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What's the reason for this? Is it part of Coinbase's payment integration? I don't recall any other websites doing this (although there's the possibility that I

What's the reason for this? Is it part of Coinbase's payment integration? I don't recall any other websites doing this (although there's the possibility that I simply haven't used other sites that also do this)

steveklabnik 13y ago
There are a couple of reasons, actually. This will be a short version of something I'm still in the process of writing, so consider this very high level, broad strokes. Consider "Coinbase" a stand-in for any service like it. I also know that lots of Bitcoin enthusiasts won't agree with me, and that's fine. The most important one is that merchants generally want USD, not BTC. Instant Exchange is a really important feature of Coinbase, and so even if we did support bare addresses, they would still be generated through Coinbase anyway, because giving our merchants USD is killer. Since Balanced isn't interested in getting in the business of holding and selling BTC, we'd need to do that through some sort of service, and Coinbase is the biggest and best one. Secondly, the UX for Coinbase-only payment is vastly superior to using bare addresses. People are generally familiar with "sign in via Facebook," and Coinbase's OAuth works the same way. Using a Bitcoin wallet to buy something on a site is very strange until you've done it a few times. Enthusiasts will know what's going on, just like any early adopter will. But for most cases, Coinbase only is waaaay better. Coinbase <-> Coinbase transactions have another special property: they can be off-blockchain. I don't remember offhand if they are for all purchases, but they are for microtransactions, at least. Coinbase can (could?) not wait for the ten minutes to confirm a transaction, since they'd just be updating balances within Coinbase itself. They could build options in that consumers have come to expect, like chargebacks, holds, and other things, that the protocol would not inherently have to support. Next, we feel that Bitcoin is best thought of as cash. Like, physical, printed notes. Websites don't actually accept USD, for example: they accept Visa, which is a financial instrument that happens to be denominated in USD. You can't mail a twenty dollar bill to most SaaS products: that'd be really silly, for a number of reasons. Using bitcoin-qt is like paying with cash, and paying with cash works great in some ways, but is a pain in others. Chargebacks, for example, are an incredibly important part of the advantage consumers see in using credit cards, and nothing like that exists with 'raw' Bitcoin in any significant capacity. I guess that could all be summed up with "Most people don't actually use cash, because it's pretty inconvenient. They use a financial instrument on top of cash, because it offers a bunch of advantages for online purchases. A successful Bitcoin will be no different."
- derefr 13y ago
  > Next, we feel that Bitcoin is best thought of as cash. Like, physical, printed notes. Websites don't actually accept USD, for example: they accept Visa, which is a financial instrument that happens to be denominated in USD. You can't mail a twenty dollar bill to most SaaS products: that'd be really silly, for a number of reasons. But that's... why people want to pay for things with Bitcoins in the first place. They want to give you cash, digitally. If they didn't want the properties of cash, they'd just cash out their bitcoins into a regular bank account, and then use a regular credit card backed by that bank account to pay. That is far, far easier, and far more well-supported by current infrastructure. The fact that they're willing to suffer the vagaries of the Bitcoin system is precisely because they have a problem with using a "financial instrument built on top of cash." Unless you accept Bitcoins with cash-like transaction semantics, you aren't going to get any transactions going through your system that weren't already going through it. Some people will choose to re-denominate transactions they could well have made in USD in BTC, but nobody's going to choose to pay with BTC where they previously wouldn't have paid at all. People who don't spend money unless it's in BTC are doing that because of BTC's cash-like transaction semantics, not because their wealth is somehow immutably denominated in BTC.
  - steveklabnik 13y ago
    Currently, some number of people who use Bitcoin do, yes. There are also some people who only use open source software because they want full control, and there are some people who have piles of cash and gold underneath their mattresses. Some don't. I personally happen to have some Bitcoin because people wanted to buy some things from me in Bitcoin, and spending it again directly as Bitcoin is waaay easier than trying to figure out how to convert it to USD for the sake of spending it again.
    - derefr 13y ago
      I would guess that you're in the category of "people who would have made a transaction in USD anyway, but will do it in BTC because they happen to have some and want to get rid of it." Adding "accept BTC" as a feature doesn't win you as a customer; you were already willing. If the point of accepting BTC is to make money for Square Market by increasing its user-base, your vote doesn't count.

steveklabnik 13y ago

There are a couple of reasons, actually. This will be a short version of something I'm still in the process of writing, so consider this very high level, broad strokes. Consider "Coinbase" a stand-in for any service like it. I also know that lots of Bitcoin enthusiasts won't agree with me, and that's fine. The most important one is that merchants generally want USD, not BTC. Instant Exchange is a really important feature of Coinbase, and so even if we did support bare addresses, they would still be generated through Coinbase anyway, because giving our merchants USD is killer. Since Balanced isn't interested in getting in the business of holding and selling BTC, we'd need to do that through some sort of service, and Coinbase is the biggest and best one. Secondly, the UX for Coinbase-only payment is vastly superior to using bare addresses. People are generally familiar with "sign in via Facebook," and Coinbase's OAuth works the same way. Using a Bitcoin wallet to buy something on a site is very strange until you've done it a few times. Enthusiasts will know what's going on, just like any early adopter will. But for most cases, Coinbase only is waaaay better. Coinbase <-> Coinbase transactions have another special property: they can be off-blockchain. I don't remember offhand if they are for all purchases, but they are for microtransactions, at least. Coinbase can (could?) not wait for the ten minutes to confirm a transaction, since they'd just be updating balances within Coinbase itself. They could build options in that consumers have come to expect, like chargebacks, holds, and other things, that the protocol would not inherently have to support. Next, we feel that Bitcoin is best thought of as cash. Like, physical, printed notes. Websites don't actually accept USD, for example: they accept Visa, which is a financial instrument that happens to be denominated in USD. You can't mail a twenty dollar bill to most SaaS products: that'd be really silly, for a number of reasons. Using bitcoin-qt is like paying with cash, and paying with cash works great in some ways, but is a pain in others. Chargebacks, for example, are an incredibly important part of the advantage consumers see in using credit cards, and nothing like that exists with 'raw' Bitcoin in any significant capacity. I guess that could all be summed up with "Most people don't actually use cash, because it's pretty inconvenient. They use a financial instrument on top of cash, because it offers a bunch of advantages for online purchases. A successful Bitcoin will be no different."

derefr 13y ago
> Next, we feel that Bitcoin is best thought of as cash. Like, physical, printed notes. Websites don't actually accept USD, for example: they accept Visa, which is a financial instrument that happens to be denominated in USD. You can't mail a twenty dollar bill to most SaaS products: that'd be really silly, for a number of reasons. But that's... why people want to pay for things with Bitcoins in the first place. They want to give you cash, digitally. If they didn't want the properties of cash, they'd just cash out their bitcoins into a regular bank account, and then use a regular credit card backed by that bank account to pay. That is far, far easier, and far more well-supported by current infrastructure. The fact that they're willing to suffer the vagaries of the Bitcoin system is precisely because they have a problem with using a "financial instrument built on top of cash." Unless you accept Bitcoins with cash-like transaction semantics, you aren't going to get any transactions going through your system that weren't already going through it. Some people will choose to re-denominate transactions they could well have made in USD in BTC, but nobody's going to choose to pay with BTC where they previously wouldn't have paid at all. People who don't spend money unless it's in BTC are doing that because of BTC's cash-like transaction semantics, not because their wealth is somehow immutably denominated in BTC.
- steveklabnik 13y ago
  Currently, some number of people who use Bitcoin do, yes. There are also some people who only use open source software because they want full control, and there are some people who have piles of cash and gold underneath their mattresses. Some don't. I personally happen to have some Bitcoin because people wanted to buy some things from me in Bitcoin, and spending it again directly as Bitcoin is waaay easier than trying to figure out how to convert it to USD for the sake of spending it again.
  - derefr 13y ago
    I would guess that you're in the category of "people who would have made a transaction in USD anyway, but will do it in BTC because they happen to have some and want to get rid of it." Adding "accept BTC" as a feature doesn't win you as a customer; you were already willing. If the point of accepting BTC is to make money for Square Market by increasing its user-base, your vote doesn't count.