Again, that is a feature, not a bug. Inflationary currency means that you need to invest money, not just sit on it. Deflationary currency means that an investment must provide returns more than what would be gained by just sitting on it.
  - sparkie 8y ago
    Only people who have enough money to invest can do so. For the low-earner, it becomes near impossible to save up for investment because the savings either need to be devalued or put into risky investments. Saving is a perfectly viable choice. If someone wants to save, it is not for you or your cronies to tell them they can't, or that you must shave your cut off their savings each year. It's a myth that people won't spend. People will save the good money and spend bad money. The bad money is still getting spent, but of course, it's constantly losing its value. The difference is the perspective on how money should be spent. Savers are low time preference people. They would rather spend their money on the future, on things that last. High time preference proponents on the other hand, only care about the next quarter, will cut corners to maximize their short term profit, and will spend their profit on cars and other depreciating assets to avoid paying the tax on their profits. They also build products which are intended to fail, so that the consumer has to buy the upgrade in a few years.
  - corv 8y ago
    Ergo inflation tends to cause malinvestment as savers want to protect as much value as possible, whereas deflation is more likely to incentivize productive investments. After all if deflationary currency is worth more tomorrow, one wants to make sure an investment in the future is sustainable. Notably one is especially interested to invest in a deflationary economy because the gains are multiplicative.
    - badge 8y ago
      Bitcoin has a higher inflation rate than USD. Bitcoin inflation rate per annum: 3.87% USD Current inflation rate for the United States is 2.7%. Early in Bitcoin history, by design Bitcoin went though a period of hyperinflation where Satoshi and a few users acquired most of the coins in circulation. Aprox 4.11% of Bitcoin users (addresses) control 96.53% of all bitcoins in circulation.
- avn2109 8y ago
  >> "...bad government policy cannot reduce the value of your Bitcoin by printing more of it." The spirit of your comment is totally true, but I have a pendatic (though vitally important!) objection. Governments in most countries don't create money and government policy in general neither controls nor influences money creation; instead, money is created by private companies (aka "banks") or a consortium of private companies (aka the owners of "central banks.")
  - sparkie 8y ago
    You're right, but on paper at least, the government sets the rules by which the central bank operates. However, we all know that the governments have been bought and paid for by the banks for a long time now.
- CaptainZapp 8y ago
  Because it allows you to save money without it losing value in the long term. That has yet to be seen. Except for true believers I yet have to find a serious economist who suggests crypto currencies as a store of value due to its volatility.
vbezhenar 8y ago
Because you're paying for all the fraud around you. It's like insurance. You're guaranteed to lose money.
DINKDINK 8y ago
All of your credit card transactions leak more and more of your PII data to the world. CC also sell all of your financial transactions to third parties. Have you factored in the cost of identity theft that results from you paying with a credit card to the value of being able to reverse that $20 ticket? Unless your identity (and the time spent rectifying it) is worth less the total aggregate of all the reversible transactions, you shouldn't be using a credit card (rationally speaking)
- notyourday 8y ago
  Identify theft from a credit card payment?! Jesus, did LifeLock's commercials start to rub off on HN crowd?
- amalcon 8y ago
  Bitcoin, on the other hand, leaks your entire transaction history to the world. Hardly an improvement.
OiNG 8y ago
i think this is a pretty important question to ask, since most people are buyers and not sellers. while things like inflationary currency and privacy are important, im skeptical that they are big enough reasons for the average person to really move the needle here. one practical reason could end up being cost. with the ubiquity of credit cards, most businesses need to bake in the credit card fee and chargebacks into the cost of their goods. its possible that some buyers would be willing to forgo the buyer protection in exchange for a discount on some purchases (assuming the credit card industry doesn't lobby to make offering these types of discounts illegal...)
- tfehring 8y ago
  Businesses that accept credit cards are already prevented from offering cash discounts by credit card companies’ merchant agreements. No lobbying needed. Also, savvy buyers can already make back most or all of the processing fees that are baked into prices without giving up the convenience or protection of credit cards. Lots of credit cards give cash back or other rewards that are worth ~2% of the purchase price.
  - ABCLAW 8y ago
    >Businesses that accept credit cards are already prevented from offering cash discounts by credit card companies’ merchant agreements. No lobbying needed. This is false in most jurisdictions.
solotronics 8y ago
legitimate question. I store my long term wealth as BTC (have done this for years) with private keys split between multiple physical locations. I spend with a credit card and sell BTC to pay it off each month.

Because it allows you to save money without it losing value in the long term. That is, bad government policy cannot reduce the value of your Bitcoin by printing more of it.

mythrwy 8y ago
Unless you buy at the wrong time, then it loses a lot of value quickly. The international decentralized non-government issued aspects of cryptocurrencies are cool though. As many scams as are in the space, there really is a seed of a neat idea.
- sparkie 8y ago
  I made the point of specifying long term (by this, I mean say 5 years). Bitcoin is unpredictable short-term because demand can change significantly on a day to day basis, where supply is predictable. If you take any point in the bitcoin history, and check its value compared to 3 years earlier, there is no point where value was lost over a 3 year period. Also, another way to look at it, is that your Bitcoin will be worth exactly the same in Bitcoin in three years. The bitcoin you own as a proportion of the total supply is fixed. Compared to fiat markets, the proportion you own to what is printed is declining year on year. Bitcoin will eventually become not less volatile, but involatile. This is because you won't be measuring its value in USD, but you will be measuring the value of USD in Bitcoins.
  - blotter_paper 8y ago
    >Bitcoin will eventually become not less volatile, but involatile. This is because you won't be measuring its value in USD, but you will be measuring the value of USD in Bitcoins. Accepting a hypothetical future where other currencies are generally compared against bitcoins, bitcoins would still not be "involatile." While markets tend to use one currency as a reference point for another, there are other reference points available. Economists often use a basket of staple goods, like milk and eggs, to get a sense of how much the dollar has fluctuated in value. As you're aware Bitcoin was designed to be deflationary. If we expect human population to rise, and bitcoins to be stagnant in number while remaining a cornerstone of the economy, our hypothetical future should see the value of bitcoins continuing to grow in the long term.
  - nradov 8y ago
    Past performance is no guarantee of future returns.
khuey 8y ago
Even assuming that's all true, that's only a reason to use it as a store of value. The comment you responded to is asking why use it as a medium of exchange?
- swift532 8y ago
  If it's truly more useful for businesses, you might get a discount. Or maybe just because you like freedom.
  - sparkie 8y ago
    As a good example of getting a discount, I've made several purchases through purse.io and saved plenty of money. A proper immediate and legal use-case, that people can exchange their otherwise illiquid Amazon credits for Bitcoin by taking a small loss.
    - patio11 8y ago
      Purse still offers 15%+ spreads on their homepage. Do you know who is willing to sell a cash equivalent for a 15% discount to face value? A carder. The 15% is their payment for services rendered.
- Karunamon 8y ago
  - Privacy. Yes the blockchain might be public, but good luck tying transactions to identities for selling my purchasing habits, or most other purposes outside of state actor law enforcement. (And even that is arguable with attention to opsec) - Uncensorability. I can pay whoever I want whatever I want, with no third party able to insert themselves between me and the recipient (or dictate who can send or receive money) for any purpose. - Irreversibility. Yes, often held up as a weakness, but has its uses. Not all transactions are physical merchandise where a third party enforcing refunds is useful.
  - nradov 8y ago
    The government is perfectly capable of sending men with guns to forcibly censor or reverse your transactions. Blockchain technology can't stop that.
MereInterest 8y ago
Again, that is a feature, not a bug. Inflationary currency means that you need to invest money, not just sit on it. Deflationary currency means that an investment must provide returns more than what would be gained by just sitting on it.
- sparkie 8y ago
  Only people who have enough money to invest can do so. For the low-earner, it becomes near impossible to save up for investment because the savings either need to be devalued or put into risky investments. Saving is a perfectly viable choice. If someone wants to save, it is not for you or your cronies to tell them they can't, or that you must shave your cut off their savings each year. It's a myth that people won't spend. People will save the good money and spend bad money. The bad money is still getting spent, but of course, it's constantly losing its value. The difference is the perspective on how money should be spent. Savers are low time preference people. They would rather spend their money on the future, on things that last. High time preference proponents on the other hand, only care about the next quarter, will cut corners to maximize their short term profit, and will spend their profit on cars and other depreciating assets to avoid paying the tax on their profits. They also build products which are intended to fail, so that the consumer has to buy the upgrade in a few years.
- corv 8y ago
  Ergo inflation tends to cause malinvestment as savers want to protect as much value as possible, whereas deflation is more likely to incentivize productive investments. After all if deflationary currency is worth more tomorrow, one wants to make sure an investment in the future is sustainable. Notably one is especially interested to invest in a deflationary economy because the gains are multiplicative.
  - badge 8y ago
    Bitcoin has a higher inflation rate than USD. Bitcoin inflation rate per annum: 3.87% USD Current inflation rate for the United States is 2.7%. Early in Bitcoin history, by design Bitcoin went though a period of hyperinflation where Satoshi and a few users acquired most of the coins in circulation. Aprox 4.11% of Bitcoin users (addresses) control 96.53% of all bitcoins in circulation.
avn2109 8y ago
>> "...bad government policy cannot reduce the value of your Bitcoin by printing more of it." The spirit of your comment is totally true, but I have a pendatic (though vitally important!) objection. Governments in most countries don't create money and government policy in general neither controls nor influences money creation; instead, money is created by private companies (aka "banks") or a consortium of private companies (aka the owners of "central banks.")
- sparkie 8y ago
  You're right, but on paper at least, the government sets the rules by which the central bank operates. However, we all know that the governments have been bought and paid for by the banks for a long time now.
CaptainZapp 8y ago
Because it allows you to save money without it losing value in the long term. That has yet to be seen. Except for true believers I yet have to find a serious economist who suggests crypto currencies as a store of value due to its volatility.

vbezhenar 8y ago

Because you're paying for all the fraud around you. It's like insurance. You're guaranteed to lose money.

DINKDINK 8y ago

All of your credit card transactions leak more and more of your PII data to the world. CC also sell all of your financial transactions to third parties. Have you factored in the cost of identity theft that results from you paying with a credit card to the value of being able to reverse that $20 ticket? Unless your identity (and the time spent rectifying it) is worth less the total aggregate of all the reversible transactions, you shouldn't be using a credit card (rationally speaking)

notyourday 8y ago
Identify theft from a credit card payment?! Jesus, did LifeLock's commercials start to rub off on HN crowd?
amalcon 8y ago
Bitcoin, on the other hand, leaks your entire transaction history to the world. Hardly an improvement.

OiNG 8y ago

i think this is a pretty important question to ask, since most people are buyers and not sellers. while things like inflationary currency and privacy are important, im skeptical that they are big enough reasons for the average person to really move the needle here. one practical reason could end up being cost. with the ubiquity of credit cards, most businesses need to bake in the credit card fee and chargebacks into the cost of their goods. its possible that some buyers would be willing to forgo the buyer protection in exchange for a discount on some purchases (assuming the credit card industry doesn't lobby to make offering these types of discounts illegal...)

tfehring 8y ago
Businesses that accept credit cards are already prevented from offering cash discounts by credit card companies’ merchant agreements. No lobbying needed. Also, savvy buyers can already make back most or all of the processing fees that are baked into prices without giving up the convenience or protection of credit cards. Lots of credit cards give cash back or other rewards that are worth ~2% of the purchase price.
- ABCLAW 8y ago
  >Businesses that accept credit cards are already prevented from offering cash discounts by credit card companies’ merchant agreements. No lobbying needed. This is false in most jurisdictions.

solotronics 8y ago

legitimate question. I store my long term wealth as BTC (have done this for years) with private keys split between multiple physical locations. I spend with a credit card and sell BTC to pay it off each month.