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Expedia Starts Accepting Bitcoin for Hotel Bookings

262 points by peter123 12y ago

doctoboggan 12y ago
The common thread in many of these announcements seems to be coinbase.
- ixmatus 12y ago
  Which bodes extremely well for them. They may quickly become the PayPal of bitcoin for providing a solid service allowing businesses to interface with BTC; as PayPal did for giving businesses and individuals a solid service to transact using the internet.
- jwcooper 12y ago
  Does coinbase sit on the Bitcoins, or turn around quickly and convert to USD somehow (where?)? Holding thousands of bitcoins as a startup seems like it would introduce a lot of volatility, even if the long-term prospects of bitcoin are good (still need to pay the employees).
  - oleganza 12y ago
    Everyone asks the same question. It does not matter if Coinbase or Expedia "sits" on BTC they receive. As long as there are people willing to sit on them, the price is going to stay the same. The price/liquidity of BTC depends not on who exactly sits on BTC, but on number of hands that own it. More hands -> more demand -> higher price and liquidity. See also this quote from Rothbard: http://blog.oleganza.com/post/43378777734/on-circulation-of-money http://blog.oleganza.com/post/43378777734/on-circulation-of-...
    - jwcooper 12y ago
      Unless their employees, partners (hosting, etc) get paid in BTC, it actually does matter if they "sit" on the BTC they receive. Many businesses and people still require to get paid in USD (EUR, etc) in order to do business. This may not always be this way, but as of today it is.
      - oleganza 12y ago
        How does it matter for seller of BTC? Once you sold it, it can be owned by anyone, how is it your concern? What's important is how many people own it. Not who exactly owns it. Today Coinbase/Bitstamp are doing good business by connecting people who want to buy BTC and sell BTC. As more people will get paid in BTC, more transfers will go directly from customer to employee without exchange intermediaries. But the real adoption does not depend on amount of transfers. That's secondary. Real adoption of money as money is in how many people hold it at every single moment of time. More people -> more demand -> more liquidity -> more value -> more trust.
  - benmorris 12y ago
    As far as the merchant end you can get the BTC turned into USD immediately if you choose. I integrated coinbase payments into my sites a few months ago. You also have the option of holding them in BTC. The technical side of what they are doing I'm not sure about that. Unless they have a huge pool of cash to buffer this money conversion they are probably selling the BTC behind the scenes.
    - jordigh 12y ago
      > they are probably selling the BTC behind the scenes. Hardly behind the scenes... https://coinbase.com/buy-bitcoin https://coinbase.com/buy-bitcoin
  - broolstoryco 12y ago
    Coinbase has an account on bitstamp where they hedge their net position. In times of high demand for btc, it sometimes happens that they run out of fiat on bitstamp and cannot process orders instantly.
    - brador 12y ago
      What happens if bitstamp follows mtgox?
      - polarix 12y ago
        Presumably they have a deliberate maximum counterparty risk.
      - deleted 12y ago
        [deleted]
      - mrb 12y ago
        Probably nothing. At worst Coinbase would only lose the fraction of their USD/BTC holdings that they have stored in Bitstamp, but they would continue business as usual. Coinbase could abandon Bitstamp if they wanted to, since they have their own customers selling and buying coins (therefore providing a supply of coins, and a way to liquidate them). And Coinbase also trade coins on multiple other exchanges (according to their claims). This makes their overall Bitcoin trading activity decentralized with no single point of failure.
    - gnaritas 12y ago
      I think that's old info, pretty sure Coinbase spreads around multiple exchanges now for their buys and sells. They haven't just used Bitstamp in quite a while.
      - broolstoryco 12y ago
        I didnt mean to imply they are restricted to Bitstamp.
- prawn 12y ago
  And in Australia to a far lesser degree, Coinjar. I think VC-backed business in the Bitcoin space will be what eventually drives it forward, short of an amazing new concept that people can't resist such as social network, gambling, whatever. We started with the speculation, then these companies will keep pressing business to support Bitcoin and then potentially it reaches a tipping point and has its own momentum.
jordigh 12y ago
Is this as big as it seems to me? This seems huge. Is it huge? I can't tell. Should I be excited? I am. Now if only I could make it easier for people to pay me in bitcoins for small freelance work...
- XorNot 12y ago
  Can you accept Coinbase payments? That's the thing here: Coinbase is just another payment processor. Most businesses are used to having to accept "some extra payment processor". Since you get to do some sort of announcement, which more most companies means you get to be in the news in a semi-positive way, why not? It's risk free for them - or at least only as risky as their ability to sue Coinbase for missed payments.
  - jordigh 12y ago
    > Can you accept Coinbase payments? I don't need help for accepting bitcoins. I trust bitcoins themselves, I consider them a real currency, not something that has to be immediately exchanged for centralised currency. So I'm fine just accepting them without an intermediary. My hope is that as bitcoins get more popular, businesses like Coinbase will seem less important. Instead, I need help getting bitcoins from all the people out there who have no idea how to get bitcoins.
    - wdewind 12y ago
      > My hope is that as bitcoins get more popular, businesses like Coinbase will seem less important. > Instead, I need help getting bitcoins from all the people out there who have no idea how to get bitcoins. If these two sentences don't sum up BTC I don't know what does.
    - taylorwc 12y ago
      I would contend that though you are at the tail end of the curve that doesn't need an intermediary, many of your customers are likely to need/desire an intermediary to facilitate for the people you mention, with no idea how to get bitcoins. Regardless of whether you, I, or HN hates Coinbase or loves Coinbase, they provide a layer of accessibility to an otherwise intimidating ecosystem.
kleer001 12y ago
This seems good. But at the heart of it I fear it defeats the whole point of Bitcoin the payment system. Why? I thought the whole point of Bitcoin was to create a decentralized payment system. And here is Coinbase (or Bitpay) becoming centralized payment systems...
- jordigh 12y ago
  Yeah, I hear you. I am hoping they are just crutches to bootstrap bitcoin adoption. If bitcoins become popular, perhaps we can lose the crutches. Or perhaps we'll have tons of competing escrow businesses. What is it with humans' tendency to centralise anyways? Here is democracy... now here's an all-powerful president and congressional oligarchy. Here is the industrial revolution to facilitate transportation of goods all around the countryside... now here are the giant megalopolises in which most of us now live. Here is the internet... now here's Gmail, the single location to email, and Facebook, the single location to put all of your personal data. Here are DVCSes... now here is github, a place to centralise all of our DVCS work. Maybe there's just something fundamentally ingrained in human psychology that makes us converge like this.
  - aaron-lebo 12y ago
    Centralization tends to be more efficient and convenient. It also is more profitable for whoever does the centralization.
  - yen223 12y ago
    > What is it with humans' tendency to centralise anyways? I think it's less about human psychology and more about managing efficiency. A well-run centralized system will always be more efficient than a well-run decentralized system, by virtue of having less overhead. Whether it's overhead from arranging logistics to one large city, instead of a hundred small cities, or overhead from interacting with one large federal government, instead of 50 small state governments.
    - baddox 12y ago
      > A well-run centralized system will always be more efficient than a well-run decentralized system, by virtue of having less overhead. That's a circular definition, unless you have some objective way to measure how "well-run" a system is other than just measuring its efficiency.
stevehawk 12y ago
Has there been much talk about how stores using Bitcoin reduces the anonymity of Bitcoin by tying IDs in the transaction of acquiring that coin to the person that ultimately uses it? I'm sure the uber nerds were already aware of this but has it been brought up enough that the general community thinks this through? One booking on Expedia and you've revealed any possible Silk Road or other curious transaction you've ever made, right?
- jordigh 12y ago
  How does this work, exactly? I use a unique address each time I receive bitcoins. Then I sometimes move money between more unique addresses in plausible-looking ways. I always use Tor for talking to the bitcoin network. How easy is it to de-anonymise me?
  - jmhain 12y ago
    See the two heuristics in this paper for creating clusters of bitcoin users [0]. The first (and rather obvious) one is to cluster all inputs of a transaction, so if you use A and B, and later use B and C, we now know the same user owns A, B, and C and only need to tie your identity to one of them. The prior one is rather weak, and could be avoided by consistent usage of unique change addresses. Thus, the second heuristic works to reveal which output is the change address. There are various ways of performing this prediction, some more deterministic than others. A pretty conservative and reliable one, described in [0], assumes an output is a change address if it (1) is the first appearance of the address, (2) the tx is not a coin generation, (3) there is no self-change address, and (4) #1 is only true for this address. There is an open-source implementation of these ideas called BitIodine [1,2] (albeit with slightly different criteria for change-address identification, including an off-by-one error in bitcoin core that caused the first output to always be the change address in a 2-output transaction until it was fixed in early 2013). Punch in one of your addresses and see what it comes up with. However, I may have found a bug that reduces input-clustering, so if it doesn't find your addresses don't get too excited. Also, don't forget about the recent technique for de-anonymizing coin mixing transactions [3]. [0] http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf [1] https://github.com/mikispag/bitiodine https://github.com/mikispag/bitiodine [2] https://bitiodine.net/ https://bitiodine.net/ [3] http://www.coindesk.com/blockchains-sharedcoin-users-can-identified-says-security-expert/ http://www.coindesk.com/blockchains-sharedcoin-users-can-ide...
mrfusion 12y ago
Side note, I'm noticing a lot of merchants accepting bitcoin asking for more information than they should need. For example I tried to buy an ebook recently and it required my home address. For Credit cards I believe that's required to verify the billing info, but there's no reason bitcoin purchases should need it for non-shippable products. And it cancels out a lot of the benefits of using bitcoins (fast purchase, anonymous from marketers)
- TomGullen 12y ago
  We sell digital services (ebooks count), and require the customers address (or part of) to determine the VAT status of the sale. Even though buying an e-book for Bitcoin seems like you shouldn't need any personally identifiable information, quite often merchants do need to collect it.
  - higherpurpose 12y ago
    So collect the country or state, not the home address.
    - TomGullen 12y ago
      I know what the rules are in the UK, but not everywhere in the world.
    - jimktrains2 12y ago
      You do know that in the US counties (and possibly cities, I need to double check cities) can leverage sales tax as well. However, it should only really be an issue of where you have nexus. It's probably just how their system handle's orders (you need home address for CC for AVS, so it's probably just required everywhere in their code.
      - toast0 12y ago
        In the US, cities can levy sales taxes as well. Also, the city field in your address does not accurately indicate your municipal boundaries; it's more of an identifier of which post office serves you and which municipal boundaries it falls within.
justme123 12y ago
These is very good news overall, taking into account that we are now in the first-stage-of-adoption of bitcoins, where the most important is to spread the info about bitcoins and increase its usage. In a later stage, when bitcoins are more diseminated and people feels bitcoin more "domestic", then there will be a interest for "personal-wallets" and "business-wallets", which may be hardware-wallets, or multisig-insured-online-services... TLDR; this is a good-first step toward bitcoin adoption, further later will be another step towards personal-wallets.
coryking 12y ago
How does this deal with damage deposits? Why would I pay with bitcoin when many rewards cards pay out extra when you use them for travel-related use? Honestly, the cynic in me says the use case for spending bitcoin is a quick way for speculators to "cash out" in a way that makes it easier to hide earnings from the tax-man.
- rational-future 12y ago
  Honestly, the cynic in you may say everyone buying a kitchen knife plans to cut a child throat, but that won't decrease the usefulness of kitchen knifes. Damage deposits - not something Expedia does with credit cards or PayPal, hotels have to ask their clients for a credit card at check in. Rewards - it's just a matter of time for Bitcoin rewards schemes to appear.
vijayboyapati 12y ago
It's interesting to think what announcement like this have in aggregate on the price of bitcoin. Counter-intuitively the price of bitcoin should face downward pressure as merchant adoption of this sort increases. Expedia doesn't hold any of the bitcoin they receive. The bitcoins are instantly converted to dollars on a market exchange. This means that holders of bitcoin, especially those who are sitting on large capital gains, now have a new outlet to realize their gains. On the other hand merchants who choose to accept bitcoin using Coinbase (or Bitpay) and who also choose to keep some fraction of their profit in bitcoin (thereby exposing their profits to currency volatility, which may even be a good thing for growth of their profits) will tend to increase the market price of bitcoin. Overall it seems like most merchants accepting bitcoin are not holding any of the bitcoins they accept. It would be great to see more merchants choosing to keep some fraction, however small, in bitcoin itself.
- TomGullen 12y ago
  I think it will happen when their suppliers accept Bitcoin as payment. The chain has to start somewhere, at the moment they have nowhere to spend them.
- notahacker 12y ago
  I suspect that, arguably more counter-intuitively, it will push the price up, fed by increased speculation due to apparent signs of Bitcoin "going mainstream" that will far exceed any actual Expedia transactions taking place. I'm more intrigued by the commercial decision from Expedia's perspective. Presumably they've done a back of the envelope calculation and decided "group of people more likely to pick Expedia over other OTAs if they can use Bitcoin" > "group of people that will be sufficiently confused by an additional payment option to abandon their cart"
  - StavrosK 12y ago
    They have tabs that go "Credit card", "Paypal", "Bitcoin", so, presumably, 0 people will be confused by that, plus they have lower fees than either CC companies or Paypal, so it sounds like an obvious win for them.
avd74 12y ago
When I first read this I thought, why would they start with hotels? may be because the big profit they make out of reservations? Then I remembered what an accountant friend once said to me: "Hotels are big portals between the black and white worlds". So you may have black money in bitcoins (and a Hotel which is your "legal business"), and want to "wash" it? now you can do it through Expedia (they having a bite in the process, hence their motivation).
- malandrew 12y ago
  Makes sense, but I'd love to here more on this. What features of hotels makes them particularly good portals between the black and white worlds.
  - volker48 12y ago
    Hard to prove how many people actually stayed in the hotel would be my guess. Other businesses like restaurants have inventory so you can't as easily make it look like you made a great deal more money than you actually did.
    - seizethecheese 12y ago
      This idea is really seductive. Wouldn't it be kind of hard/traceable to fake bookings though? It seems like strip clubs or some sort of service company would be better.
  - netcan 12y ago
    Say you run a hotel at 60% occupancy. Then the hotel suddenly goes to 80% occupancy. No additional costs. No inventory paper trail. A small motel with paper bookings could probably launder a lot of money for a silent partner. 10k comes in as bitcoin bookings (2-3 rooms per night). 10k-laundry fee gets paid as dividends to an "investor," "consultant" or anything really. The reservation books are paper. Many consumer facing service businesses fit the bill, but hotels are a nice big category. It makes sense for them to be accepting internet payments.
- 12y ago
malloreon 12y ago
Does Expedia hold any bitcoin reserves? Do they interact with bitcoin at all? Nope. They let someone else do it and just accept real money.
- codyb 12y ago
  That's okay though. As bitcoin proliferates large businesses will eventually start cutting out the middle man. But currently, with the drastic swings, it's not a sound economic move (especially publicly owned) to actually have holdings in bitcoin. It requires infrastructure for cash exchanges too. Is Expedia going to pay its dividends with its bitcoin reserves? Not yet!
- Mangalor 12y ago
  Coinbase will likely have to keep more reserves though to compensate with the new business.
- dustcoin 12y ago
  Overstock keeps 10% of bitcoin sales in bitcoin: http://www.reddit.com/r/tabled/comments/24knns/table_iama_im_patrick_byrne_a_profreedom/ http://www.reddit.com/r/tabled/comments/24knns/table_iama_im...
pistle 12y ago
The common thread is coinbase creating a low-friction opportunity for merchants to accept another form of payment, but to be paid in - most likely - USD as far as they are concerned. This does nothing to disperse bitcoin into many little places. In other words, accepting bitcoin by online merchants everywhere doesn't make many people want to go trade fiat for a volatile currency with all the inconveniences inherent. You need a frictionless means and stimulus for many swathes of people and organizations to accept and hold BC instead of wanting fiat conversions immediately. "We take Discover/American Express etc." only really got so far to help with consumer adoption of those networks. This keeps coming around to a currency without a country is a PITA. What are return policies around goods bought with BC? Do you get BC back or fiat? Do you get spot prices at time of return request, etc?
rmason 12y ago
Well it seems that Expedia did a great thing by allowing you to use Bitcoin to pay for hotel bookings. So that means I don’t need to use my credit card any longer when I check into the hotel? Not exactly: http://www.reddit.com/r/Bitcoin/comments/27vc4x/expedia_starts_accepting_bitcoin_for_hotel/ http://www.reddit.com/r/Bitcoin/comments/27vc4x/expedia_star... If you read down in the comments you see hotel workers saying they will still apply a 2X block on the daily rate of the room to your credit card, even if you've paid for the room with Bitcoin. A block that can take up to two weeks to be released. Obviously the standard hotel procedures will need to be revised but until then Bitcoin buyer beware ;<(. Rick
- jpatokal 12y ago
  Think of it this way: you're paying by Bitcoin, but you're guaranteeing that you won't drink the minibar dry or trash the room with a credit card. This won't change until there's a well-established Bitcoin credit facility.
kolev 12y ago
Expedia accepts Coinbase, not Bitcoin. This is no different than accepting PayPal. Did you pay with PayPal balance, credit card, or bank account - it doesn't matter. You implement PayPal APIs and you receive dollars from PayPal. The rest is just speculation, but seems that price is dropping as "acceptance" like this can only lead to selling pressure if it ever gains any traction, of course. I'm really surprised all these merchants implementing Bitcoin for the PR, but confusing their checkout routine. The path to checkout should be as short as possible with as little decisions to be made along the way. Any distraction can lead to abandonment. Is the cheap PR all worth it? I personally doubt. It's obvious that the general public is not interested in Bitcoin and is, in fact, getting bored. I keep polling non-techie friends, the common theme is "Bitcoin is a scam". Even most tech people aren't much interested except the small share who invest in stocks, i.e. the speculator by nature.
- bequanna 12y ago
  > It's obvious that the general public is not interested in Bitcoin and is, in fact, getting bored. Do you have any proof to backup this statement? Bitcoin related growth abound. The number of My Wallet Users has doubled in the past 6 months. http://blockchain.info/charts/my-wallet-n-users http://blockchain.info/charts/my-wallet-n-users
  - kolev 12y ago
    Lots of people are splitting coins into multiple wallets, duh.
  - kolev 12y ago
    Also, I'm sure there are speculators running scripts to generate new wallets and pump the bubble further.
    - bequanna 12y ago
      >Also, I'm sure there are speculators running scripts to generate new wallets and pump the bubble further. That sounds like pretty strong, objective evidence. /s There are Bitcoin bulls and bears. Nothing wrong with being either. But, if you're going to make claims, at least have facts to back them up.
taariqlewis 12y ago
Speculative bitcoiners will not spend their hard-earned BTC on travel goods and services. They will HODL and continue to buy their air and hotel with fiat cash which will be cheaper, faster, and easier.
vundervul 12y ago
Too bad, I liked expedia. Now I have to use travelocity.
abc123xyz 12y ago
This is only in US, I went to expedia, no bitcoin option, well that was a let down.

262 points by peter123 12y ago

doctoboggan 12y ago

The common thread in many of these announcements seems to be coinbase.

ixmatus 12y ago
Which bodes extremely well for them. They may quickly become the PayPal of bitcoin for providing a solid service allowing businesses to interface with BTC; as PayPal did for giving businesses and individuals a solid service to transact using the internet.
jwcooper 12y ago
Does coinbase sit on the Bitcoins, or turn around quickly and convert to USD somehow (where?)? Holding thousands of bitcoins as a startup seems like it would introduce a lot of volatility, even if the long-term prospects of bitcoin are good (still need to pay the employees).
- oleganza 12y ago
  Everyone asks the same question. It does not matter if Coinbase or Expedia "sits" on BTC they receive. As long as there are people willing to sit on them, the price is going to stay the same. The price/liquidity of BTC depends not on who exactly sits on BTC, but on number of hands that own it. More hands -> more demand -> higher price and liquidity. See also this quote from Rothbard: http://blog.oleganza.com/post/43378777734/on-circulation-of-money http://blog.oleganza.com/post/43378777734/on-circulation-of-...
  - jwcooper 12y ago
    Unless their employees, partners (hosting, etc) get paid in BTC, it actually does matter if they "sit" on the BTC they receive. Many businesses and people still require to get paid in USD (EUR, etc) in order to do business. This may not always be this way, but as of today it is.
    - oleganza 12y ago
      How does it matter for seller of BTC? Once you sold it, it can be owned by anyone, how is it your concern? What's important is how many people own it. Not who exactly owns it. Today Coinbase/Bitstamp are doing good business by connecting people who want to buy BTC and sell BTC. As more people will get paid in BTC, more transfers will go directly from customer to employee without exchange intermediaries. But the real adoption does not depend on amount of transfers. That's secondary. Real adoption of money as money is in how many people hold it at every single moment of time. More people -> more demand -> more liquidity -> more value -> more trust.
- benmorris 12y ago
  As far as the merchant end you can get the BTC turned into USD immediately if you choose. I integrated coinbase payments into my sites a few months ago. You also have the option of holding them in BTC. The technical side of what they are doing I'm not sure about that. Unless they have a huge pool of cash to buffer this money conversion they are probably selling the BTC behind the scenes.
  - jordigh 12y ago
    > they are probably selling the BTC behind the scenes. Hardly behind the scenes... https://coinbase.com/buy-bitcoin https://coinbase.com/buy-bitcoin
- broolstoryco 12y ago
  Coinbase has an account on bitstamp where they hedge their net position. In times of high demand for btc, it sometimes happens that they run out of fiat on bitstamp and cannot process orders instantly.
  - brador 12y ago
    What happens if bitstamp follows mtgox?
    - polarix 12y ago
      Presumably they have a deliberate maximum counterparty risk.
    - deleted 12y ago
      [deleted]
    - mrb 12y ago
      Probably nothing. At worst Coinbase would only lose the fraction of their USD/BTC holdings that they have stored in Bitstamp, but they would continue business as usual. Coinbase could abandon Bitstamp if they wanted to, since they have their own customers selling and buying coins (therefore providing a supply of coins, and a way to liquidate them). And Coinbase also trade coins on multiple other exchanges (according to their claims). This makes their overall Bitcoin trading activity decentralized with no single point of failure.
  - gnaritas 12y ago
    I think that's old info, pretty sure Coinbase spreads around multiple exchanges now for their buys and sells. They haven't just used Bitstamp in quite a while.
    - broolstoryco 12y ago
      I didnt mean to imply they are restricted to Bitstamp.
prawn 12y ago
And in Australia to a far lesser degree, Coinjar. I think VC-backed business in the Bitcoin space will be what eventually drives it forward, short of an amazing new concept that people can't resist such as social network, gambling, whatever. We started with the speculation, then these companies will keep pressing business to support Bitcoin and then potentially it reaches a tipping point and has its own momentum.

jordigh 12y ago

Is this as big as it seems to me? This seems huge. Is it huge? I can't tell. Should I be excited? I am. Now if only I could make it easier for people to pay me in bitcoins for small freelance work...

XorNot 12y ago
Can you accept Coinbase payments? That's the thing here: Coinbase is just another payment processor. Most businesses are used to having to accept "some extra payment processor". Since you get to do some sort of announcement, which more most companies means you get to be in the news in a semi-positive way, why not? It's risk free for them - or at least only as risky as their ability to sue Coinbase for missed payments.
- jordigh 12y ago
  > Can you accept Coinbase payments? I don't need help for accepting bitcoins. I trust bitcoins themselves, I consider them a real currency, not something that has to be immediately exchanged for centralised currency. So I'm fine just accepting them without an intermediary. My hope is that as bitcoins get more popular, businesses like Coinbase will seem less important. Instead, I need help getting bitcoins from all the people out there who have no idea how to get bitcoins.
  - wdewind 12y ago
    > My hope is that as bitcoins get more popular, businesses like Coinbase will seem less important. > Instead, I need help getting bitcoins from all the people out there who have no idea how to get bitcoins. If these two sentences don't sum up BTC I don't know what does.
  - taylorwc 12y ago
    I would contend that though you are at the tail end of the curve that doesn't need an intermediary, many of your customers are likely to need/desire an intermediary to facilitate for the people you mention, with no idea how to get bitcoins. Regardless of whether you, I, or HN hates Coinbase or loves Coinbase, they provide a layer of accessibility to an otherwise intimidating ecosystem.

kleer001 12y ago

This seems good. But at the heart of it I fear it defeats the whole point of Bitcoin the payment system. Why? I thought the whole point of Bitcoin was to create a decentralized payment system. And here is Coinbase (or Bitpay) becoming centralized payment systems...

jordigh 12y ago
Yeah, I hear you. I am hoping they are just crutches to bootstrap bitcoin adoption. If bitcoins become popular, perhaps we can lose the crutches. Or perhaps we'll have tons of competing escrow businesses. What is it with humans' tendency to centralise anyways? Here is democracy... now here's an all-powerful president and congressional oligarchy. Here is the industrial revolution to facilitate transportation of goods all around the countryside... now here are the giant megalopolises in which most of us now live. Here is the internet... now here's Gmail, the single location to email, and Facebook, the single location to put all of your personal data. Here are DVCSes... now here is github, a place to centralise all of our DVCS work. Maybe there's just something fundamentally ingrained in human psychology that makes us converge like this.
- aaron-lebo 12y ago
  Centralization tends to be more efficient and convenient. It also is more profitable for whoever does the centralization.
- yen223 12y ago
  > What is it with humans' tendency to centralise anyways? I think it's less about human psychology and more about managing efficiency. A well-run centralized system will always be more efficient than a well-run decentralized system, by virtue of having less overhead. Whether it's overhead from arranging logistics to one large city, instead of a hundred small cities, or overhead from interacting with one large federal government, instead of 50 small state governments.
  - baddox 12y ago
    > A well-run centralized system will always be more efficient than a well-run decentralized system, by virtue of having less overhead. That's a circular definition, unless you have some objective way to measure how "well-run" a system is other than just measuring its efficiency.

stevehawk 12y ago

Has there been much talk about how stores using Bitcoin reduces the anonymity of Bitcoin by tying IDs in the transaction of acquiring that coin to the person that ultimately uses it? I'm sure the uber nerds were already aware of this but has it been brought up enough that the general community thinks this through? One booking on Expedia and you've revealed any possible Silk Road or other curious transaction you've ever made, right?

jordigh 12y ago
How does this work, exactly? I use a unique address each time I receive bitcoins. Then I sometimes move money between more unique addresses in plausible-looking ways. I always use Tor for talking to the bitcoin network. How easy is it to de-anonymise me?
- jmhain 12y ago
  See the two heuristics in this paper for creating clusters of bitcoin users [0]. The first (and rather obvious) one is to cluster all inputs of a transaction, so if you use A and B, and later use B and C, we now know the same user owns A, B, and C and only need to tie your identity to one of them. The prior one is rather weak, and could be avoided by consistent usage of unique change addresses. Thus, the second heuristic works to reveal which output is the change address. There are various ways of performing this prediction, some more deterministic than others. A pretty conservative and reliable one, described in [0], assumes an output is a change address if it (1) is the first appearance of the address, (2) the tx is not a coin generation, (3) there is no self-change address, and (4) #1 is only true for this address. There is an open-source implementation of these ideas called BitIodine [1,2] (albeit with slightly different criteria for change-address identification, including an off-by-one error in bitcoin core that caused the first output to always be the change address in a 2-output transaction until it was fixed in early 2013). Punch in one of your addresses and see what it comes up with. However, I may have found a bug that reduces input-clustering, so if it doesn't find your addresses don't get too excited. Also, don't forget about the recent technique for de-anonymizing coin mixing transactions [3]. [0] http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf [1] https://github.com/mikispag/bitiodine https://github.com/mikispag/bitiodine [2] https://bitiodine.net/ https://bitiodine.net/ [3] http://www.coindesk.com/blockchains-sharedcoin-users-can-identified-says-security-expert/ http://www.coindesk.com/blockchains-sharedcoin-users-can-ide...

mrfusion 12y ago

Side note, I'm noticing a lot of merchants accepting bitcoin asking for more information than they should need. For example I tried to buy an ebook recently and it required my home address. For Credit cards I believe that's required to verify the billing info, but there's no reason bitcoin purchases should need it for non-shippable products. And it cancels out a lot of the benefits of using bitcoins (fast purchase, anonymous from marketers)

TomGullen 12y ago
We sell digital services (ebooks count), and require the customers address (or part of) to determine the VAT status of the sale. Even though buying an e-book for Bitcoin seems like you shouldn't need any personally identifiable information, quite often merchants do need to collect it.
- higherpurpose 12y ago
  So collect the country or state, not the home address.
  - TomGullen 12y ago
    I know what the rules are in the UK, but not everywhere in the world.
  - jimktrains2 12y ago
    You do know that in the US counties (and possibly cities, I need to double check cities) can leverage sales tax as well. However, it should only really be an issue of where you have nexus. It's probably just how their system handle's orders (you need home address for CC for AVS, so it's probably just required everywhere in their code.
    - toast0 12y ago
      In the US, cities can levy sales taxes as well. Also, the city field in your address does not accurately indicate your municipal boundaries; it's more of an identifier of which post office serves you and which municipal boundaries it falls within.

justme123 12y ago

These is very good news overall, taking into account that we are now in the first-stage-of-adoption of bitcoins, where the most important is to spread the info about bitcoins and increase its usage. In a later stage, when bitcoins are more diseminated and people feels bitcoin more "domestic", then there will be a interest for "personal-wallets" and "business-wallets", which may be hardware-wallets, or multisig-insured-online-services... TLDR; this is a good-first step toward bitcoin adoption, further later will be another step towards personal-wallets.

coryking 12y ago

How does this deal with damage deposits? Why would I pay with bitcoin when many rewards cards pay out extra when you use them for travel-related use? Honestly, the cynic in me says the use case for spending bitcoin is a quick way for speculators to "cash out" in a way that makes it easier to hide earnings from the tax-man.

rational-future 12y ago
Honestly, the cynic in you may say everyone buying a kitchen knife plans to cut a child throat, but that won't decrease the usefulness of kitchen knifes. Damage deposits - not something Expedia does with credit cards or PayPal, hotels have to ask their clients for a credit card at check in. Rewards - it's just a matter of time for Bitcoin rewards schemes to appear.

vijayboyapati 12y ago

It's interesting to think what announcement like this have in aggregate on the price of bitcoin. Counter-intuitively the price of bitcoin should face downward pressure as merchant adoption of this sort increases. Expedia doesn't hold any of the bitcoin they receive. The bitcoins are instantly converted to dollars on a market exchange. This means that holders of bitcoin, especially those who are sitting on large capital gains, now have a new outlet to realize their gains. On the other hand merchants who choose to accept bitcoin using Coinbase (or Bitpay) and who also choose to keep some fraction of their profit in bitcoin (thereby exposing their profits to currency volatility, which may even be a good thing for growth of their profits) will tend to increase the market price of bitcoin. Overall it seems like most merchants accepting bitcoin are not holding any of the bitcoins they accept. It would be great to see more merchants choosing to keep some fraction, however small, in bitcoin itself.

TomGullen 12y ago
I think it will happen when their suppliers accept Bitcoin as payment. The chain has to start somewhere, at the moment they have nowhere to spend them.
notahacker 12y ago
I suspect that, arguably more counter-intuitively, it will push the price up, fed by increased speculation due to apparent signs of Bitcoin "going mainstream" that will far exceed any actual Expedia transactions taking place. I'm more intrigued by the commercial decision from Expedia's perspective. Presumably they've done a back of the envelope calculation and decided "group of people more likely to pick Expedia over other OTAs if they can use Bitcoin" > "group of people that will be sufficiently confused by an additional payment option to abandon their cart"
- StavrosK 12y ago
  They have tabs that go "Credit card", "Paypal", "Bitcoin", so, presumably, 0 people will be confused by that, plus they have lower fees than either CC companies or Paypal, so it sounds like an obvious win for them.

avd74 12y ago

When I first read this I thought, why would they start with hotels? may be because the big profit they make out of reservations? Then I remembered what an accountant friend once said to me: "Hotels are big portals between the black and white worlds". So you may have black money in bitcoins (and a Hotel which is your "legal business"), and want to "wash" it? now you can do it through Expedia (they having a bite in the process, hence their motivation).

malandrew 12y ago
Makes sense, but I'd love to here more on this. What features of hotels makes them particularly good portals between the black and white worlds.
- volker48 12y ago
  Hard to prove how many people actually stayed in the hotel would be my guess. Other businesses like restaurants have inventory so you can't as easily make it look like you made a great deal more money than you actually did.
  - seizethecheese 12y ago
    This idea is really seductive. Wouldn't it be kind of hard/traceable to fake bookings though? It seems like strip clubs or some sort of service company would be better.
- netcan 12y ago
  Say you run a hotel at 60% occupancy. Then the hotel suddenly goes to 80% occupancy. No additional costs. No inventory paper trail. A small motel with paper bookings could probably launder a lot of money for a silent partner. 10k comes in as bitcoin bookings (2-3 rooms per night). 10k-laundry fee gets paid as dividends to an "investor," "consultant" or anything really. The reservation books are paper. Many consumer facing service businesses fit the bill, but hotels are a nice big category. It makes sense for them to be accepting internet payments.
12y ago

malloreon 12y ago

Does Expedia hold any bitcoin reserves? Do they interact with bitcoin at all? Nope. They let someone else do it and just accept real money.

codyb 12y ago
That's okay though. As bitcoin proliferates large businesses will eventually start cutting out the middle man. But currently, with the drastic swings, it's not a sound economic move (especially publicly owned) to actually have holdings in bitcoin. It requires infrastructure for cash exchanges too. Is Expedia going to pay its dividends with its bitcoin reserves? Not yet!
Mangalor 12y ago
Coinbase will likely have to keep more reserves though to compensate with the new business.
dustcoin 12y ago
Overstock keeps 10% of bitcoin sales in bitcoin: http://www.reddit.com/r/tabled/comments/24knns/table_iama_im_patrick_byrne_a_profreedom/ http://www.reddit.com/r/tabled/comments/24knns/table_iama_im...

pistle 12y ago

The common thread is coinbase creating a low-friction opportunity for merchants to accept another form of payment, but to be paid in - most likely - USD as far as they are concerned. This does nothing to disperse bitcoin into many little places. In other words, accepting bitcoin by online merchants everywhere doesn't make many people want to go trade fiat for a volatile currency with all the inconveniences inherent. You need a frictionless means and stimulus for many swathes of people and organizations to accept and hold BC instead of wanting fiat conversions immediately. "We take Discover/American Express etc." only really got so far to help with consumer adoption of those networks. This keeps coming around to a currency without a country is a PITA. What are return policies around goods bought with BC? Do you get BC back or fiat? Do you get spot prices at time of return request, etc?

rmason 12y ago

Well it seems that Expedia did a great thing by allowing you to use Bitcoin to pay for hotel bookings. So that means I don’t need to use my credit card any longer when I check into the hotel? Not exactly: http://www.reddit.com/r/Bitcoin/comments/27vc4x/expedia_starts_accepting_bitcoin_for_hotel/ http://www.reddit.com/r/Bitcoin/comments/27vc4x/expedia_star... If you read down in the comments you see hotel workers saying they will still apply a 2X block on the daily rate of the room to your credit card, even if you've paid for the room with Bitcoin. A block that can take up to two weeks to be released. Obviously the standard hotel procedures will need to be revised but until then Bitcoin buyer beware ;<(. Rick

jpatokal 12y ago
Think of it this way: you're paying by Bitcoin, but you're guaranteeing that you won't drink the minibar dry or trash the room with a credit card. This won't change until there's a well-established Bitcoin credit facility.

kolev 12y ago

Expedia accepts Coinbase, not Bitcoin. This is no different than accepting PayPal. Did you pay with PayPal balance, credit card, or bank account - it doesn't matter. You implement PayPal APIs and you receive dollars from PayPal. The rest is just speculation, but seems that price is dropping as "acceptance" like this can only lead to selling pressure if it ever gains any traction, of course. I'm really surprised all these merchants implementing Bitcoin for the PR, but confusing their checkout routine. The path to checkout should be as short as possible with as little decisions to be made along the way. Any distraction can lead to abandonment. Is the cheap PR all worth it? I personally doubt. It's obvious that the general public is not interested in Bitcoin and is, in fact, getting bored. I keep polling non-techie friends, the common theme is "Bitcoin is a scam". Even most tech people aren't much interested except the small share who invest in stocks, i.e. the speculator by nature.

bequanna 12y ago
> It's obvious that the general public is not interested in Bitcoin and is, in fact, getting bored. Do you have any proof to backup this statement? Bitcoin related growth abound. The number of My Wallet Users has doubled in the past 6 months. http://blockchain.info/charts/my-wallet-n-users http://blockchain.info/charts/my-wallet-n-users
- kolev 12y ago
  Lots of people are splitting coins into multiple wallets, duh.
- kolev 12y ago
  Also, I'm sure there are speculators running scripts to generate new wallets and pump the bubble further.
  - bequanna 12y ago
    >Also, I'm sure there are speculators running scripts to generate new wallets and pump the bubble further. That sounds like pretty strong, objective evidence. /s There are Bitcoin bulls and bears. Nothing wrong with being either. But, if you're going to make claims, at least have facts to back them up.

taariqlewis 12y ago

Speculative bitcoiners will not spend their hard-earned BTC on travel goods and services. They will HODL and continue to buy their air and hotel with fiat cash which will be cheaper, faster, and easier.

vundervul 12y ago

Too bad, I liked expedia. Now I have to use travelocity.

abc123xyz 12y ago

This is only in US, I went to expedia, no bitcoin option, well that was a let down.