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I am sorry I cannot agree with you. You cannot collect profits from a transaction between 2 Bitcoin users like PayPal does right now with "real" money. If the

by vlasta2 13y ago

I am sorry I cannot agree with you. You cannot collect profits from a transaction between 2 Bitcoin users like PayPal does right now with "real" money. If the world adopted Bitcoin, it would be the end of PayPal's business model. If PayPal were ready to replace their business model with something way less profitable, but more future-proof, it would still make no sense for them to adopt bitcoin. It would only make sense if they owned significant amount (50%) of the existing bitcoins and had the code base under at least indirect control. What would happen if this were true and the bitcoiners found out? ...too many ifs. That said, Bitcoin will never become a commonly used currency in its current form. The built-in deflation is a fatal flaw, which makes it unusable for normal buyers or sellers. It is only appealing for "get-rich-quick" investors, which is a shame, 'cause we really need a good solution (0% fee & safe) for online payments.

ok_craig 13y ago
There's no reason PayPal has to build a vanilla bitcoin wallet interface. It's true that you cannot simply deduct a certain percentage from a direct bitcoin transaction. However, they could pool your coins in their own controlled address, and when you choose to send a payment through them, it makes one transaction on your behalf for that amount, and also a second transaction for 1% to their revenue address. Average Joes who don't want to bother having to understand bitcoin may find this tradeoff acceptable if PayPal makes it worth it by providing a very simple and secure bitcoin interface that is better than everything else out there. Whether you think bitcoin itself is doomed to failure due to deflation and all that is a different topic entirely.
- vlasta2 13y ago
  One of the advantages of bitcoin is that you do not need a middle man to do a transaction. Some people may choose one for whatever reason, but would they be OK with paying the transaction fees? Would you use a credit card if you had to pay 4% more than if you paid in cash? I do not think many people would be OK with that. It may sound as if I am a PayPal lover and bitcoin hater, which is NOT the case. I just do not see them cooperating sensible.
  - clueless123 13y ago
    You write: "Would you use a credit card if you had to pay 4% more than if you paid in cash? " That is exactly what happens today on the real world. If you make it convinient for me to use your "credit card", I will use it, and because of that, vendors pay the 4% fee. All paypal needs to do is to make it easy (at non bitcoin vendors for example) for me to spend my bitcoins and I will use it. Vendors will fall in line because they want my business. The above said.. IMHO, there is no way in hell that "the man" will allow bitcoin in its current form to prosper (at least not without a heck of a fight), as to much visibility & control would be lost.
    - vlasta2 13y ago
      Today, the buyer does not experience the fee. Sellers accept it, because the middle man gives them no other choice. With bitcoins, the middle man has no leverage anymore as the buyer and the seller can interact directly. That was my point.
      - Domenic_S 13y ago
        The buyer does experience the fee in the form of increased price. They just don't notice it because it's baked in. Anyone who buys stuff at the grocery store in cash is financing other people's rewards points. Ever wonder why Arco is the cheapest gas?
      - analog 13y ago
        In some cases you can end up paying a charge for using a credit card. Low cost airlines are an example. EasyJet adds a 2.5% surcharge for credit cards. People still use them. http://www.easyjet.com/book/paymentoptions http://www.easyjet.com/book/paymentoptions
  - baddox 13y ago
    You don't need a middle man for physical cash (let's use USD as the example), but services like credit cards and debit cards are extremely convenient. Middle men can certainly be of great value to the bitcoin economy, by providing similar services to the ones that already exist on top of government currencies.
javert 13y ago
> The built-in deflation is a fatal flaw Yeah, I mean, gold didn't work as a currency all those hundreds of years. /sarcasm
- rsofaer 13y ago
  The amount of gold in circulation has never stopped increasing.
  - draugadrotten 13y ago
    Nothing prevents you from creating a "bitcoin-B", "bitcoin-C" and so on. There will be enough bitcoins for everybody. Disclaimer: I believe bitcoins are tulip bulbs.
    - YokoZar 13y ago
      More relevantly, nothing stops you from creating a tradeable note that says "redeemable for 1 bitcoin from <trusted authority>" and then using those as currency. This happened with gold, and also would happen if we saw a true bitcoin bank rather than bitcoin wallet -- they'd pay a bit of interest, and in return would pool their deposits and use some fraction of them to generate revenue through other channels.
    - javert 13y ago
      bitcoin-B would not be bitcoins, nobody would use them, and they would at best be tulip bulbs. Unless you are using them to do something different then currency.
  - codeulike 13y ago
    If the bitcoin protocols changed to allow divisions to 9 decimal places instead of 8, would that be viewed as an increase in the money supply, or no change, in traditional economics?
    - nly 13y ago
      Would re-introducing a half-penny coin increase the money supply? No. Basically, as long as you maintain proportionality, you can re-denominate currency (or shares for that matter) at will.
mseebach 13y ago
It's like oil companies investing in green tech. If that's where you think the world is headed, it's better to get on the train and be a player than to get left behind. For PayPal and BTC - even in the best scenario for BitCion, there's going to be a very long transition period, and PayPal has a very good position to profit from being an intermediate in that period. And once all centralised currencies are gone, true, PayPal's current business model is irrelevant, but by then, they'll have world-class expertise on BitCoin and can probably keep in the game as wallet operators or makers of hardware for casual transactions or whatever.

by vlasta2 13y ago

ok_craig 13y ago

There's no reason PayPal has to build a vanilla bitcoin wallet interface. It's true that you cannot simply deduct a certain percentage from a direct bitcoin transaction. However, they could pool your coins in their own controlled address, and when you choose to send a payment through them, it makes one transaction on your behalf for that amount, and also a second transaction for 1% to their revenue address. Average Joes who don't want to bother having to understand bitcoin may find this tradeoff acceptable if PayPal makes it worth it by providing a very simple and secure bitcoin interface that is better than everything else out there. Whether you think bitcoin itself is doomed to failure due to deflation and all that is a different topic entirely.

vlasta2 13y ago
One of the advantages of bitcoin is that you do not need a middle man to do a transaction. Some people may choose one for whatever reason, but would they be OK with paying the transaction fees? Would you use a credit card if you had to pay 4% more than if you paid in cash? I do not think many people would be OK with that. It may sound as if I am a PayPal lover and bitcoin hater, which is NOT the case. I just do not see them cooperating sensible.
- clueless123 13y ago
  You write: "Would you use a credit card if you had to pay 4% more than if you paid in cash? " That is exactly what happens today on the real world. If you make it convinient for me to use your "credit card", I will use it, and because of that, vendors pay the 4% fee. All paypal needs to do is to make it easy (at non bitcoin vendors for example) for me to spend my bitcoins and I will use it. Vendors will fall in line because they want my business. The above said.. IMHO, there is no way in hell that "the man" will allow bitcoin in its current form to prosper (at least not without a heck of a fight), as to much visibility & control would be lost.
  - vlasta2 13y ago
    Today, the buyer does not experience the fee. Sellers accept it, because the middle man gives them no other choice. With bitcoins, the middle man has no leverage anymore as the buyer and the seller can interact directly. That was my point.
    - Domenic_S 13y ago
      The buyer does experience the fee in the form of increased price. They just don't notice it because it's baked in. Anyone who buys stuff at the grocery store in cash is financing other people's rewards points. Ever wonder why Arco is the cheapest gas?
    - analog 13y ago
      In some cases you can end up paying a charge for using a credit card. Low cost airlines are an example. EasyJet adds a 2.5% surcharge for credit cards. People still use them. http://www.easyjet.com/book/paymentoptions http://www.easyjet.com/book/paymentoptions
- baddox 13y ago
  You don't need a middle man for physical cash (let's use USD as the example), but services like credit cards and debit cards are extremely convenient. Middle men can certainly be of great value to the bitcoin economy, by providing similar services to the ones that already exist on top of government currencies.

javert 13y ago

> The built-in deflation is a fatal flaw Yeah, I mean, gold didn't work as a currency all those hundreds of years. /sarcasm

rsofaer 13y ago
The amount of gold in circulation has never stopped increasing.
- draugadrotten 13y ago
  Nothing prevents you from creating a "bitcoin-B", "bitcoin-C" and so on. There will be enough bitcoins for everybody. Disclaimer: I believe bitcoins are tulip bulbs.
  - YokoZar 13y ago
    More relevantly, nothing stops you from creating a tradeable note that says "redeemable for 1 bitcoin from <trusted authority>" and then using those as currency. This happened with gold, and also would happen if we saw a true bitcoin bank rather than bitcoin wallet -- they'd pay a bit of interest, and in return would pool their deposits and use some fraction of them to generate revenue through other channels.
  - javert 13y ago
    bitcoin-B would not be bitcoins, nobody would use them, and they would at best be tulip bulbs. Unless you are using them to do something different then currency.
- codeulike 13y ago
  If the bitcoin protocols changed to allow divisions to 9 decimal places instead of 8, would that be viewed as an increase in the money supply, or no change, in traditional economics?
  - nly 13y ago
    Would re-introducing a half-penny coin increase the money supply? No. Basically, as long as you maintain proportionality, you can re-denominate currency (or shares for that matter) at will.

mseebach 13y ago

It's like oil companies investing in green tech. If that's where you think the world is headed, it's better to get on the train and be a player than to get left behind. For PayPal and BTC - even in the best scenario for BitCion, there's going to be a very long transition period, and PayPal has a very good position to profit from being an intermediate in that period. And once all centralised currencies are gone, true, PayPal's current business model is irrelevant, but by then, they'll have world-class expertise on BitCoin and can probably keep in the game as wallet operators or makers of hardware for casual transactions or whatever.