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The Bitcoin community might want to take a deep breath and recognize where Bitcoin has the most real-world use. The idea that my mom will someday use Bitcoin to

The Bitcoin community might want to take a deep breath and recognize where Bitcoin has the most real-world use. The idea that my mom will someday use Bitcoin to buy books online is about as realistic as the belief that, any minute now, youngsters will realize that the daily newspaper is better read in paper form, because of the texture and experience and the anonymity of paper. For that matter, I am a computer programmer, and I love to play with new technologies, and I'm utterly unable to imagine why I'd ever want to pay with anything with Bitcoin. There are a large number of people living in China who would like to get around the nation's currency controls. There are a large number of people living in Russia that want to move money without being tracked. There are a large number of people living in Latin America who want to avoid taxes in their own countries. This is what drives the use of Bitcoin. The only large scale need for Bitcoin is criminal activity, in China, Russia, Latin America and elsewhere. Currency regulated by the government is a classic "good enough" product. It might lack some features that would be nice, but 99% of the public doesn't seem to care. Rather, they want more money, but they don't want to change money. If they had real doubts about the currency, they would dump it in exchange for real goods. But instead, most people work hard to acquire more money, and they show no real concern with the standard proxies for currency (credit cards, checks, etc).

bhayden 12y ago
The appeal of bitcoin to me, a regular American, is much the same appeal that using a VPN, having encrypted hard drives, and not sharing information about myself all over social media does. There is very little ability to have privacy when paying with USD. You can have cash transactions, in real life, or send money orders through the mail. That's pretty much it. I want privacy in my spending and in my assets. If I like reading about hacking and buy an eBook about it, I don't want that to be evidence against me when law enforcement comes knocking and tries to trump up charges against (see HN post about this just today). If I buy a VPN service, I don't want to become a target for surveillance. There are tons of legitimate, legal reasons to want privacy in purchasing and assets.
- amalcon 12y ago
  Publishing your entire transaction history for the entire world to see doesn't seem like the best way to have privacy, even if it is under a pseudonym. After all, purchasing history seems like one of the best tools to trace a pseudonym.
  - mirimir 12y ago
    We can have as many pseudonyms as we need, and can transfer Bitcoins among them via mixing services. No pseudonym need make more than one purchase. It's the difficulty of anonymous postal delivery that's limiting.
    - amalcon 12y ago
      You can do the same thing with USD. It's called money laundering, and was not invented by the Bitcoin community. Granted, for the time being it's a lot easier to do with Bitcoin, but any kind of mass market adoption would surely change this.
      - bhayden 12y ago
        Money laundering doesn't really solve the problem of being able to buy good digitally without revealing your identity.
        amalcon 12y ago
        All of the things mirmir mentioned are considered money laundering when done with USD, so they either solve that problem for both or for neither. Neither result is an argument in favor of bitcoin, so whether or not they do is immaterial.
        mirimir 12y ago
        Postal delivery of physical goods is problematic, and anonymous payment is pointless. But that's not an issue for software licenses, ebooks, server and VPS rental, VPN subscriptions, consulting services, and so on.
drcode 12y ago
I disagree somwhat- We're slowly moving into a new economy where the distinction between buyers and sellers is blurring: Instead of everyone making their purchases from a few megacorp sellers, the future will be one where any person may have a small shop or sell a small product with a small unit price (maybe even your mom someday.) In that type of environment, it is helpful to have a payment system that is more "seller-friendly" than what we have now, since the sellers no longer have economies of scale to offset sale-side costs. Cryptocurrencies hold the promise fill the role of these "seller-friendly" currencies, since they allow anyone to accept payments without intermediaries and by merely tacking some minimal logic to their software stack of choice... though I agree they still have a long way to go to achieving this.
- aioprisan 12y ago
  How is that creating a blur between buyers and sellers? We've always had small businesses and will continue to have both small businesses and large corporations. I don't understand the small unit price correlation to a small business. The 1-2% savings in processing fees right now are heavily offset by the instability of the currency. Not being able to plan your cost of goods sold and having predictable formulas for this will kill a business a heck of a lot more than an extra percentage point for processing via convenient electronic payments.
  - tracker1 12y ago
    You mean like the stability in the cost of things like food and gas?
    - lmm 12y ago
      Yep. Prices of both of those are far more stable in USD than in bitcoin.
smokeyj 12y ago
> The idea that my mom will someday use Bitcoin to buy books online is about as realistic as the belief that, any minute now, youngsters will realize that the daily newspaper is better read in paper form Your mom probably didn't push for the adoption of email yet here it is (sorry usps). The advantages of faster cheaper easier don't require much convincing, especially in the case of money/contracts/assets. The idea that people will adopt antiquated technologies when better alternatives exist is paradoxical, which makes your analogy especially confusing. Government currency is the antiquated technology, not bitcoin. For those remittance services you point to, they need market depth in order to operate. Sure the underground market can provide some, but merchant adoption sure isn't going to hurt.
- etchalon 12y ago
  Bitcoin is none of these things: faster cheaper easier.
  - StavrosK 12y ago
    How is it not faster and cheaper?
    - ufo 12y ago
      speed: The blockchain is updated only every 10 minutes and you need to wait for even longer if you want to be 100% sure a longer fork won't show up. cost: bitcoin miners must spend enormous amounts of energy in an inefficient process in order to keep the network running. Right now, most of the mining costs are covered by the bitcoin bounty that is awarded to miners that successfully mine a block but this reward decreases with time and eventually and transaction fees will have to increase to compensate.
      - WillNotDownvote 12y ago
        Speed- The difference is after that 10 minutes, the transaction is settled. The money has moved. What you have with a credit card in 10 minutes is a promise that the money will move, possibly days or even weeks later. The bitcoin can be moved again (spent by the receiver) after 10 minutes. Try that with money you received by a credit card payment. This really is the fundamental difference of bitcoin- once the money has moved, it's really moved. It takes some time and thinking to appreciate how that opens things up quite a bit.
venaoy 12y ago
The world's simplest reasons why you might pay something using bitcoins is simply when this is the only way, or cheapest way, or safest way to make a transaction. Example #1: some merchants are hit really hard with fraud, such as intangible goods paid by international credit card transactions. So hard that they decided to stop selling internationally. These merchants discover that Bitcoin re-enables them to sell internationally because Bitcoin completely solves the fraud problem for them (since transactions are irreversible). In that case, as an international customer of such a merchant, paying in Bitcoin is your only option. Example #2: some merchants offer discounts when paying in Bitcoin (because they don't incur credit card fees). So it is in your interest to pay in Bitcoin: you don't have to pay the fees from exchanging coins for fiat, and you don't have to pay the indirect credit card fees that the merchant would make you cover (via the absence of a discount). Example #3: as Bicoin's adoption grows, more and more people end up having bitcoins in their hands, like your nephew giving you $50 worth of coins for Christmas. What's the easiest for you to use them? Setting up an account at an exchange (and incurring the associated hassles and fees when selling), or just spending them directly? Of course in this case you would want to spend them directly. Example #4: say you are travelling out of town and paying for a meal in a restaurant that you suspect might be skimming credit cards... do you pay using a credit card or bitcoins? Using Bitcoin here would be much safer. It has all the advantages of credit cards (and more) without the inconvenience and danger of handling cash (losing it, getting robbed, no ability to "back up" cash, etc). Hardware bitcoin wallets have especially an insane opportunity to innovate in this space (wrt. security and ease of use).
- StavrosK 12y ago
  It took me no less than one hour to pay for a flight the other day, because of various cc-related problems, not the least of which being the train wreck that is Verified by Visa. I so, so wished for a Bitcoin option...
  - pepr 12y ago
    This. I tried buying a pair of flight tickets from a German airline Condor with a US credit card. What a hassle, in the end I had to call the bank, get redirected and verified 4 times (because they don't pass the verification along when they redirect your call) and I was finally able to pay for the damn tickets when they "pre-authorized" the transaction.
celticninja 12y ago
i think it is most likely to be successful not as a consumer level product but at an infrastructure level. businesses will exploit the blockchain and end users will be using it without realising it, so moneygram and western union will use it to send money for you, you wont know, you will be sending euros, dollars, shekels, whatever but you benefit from lower transaction costs, say half of what WU currently charge but for WU they would be making more per transaction as a result of leveraging the blockchain and low cost bitcoin transactions.
iopq 12y ago
That's like saying "nobody will give up newspapers to use this Internet thing to get their news". Yet here we are.

bhayden 12y ago

The appeal of bitcoin to me, a regular American, is much the same appeal that using a VPN, having encrypted hard drives, and not sharing information about myself all over social media does. There is very little ability to have privacy when paying with USD. You can have cash transactions, in real life, or send money orders through the mail. That's pretty much it. I want privacy in my spending and in my assets. If I like reading about hacking and buy an eBook about it, I don't want that to be evidence against me when law enforcement comes knocking and tries to trump up charges against (see HN post about this just today). If I buy a VPN service, I don't want to become a target for surveillance. There are tons of legitimate, legal reasons to want privacy in purchasing and assets.

amalcon 12y ago
Publishing your entire transaction history for the entire world to see doesn't seem like the best way to have privacy, even if it is under a pseudonym. After all, purchasing history seems like one of the best tools to trace a pseudonym.
- mirimir 12y ago
  We can have as many pseudonyms as we need, and can transfer Bitcoins among them via mixing services. No pseudonym need make more than one purchase. It's the difficulty of anonymous postal delivery that's limiting.
  - amalcon 12y ago
    You can do the same thing with USD. It's called money laundering, and was not invented by the Bitcoin community. Granted, for the time being it's a lot easier to do with Bitcoin, but any kind of mass market adoption would surely change this.
    - bhayden 12y ago
      Money laundering doesn't really solve the problem of being able to buy good digitally without revealing your identity.
      - amalcon 12y ago
        All of the things mirmir mentioned are considered money laundering when done with USD, so they either solve that problem for both or for neither. Neither result is an argument in favor of bitcoin, so whether or not they do is immaterial.
      - mirimir 12y ago
        Postal delivery of physical goods is problematic, and anonymous payment is pointless. But that's not an issue for software licenses, ebooks, server and VPS rental, VPN subscriptions, consulting services, and so on.

drcode 12y ago

I disagree somwhat- We're slowly moving into a new economy where the distinction between buyers and sellers is blurring: Instead of everyone making their purchases from a few megacorp sellers, the future will be one where any person may have a small shop or sell a small product with a small unit price (maybe even your mom someday.) In that type of environment, it is helpful to have a payment system that is more "seller-friendly" than what we have now, since the sellers no longer have economies of scale to offset sale-side costs. Cryptocurrencies hold the promise fill the role of these "seller-friendly" currencies, since they allow anyone to accept payments without intermediaries and by merely tacking some minimal logic to their software stack of choice... though I agree they still have a long way to go to achieving this.

aioprisan 12y ago
How is that creating a blur between buyers and sellers? We've always had small businesses and will continue to have both small businesses and large corporations. I don't understand the small unit price correlation to a small business. The 1-2% savings in processing fees right now are heavily offset by the instability of the currency. Not being able to plan your cost of goods sold and having predictable formulas for this will kill a business a heck of a lot more than an extra percentage point for processing via convenient electronic payments.
- tracker1 12y ago
  You mean like the stability in the cost of things like food and gas?
  - lmm 12y ago
    Yep. Prices of both of those are far more stable in USD than in bitcoin.

smokeyj 12y ago

> The idea that my mom will someday use Bitcoin to buy books online is about as realistic as the belief that, any minute now, youngsters will realize that the daily newspaper is better read in paper form Your mom probably didn't push for the adoption of email yet here it is (sorry usps). The advantages of faster cheaper easier don't require much convincing, especially in the case of money/contracts/assets. The idea that people will adopt antiquated technologies when better alternatives exist is paradoxical, which makes your analogy especially confusing. Government currency is the antiquated technology, not bitcoin. For those remittance services you point to, they need market depth in order to operate. Sure the underground market can provide some, but merchant adoption sure isn't going to hurt.

etchalon 12y ago
Bitcoin is none of these things: faster cheaper easier.
- StavrosK 12y ago
  How is it not faster and cheaper?
  - ufo 12y ago
    speed: The blockchain is updated only every 10 minutes and you need to wait for even longer if you want to be 100% sure a longer fork won't show up. cost: bitcoin miners must spend enormous amounts of energy in an inefficient process in order to keep the network running. Right now, most of the mining costs are covered by the bitcoin bounty that is awarded to miners that successfully mine a block but this reward decreases with time and eventually and transaction fees will have to increase to compensate.
    - WillNotDownvote 12y ago
      Speed- The difference is after that 10 minutes, the transaction is settled. The money has moved. What you have with a credit card in 10 minutes is a promise that the money will move, possibly days or even weeks later. The bitcoin can be moved again (spent by the receiver) after 10 minutes. Try that with money you received by a credit card payment. This really is the fundamental difference of bitcoin- once the money has moved, it's really moved. It takes some time and thinking to appreciate how that opens things up quite a bit.

venaoy 12y ago

The world's simplest reasons why you might pay something using bitcoins is simply when this is the only way, or cheapest way, or safest way to make a transaction. Example #1: some merchants are hit really hard with fraud, such as intangible goods paid by international credit card transactions. So hard that they decided to stop selling internationally. These merchants discover that Bitcoin re-enables them to sell internationally because Bitcoin completely solves the fraud problem for them (since transactions are irreversible). In that case, as an international customer of such a merchant, paying in Bitcoin is your only option. Example #2: some merchants offer discounts when paying in Bitcoin (because they don't incur credit card fees). So it is in your interest to pay in Bitcoin: you don't have to pay the fees from exchanging coins for fiat, and you don't have to pay the indirect credit card fees that the merchant would make you cover (via the absence of a discount). Example #3: as Bicoin's adoption grows, more and more people end up having bitcoins in their hands, like your nephew giving you $50 worth of coins for Christmas. What's the easiest for you to use them? Setting up an account at an exchange (and incurring the associated hassles and fees when selling), or just spending them directly? Of course in this case you would want to spend them directly. Example #4: say you are travelling out of town and paying for a meal in a restaurant that you suspect might be skimming credit cards... do you pay using a credit card or bitcoins? Using Bitcoin here would be much safer. It has all the advantages of credit cards (and more) without the inconvenience and danger of handling cash (losing it, getting robbed, no ability to "back up" cash, etc). Hardware bitcoin wallets have especially an insane opportunity to innovate in this space (wrt. security and ease of use).

StavrosK 12y ago
It took me no less than one hour to pay for a flight the other day, because of various cc-related problems, not the least of which being the train wreck that is Verified by Visa. I so, so wished for a Bitcoin option...
- pepr 12y ago
  This. I tried buying a pair of flight tickets from a German airline Condor with a US credit card. What a hassle, in the end I had to call the bank, get redirected and verified 4 times (because they don't pass the verification along when they redirect your call) and I was finally able to pay for the damn tickets when they "pre-authorized" the transaction.

celticninja 12y ago

i think it is most likely to be successful not as a consumer level product but at an infrastructure level. businesses will exploit the blockchain and end users will be using it without realising it, so moneygram and western union will use it to send money for you, you wont know, you will be sending euros, dollars, shekels, whatever but you benefit from lower transaction costs, say half of what WU currently charge but for WU they would be making more per transaction as a result of leveraging the blockchain and low cost bitcoin transactions.

iopq 12y ago

That's like saying "nobody will give up newspapers to use this Internet thing to get their news". Yet here we are.