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.
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"
> I'm more intrigued by the commercial decision from Expedia's perspective.
I suspect pure marketing. A mainstream player announcing support for bitcoin is still newsworthy. In another year, probably not so much as there will have been a series of such announcements by then.
Even if they don't do a single bitcoin transaction, the coverage and back-links will more than cover the cost of integration, and any resulting bit coin transactions (that don't replace a more traditional form of payment) are upside.
Yea--some Harvard MBA making a name for themselves? I wish
I wasn't so cynical. I sincerely hope crypto currencies annihilate the credit card industry. I guess any publicity
is good publicity?
Yea--some Harvard MBA making a name for themselves? I wish I wasn't so cynical.
It's not cynical. Accepting bitcoin as payment isn't beneficial right now. There's no benefit for merchants, because it's instantly converted back to traditional currency. There's no benefit for consumers, because consumers have to buy bitcoin in order to spend bitcoin, and buying bitcoin means consumers have to manage their own wallet or store their money in a third party service that can fail or steal their money at any time.
The singular benefit is the publicity your business gets by accepting bitcoin. In other words, bitcoin is trendy.
This isn't a dismissal of bitcoin. History has shown that trends are a powerful force. If it achieves a kind of critical mass, then that will open up other avenues for bitcoin to become useful. But in the meantime, be assured that your gut instinct of "there doesn't seem to be any reason to accept bitcoin except publicity" is spot on.
As an aside, I think these announcements won't affect the fundamental price of bitcoin. They'll cause fluctuations, but not any long-term rise or fall. The price of bitcoin is driven by speculation. It always has been, and always will be. The fundamental price at any given time is due to speculators with large amounts of bitcoin who place large buy orders in hopes of getting other speculators to place large buy orders, then they sell. From a game theory point of view, if a bunch of gamblers all place large buy orders, the first gambler to sell stands to profit, and the other gamblers will lose out. You can see the evidence of this at any time: http://i.imgur.com/SYHhSCv.png ... A gambler buys a bunch of bitcoin, which causes other gamblers to buy a bunch of bitcoin, which lets the first gambler sell off their position and make out handsomely.
There's no long-term speculation going on. Or, if there is, then the long-term speculation is being done by a few dozen people with massive bitcoin holdings. No one else's speculation is a significant price mover.
It's true that the market responds to announcements, but it's not true that the market price is driven by announcements. They just serve as a trigger for gamblers to initiate gambles. Hence, I don't think the fundamental price will shift very much; what shifts the price is when large players enter or exit the market, which happens much more rarely than announcements do.
> Accepting bitcoin as payment isn't beneficial right now. There's no benefit for merchants, because it's instantly converted back to traditional currency.
I see two advantages: 1) They get their name in the news (and in consumers minds), and 2) they get the bitcoin spenders that they may not have otherwise (an admittedly small bump at the moment, but a bump nonetheless and at virtually no cost).
2) they get the bitcoin spenders that they may not have otherwise (an admittedly small bump at the moment, but a bump nonetheless and at virtually no cost).
I hear from merchants who start taking bitcoin that after an initial spike they see almost no volume.
The above quote fits with my experience as well, though my sample size was a single merchant. I noticed they were accepting bitcoin, so I sent a congratulatory email and got a response along the lines of, "Surprisingly, no one at all has bought my product using bitcoin! Maybe that will change in the future..."
> Accepting bitcoin as payment isn't beneficial right now. There's no benefit for merchants, because it's instantly converted back to traditional currency.
I see another benefit. Merchants benefit from lower transaction fee vs credit card.
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.
With a large enough user base, you'll definitely encounter people that will be sufficiently intrigued by the idea of paying with Bitcoins they don't have (or confused by accidentally clicking on the Bitcoin tab) to get distracted and end up making the payment via one of the other hotel search website windows they have open. That's true even if the Bitcoin tab is much more discreet than the "credit/debit card" default.
There are, after all, enough people confused by a concept as non-novel as the address their credit card is registered to for some companies to be willing to pay higher interchange fees and accept higher chargeback risk to omit those fields from their CC forms.
I think this reasoning is mistaken. Yes, bitcoin-accepting vendors act as a new sink for supply, but for that reason they also increase the incentive to leave bitcoin sitting in your wallet, ready to spend on something you would like to buy (much as we keep money in our checking accounts so we can draw on them at will). In aggregate, if (big if) lots of people are using bitcoin as money, then speculative demand may decrease, but currency demand could increase dramatically.
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.
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).
As an entrepreneur in the travel space, my guess is that this move is primarily a PR move, and actual Bitcoin transactions aren't expected to move the needle in any substantial way.
If its primarily a PR move, the reason for starting with hotels is simple: Expedia, and all the OTAs (Online Travel Agency), make the VAST majority of their profit from hotel bookings* due to two factors:
1) Airlines pay extremely small commissions (starting with when Delta announced 15 years ago they wouldn't pay commissions on flights)
2) Hotels pay extremely high commissions, since unsold hotel rooms disappear as inventory the next day
Assuming the goal is PR, Expedia cares much more about getting consumers to think of Expedia as a place to book hotels than they do booking flights- thus they are "starting" with hotels.
*For example, in 2013 Priceline sold 270M hotel nights and 7M airline tickets. Of their $7B in revenue and $2B in profit, very very little came from airline ticket sales.
>> "Hotels are big portals between the black and white worlds".
When I read that, I thought of people making trips that they would prefer no one finding out about. Affairs, etc. I guess that's also a legitimate use case for adopting BTC.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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?
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 ;<(.
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.
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...
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.
> 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.
> Maybe there's just something fundamentally ingrained in human psychology that makes us converge like this.
Or perhaps there are meetings in boardrooms where the upper echelon of a given sector of the economy work hand in hand with thinktanks, highly paid psychologist consultants, PR firms, journalists, and media executives(at the ownership level) to design and execute strategies that encourage whole populations to act against their best interests by entering into these sorts of centralized arrangements.
Why does everyone always jump to "human nature" as the explanation ? I'll tell you why it's because they have no visibility into the 10+ billion dollar/year PR industry that is operating in our midst. Human nature does factor into this though.. it's human nature to assume that you're not personally vulnerable to suggestion and manipulation, so people tend to write it off even though statistically speaking the odds are that they can be influenced, and are being influenced.
Businesses want to reduce risk, reduce overhead and maximize profits. Lenders want to reduce risk and maximize return. Customers want their assets protected and want fraudulent charges to be reversible. Other businesses in other countries want to know what to expect when dealing with businesses in yours. Having a known regulatory framework and a system of laws regarding commerce, trade and consumer protection facilitates the level of efficiency and complexity necessary to have the economies of scale we currently do.
Almost everything else you list is a matter of scale. As far as industrialization goes, all that industry requires an infrastructure, which itself requires an infrastructure, adjacency to materials, shipping, energy and a labor pool which won't be paid well enough to simply drive in to work from wherever. Even mere agriculture can be considered a centralization of hunting and gathering - as you needed one place to keep all the farms and the slaves and the temples and preferably all of that close to a river. It's not irrational. In fact, I believe the more difficult argument is in favor of decentralization - Bitcoin is attractive to speculators, scammers and hipsters but why would it be attractive to businesses or the average consumer without a proxy for the existing legal apparatus?
Gmail is not "the single location to email", it's simply the leader, there are still many email services out there, you can host your own email server if you want, it's (probably) not illegal. Is Google not an example of a free market working as intended? Surely, just because a free market suggests there should be competition, it doesn't imply there must be. You don't have to use Facebook if you don't want to. Sure, everyone you know is probably on facebook but you're free to try to create your own social media site and compete, or simply not use it. The market decided on facebook, if you don't like it, well, too bad I guess. Github exists because someone decided an online version of git would be successful, and they were right, it is. The market chooses winners, either honestly or dishonestly, legally or extralegally, and eventually the winners dominate, which Facebook and Google do.
Centralization is prone to corruption... 2008 financial crisis ilustrated it very well worldwide...
Decentralization, while having a bigger overhead, also benefits from a bigger pool of contributors...
Example 1 - mathematics: if the europe-mathematics did not cooperate with other world-mathematics, they would limit their knowledge to only european findings, which would leave them reduced compared to the worldwide mathematics investigation
Example 2 - wikipedia: more updated and complete than many classic-editor-encyclopedias that were sold before wikipedia was made.
> Maybe there's just something fundamentally ingrained in human psychology that makes us converge like this.
Convenience/laziness, lack of concern about privacy, and social signalling help to explain the internet related centralisation examples you noted.
"Free", convenient and easy-to-use (and your privacy goes out the window) will win over inconvenient, marketed improperly, and slightly more difficult to use every time with the mass market.
I've found that the-whole-point-of-isms are almost always wrong.
It's not the whole point of Bitcoin to be a decentralised payment system. It's part of the point, sure, but there are many other points, such as being an asset with a predictable inflation rate, and allowing the storage of value protected by cryptography.
A few centralised actors offering service to those who choose to use it does not negate those points of Bitcoin.
Now I can travel to another country and book a hotel through this service (if they allow this in their terms of contract) with my Bitcoins without involving any banks or credit companies on my side and nobody is in-between (except the Internet). Seems pretty de-central to me. If they choose to handle the Bitcoin clearance through an intermediary is none of my concern, so I don't see any fundamental principle violated here.
Almost all of these merchants are receiving USD and they do need some party to handle the exchange risk. Coinbase/Bitpay do this and their fees are substantially lower than credit card companies.
This. I integrated coinbase into my sites and that is why. However, I do see the important part here is that a customer doesn't need a coinbase account, they can send BTC natively which is a big distinction from using a CC.
The real service Coinbase is providing is the conversion of bitcoins into government currency. I can't think of an immediate way to decentralize that, because moving government currency between people requires centralization (short of mailing physical cash, which obviously has its own issues).
It's fairly trivial to simply accept bitcoins in a decentralized fashion. That's just what normal Bitcoin transactions are.
The real problem is trustworthy BTC -> USD. Expedia can't pay their employees with BTC, and the executives don't want their bonuses in BTC either.
Coinbase is a solution to this problem. And it's better to have one trustworthy, rather than a bunch of mtgoxes. Yes, it makes it 'centralized' but it's the best solution in this case. Without it, BTC is just internet points.
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.
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?
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.
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].
True anonymity is not a feature or a design goal of Bitcoin. It's pseudonymous, so it's better than a credit card and worse than cash. A lot of care must be taken to keep yourself anonymous on the Bitcoin network, and anyone who cares about that certainly shouldn't be buying airline tickets with Bitcoin unless they have completely disjoint wallets.
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?
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?
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.
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.
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.
> I would contend that though you are at the tail end of the curve that doesn't need an intermediary
If you want to do away with intermediaries, what Bitcoin needs is a large ecosystem, such that my BTC never needs to be converted to USD to be useful - I want to be able to be paid in BTC, then to be able to exchange that same BTC for food. The food vendor in turn needs to be able to exchange that BTC for, say, a car.
For that to happen, Bitcoin needs a critical mass of adopters. Unfortunately, the Bitcoin feature of capping the number of total BTCs in circulation means that the number of BTC users will always be limited.
Mmh.. mathematically true, but practically? First consider that block awards will continue being generated until roughly the year 2100 and probably up to another half decade on top of that.
Empires have crumbled in less time..
Secondly, remember that 1BTC is divisible down to 8 decimal places. There's no reason that .00000001BTC (aka 1 Satoshi) couldn't become the base unit of transaction.
If this were to happen (say with a client update), that would mean, once the block awards cease generating in a hundred years or so, and all 24,000,000 BTC are mined, that would mean there's (24M * 10^8) 24 quintillion individual units of currency in the world.
There will never be even 21 million of BTC. Pretty close to 21M, but it won't get there. Also, 99,99% of block rewards will be distributed before 2040. The next 60 years till 2100 blocks will only reward a few satoshis each, except for transaction fees.
Bitcoins are very divisible. As more and more people use Bitcoins, the coins become worth more and people can simply trade smaller and smaller pieces of them. The limited supply doesn't limit the number of users.
The blockchain describes stakes in a conceptual ledger. The current limitations on divisibility are easy to change in the future. 21 million is arbitrary and meaningless.
> The current limitations on divisibility are easy to change in the future.
Not true.
> 21 million is arbitrary and meaningless.
Also not true.
Changing either of those things requires a hard fork of the network and a majority consensus among the miners globally which is in no way "easy to do".
Suing a startup company with no tangible assets is not much of an insurance. How much does it cost for the biggest travel company in the world to set their systems to accept bitcoins, pass a contract through lawyers, train support, etc? I'd say at least as much as the value of appearing in the news.
So IMHO Expedia sow the huge value of the BitCoin payment system.
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)
Credit card address verification comes down to a risk/reward calculation. You don't have to verify the address. At some processors, doing AVS (address verification service) to some degree is worth ~1% off interchange, due to the implicit reduced fraud risk. Address verification is a fiddly beast, and returns one of about ~15 codes rather than the binary you might naively expect. (It covers cases like "Street address matched but 5 digit zip did not" or "Foreign card; we're clueless".)
It also gets used in merchant risk processing, separately from risk regarding the payment itself. Some bitcoiners are of the opinion that bitcoin means the end of risk from the merchant side of the equation. This is, broadly speaking, not true. There are plenty of transactions where "X happened but at least we got paid the agreed amount" is a failure condition.
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.
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.
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.
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.
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.
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.
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.