3 ms·

I guess I don't understand. First of all these kinds of transactions need a vehicle like bitcoin, because using cash introduces a lot of middle men that dramat

by pfisch 13y ago

I guess I don't understand. First of all these kinds of transactions need a vehicle like bitcoin, because using cash introduces a lot of middle men that dramatically decrease the efficiency of illegal transactions. Second of all there is no way to send money right now for legal transactions without also introducing a bunch of similar middle men. I think square cash is maybe free right now in a promotional sort of way but it will not continue to be free. Third there is no good way to do micro transactions right now...also because of middle men. This seems like a disruptive technology that will displace a lot of middle men.... As long as it doesn't get hacked it at least seems like a pretty great idea.

XorNot 13y ago
This post seems like you don't understand the Bitcoin protocol or the exchanges. The current BTC trade goes as: You --> some money handler --> exchange --> bitcoin --> a bunch of nodes which take a cut for processing a transaction (and 20 minutes to hit the network) --> exchange --> another money handler --> recipient. What part of that seems like it has less middlemen? And oh yeah, very few of those parties are beholden to any kind of regulation or ability to seek remission if something is not as advertised.
- pfisch 13y ago
  The average credit card processing cost for a retail business where cards are swiped is roughly 1.95% - 2%. The average cost for card-not-present businesses, such as online shops, is roughly 2.30% - 2.50%. However microtransactions cost even more than this and escalate as you have more small transactions. Once you have bitcoins the transaction costs are now 0. Getting USD to bitcoins is obviously hard right now because it is not really a currency yet, but somewhere between 0.2-0.5% is probably what it will end up being to convert USD to BTC, however once that has been done all subsequent transactions are now free forever. I expect that bitcoins will be a lot like withdrawing cash from atms in the future except you will be able to do it from your computer or phone on your banking website. Also if reputable dealers like amazon and steam were charging less for items bought via btc transactions I think a lot of people would switch over really fast.(This is of course after btc stabilizes once a bunch more money enters the market)
  - Nursie 13y ago
    There are processing fees built into the system, so not it's not 0%. As mining rewards drop these may have to rise in compensation. Most people can't mine, and would have to eat fees. Further to that, BTC is a terrible step backwards for consumers as chargeback is not there. The cost for amazon to introduce consumer protections like this (that may be required by law in some places) is likely to dwarf credit card fees.
    - pfisch 13y ago
      What consumer protections are you talking about? Issuing a refund? I'm pretty sure they could issue a refund if they wanted to. The transaction fees you are talking about are so much smaller than credit card companies they are basically negligible. Also they keep dropping lower.
      - lukifer 13y ago
        They're referring to chargebacks, where Amazon refuses to give you your money back, and so MasterCard does it by force. The difference with BitCoin is not that you can't have escrow or middlemen, but that the middlemen services can compete, and are optional.
  - Steko 13y ago
    "The average credit card processing cost for a retail business where cards are swiped is roughly 1.95% - 2%." Those are US numbers. In fact, credit card costs are plummeting across the world [1] and every year more and more shops force a debit swipe where available (spoilers: more and more people) so they pay a dime instead of 1-2%. In addition E-checks are basically free. [1] http://www.csmonitor.com/var/archive/storage/images/media/images/0413-creditcharges/9964383-1-eng-US/0413-creditcharges_full_600.jpg http://www.csmonitor.com/var/archive/storage/images/media/im... Further as sibling notes the argument that bitcoin is free from middlemen is not very convincing. Middlemen would have to exist in a bitcoin world both because of bitcoin's very nature of requiring them and because of the same reasons middlemen exist in the world today.

by pfisch 13y ago

XorNot 13y ago

This post seems like you don't understand the Bitcoin protocol or the exchanges. The current BTC trade goes as: You --> some money handler --> exchange --> bitcoin --> a bunch of nodes which take a cut for processing a transaction (and 20 minutes to hit the network) --> exchange --> another money handler --> recipient. What part of that seems like it has less middlemen? And oh yeah, very few of those parties are beholden to any kind of regulation or ability to seek remission if something is not as advertised.

pfisch 13y ago
The average credit card processing cost for a retail business where cards are swiped is roughly 1.95% - 2%. The average cost for card-not-present businesses, such as online shops, is roughly 2.30% - 2.50%. However microtransactions cost even more than this and escalate as you have more small transactions. Once you have bitcoins the transaction costs are now 0. Getting USD to bitcoins is obviously hard right now because it is not really a currency yet, but somewhere between 0.2-0.5% is probably what it will end up being to convert USD to BTC, however once that has been done all subsequent transactions are now free forever. I expect that bitcoins will be a lot like withdrawing cash from atms in the future except you will be able to do it from your computer or phone on your banking website. Also if reputable dealers like amazon and steam were charging less for items bought via btc transactions I think a lot of people would switch over really fast.(This is of course after btc stabilizes once a bunch more money enters the market)
- Nursie 13y ago
  There are processing fees built into the system, so not it's not 0%. As mining rewards drop these may have to rise in compensation. Most people can't mine, and would have to eat fees. Further to that, BTC is a terrible step backwards for consumers as chargeback is not there. The cost for amazon to introduce consumer protections like this (that may be required by law in some places) is likely to dwarf credit card fees.
  - pfisch 13y ago
    What consumer protections are you talking about? Issuing a refund? I'm pretty sure they could issue a refund if they wanted to. The transaction fees you are talking about are so much smaller than credit card companies they are basically negligible. Also they keep dropping lower.
    - lukifer 13y ago
      They're referring to chargebacks, where Amazon refuses to give you your money back, and so MasterCard does it by force. The difference with BitCoin is not that you can't have escrow or middlemen, but that the middlemen services can compete, and are optional.
- Steko 13y ago
  "The average credit card processing cost for a retail business where cards are swiped is roughly 1.95% - 2%." Those are US numbers. In fact, credit card costs are plummeting across the world [1] and every year more and more shops force a debit swipe where available (spoilers: more and more people) so they pay a dime instead of 1-2%. In addition E-checks are basically free. [1] http://www.csmonitor.com/var/archive/storage/images/media/images/0413-creditcharges/9964383-1-eng-US/0413-creditcharges_full_600.jpg http://www.csmonitor.com/var/archive/storage/images/media/im... Further as sibling notes the argument that bitcoin is free from middlemen is not very convincing. Middlemen would have to exist in a bitcoin world both because of bitcoin's very nature of requiring them and because of the same reasons middlemen exist in the world today.