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With more of these issues happening in the bitcoin world, it just screams of bad PR and self-limiting for mass adoption. I know it was stated that this helps "w

With more of these issues happening in the bitcoin world, it just screams of bad PR and self-limiting for mass adoption. I know it was stated that this helps "weed" out the bad apples, but to be honest, I couldn't even tell you who the legimitate ones are and I bet you can't either because it's just too soon to tell. There's an implicit trust for me with banks in that they've been around for a while (even though many have/will fail(ed)), but you get some satiation with FDIC deposit insurance as well as government regulation. Curious what other people think about the public perception of bitcoin right now, and how to avoid something like this.

FigBug 13y ago
The way I see it, unless you are a speculator/miner, there is no upside to using bitcoin for transactions right now. The risks are too high for almost existence benefits. I understand when merchants would be pushing bitcoin, no fees, no charge backs etc. But what is the benefit for the consumer?
- berberous 13y ago
  The reduced fees could be split by consumer and merchant, so that the consumer gets lower prices. Practically though, I agree with you; right now the ability to reverse transactions is probably worth more than any price savings.
  - FigBug 13y ago
    I just ran the numbers for curiosities sake: The average American spends $20,000 on their credit cards. If credit card fees are 4% and the retailer gives half back, the customer saves: $400 a year. To save $400, the customer: - Gives up access to credit - Gives up 30 day interest free on purchases - Gives up 1% back rewards ($200) - Gives up fraud protection - Takes on the risk of carrying 'virtual cash' Of course all these services could be built on top of bitcoin, but that's going to cost money and eat into what little saving there already was. I can't see bitcoin working in retail. Maybe for easy currency exchange between people in different countries it'll succeed. Not sure where else.
  - wpietri 13y ago
    One important barrier to this is that merchant agreements, at least years ago when I last read one carefully, prevented you from offering lower prices to non-credit-card payers.
    - einhverfr 13y ago
      Although I am not that big of a fan of Dodd-Frank on the whole, one good thing in that bill, at least in the US, is that it outlawed such clauses in merchant agreements.
      - wpietri 13y ago
        Wow, I missed that. Great to hear!
- MichaelGG 13y ago
  I'm not sold on the dream of Bitcoin. But I will say that for a high-risk, international service (VoIP), Bitcoin via Coinbase is a fantastic thing. Fraud is massive, yet we have customers all around the world. With Bitcoin, they can buy locally from Egypt to China and instantly transfer to us. They get service with less payment hassle, we get risk-free cheap transfers. The most popular alternative is using Western Union, which is more work and more expensive. And Coinbase eliminates the exchange risk (well in theory). But general consumers? Yeah I can't see myself buying something with BTC.
mortenjorck 13y ago
I see a huge opportunity right now for the first major insurer that can figure out the actuarials on this and offer a product to bitcoin exchanges.
- goldenkey 13y ago
  There's no way to prove whether a hack is internal. So the only opportunity is to get screwed, just like a customer, but worse.
  - sillysaurus3 13y ago
    Sad to say, but this is probably correct. Bitcoin's anonymity for private keys is also its greatest weakness right now. In the case of disaster, there's no way to prove whether a private key was lost, stolen by an external party, or stolen by the founders. Bank accounts are much easier to audit.
    - wmf 13y ago
      This calls for HSMs with audited code. (Not that anyone could afford it.)
      - deleted 13y ago
        [deleted]
tomelders 13y ago
I've lost faith. I've lost every bitcoin I've ever had, either as a result of fraud, theft, government intervention and one slightly embarrassing technical snafu. And now bitcoins are too expensive for me to consider it a fun experiment. I don't trust any of the players, and I don't believe any of the promises. Good luck to bitcoin, but I'm out for the time being.
- rjbwork 13y ago
  I don't mean to be patronizing, but I may come off that way: why have you not been holding the vast majority of your BTC in your own local and triply (or more) backed up wallet, and liquidating to USD/other fiat in small pieces when you need to? I don't get how people can lose their entire stash of coin to these types of things. I don't even own any BTC.
  - sosborn 13y ago
    > liquidating to USD/other fiat in small pieces when you need to? Just a hunch, but the meteoric rise in value probably prevents most people from simply cashing out.
    - rjbwork 13y ago
      Why? Isn't the demand for the existing coins what drives the rise in value? Logically there should be demand for one's sale of the coins at that point right?
      - sosborn 13y ago
        What I mean is that when the value keeps going up there is psychological barrier to cashing out. The thought is that it will keep going up so if I cash out now I'm missing out.
  - oelmekki 13y ago
    I have to agree with that, even if it's very hard and is on the edge of blaming the victim. I feel for people losing everything, but really, don't keep your stash at exchanges. Those are meant for trading, not as main account. To make a comparison with fiat money, would you throw your main bank account at trading ? Chances are you would have a main bank account and a secondary one for trading that would only contain money you're ok to lose. To push the metaphor further, would put your whole money at trade in an obscur online bank that was created just a few time ago ? The main strength of cryptocurrencies is that they are decentralized. You're supposed to have your stash on your main computer. Each time people try to use a centralized online wallet instead, shit happens. This sounds quite weird as it feels like keeping one's money under his bed, but really, it was how it was meant to work. Again, I feel for victims here, but please, be smart about it : recommend to anyone owning crytocurrencies to hold them on a local wallet, with backup for keys encrypted on a thumbdrive. Explain to them what happened to you.
User8712 13y ago
I'm wondering if the outcome of these stories is going to prove that claiming you've been hacked is an acceptable answer. If so, isn't it going to be tempting for struggling Bitcoin businesses to claim the same, and walk away with millions before they go to zero?

FigBug 13y ago

The way I see it, unless you are a speculator/miner, there is no upside to using bitcoin for transactions right now. The risks are too high for almost existence benefits. I understand when merchants would be pushing bitcoin, no fees, no charge backs etc. But what is the benefit for the consumer?

berberous 13y ago
The reduced fees could be split by consumer and merchant, so that the consumer gets lower prices. Practically though, I agree with you; right now the ability to reverse transactions is probably worth more than any price savings.
- FigBug 13y ago
  I just ran the numbers for curiosities sake: The average American spends $20,000 on their credit cards. If credit card fees are 4% and the retailer gives half back, the customer saves: $400 a year. To save $400, the customer: - Gives up access to credit - Gives up 30 day interest free on purchases - Gives up 1% back rewards ($200) - Gives up fraud protection - Takes on the risk of carrying 'virtual cash' Of course all these services could be built on top of bitcoin, but that's going to cost money and eat into what little saving there already was. I can't see bitcoin working in retail. Maybe for easy currency exchange between people in different countries it'll succeed. Not sure where else.
- wpietri 13y ago
  One important barrier to this is that merchant agreements, at least years ago when I last read one carefully, prevented you from offering lower prices to non-credit-card payers.
  - einhverfr 13y ago
    Although I am not that big of a fan of Dodd-Frank on the whole, one good thing in that bill, at least in the US, is that it outlawed such clauses in merchant agreements.
    - wpietri 13y ago
      Wow, I missed that. Great to hear!
MichaelGG 13y ago
I'm not sold on the dream of Bitcoin. But I will say that for a high-risk, international service (VoIP), Bitcoin via Coinbase is a fantastic thing. Fraud is massive, yet we have customers all around the world. With Bitcoin, they can buy locally from Egypt to China and instantly transfer to us. They get service with less payment hassle, we get risk-free cheap transfers. The most popular alternative is using Western Union, which is more work and more expensive. And Coinbase eliminates the exchange risk (well in theory). But general consumers? Yeah I can't see myself buying something with BTC.

mortenjorck 13y ago

I see a huge opportunity right now for the first major insurer that can figure out the actuarials on this and offer a product to bitcoin exchanges.

goldenkey 13y ago
There's no way to prove whether a hack is internal. So the only opportunity is to get screwed, just like a customer, but worse.
- sillysaurus3 13y ago
  Sad to say, but this is probably correct. Bitcoin's anonymity for private keys is also its greatest weakness right now. In the case of disaster, there's no way to prove whether a private key was lost, stolen by an external party, or stolen by the founders. Bank accounts are much easier to audit.
  - wmf 13y ago
    This calls for HSMs with audited code. (Not that anyone could afford it.)
    - deleted 13y ago
      [deleted]

tomelders 13y ago

I've lost faith. I've lost every bitcoin I've ever had, either as a result of fraud, theft, government intervention and one slightly embarrassing technical snafu. And now bitcoins are too expensive for me to consider it a fun experiment. I don't trust any of the players, and I don't believe any of the promises. Good luck to bitcoin, but I'm out for the time being.

rjbwork 13y ago
I don't mean to be patronizing, but I may come off that way: why have you not been holding the vast majority of your BTC in your own local and triply (or more) backed up wallet, and liquidating to USD/other fiat in small pieces when you need to? I don't get how people can lose their entire stash of coin to these types of things. I don't even own any BTC.
- sosborn 13y ago
  > liquidating to USD/other fiat in small pieces when you need to? Just a hunch, but the meteoric rise in value probably prevents most people from simply cashing out.
  - rjbwork 13y ago
    Why? Isn't the demand for the existing coins what drives the rise in value? Logically there should be demand for one's sale of the coins at that point right?
    - sosborn 13y ago
      What I mean is that when the value keeps going up there is psychological barrier to cashing out. The thought is that it will keep going up so if I cash out now I'm missing out.
- oelmekki 13y ago
  I have to agree with that, even if it's very hard and is on the edge of blaming the victim. I feel for people losing everything, but really, don't keep your stash at exchanges. Those are meant for trading, not as main account. To make a comparison with fiat money, would you throw your main bank account at trading ? Chances are you would have a main bank account and a secondary one for trading that would only contain money you're ok to lose. To push the metaphor further, would put your whole money at trade in an obscur online bank that was created just a few time ago ? The main strength of cryptocurrencies is that they are decentralized. You're supposed to have your stash on your main computer. Each time people try to use a centralized online wallet instead, shit happens. This sounds quite weird as it feels like keeping one's money under his bed, but really, it was how it was meant to work. Again, I feel for victims here, but please, be smart about it : recommend to anyone owning crytocurrencies to hold them on a local wallet, with backup for keys encrypted on a thumbdrive. Explain to them what happened to you.

User8712 13y ago

I'm wondering if the outcome of these stories is going to prove that claiming you've been hacked is an acceptable answer. If so, isn't it going to be tempting for struggling Bitcoin businesses to claim the same, and walk away with millions before they go to zero?