4 ms·

good point, this should be what BT is made for (or at least a very good use case) and yet, no mention.

PeterisP 12y ago
There were valid mentions about the many purchasing businesses who are unable to pay in Paypal due to their procurement bureaucracy rules. I seriously doubt that they'd able to pay in Bitcoin as well. Otherwise, Bitcoin may be an okay option for the receiver; maybe a bit of a hassle to do proper accounting/taxes. Locally, I see options to 'cash out' BTC that will cost me something like 2.5% due to buy/sell spread - not the cheapest option but similar to accepting the same amount from a credit card. I'd personally prefer good wire transfers, though - if worldwide transfers would be more similar to EU-wide bank transfers, then that'd be better than Bitcoin for freelance invoicing.
patio11 12y ago
I'm going to again solidify my position as HN's Official Bitcoin Critic with this, but the reason I didn't suggest it is because BTC is a terrible method for doing international payments. 1) See elsewhere on this page where we explained that most companies are unwilling to add new payment types to accommodate individual vendors. This is as true for Bitcoin as it is for Paypal. It is probably more true, actually, since Paypal is a known-to-be-legal regulated subsidiary of a US Fortune 500 company and Bitcoin is Bitcoin. 2) Suppose you issue a US company an invoice for $10,000 and say "You can settle this invoice in Bitcoin." How are they actually supposed to do that? My impression is that the best option currently is to connect their bank account to Coinbase (note: non-starter!), wait a few days for it to be connected, then purchase $10k worth of Bitcoin at market price. $10k is +/- 17 BTC, which they won't actually be allowed to purchase in a day. It will actually take four days of repeated work to buy that $10k of Bitcoin. Then they can actually transfer it to you and, yay, you now have BTC. 3) But wait! What happens if the BTC price changes over the ~7 business days it takes from the time your client starts taking action on your invoice to the time they send you your BTC? Answer: somebody pays for this risk. Volatility is an implicit tax on transactions. One of the parties is going to be short BTC and one will be long BTC for the week, and given that BTC can very easily move 20% in a week, that means that your $10k invoice might be $8k or $12k. 3a) Clients do not like when $10k invoices turn into $12k invoices because To The Moon, Yo. 4) Suppose you have +/- $10k worth of BTC. How do you solve the Last Quarter Mile problem to your own bank account and/or local currency? Your options are a) send the BTC to an unregulated exchange and accept counterparty/currency risk (then hope that getting a large wire transfer from them doesn't cause your bank to reevaluate how desirable your business is) or b) attempt to deal with LocalBitcoins sellers multiple times, which apparently combines the wonderful trust of the clandestine drug economy with the mind-altering properties of currency exchanges. 4a) Time you spend on figuring out how to turn $10k of Internet money into $10k of local currency is time you aren't spending lining up your next $10k engagement. 5) If at any point you or one of your counterparties screw up in securing any computer or trusting any member of the Bitcoin economy, your $10k vanishes into the ether. You should neither accept nor request BTC for professional services. They're more expensive end-to-end than dealing with banks and expose you to multiple unique sources of risk. You have plenty of risk in your business already, and if your risk appetite is high, there are more lucrative forms of risk you can "buy" than transacting in BTC, such as attempting to move your consulting practice upmarket.
- pmorici 12y ago
  I disagree. This was the state of things perhaps 1-2 years ago but this doesn't represent the situation at all today. Using a bitcoin payment processor like Bitpay you have zero exchange rate risk and can receive payment in 9 different currencies in 33 countries. Coinbases daily buy limit is $50,000 not 10k You still have the computer security problem when you are using online banking and any reputable Bitcoin company has as good or better security than a bank. Two factor auth, and hardware tokens are the norm. I can't say the same for most of the banks I've used.
  - vacri 12y ago
    any reputable Bitcoin company has as good or better security than a bank. Like Mt Gox? It was reputable enough to handle 2/3rds of all bitcoin transactions. Besides, if you're concerned about your banking, you can easily shop around and find one with the hardware token security you like.
    - pmorici 12y ago
      Mt. Gox wasn't reputable and anyone willing to look would have seen that disaster coming 6-9 months away at least. People were just being greedy because of the higher BTC exchange rate there.
  - lifeisstillgood 12y ago
    I'm not sure bitpay solves this. The whole "international transfer is hard" thing is what Stellar was about recently. Afaik bitpay is "receive bitcoin, get USD deposited into your account". It makes taking bitcoin payments from people who already have bitcoin easy. I'm sure it's great. But it presupposes my client has a stash of bitcoin already. If they do the chances are they have their own internal Treasury, accounts in multiple other currencies probably in multiple of countries and frankly would find it easier to pay me in GBP out of the UK bank account that their clients keep filling up. And I do not work for clients who run their own treasury - well sometimes but even then this never comes up. I personally love bitcoin for international money transfers. My bet is on supporting the diaspora - families who trust each other but live in different countries and want to send some money home. Right now they get stiffed by Wells Fargo - but if Son in law in NYC can operate a gateway and Father in law can do the same in Hyderabad then all the members of their family can give son in law dollars and he can tell ... You get the idea. It's how foreign exchange started

There were valid mentions about the many purchasing businesses who are unable to pay in Paypal due to their procurement bureaucracy rules. I seriously doubt that they'd able to pay in Bitcoin as well. Otherwise, Bitcoin may be an okay option for the receiver; maybe a bit of a hassle to do proper accounting/taxes. Locally, I see options to 'cash out' BTC that will cost me something like 2.5% due to buy/sell spread - not the cheapest option but similar to accepting the same amount from a credit card. I'd personally prefer good wire transfers, though - if worldwide transfers would be more similar to EU-wide bank transfers, then that'd be better than Bitcoin for freelance invoicing.

patio11 12y ago

I'm going to again solidify my position as HN's Official Bitcoin Critic with this, but the reason I didn't suggest it is because BTC is a terrible method for doing international payments. 1) See elsewhere on this page where we explained that most companies are unwilling to add new payment types to accommodate individual vendors. This is as true for Bitcoin as it is for Paypal. It is probably more true, actually, since Paypal is a known-to-be-legal regulated subsidiary of a US Fortune 500 company and Bitcoin is Bitcoin. 2) Suppose you issue a US company an invoice for $10,000 and say "You can settle this invoice in Bitcoin." How are they actually supposed to do that? My impression is that the best option currently is to connect their bank account to Coinbase (note: non-starter!), wait a few days for it to be connected, then purchase $10k worth of Bitcoin at market price. $10k is +/- 17 BTC, which they won't actually be allowed to purchase in a day. It will actually take four days of repeated work to buy that $10k of Bitcoin. Then they can actually transfer it to you and, yay, you now have BTC. 3) But wait! What happens if the BTC price changes over the ~7 business days it takes from the time your client starts taking action on your invoice to the time they send you your BTC? Answer: somebody pays for this risk. Volatility is an implicit tax on transactions. One of the parties is going to be short BTC and one will be long BTC for the week, and given that BTC can very easily move 20% in a week, that means that your $10k invoice might be $8k or $12k. 3a) Clients do not like when $10k invoices turn into $12k invoices because To The Moon, Yo. 4) Suppose you have +/- $10k worth of BTC. How do you solve the Last Quarter Mile problem to your own bank account and/or local currency? Your options are a) send the BTC to an unregulated exchange and accept counterparty/currency risk (then hope that getting a large wire transfer from them doesn't cause your bank to reevaluate how desirable your business is) or b) attempt to deal with LocalBitcoins sellers multiple times, which apparently combines the wonderful trust of the clandestine drug economy with the mind-altering properties of currency exchanges. 4a) Time you spend on figuring out how to turn $10k of Internet money into $10k of local currency is time you aren't spending lining up your next $10k engagement. 5) If at any point you or one of your counterparties screw up in securing any computer or trusting any member of the Bitcoin economy, your $10k vanishes into the ether. You should neither accept nor request BTC for professional services. They're more expensive end-to-end than dealing with banks and expose you to multiple unique sources of risk. You have plenty of risk in your business already, and if your risk appetite is high, there are more lucrative forms of risk you can "buy" than transacting in BTC, such as attempting to move your consulting practice upmarket.

pmorici 12y ago
I disagree. This was the state of things perhaps 1-2 years ago but this doesn't represent the situation at all today. Using a bitcoin payment processor like Bitpay you have zero exchange rate risk and can receive payment in 9 different currencies in 33 countries. Coinbases daily buy limit is $50,000 not 10k You still have the computer security problem when you are using online banking and any reputable Bitcoin company has as good or better security than a bank. Two factor auth, and hardware tokens are the norm. I can't say the same for most of the banks I've used.
- vacri 12y ago
  any reputable Bitcoin company has as good or better security than a bank. Like Mt Gox? It was reputable enough to handle 2/3rds of all bitcoin transactions. Besides, if you're concerned about your banking, you can easily shop around and find one with the hardware token security you like.
  - pmorici 12y ago
    Mt. Gox wasn't reputable and anyone willing to look would have seen that disaster coming 6-9 months away at least. People were just being greedy because of the higher BTC exchange rate there.
- lifeisstillgood 12y ago
  I'm not sure bitpay solves this. The whole "international transfer is hard" thing is what Stellar was about recently. Afaik bitpay is "receive bitcoin, get USD deposited into your account". It makes taking bitcoin payments from people who already have bitcoin easy. I'm sure it's great. But it presupposes my client has a stash of bitcoin already. If they do the chances are they have their own internal Treasury, accounts in multiple other currencies probably in multiple of countries and frankly would find it easier to pay me in GBP out of the UK bank account that their clients keep filling up. And I do not work for clients who run their own treasury - well sometimes but even then this never comes up. I personally love bitcoin for international money transfers. My bet is on supporting the diaspora - families who trust each other but live in different countries and want to send some money home. Right now they get stiffed by Wells Fargo - but if Son in law in NYC can operate a gateway and Father in law can do the same in Hyderabad then all the members of their family can give son in law dollars and he can tell ... You get the idea. It's how foreign exchange started