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All the difficulty of buying/selling Bitcoins for cash online only highlights how inflexible it is to move money with legacy technologies. Everyone who touches

All the difficulty of buying/selling Bitcoins for cash online only highlights how inflexible it is to move money with legacy technologies. Everyone who touches fiat currency must comply with tons of costly regulations, allow reversal of transfers and verify identities of people involved. This not only increases costs for everyone, but also reduces competition. The only stuff that can be irreversibly transferred is either physical commodity (including paper cash and precious metals) or Bitcoin. But, luckily, once you buy yourself some bitcoins, you may do whatever you want with them. Buy stuff, gamble, donate, pay freelancers, or anonymize as much as you want. There are only two ways eBay can possibly "embrace" Bitcoin: 1. By promising non-reversible transfers of USD when exchanged for Bitcoin. This may be problematic if there are some "customer protection" regulations that demand possibility to return funds. 2. By separating USD payments from BTC payments completely. E.g. you can sell/buy stuff on eBay for BTC without converting it to USD on eBay, but elsewhere. This is much more doable without triggering FinCEN regulations or chargebacks.

Nursie 13y ago
Many people (myself included) don't think irreversible transactions are a good idea. People like the protections afforded them by credit cards, and by financial regulation. Many financial regulations exist to stop the public being screwed over by the unscrupulous. If they increase costs a little, well that's the insurance cover for when we inevitably run into people who want to take us for a ride.
- oleganza 13y ago
  I see what you mean, but you miss an important point. Reversible transactions must be reversed by a human intermediary. An insurance company, a financial institution, someone who you must trust this way or another. In addition to obvious value (that you described), this also creates all sorts of issues we all know about: fraud, regulatory hassle, spying, freezing of accounts etc. Bitcoin as a protocol (or any alternative money-moving protocol for that matter) itself cannot reverse anything. It's just a protocol. Anyone can set up their own BitcoinPayPal and mediate Bitcoin transactions and reverse them as they like. The value of Bitcoin is that you can opt in insured reversible transactions based on trust if you want to. But that's not necessary. USD is limited precisely because you have no other way to move it across the internet without trusting intermediaries that might reverse the transaction. Bitcoin simply gives you all possibilities, USD gives you less. There's nothing impossible in having eBay to act as an escrow for BTC transactions just like with USD. But the power of BTC is that you can ultimately own it, while USD must be always stored in someone else's hands.
  - Nursie 13y ago
    I'm not sure it's correct to say BTC gives you all possibilities yet, though those services could be built. It may be a while before they are built because the bitcoin community in general seem to be violently against reversible transactions as a concept. As for 'owning' BTC, the concept is entertaining. BTC is an entry in a public ledger, you own the private key to access it, but it's very hard to say where exactly a BTC is at any given time.
- rlpb 13y ago
  I happily use reversible transactions and pay the premium when I wish to deal with a person or company that I have not used before and nothing to base their reputation on. On the Internet, I only use credit cards for these types of transactions since I enjoy strong protection in my jurisdiction. And I am happy to pay the premium. Note that nothing about irreversible transactions stops you from verifying the identity of the other party and suing over failure to perform on a contract. I accept that this is tedious and difficult over multiple jurisdictions. In society we seem to prefer giving the money sender arbitrary control instead. But this just makes it difficult for money receivers who do not deal with bulk volumes, and allows money senders to abuse money receivers. I think it's important not to conflate reversible transactions with other forms of contract enforcement, such as the courts. But I'd still like the option of executing an irreversible transaction when I choose to do so. In the physical world, I use cash for this, and it works well. I'd like an online equivalent. Otherwise, the increased cost just becomes a tax on online transactions. There are many transactions which aren't tied to a contract where performance can be measured. Take crowdfunding, for example. What does a reversible transaction even mean? Paypal's stance is just to ban or freeze accounts performing these kinds of activities. So by banning irreversible transactions, you stop certain activities from taking place, since there exist legitimate transactions which do not correspond to contracts that can be measured. I think we harm society as a result. Reversible transactions: good. No option of irreversible transactions: bad.
- vdaniuk 13y ago
  Well, one of the elements of market disruption is unbundling of product.For example, if you unbundle hotel services you get safe place to stay, comfortable place to stay, services-on-demand, ease of finding such place. AirBnB has thrown out services-on-demand from its value proposition and had an opportunity to capitalize on being a market connecting buyers and sellers. If we unbundle reversible transactions we get money transmission and satisfaction guarantee through complex legal system. What happens if we technology will allow same level of protection but on top of instant, irreversible transactions. Many sources of government inefficiencies would be eliminated. It may be a complex thing to do, but we should think of the components of reversible transactions and how to innovate on each of it.

Nursie 13y ago

Many people (myself included) don't think irreversible transactions are a good idea. People like the protections afforded them by credit cards, and by financial regulation. Many financial regulations exist to stop the public being screwed over by the unscrupulous. If they increase costs a little, well that's the insurance cover for when we inevitably run into people who want to take us for a ride.

oleganza 13y ago
I see what you mean, but you miss an important point. Reversible transactions must be reversed by a human intermediary. An insurance company, a financial institution, someone who you must trust this way or another. In addition to obvious value (that you described), this also creates all sorts of issues we all know about: fraud, regulatory hassle, spying, freezing of accounts etc. Bitcoin as a protocol (or any alternative money-moving protocol for that matter) itself cannot reverse anything. It's just a protocol. Anyone can set up their own BitcoinPayPal and mediate Bitcoin transactions and reverse them as they like. The value of Bitcoin is that you can opt in insured reversible transactions based on trust if you want to. But that's not necessary. USD is limited precisely because you have no other way to move it across the internet without trusting intermediaries that might reverse the transaction. Bitcoin simply gives you all possibilities, USD gives you less. There's nothing impossible in having eBay to act as an escrow for BTC transactions just like with USD. But the power of BTC is that you can ultimately own it, while USD must be always stored in someone else's hands.
- Nursie 13y ago
  I'm not sure it's correct to say BTC gives you all possibilities yet, though those services could be built. It may be a while before they are built because the bitcoin community in general seem to be violently against reversible transactions as a concept. As for 'owning' BTC, the concept is entertaining. BTC is an entry in a public ledger, you own the private key to access it, but it's very hard to say where exactly a BTC is at any given time.
rlpb 13y ago
I happily use reversible transactions and pay the premium when I wish to deal with a person or company that I have not used before and nothing to base their reputation on. On the Internet, I only use credit cards for these types of transactions since I enjoy strong protection in my jurisdiction. And I am happy to pay the premium. Note that nothing about irreversible transactions stops you from verifying the identity of the other party and suing over failure to perform on a contract. I accept that this is tedious and difficult over multiple jurisdictions. In society we seem to prefer giving the money sender arbitrary control instead. But this just makes it difficult for money receivers who do not deal with bulk volumes, and allows money senders to abuse money receivers. I think it's important not to conflate reversible transactions with other forms of contract enforcement, such as the courts. But I'd still like the option of executing an irreversible transaction when I choose to do so. In the physical world, I use cash for this, and it works well. I'd like an online equivalent. Otherwise, the increased cost just becomes a tax on online transactions. There are many transactions which aren't tied to a contract where performance can be measured. Take crowdfunding, for example. What does a reversible transaction even mean? Paypal's stance is just to ban or freeze accounts performing these kinds of activities. So by banning irreversible transactions, you stop certain activities from taking place, since there exist legitimate transactions which do not correspond to contracts that can be measured. I think we harm society as a result. Reversible transactions: good. No option of irreversible transactions: bad.
vdaniuk 13y ago
Well, one of the elements of market disruption is unbundling of product.For example, if you unbundle hotel services you get safe place to stay, comfortable place to stay, services-on-demand, ease of finding such place. AirBnB has thrown out services-on-demand from its value proposition and had an opportunity to capitalize on being a market connecting buyers and sellers. If we unbundle reversible transactions we get money transmission and satisfaction guarantee through complex legal system. What happens if we technology will allow same level of protection but on top of instant, irreversible transactions. Many sources of government inefficiencies would be eliminated. It may be a complex thing to do, but we should think of the components of reversible transactions and how to innovate on each of it.