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For Bitcoin to succeed as a means of payment, chains of payments need to arise. I.e. merchants not only accepting Bitcoins, but also keeping them and spending t

by Hermel 12y ago

For Bitcoin to succeed as a means of payment, chains of payments need to arise. I.e. merchants not only accepting Bitcoins, but also keeping them and spending them on suppliers and paying their employees (partially) in Bitcoin. As you say, buying Bitcoins to buy something and then the merchant immediately selling them again is pointless. That's why I'm skeptical with Bitcoin as a replacement for everyday payments. However, there is a chance of it finding significant niches online and internationally. Furthermore, it also has a value as a store of wealth, which is its main price driver (buying an hording a Bitcoin has a much bigger impact on price than buying and spending a Bitcoin with a merchant that sells it again).

sillysaurus3 12y ago
I.e. merchants not only accepting Bitcoins, but also keeping them and spending them on suppliers and paying their employees (partially) in Bitcoin. I think this is illegal now in New York. The new regulation requires that companies keep profits in USD and not bitcoin. For bitcoin to succeed, it needs to become safe. It's still incredibly easy to lose your money if it's stored in bitcoin.
- embolalia 12y ago
  Nothing is illegal yet. The regulations have been proposed, but there's still a 45-day comment period that hasn't started yet. I don't know if there are more comment/review periods after that. Moreover, as I understood it, the proposed regulations apply pretty much entirely to those holding others' BTC, not to retailers. I didn't see anything in my (admittedly very cursory) reading to suggest a company that only takes BTC as payment for services would be disallowed from investing in, or making payments in, BTC.
- fragsworth 12y ago
  > For bitcoin to succeed, it needs to become safe. It's still incredibly easy to lose your money if it's stored in bitcoin. It's not that "bitcoin has to become safe" - it's that the users have to become security-minded. If it's even possible for that to happen in a mainstream way, it's going to be a very slow process. Like decades or generations.
  - bobbygoodlatte 12y ago
    Or they can just use Coinbase Vault :) https://coinbase.com/vault https://coinbase.com/vault
    - sillysaurus3 12y ago
      If Coinbase goes out of business, you'll lose all your money. Coinbase is a startup, and >90% of startups fail. "Vault" is a marketing term designed to make people feel comfortable for no reason. Given this major disadvantage, what benefit does Coinbase Vault offer to outweigh it?
      - aianus 12y ago
        Coinbase isn't running a fractional reserve. Barring fraud, everyone would get their BTC back even if it fails.
        deleted 12y ago
        [deleted]
        earonesty 12y ago
        Prove it.
- sunshinerag 12y ago
  where does it say they need to keep the profits in USD? It would be interesting to know how they justify that - http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf.
jgeerts 12y ago
We just don't understand yet what we can do with it, I think we need to see bitcoin as the raw protocol and now we have to build layers on top of it to handle security/transactions properly, what those layers are and what it looks like is yet to be decided. Any company can now be the company for bitcoin that google was to the internet if they solve the right problem. It will be possible to do everyday payments with it, it's not that because that bitcoin is decentralised that no centralised value can exist with it. It's just so beautiful that you can interact with it any you want. Take for example mint.com that has to acquire and integrate with each and every bank separately, with bitcoin anyone can build a mint.com with the blockchain. It has the potential to change the world in ways we cannot imagine yet. I'm even dreaming about open governments where we can actually see the governments spending... I'm a dreamer.
- kolinko 12y ago
  There are also smart contracts & distributed oracles (orisi.org)
im3w1l 12y ago
>As you say, buying Bitcoins to buy something and then the merchant immediately selling them again is pointless. It is not that simple, in my opinion. While the merchant may hold the bitcoins for a very short while post-purchase, the customer will probably not have automated infrastructure, and not be that efficient. The main usage of "bitcoin seconds" in the transaction while likely be the bitcoins sitting on the buyers wallet or bitcoin exchange account prior to the purchase. Now, I am just doing guesswork, but it doesn't seem that unlikely that a customer will acquire the bitcoins for the purchase a few hours, or perhaps even a few days in advance.

by Hermel 12y ago

sillysaurus3 12y ago

I.e. merchants not only accepting Bitcoins, but also keeping them and spending them on suppliers and paying their employees (partially) in Bitcoin. I think this is illegal now in New York. The new regulation requires that companies keep profits in USD and not bitcoin. For bitcoin to succeed, it needs to become safe. It's still incredibly easy to lose your money if it's stored in bitcoin.

embolalia 12y ago
Nothing is illegal yet. The regulations have been proposed, but there's still a 45-day comment period that hasn't started yet. I don't know if there are more comment/review periods after that. Moreover, as I understood it, the proposed regulations apply pretty much entirely to those holding others' BTC, not to retailers. I didn't see anything in my (admittedly very cursory) reading to suggest a company that only takes BTC as payment for services would be disallowed from investing in, or making payments in, BTC.
fragsworth 12y ago
> For bitcoin to succeed, it needs to become safe. It's still incredibly easy to lose your money if it's stored in bitcoin. It's not that "bitcoin has to become safe" - it's that the users have to become security-minded. If it's even possible for that to happen in a mainstream way, it's going to be a very slow process. Like decades or generations.
- bobbygoodlatte 12y ago
  Or they can just use Coinbase Vault :) https://coinbase.com/vault https://coinbase.com/vault
  - sillysaurus3 12y ago
    If Coinbase goes out of business, you'll lose all your money. Coinbase is a startup, and >90% of startups fail. "Vault" is a marketing term designed to make people feel comfortable for no reason. Given this major disadvantage, what benefit does Coinbase Vault offer to outweigh it?
    - aianus 12y ago
      Coinbase isn't running a fractional reserve. Barring fraud, everyone would get their BTC back even if it fails.
      - deleted 12y ago
        [deleted]
      - earonesty 12y ago
        Prove it.
sunshinerag 12y ago
where does it say they need to keep the profits in USD? It would be interesting to know how they justify that - http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf.

jgeerts 12y ago

We just don't understand yet what we can do with it, I think we need to see bitcoin as the raw protocol and now we have to build layers on top of it to handle security/transactions properly, what those layers are and what it looks like is yet to be decided. Any company can now be the company for bitcoin that google was to the internet if they solve the right problem. It will be possible to do everyday payments with it, it's not that because that bitcoin is decentralised that no centralised value can exist with it. It's just so beautiful that you can interact with it any you want. Take for example mint.com that has to acquire and integrate with each and every bank separately, with bitcoin anyone can build a mint.com with the blockchain. It has the potential to change the world in ways we cannot imagine yet. I'm even dreaming about open governments where we can actually see the governments spending... I'm a dreamer.

kolinko 12y ago
There are also smart contracts & distributed oracles (orisi.org)

im3w1l 12y ago

>As you say, buying Bitcoins to buy something and then the merchant immediately selling them again is pointless. It is not that simple, in my opinion. While the merchant may hold the bitcoins for a very short while post-purchase, the customer will probably not have automated infrastructure, and not be that efficient. The main usage of "bitcoin seconds" in the transaction while likely be the bitcoins sitting on the buyers wallet or bitcoin exchange account prior to the purchase. Now, I am just doing guesswork, but it doesn't seem that unlikely that a customer will acquire the bitcoins for the purchase a few hours, or perhaps even a few days in advance.