6 ms·

Why BitcoinStore is going to bring an end to a Decade of PayPal

24 points by Coinabul1 14y ago

jareau 14y ago
Why is bitcoin the one "true" alternative? If payment services like Balanced and Stripe solve most of the problems of PayPal (frozen accounts, pleasant APIs, etc) then why are they less worthy alternatives?
- Coinabul1 14y ago
  I feel like there are more problems at PayPal than just frozen accounts. The inherent issues I have with PayPal is a: they're a middleman and bump up prices. and b: they facilitate chargebacks which lead to an ever increase amount of fraud. More fraud equals more cost. As the conventional alternatives continue to grow they'll face more and more fraud. Bitcoin has no chargeback fraud. It never will.
  - slinkyavenger 14y ago
    Bitcoin fluctuates wildly in value. Bitcoin takes quite a while for a transaction to happen, and there are waits and fees involved in exchanging money from USD and back to USD. Bitcoin doesn't allow chargebacks, an important consumer protection mechanism, therefore helping to perpetuate fraud. No one wants to buy anything with bitcon, and no one wants to go through the trouble of selling anything with bitcoin.
    - discountgenius 14y ago
      > Bitcoin doesn't allow chargebacks, an important consumer protection mechanism, therefore helping to perpetuate fraud. Chargebacks enable WAY more fraud than they stop.
      - ScottWhigham 14y ago
        Downvoted for a blanket statement with no facts/source to back it up
    - lectrick 14y ago
      > Bitcoin fluctuates wildly in value. It's been just growing steadily lately, but a seller can always convert to their local currency on the spot using a BTC payment processor. > Bitcoin takes quite a while for a transaction to happen 100% false. Every time I've used it, transactions take less than a second. Stop spreading FUD aka bullshit. > and there are waits and fees involved in exchanging money from USD and back to USD Yep... for now. I think the point is that at some point you won't have all your monetary holdings as USD. > Bitcoin doesn't allow chargebacks, an important consumer protection mechanism, therefore helping to perpetuate fraud. That's a funny thing to say, given that chargebacks are the very source of fraud these days. BTC is attractive to merchants precisely because you can't chargeback. If you have a problem with a merchant, bitch about them elsewhere and their reputation will suffer.
      - betterunix 14y ago
        "Every time I've used it, transactions take less than a second" Are you bothering to wait for confirmations? Last I checked, waiting for confirmation of a transaction was a 10 to 30 minute process.
      - slinkyavenger 14y ago
        Growing steadily? Bitcoin value is wildly speculative, since it's only backed up by make-work, illegal goods trade, and scams. 100% true, at least for vendors, since they'll be waiting for confirmations. Otherwise they're facing double-spend scams and things like that. Fear, uncertainty, and doubt aren't bullshit, but it's cute that you deflect a real argument with an acronym. There won't be a time where any intelligent person would have all their holdings in Bitcoin, because it is nothing more than a proposal that got out of hand. The guy who came up with it even said it'd be stupid for someone to use it like a real currency. Furthermore there will still be transaction fees, since those are what's planned to support the network operators after coins are mined. Regarding chargebacks, having a currency forbid them is not the appropriate answer to fraud that involves them. No consumer would have any faith in the system without some basic protection in case their stuff gets stolen. For all the problems caused by banks, it sure is nice to have someone who is regulated provide some kind of security in case I lose my wallet. So there you have it. Bitcoins are bad for merchants, as well as consumers. Edit: I love the quip about how a bad merchant's reputation will suffer. That doesn't work. If you want proof, just look at the bitcoin talk forums. Tons of scammers. If they get a scammer tag, they just come back under a different name. Reputations may matter face to face, but they're worthless here.
    - pepr 14y ago
      1. Chargebacks are only necessary because of the pull nature of the US banking system. I haven't even heard about chargeback until I came to US from Europe. Bitcoin is push, no chargebacks are necessary because nobody can take your money. 2. For smaller sums of money (e.g. coffee) you can pretty much assume the transaction to be confirmed once you see it on the network. To be really, really sure the transaction is confirmed and money is yours, you have to wait about an hour. 3. Indeed, Bitcoin fluctuates, you need to peg it to your expenses which is usually your local currency. That doesn't mean you must convert it to that currency. You can incorporate this into your payment button. But yes, this is a downside.
      - icebraining 14y ago
        Well, I'm not from the US either, but as far as I know, chargebacks are used in other situations too, like dealing with a merchant that ends up not delivering the goods.
    - mrb 14y ago
      "No one wants to buy anything with bitcon, and no one wants to go through the trouble of selling anything with bitcoin." You have absolutely no idea what you are talking about. - There are at the very least 5k+ merchants selling products & services for bitcoins - a small fraction of them is listed on https://en.bitcoin.it/wiki/Trade https://en.bitcoin.it/wiki/Trade - and this is increasing every day - BitPay alone signed up 1500 businesses accepting Bitcoin: http://finance.sfgate.com/hearst.sfgate/news/read/23400142/when_your_paypal http://finance.sfgate.com/hearst.sfgate/news/read/23400142/w... You are not a Bitcoin user and have no idea how successful it is, that is fine, but do not spread lies. Obviously you have no idea how quickly the number of buyers and sellers using Bitcoin is rising...
      - betterunix 14y ago
        It is kind of difficult to determine the rate at which Bitcoin use is growing from your comment. 5000 merchants, 1500 businesses...and in what period of time? How many are still using Bitcoin today e.g. is the EFF among the thousands of Bitcoin businesses you cite? If you want to tell people that they need to get a clue, you could at least try to give them a clue in the process.
        mrb 14y ago
        Ok, well, for example one can look at the estimated USD transaction volume maintained by blockchain.info: http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... which went, over 1 year, from $0.5M to $10M transacted per day (it uses an algorithm to attempt to ignore the change of a transaction, hence "estimated"). A fraction of this volume is from people just moving BTC between their different wallets. It is impossible to estimate how large this fraction is. But the reasonable assumption that people are not artificially trying to game this chart by moving coins around leads to the reasonable conclusion that the volume of real transactions is increasing as well. You can look at the USD volume traded on the top Bitcoin exchanges which went, over 1 year, from $200-300k to $1.0-2.5M per day: http://blockchain.info/charts/trade-volume http://blockchain.info/charts/trade-volume You can look at Silk Road, who went, over 2 years, from zero to $2 million/month of Bitcoin revenues: http://arstechnica.com/tech-policy/2012/08/study-estimates-2-million-a-month-in-bitcoin-drug-sales/ http://arstechnica.com/tech-policy/2012/08/study-estimates-2... A Bitcoin casino went, over 6 months, from zero to $0.5 million profits (in bitcoins): http://arstechnica.com/business/2013/01/bitcoin-based-casino-rakes-in-over-500000-profit-in-six-months/ http://arstechnica.com/business/2013/01/bitcoin-based-casino... Bottom line, all the indicators point to increased Bitcoin spending.
- betterunix 14y ago
  "Why is bitcoin the one "true" alternative?" It is not, who said that it is? We have known how to make secure digital cash systems since the 1980s.
  - Retric 14y ago
    It's got a good name and that's about it.
thinkcomp 14y ago
If you want to know why PayPal has been around for a decade with no competitors, you should read this: http://news.ycombinator.com/item?id=5295236 http://news.ycombinator.com/item?id=5295236
- Coinabul1 14y ago
  Exactly. They've stacked the deck against any startup. I recall that one startup in California, facecash or something, that couldn't get licensing even though they're entirely qualified. That's the beautiful thing about Bitcoin, it isn't just any startup, it's an open source project. If one exchange can't get a banking license, another one will. Everyone can use it and no one can shut it down at a centralized location.
  - thinkcomp 14y ago
    I run FaceCash. I would advise talking to a lawyer. (I am not a lawyer.) I would also advise, to anyone who can make it, going to Sacramento on March 11: http://abnk.assembly.ca.gov/hearings http://abnk.assembly.ca.gov/hearings
    - Coinabul1 14y ago
      I've talked with lawyers! I don't advise running an exchange anywhere near the United States. (But yes, I'm not a lawyer either.) If I didn't have jury duty I would be there. I hope you can shed some light on these guys. Can I expect another post with updates? :)
- ndonnellan 14y ago
  Am I missing something obvious? Where's the link to PayPal in the article? Is that up next in the series?
spqr 14y ago
I've seen articles about Bitcoinstore referring to Newegg and Amazon as dinosaurs. Bitcoinstore should load their site in an iPhone. I just did and it looks like a jumbled mess of a site from 1996.
sethist 14y ago
Until the value of Bitcoin is more stable and technology illiterate people start to use it, there is no way that something like this can replace PayPal.
- astrodust 14y ago
  It's not the price stability, which is still a serious concern, but the fact that you're talking about a system designed by crypto-anarchists. There is no way Bitcoin will ever displace Paypal without serious, fundamental changes.
  - dmix 14y ago
    That was ad hominem and lacking a proper argument against bitcoin or crypto-currencies.
    - astrodust 14y ago
      I have no problem with crypto-currencies in general, but one where you have literally no idea who wrote it? That's more than a little worrying. Would you place much trust in a platform when you have absolutely no idea where it came from or what the motivations behind it might be?
      - dmix 14y ago
        The creator of Truecrypt is anonymous. But third parties can still verify is security.
  - wmf 14y ago
    It's funny you should mention that, since Paypal was also founded by crypto-anarchists.
    - astrodust 14y ago
      Paypal is also an entity with a head office, where the people involved in creating it are widely known. Although you might disagree with their policies or ethics, at least they're a legitimate concern. Bitcoin was created by "some guy" that, if anybody knows them, nobody's talking. Illegal, underground money lenders are more above-board than this.
betterunix 14y ago
Why would a major, established business like Amazon want to deal with Bitcoin? Transaction times of 10 minutes? Questions about how to pay their taxes (yes, believe it or not, a business as enormous as Amazon is not going to fail to pay taxes) and what taxes should be paid on BTC transactions are probably enough to keep them away. Amazon issues lines of credit to their customers, and only a fool would issue a line of credit in a currency that has built-in deflation. I think it is more likely that Congress will dismantle the military industrial complex.
- Coinabul1 14y ago
  When a little startup already has better pricing than a well established billion dollar company, that's something to take note of. Most Bitcoin Processors give confirmation fairly quickly. The customer doesn't have to wait 10 minutes. Taxes shouldn't be too big of an issue. They just get reported like accepting any other foreign currency. As for line of credit... you should check out Ripple.com
  - betterunix 14y ago
    "When a little startup already has better pricing than a well established billion dollar company, that's something to take note of." By selling at a loss. We are not talking about a startup that outprices Amazon by actually doing something technically superior to cut costs, we are talking about a startup that is trying to use a loss leader strategy. Nothing to see here, it's a well known tactic. "Most Bitcoin Processors give confirmation fairly quickly. The customer doesn't have to wait 10 minutes." Last I checked, it was 10-30 minutes. More importantly, isn't using a payment processor defeating the whole point here? What advantage does Amazon get from using a BTC payment processor over Visa? Were we trying to avoid convincing Visa to become a Bitcoin processor? "Taxes shouldn't be too big of an issue. They just get reported like accepting any other foreign currency." Bitcoin is not a foreign currency. In all likelihood, Amazon would have to report taxes on BTC transactions as if they were barter transactions, which basically means reporting the dollar value of the goods being sold. That means that either Amazon has to adjust the prices of goods on a day-by-day basis to account for Bitcoin prices, or take the risk that they will wind up losing money as Bitcoin fluctuates (and without a futures market on Bitcoin, there are few ways to mitigate that risk, except the immediately convert the BTC they receive back into dollars -- so again, why bother with the extra complication?). As for lines of credit, the point is this: issuing a loan in a deflationary currency is a massively bad idea. Deflation makes loans harder to repay over time, and at an accelerating rate. Amazon would have to keep adjusting their interest rate on BTC lines of credit to stave off the possibility of a disaster, which would only make the credit more difficult to utilize. This is widely understood by economists, and it is among the more important reasons that governments work hard to prevent their currencies from deflating.
mootothemax 14y ago
Not a single mention of fraud prevention, AKA why no-one else has successfully challenged PayPal to date. Buyers can perform fraud. Sellers can perform fraud. Sometimes they're the same person. None of this is easy. But articles like this pretend it is.
SpikeDad 14y ago
Another favorite geek service that touted as the end of something that regular folks use. Do folks around her realize yet that we're not regular folks and our interest, desires and accommodations are often not connected at all with those of the average non-geek person?
- throwawayG9 14y ago
  I'm pretty sure average non-geek persons will receive with open arms a currency that can't be manipulated by the government, among other benefits, once they are sure it's safe and not a scam, like some people even here in HN sometimes suggest.
  - illuminate 14y ago
    So, geeks and Birchers? :p
    - throwawayG9 14y ago
      What do you mean by "bircher"? I found this: http://www.urbandictionary.com/define.php?term=bircher http://www.urbandictionary.com/define.php?term=bircher
      - illuminate 14y ago
        Not at all. http://en.wikipedia.org/wiki/John_Birch_Society http://en.wikipedia.org/wiki/John_Birch_Society , the Ron Paul fans, and anyone else against the Fed.
foxylad 14y ago
It seems to me that the beauty (and probably the downfall) of bitcoin is that it is equivalent to cash. If you're careful, you can use it anonymously. No charge-backs - just like cash. You need to use the same care with bitcoin as we used to use with cash. Credit cards are far more forgiving, thanks mainly to the charge-back mechanism (which incidentally is a US thing - in most countries it is un-heard of). My biggest fear for bitcoin is that governments will kill it, because they have no control over it. They've been delighted to see cash fading away, but I predict that if bitcoin ever does get traction with the general public, we'll see a deluge of "bitcoin is the currency of the terrorists and child-molesters" propaganda which will make copyright scaremongering seem quaint.

24 points by Coinabul1 14y ago

Why is bitcoin the one "true" alternative? If payment services like Balanced and Stripe solve most of the problems of PayPal (frozen accounts, pleasant APIs, etc) then why are they less worthy alternatives?

Coinabul1 14y ago
I feel like there are more problems at PayPal than just frozen accounts. The inherent issues I have with PayPal is a: they're a middleman and bump up prices. and b: they facilitate chargebacks which lead to an ever increase amount of fraud. More fraud equals more cost. As the conventional alternatives continue to grow they'll face more and more fraud. Bitcoin has no chargeback fraud. It never will.
- slinkyavenger 14y ago
  Bitcoin fluctuates wildly in value. Bitcoin takes quite a while for a transaction to happen, and there are waits and fees involved in exchanging money from USD and back to USD. Bitcoin doesn't allow chargebacks, an important consumer protection mechanism, therefore helping to perpetuate fraud. No one wants to buy anything with bitcon, and no one wants to go through the trouble of selling anything with bitcoin.
  - discountgenius 14y ago
    > Bitcoin doesn't allow chargebacks, an important consumer protection mechanism, therefore helping to perpetuate fraud. Chargebacks enable WAY more fraud than they stop.
    - ScottWhigham 14y ago
      Downvoted for a blanket statement with no facts/source to back it up
  - lectrick 14y ago
    > Bitcoin fluctuates wildly in value. It's been just growing steadily lately, but a seller can always convert to their local currency on the spot using a BTC payment processor. > Bitcoin takes quite a while for a transaction to happen 100% false. Every time I've used it, transactions take less than a second. Stop spreading FUD aka bullshit. > and there are waits and fees involved in exchanging money from USD and back to USD Yep... for now. I think the point is that at some point you won't have all your monetary holdings as USD. > Bitcoin doesn't allow chargebacks, an important consumer protection mechanism, therefore helping to perpetuate fraud. That's a funny thing to say, given that chargebacks are the very source of fraud these days. BTC is attractive to merchants precisely because you can't chargeback. If you have a problem with a merchant, bitch about them elsewhere and their reputation will suffer.
    - betterunix 14y ago
      "Every time I've used it, transactions take less than a second" Are you bothering to wait for confirmations? Last I checked, waiting for confirmation of a transaction was a 10 to 30 minute process.
    - slinkyavenger 14y ago
      Growing steadily? Bitcoin value is wildly speculative, since it's only backed up by make-work, illegal goods trade, and scams. 100% true, at least for vendors, since they'll be waiting for confirmations. Otherwise they're facing double-spend scams and things like that. Fear, uncertainty, and doubt aren't bullshit, but it's cute that you deflect a real argument with an acronym. There won't be a time where any intelligent person would have all their holdings in Bitcoin, because it is nothing more than a proposal that got out of hand. The guy who came up with it even said it'd be stupid for someone to use it like a real currency. Furthermore there will still be transaction fees, since those are what's planned to support the network operators after coins are mined. Regarding chargebacks, having a currency forbid them is not the appropriate answer to fraud that involves them. No consumer would have any faith in the system without some basic protection in case their stuff gets stolen. For all the problems caused by banks, it sure is nice to have someone who is regulated provide some kind of security in case I lose my wallet. So there you have it. Bitcoins are bad for merchants, as well as consumers. Edit: I love the quip about how a bad merchant's reputation will suffer. That doesn't work. If you want proof, just look at the bitcoin talk forums. Tons of scammers. If they get a scammer tag, they just come back under a different name. Reputations may matter face to face, but they're worthless here.
  - pepr 14y ago
    1. Chargebacks are only necessary because of the pull nature of the US banking system. I haven't even heard about chargeback until I came to US from Europe. Bitcoin is push, no chargebacks are necessary because nobody can take your money. 2. For smaller sums of money (e.g. coffee) you can pretty much assume the transaction to be confirmed once you see it on the network. To be really, really sure the transaction is confirmed and money is yours, you have to wait about an hour. 3. Indeed, Bitcoin fluctuates, you need to peg it to your expenses which is usually your local currency. That doesn't mean you must convert it to that currency. You can incorporate this into your payment button. But yes, this is a downside.
    - icebraining 14y ago
      Well, I'm not from the US either, but as far as I know, chargebacks are used in other situations too, like dealing with a merchant that ends up not delivering the goods.
  - mrb 14y ago
    "No one wants to buy anything with bitcon, and no one wants to go through the trouble of selling anything with bitcoin." You have absolutely no idea what you are talking about. - There are at the very least 5k+ merchants selling products & services for bitcoins - a small fraction of them is listed on https://en.bitcoin.it/wiki/Trade https://en.bitcoin.it/wiki/Trade - and this is increasing every day - BitPay alone signed up 1500 businesses accepting Bitcoin: http://finance.sfgate.com/hearst.sfgate/news/read/23400142/when_your_paypal http://finance.sfgate.com/hearst.sfgate/news/read/23400142/w... You are not a Bitcoin user and have no idea how successful it is, that is fine, but do not spread lies. Obviously you have no idea how quickly the number of buyers and sellers using Bitcoin is rising...
    - betterunix 14y ago
      It is kind of difficult to determine the rate at which Bitcoin use is growing from your comment. 5000 merchants, 1500 businesses...and in what period of time? How many are still using Bitcoin today e.g. is the EFF among the thousands of Bitcoin businesses you cite? If you want to tell people that they need to get a clue, you could at least try to give them a clue in the process.
      - mrb 14y ago
        Ok, well, for example one can look at the estimated USD transaction volume maintained by blockchain.info: http://blockchain.info/charts/estimated-transaction-volume-usd http://blockchain.info/charts/estimated-transaction-volume-u... which went, over 1 year, from $0.5M to $10M transacted per day (it uses an algorithm to attempt to ignore the change of a transaction, hence "estimated"). A fraction of this volume is from people just moving BTC between their different wallets. It is impossible to estimate how large this fraction is. But the reasonable assumption that people are not artificially trying to game this chart by moving coins around leads to the reasonable conclusion that the volume of real transactions is increasing as well. You can look at the USD volume traded on the top Bitcoin exchanges which went, over 1 year, from $200-300k to $1.0-2.5M per day: http://blockchain.info/charts/trade-volume http://blockchain.info/charts/trade-volume You can look at Silk Road, who went, over 2 years, from zero to $2 million/month of Bitcoin revenues: http://arstechnica.com/tech-policy/2012/08/study-estimates-2-million-a-month-in-bitcoin-drug-sales/ http://arstechnica.com/tech-policy/2012/08/study-estimates-2... A Bitcoin casino went, over 6 months, from zero to $0.5 million profits (in bitcoins): http://arstechnica.com/business/2013/01/bitcoin-based-casino-rakes-in-over-500000-profit-in-six-months/ http://arstechnica.com/business/2013/01/bitcoin-based-casino... Bottom line, all the indicators point to increased Bitcoin spending.
betterunix 14y ago
"Why is bitcoin the one "true" alternative?" It is not, who said that it is? We have known how to make secure digital cash systems since the 1980s.
- Retric 14y ago
  It's got a good name and that's about it.

thinkcomp 14y ago

If you want to know why PayPal has been around for a decade with no competitors, you should read this: http://news.ycombinator.com/item?id=5295236 http://news.ycombinator.com/item?id=5295236

Coinabul1 14y ago
Exactly. They've stacked the deck against any startup. I recall that one startup in California, facecash or something, that couldn't get licensing even though they're entirely qualified. That's the beautiful thing about Bitcoin, it isn't just any startup, it's an open source project. If one exchange can't get a banking license, another one will. Everyone can use it and no one can shut it down at a centralized location.
- thinkcomp 14y ago
  I run FaceCash. I would advise talking to a lawyer. (I am not a lawyer.) I would also advise, to anyone who can make it, going to Sacramento on March 11: http://abnk.assembly.ca.gov/hearings http://abnk.assembly.ca.gov/hearings
  - Coinabul1 14y ago
    I've talked with lawyers! I don't advise running an exchange anywhere near the United States. (But yes, I'm not a lawyer either.) If I didn't have jury duty I would be there. I hope you can shed some light on these guys. Can I expect another post with updates? :)
ndonnellan 14y ago
Am I missing something obvious? Where's the link to PayPal in the article? Is that up next in the series?

spqr 14y ago

I've seen articles about Bitcoinstore referring to Newegg and Amazon as dinosaurs. Bitcoinstore should load their site in an iPhone. I just did and it looks like a jumbled mess of a site from 1996.

sethist 14y ago

Until the value of Bitcoin is more stable and technology illiterate people start to use it, there is no way that something like this can replace PayPal.

astrodust 14y ago
It's not the price stability, which is still a serious concern, but the fact that you're talking about a system designed by crypto-anarchists. There is no way Bitcoin will ever displace Paypal without serious, fundamental changes.
- dmix 14y ago
  That was ad hominem and lacking a proper argument against bitcoin or crypto-currencies.
  - astrodust 14y ago
    I have no problem with crypto-currencies in general, but one where you have literally no idea who wrote it? That's more than a little worrying. Would you place much trust in a platform when you have absolutely no idea where it came from or what the motivations behind it might be?
    - dmix 14y ago
      The creator of Truecrypt is anonymous. But third parties can still verify is security.
- wmf 14y ago
  It's funny you should mention that, since Paypal was also founded by crypto-anarchists.
  - astrodust 14y ago
    Paypal is also an entity with a head office, where the people involved in creating it are widely known. Although you might disagree with their policies or ethics, at least they're a legitimate concern. Bitcoin was created by "some guy" that, if anybody knows them, nobody's talking. Illegal, underground money lenders are more above-board than this.

betterunix 14y ago

Why would a major, established business like Amazon want to deal with Bitcoin? Transaction times of 10 minutes? Questions about how to pay their taxes (yes, believe it or not, a business as enormous as Amazon is not going to fail to pay taxes) and what taxes should be paid on BTC transactions are probably enough to keep them away. Amazon issues lines of credit to their customers, and only a fool would issue a line of credit in a currency that has built-in deflation. I think it is more likely that Congress will dismantle the military industrial complex.

Coinabul1 14y ago
When a little startup already has better pricing than a well established billion dollar company, that's something to take note of. Most Bitcoin Processors give confirmation fairly quickly. The customer doesn't have to wait 10 minutes. Taxes shouldn't be too big of an issue. They just get reported like accepting any other foreign currency. As for line of credit... you should check out Ripple.com
- betterunix 14y ago
  "When a little startup already has better pricing than a well established billion dollar company, that's something to take note of." By selling at a loss. We are not talking about a startup that outprices Amazon by actually doing something technically superior to cut costs, we are talking about a startup that is trying to use a loss leader strategy. Nothing to see here, it's a well known tactic. "Most Bitcoin Processors give confirmation fairly quickly. The customer doesn't have to wait 10 minutes." Last I checked, it was 10-30 minutes. More importantly, isn't using a payment processor defeating the whole point here? What advantage does Amazon get from using a BTC payment processor over Visa? Were we trying to avoid convincing Visa to become a Bitcoin processor? "Taxes shouldn't be too big of an issue. They just get reported like accepting any other foreign currency." Bitcoin is not a foreign currency. In all likelihood, Amazon would have to report taxes on BTC transactions as if they were barter transactions, which basically means reporting the dollar value of the goods being sold. That means that either Amazon has to adjust the prices of goods on a day-by-day basis to account for Bitcoin prices, or take the risk that they will wind up losing money as Bitcoin fluctuates (and without a futures market on Bitcoin, there are few ways to mitigate that risk, except the immediately convert the BTC they receive back into dollars -- so again, why bother with the extra complication?). As for lines of credit, the point is this: issuing a loan in a deflationary currency is a massively bad idea. Deflation makes loans harder to repay over time, and at an accelerating rate. Amazon would have to keep adjusting their interest rate on BTC lines of credit to stave off the possibility of a disaster, which would only make the credit more difficult to utilize. This is widely understood by economists, and it is among the more important reasons that governments work hard to prevent their currencies from deflating.

mootothemax 14y ago

Not a single mention of fraud prevention, AKA why no-one else has successfully challenged PayPal to date. Buyers can perform fraud. Sellers can perform fraud. Sometimes they're the same person. None of this is easy. But articles like this pretend it is.

SpikeDad 14y ago

Another favorite geek service that touted as the end of something that regular folks use. Do folks around her realize yet that we're not regular folks and our interest, desires and accommodations are often not connected at all with those of the average non-geek person?

throwawayG9 14y ago
I'm pretty sure average non-geek persons will receive with open arms a currency that can't be manipulated by the government, among other benefits, once they are sure it's safe and not a scam, like some people even here in HN sometimes suggest.
- illuminate 14y ago
  So, geeks and Birchers? :p
  - throwawayG9 14y ago
    What do you mean by "bircher"? I found this: http://www.urbandictionary.com/define.php?term=bircher http://www.urbandictionary.com/define.php?term=bircher
    - illuminate 14y ago
      Not at all. http://en.wikipedia.org/wiki/John_Birch_Society http://en.wikipedia.org/wiki/John_Birch_Society , the Ron Paul fans, and anyone else against the Fed.

foxylad 14y ago

It seems to me that the beauty (and probably the downfall) of bitcoin is that it is equivalent to cash. If you're careful, you can use it anonymously. No charge-backs - just like cash. You need to use the same care with bitcoin as we used to use with cash. Credit cards are far more forgiving, thanks mainly to the charge-back mechanism (which incidentally is a US thing - in most countries it is un-heard of). My biggest fear for bitcoin is that governments will kill it, because they have no control over it. They've been delighted to see cash fading away, but I predict that if bitcoin ever does get traction with the general public, we'll see a deluge of "bitcoin is the currency of the terrorists and child-molesters" propaganda which will make copyright scaremongering seem quaint.