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> Anecdotally, I hear from merchants who start taking bitcoin that after an initial spike they see almost no volume. To me, this is one of the biggest problem

by IvyMike 13y ago

> Anecdotally, I hear from merchants who start taking bitcoin that after an initial spike they see almost no volume. To me, this is one of the biggest problems with adoption--bitcoin doesn't offer much benefit to the typical consumer for mundane transactions. I'm about to buy a coffee machine on Overstock.com. There's no practical reason that bitcoins are better than what I'm going to do which is put it on my mastercard. And there's a lot of reasons that getting my money into bitcoin in the first place is a giant pain in the ass. Yeah, there are some potential situations that could change this, and if I lived in a country with massive inflation I might feel differently, but as it stands, I don't see any compelling reason to use bitcoin to make purchases.

loopdoend 13y ago
It doesn't benefit consumers for any transaction. Unless you consider the deed itself to be a benefit, outweighing all the negative. I don't. As a consumer, I don't like getting fucked by the spread on exchange rates on the buy AND sell sides when I try to pay in bitcoin. Want to buy some bitcoin? Unless you're doing it face-to-face you're going to get jacked a few percent. Want to spend them? Unless it's at a bitcoin-only merchant, jacked again. Add in the fact that I'm not getting whatever points my credit card would have given me, that I've got absolutely no recourse against the merchant, and that I have to worry about hackers stealing my money... there's no reason for me to use it.
- driverdan 13y ago
  Two words: money transfers. Bitcoin works very well for low friction P2P transfers. This may be considered a solved problem in Europe where bank transfers are easy and the norm but in the US and other parts of the world it's unsolved and a pain in the ass. There is no easy way for me to transfer money to a friend other than handing them cash. You might suggest an awful centralized service like PayPal but there are plenty of problems with them too. What if I want to send money to a friend who lives in another country? Even harder. Bitcoin solves this problem.
  - smm2000 13y ago
    You can mail him a check - zero transaction fee and works every single time. No easy way to do it electronically though. Also you could not really do it with random strangers - risk of fraud is fairly high.
gnaritas 13y ago
Keeping your credit card number out of their database where it can't be hacked is a practical reason to use bitcoin. It reduces your risk of merchant's getting hacked, which happens all the time.
- miros 13y ago
  Yeah but my credit card company protects me from that sort of fraud so it really isn't a practical concern.
  - gnaritas 13y ago
    Only if you notice and report it, people get skimmed all the time and never notice.
    - IvyMike 13y ago
      > people get skimmed all the time and never notice. Insert Mt.Gox joke here.
    - pbreit 13y ago
      There's an app for that: https://www.billguard.com/ https://www.billguard.com/
      - gnaritas 13y ago
        Ha, why of course there is, I should have figured.
- Goronmon 13y ago
  So, a merchant gets hacked and your credit card info is stolen. You notice fraudulent charges, call your credit card company and they reverse the charges and send you a new card. If someone gets access to your bitcoin wallet or whatever storage mechanism you are using fails, then that money is gone forever with no way to recover it. If you are a regular user with no need to make a political statement with the use of a non-traditional currency, what exactly about the second scenario sounds safer?
sanderjd 13y ago
I think it could (or maybe "should") be totally great for tiny payments. Less like 0.5BTC for a coffee machine, more like 0.001BTC for a single API request. It seems uniquely suited for tiny, frequent, low-risk payments. That doesn't seem like a very widespread business model, but maybe that's because it's been tough to do without something like bitcoin.
miros 13y ago
It's also worth pointing out that you are probably incurring significant fees when converting from your native currency into bitcoin. In addition, if you are holding bitcoins with the expectation that they will actually appreciate (i.e. the currency will deflate rather than inflate) you are effectively losing money by spending it, further discouraging you from engaging in the transaction. Krugman has enjoyed making this point a few times: http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/ http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/ http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfetters/ http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfett...
acomjean 13y ago
Odd because one of the benefits of Bit Coin is lower transaction fees that what credit card companies charge. One would think businesses would really like this and promote it.
- a_c_s 13y ago
  The huge variations in price mean that a company could very easily lose more than the few, entirely predictable, percent the credit card companies charge.
  - mpyne 13y ago
    And adding the cost of insurance to account for the risk of having your hot wallet wiped out could ruin the transaction fee advantage all by itself.
endeavor 13y ago
When you say "the typical consumer", I think you are really saying "the typical, relatively wealthy consumer living in the first world". For the some billions of people on the Earth who don't have a stable currency, credit/debit cards, mortgages and other financial products Bitcoin has more benefits. Think of the WhatsApp demographic without a smart-phone.
- mpyne 13y ago
  Honestly I think it would be the opposite; Bitcoin would be yet another way that the developed world has screwed over the developing world, once malicious actors realize that perfectly good wallet.dats exist on the cellphones of people who think that having sex with virgins cures AIDS.

by IvyMike 13y ago

loopdoend 13y ago

It doesn't benefit consumers for any transaction. Unless you consider the deed itself to be a benefit, outweighing all the negative. I don't. As a consumer, I don't like getting fucked by the spread on exchange rates on the buy AND sell sides when I try to pay in bitcoin. Want to buy some bitcoin? Unless you're doing it face-to-face you're going to get jacked a few percent. Want to spend them? Unless it's at a bitcoin-only merchant, jacked again. Add in the fact that I'm not getting whatever points my credit card would have given me, that I've got absolutely no recourse against the merchant, and that I have to worry about hackers stealing my money... there's no reason for me to use it.

driverdan 13y ago
Two words: money transfers. Bitcoin works very well for low friction P2P transfers. This may be considered a solved problem in Europe where bank transfers are easy and the norm but in the US and other parts of the world it's unsolved and a pain in the ass. There is no easy way for me to transfer money to a friend other than handing them cash. You might suggest an awful centralized service like PayPal but there are plenty of problems with them too. What if I want to send money to a friend who lives in another country? Even harder. Bitcoin solves this problem.
- smm2000 13y ago
  You can mail him a check - zero transaction fee and works every single time. No easy way to do it electronically though. Also you could not really do it with random strangers - risk of fraud is fairly high.

gnaritas 13y ago

Keeping your credit card number out of their database where it can't be hacked is a practical reason to use bitcoin. It reduces your risk of merchant's getting hacked, which happens all the time.

miros 13y ago
Yeah but my credit card company protects me from that sort of fraud so it really isn't a practical concern.
- gnaritas 13y ago
  Only if you notice and report it, people get skimmed all the time and never notice.
  - IvyMike 13y ago
    > people get skimmed all the time and never notice. Insert Mt.Gox joke here.
  - pbreit 13y ago
    There's an app for that: https://www.billguard.com/ https://www.billguard.com/
    - gnaritas 13y ago
      Ha, why of course there is, I should have figured.
Goronmon 13y ago
So, a merchant gets hacked and your credit card info is stolen. You notice fraudulent charges, call your credit card company and they reverse the charges and send you a new card. If someone gets access to your bitcoin wallet or whatever storage mechanism you are using fails, then that money is gone forever with no way to recover it. If you are a regular user with no need to make a political statement with the use of a non-traditional currency, what exactly about the second scenario sounds safer?

sanderjd 13y ago

I think it could (or maybe "should") be totally great for tiny payments. Less like 0.5BTC for a coffee machine, more like 0.001BTC for a single API request. It seems uniquely suited for tiny, frequent, low-risk payments. That doesn't seem like a very widespread business model, but maybe that's because it's been tough to do without something like bitcoin.

miros 13y ago

It's also worth pointing out that you are probably incurring significant fees when converting from your native currency into bitcoin. In addition, if you are holding bitcoins with the expectation that they will actually appreciate (i.e. the currency will deflate rather than inflate) you are effectively losing money by spending it, further discouraging you from engaging in the transaction. Krugman has enjoyed making this point a few times: http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/ http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/ http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfetters/ http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfett...

acomjean 13y ago

Odd because one of the benefits of Bit Coin is lower transaction fees that what credit card companies charge. One would think businesses would really like this and promote it.

a_c_s 13y ago
The huge variations in price mean that a company could very easily lose more than the few, entirely predictable, percent the credit card companies charge.
- mpyne 13y ago
  And adding the cost of insurance to account for the risk of having your hot wallet wiped out could ruin the transaction fee advantage all by itself.

endeavor 13y ago

When you say "the typical consumer", I think you are really saying "the typical, relatively wealthy consumer living in the first world". For the some billions of people on the Earth who don't have a stable currency, credit/debit cards, mortgages and other financial products Bitcoin has more benefits. Think of the WhatsApp demographic without a smart-phone.

mpyne 13y ago
Honestly I think it would be the opposite; Bitcoin would be yet another way that the developed world has screwed over the developing world, once malicious actors realize that perfectly good wallet.dats exist on the cellphones of people who think that having sex with virgins cures AIDS.