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> why would anyone want to exchange a reasonable stable national currency for bitcoin? Name me 10 currencies you'd be comfortable holding. It'll probably be ve

> why would anyone want to exchange a reasonable stable national currency for bitcoin? Name me 10 currencies you'd be comfortable holding. It'll probably be very difficult. Fact is, billions use currencies with high inflation rates and with relatively short lifespans. And it's not just places like Zimbabwe that have many problems besides insane inflation the past decade. It's also relatively developed countries like Argentina that suffer from insane inflation. It's also small stable countries with a nice standard of living ($27k GDP PPP) with an educated population like Cyprus where many lost their savings as bank deposits were frozen or seized. And that's just protection from governmental malfeasance that hundreds of millions have to be aware of. But it's also the fact that billions are unbanked. We at HN know more than anyone that providing a physical service (like mail delivery) is 1 million times more expensive than a digital service (like e-mail). Same for banking, for vaults, for ATMs, for services like lending, payments, remittance or money transfer. A digital version can be much cheaper, as well as more accessible. (for a bank you often need proof of identity, residence and employment. Good luck when you have no birth certificate, when you live in a slum, when you have an off-the-record job like selling fruit on the corner of the street). Digital banking can bring cheap financial services to hundreds of millions who don't have it, yet have (intermittent) access to networks as simple as SMS or radio, which can plug in to gateways to the bitcoin network. Next up is us, the wealthy who enjoy relatively nice financial services. Bitcoin can save 1-3% in fees on any transaction. Imagine that there's a 1-3% tax on everything, not value added, everything, every transaction, whether B2C or B2B, and you have a way to remove that. That's very significant. Entire industries run on margins of 1-5%. Amazon's 2013 margin was 0.35%, imagine they could shave off even 0.5%. Now that doesn't mean we all should actually buy and hold bitcoin. As you say, the volatility dwarfs this percentage. But volatility can be exclusive to investors. For example, Bitreserve (founded by the founder of CNET) lets you lock in the price. That means you can buy $100 of bitcoin, and see $100 on your account, as if it was Paypal. And then you can spend that $100 anytime you want, and it'll always be worth that much. On the backend the service then lets investors create a market to lock in that price, where various investors make short or long bets, a derivatives market can take out the volatility for the customer, thereby allowing people to use bitcoin, save costs, yet be shielded from volatility. That means business to business payments, too. Besides that there's lots of other things. Like the fact it can be much more secure. Creditcard fraud is rampant as your password is essentially on the card and you have to share it everytime you pay, it's crazy. Chargeback fraud is an issue. Identity theft is therefore an issue. And you can envision crazy things like a Google driverless car paying, on the fly, to another driverless car infront of it, to move away, so that it can take that lane and go faster, because the one in the back is willing to pay extra for speed, and the one in front is okay with arriving a little later. Those kinds of thing can almost only be built on a global, permissionless protocol layer. So indeed none of us may use bitcoin, it may just be a machine to machine currency, it's too early to tell, it can have an impact in many different ways.

dangerlibrary 12y ago
But so little of that is exclusive to BTC as opposed to a digital transaction valued in national currency, and almost none of the benefits you list accrue to consumers - they all benefit merchants. - Getting rid of charge back fraud also gets rid of charge backs - an important consumer protection. - I don't need 10 currencies I'd be comfortable holding, but any of these - http://fxtrade.oanda.com/analysis/currency-volatility http://fxtrade.oanda.com/analysis/currency-volatility have far lower volatility than BTC. - Bankless people need banks, not cryptocurrencies. There's no difference to a bankless person between a mobile app to an online bank and a bitcoin gateway. - My credit card pays me back a chunk of that "1-3% tax on everything," my bitcoin wallet doesn't. Until bitcoin gains market share and the tax goes away, I'm just paying more to use bitcoin. - My credit card company provides fraud protection for when my card is stolen, my BTC wallet does not. Looking to the future doesn't make me want to transact in BTC right now.
- beaner 12y ago
  - Chargebacks happen when cards are stolen. Cards are stolen because they are fundamentally pull payment methods. Every time you pay, you hand the keys to your money over to someone else. Think about this for a second, because it is absolutely insane. Whenever you pay with a credit card, you have to trust the merchant to (1) charge the right amount, (2) only do it once, and (3) themselves take your privacy seriously enough to not have your information stolen by another party, who, if they did get hold of your card info, could abuse it at will and then share with more 3rd parties or have it stolen from them! Credit cards are broken fundamentally. If the only kinds of payments were push payments, where consumers choose when to pay and the merchant has no ability to pull at will, the entire issue of credit card thefts - think Target, Home Depot, or the Russian hackers - would simply not exist. So chargebacks due to fraud simply wouldn't be there. Sure, there are other use cases for chargebacks, like you felt you didn't get what you paid for or something, but that switches to a customer service issue which increases competition among merchants. - Who cares about volatility? You don't need to own bitcoin to use it. When you want to send it, buy it at the time, then send it. Big whoop. Also what is volatility on $100? Are you that concerned about losing or gaining $5, $10, $20 in a day, with a total maximum limit of losing at most $100 if it goes to zero, which seems extremely unlikely? Nobody said you have to invest your life savings. Participating in the technology is as expensive or as cheap as you would like. - "Bankless people need banks, not cryptocurrencies." - Why? You didn't actually say. "There's no difference to a bankless person between a mobile app to an online bank and a bitcoin gateway." - Which is great, because since "people need banks" (your words), bitcoin can finally provide it to them. - "My credit card pays me back a chunk of that "1-3% tax on everything," my bitcoin wallet doesn't." - This is short-term thinking. Wouldn't you want something that can provide lower fees to gain market share in the long term, so that discount is not just available to the exclusive group of people who qualify for nice credit cards, but to every person, regardless of qualifications or payment methods? - Last point is covered by my first point.

dangerlibrary 12y ago

But so little of that is exclusive to BTC as opposed to a digital transaction valued in national currency, and almost none of the benefits you list accrue to consumers - they all benefit merchants. - Getting rid of charge back fraud also gets rid of charge backs - an important consumer protection. - I don't need 10 currencies I'd be comfortable holding, but any of these - http://fxtrade.oanda.com/analysis/currency-volatility http://fxtrade.oanda.com/analysis/currency-volatility have far lower volatility than BTC. - Bankless people need banks, not cryptocurrencies. There's no difference to a bankless person between a mobile app to an online bank and a bitcoin gateway. - My credit card pays me back a chunk of that "1-3% tax on everything," my bitcoin wallet doesn't. Until bitcoin gains market share and the tax goes away, I'm just paying more to use bitcoin. - My credit card company provides fraud protection for when my card is stolen, my BTC wallet does not. Looking to the future doesn't make me want to transact in BTC right now.

beaner 12y ago
- Chargebacks happen when cards are stolen. Cards are stolen because they are fundamentally pull payment methods. Every time you pay, you hand the keys to your money over to someone else. Think about this for a second, because it is absolutely insane. Whenever you pay with a credit card, you have to trust the merchant to (1) charge the right amount, (2) only do it once, and (3) themselves take your privacy seriously enough to not have your information stolen by another party, who, if they did get hold of your card info, could abuse it at will and then share with more 3rd parties or have it stolen from them! Credit cards are broken fundamentally. If the only kinds of payments were push payments, where consumers choose when to pay and the merchant has no ability to pull at will, the entire issue of credit card thefts - think Target, Home Depot, or the Russian hackers - would simply not exist. So chargebacks due to fraud simply wouldn't be there. Sure, there are other use cases for chargebacks, like you felt you didn't get what you paid for or something, but that switches to a customer service issue which increases competition among merchants. - Who cares about volatility? You don't need to own bitcoin to use it. When you want to send it, buy it at the time, then send it. Big whoop. Also what is volatility on $100? Are you that concerned about losing or gaining $5, $10, $20 in a day, with a total maximum limit of losing at most $100 if it goes to zero, which seems extremely unlikely? Nobody said you have to invest your life savings. Participating in the technology is as expensive or as cheap as you would like. - "Bankless people need banks, not cryptocurrencies." - Why? You didn't actually say. "There's no difference to a bankless person between a mobile app to an online bank and a bitcoin gateway." - Which is great, because since "people need banks" (your words), bitcoin can finally provide it to them. - "My credit card pays me back a chunk of that "1-3% tax on everything," my bitcoin wallet doesn't." - This is short-term thinking. Wouldn't you want something that can provide lower fees to gain market share in the long term, so that discount is not just available to the exclusive group of people who qualify for nice credit cards, but to every person, regardless of qualifications or payment methods? - Last point is covered by my first point.