What a fantastic product page. After less that 30 seconds, I knew exactly what Stripe was doing with Bitcoin, how to use the new feature and integrate it.
This is great news for Bitcoin. If all it takes is one extra line of code for online retailers to start accepting the currency, widespread adoption could sky rocket. That's always been Bitcoin's crutch, simple integration. Others like Coinbase and Bitpay have made it much easier to accept Bitcoin, but usually more services are required to accept other forms of payment. This simple catch-all solution is a game-changer. Congratulations Stripe.
I think the crutch now is not that it's hard to acquire bitcoins (thanks to coinbase and friends) or pay with bitcoin (thanks to stripe and friends), no, the only crutch is why should I buy bitcoins with my dollars when I can just pay with my dollars directly?
It can be useful for people who either don't have access to credit cards but have access to bitcoins, people who already have a lot of bitcoins and curious tech people.
Keep in mind that the merchant fee is .5% with Strip/Bitcoin. With regular credit card payment processing, the fee is something like 2.25%. The difference could be shared equally between the merchant and their customers. Life would be 1% cheaper for everyone (kind of).
The problem with this is that, from the buyer's perspective, the price is almost always the same when using a credit card or alternative. And with a credit card, the buyer gets rewards back, typically 1% or so. So, sadly, using a credit card continues to have more protections, costs less, and has deferred payment. I don't think this is a good thing, just saying. I hold some bitcoins, but I never buy anything with them. It costs more.
What you said is 100% correct, which is why companies accepting bitcoin need to give the entire ~2-3% discount to customers. Very few credit cards will match 2-3% rewards, and from the sellers perspective bitcoin is better than credit cards payments.
To name a few benefits:
- There are no chargebacks
- Funds are available immediately (though transferring from BTC to USD may take a day)
- You can accept payment from anyone anywhere in the world (harder with CC atm)
- Fraud detection isn't as important w/out chargebacks. Granted this is a concern for consumers, which is why they need solid security for their wallets. I think of it like cash transactions. You don't have to worry about someone coming into a store and claiming that someone spent their $5 bill with serial code 123-xyz after stealing it.
Bingo. Chargebacks are my way of making sure I have a fallback if the merchant fails to live up to their end of the bargain. I use them as an option of absolute last resort, but the few times I have, I've been very glad that I had the option, and that the credit card companies bent over backwards to shield me from the headaches of the issue.
I also had a lot of headache when a seller charged me twice and tried to send me another product because I had to charge back several transactions while explaining "yes, the FIRST one was legitimate and I got he product, but the later ones are not".
I had to charge back twice because the seller kept on charging me on the same credit card number! At least with Bitcoin you're only in for whatever you pay.
companies who fail to live up to their end of the bargin in a bitcoin world won't survive long. I've been shopping on the internet since the 90's and not once have I had to place a chargeback.. Chargebacks are mostly fraud and people wanting shit for free.. In turn goods become higher priced and that cost is passed onto all the other customers.. Anytime I have been unhappy with an internet purchase the company has always given me a refund. The need for chargebacks is truly minimal. Any company that wants to keep their customers is going to issue a refund. Companies that won't are shady and need to go out of business anyway.
>companies who fail to live up to their end of the bargin in a bitcoin world won't survive long.
Yes, just long enough, like Butterfly Labs. (Credit card purchasers: could do a chargeback. Bitcoin purchasers: SOL.)
Chargebacks and reversibility in general are essential to consumers. If shit goes wrong, it's gotta be fixable.
(This is also why nobody actually wants smart contracts. They know that the plot of Dr Strangelove is literally an irreversible smart contract going wrong. Consumers want fixability, business-to-business wants the option of lawyering out of a bad deal. The only people who want smart contracts are the businesses who currently screw over their customers with mandatory arbitration clauses.)
Which is why a 2-3% discount for Bitcoin purchases is appropriate. With reputable merchants, I would be willing to give up the ability to charge back for an additional 1-2% discount.
No idea why this was down voted. This is a very legitimate comment. When I'm wrongfully charged or sent goods that aren't what's advertised and support doesn't help or reply. A charge back offers the protection a buyer needs.
You increase the number of non-payers by not only having the fraudulent ones but also the lazy ones who delay payment, the forgetful ones who keep forgetting to pay and the ones that don't get your bills. Then you add on the cost of trying to collect from all those people. Cheaper to just charge up front and accept that some tiny percentage will be fraudulent.
That's why the seller has to give the money to the consumer. The seller avoids the customers who scam which is a non-0% amount of the time, so if the seller is trusted this would be a good thing to do. I'm talking Amazon-level trust.
In addition: When you implement 3D Secure (Mastercard's Mastercode or VISA's VBV), you are also not liable for chargeback. In Asia, most payment gateways implement 3D secure.
I mentioned this in another comment, but this is why I would encourage consumers to only take a discount like this from reputable sellers.
eg I would gladly take a 2% discount with Amazon, as it would save me hundreds over time.
On the other hand, if I were trying out a new SaaS product I would start with a credit card and opt to use BTC once I trusted the company and their product, much like I wouldn't buy a 1 year subscription for a 10% discount without first using the product for a month or two.
> Historically Visa has not permitted retailer surcharging, but allowing surcharging was a key provision required by merchants to settle long-standing litigation brought by a class of retailers in 2005.
It's good that governments still have a bigger stick they can use to beat some sense into corporations.
IIRC, it is now. There was a lawsuit about that in I think 2011 where merchants settled with credit card companies and payment processors that they are allowed to charge less for cash transactions. That had previously been prohibited, which was circumvented to a degree by the pervasive "minimum purchase" sign.
I'm pressed for time at the moment, so I can't provide a link.
What rationale is there to have a law specifically about this?
It seems to me like there's three contracts involved: The agreement between merchant/CC, consumer/CC, and consumer/merchant. Since these are all private parties, why does the government even care what contractual arrangements they make among themselves regarding how the form of payment affects how much needs to be paid?
You can say "if you are dressed like a clown today we will give you a 10% discount". Point being that there is nothing to prevent you from giving someone a discount as long as it doesn't break any laws and as long as you are offering it to everyone that falls into the same category (or the discount has been negotiated).
Nothing but your merchant agreement. I worked a register in a small store when I was 16, and in a slow moment I ended up reading some of the stuff VISA sent along with their booklet of invalid credit card numbers. (Yes, this was a while ago.)
In in the fine print it was clear that offering your customers a cash discount was grounds for immediately canceling your ability to take credit cards. If I recall rightly, I noticed because the store I was at did indeed offer a discount. In practice, I'm sure the store was small enough that VISA didn't care. But for larger operations I'm sure it was a serious threat.
I believe they were eventually sued and lost, but since I rarely see discounts like that, I imagine they have some sort of not-quite-illegal trick, like offering merchants advertising credits based on charged card volume.
Ok imagine next time you buy flights or concert tickets, instead of invariably paying some $6 credit card surcharge per booking, you are offered the option of booking with bitcoin for a $2 or even no surcharge. I will definately at that stage start looking at paying with bitcoin.
Then as a significant proportion of the population (say 20%) starts paying with bitcoin, other online shops like amazon will start seeing that they are saving a LOT by not paying 2% interchange fees to cover bullshit credit card reward programs and fees. And then the number of stores charging an additional credit card levy will increase as shops are not automatically building the credit card fee into the price, and then the number of people being pushed into bitcoin will increase.
The only thing that can stop this is credit card companies effectively lobbying that shops cannot charge more for credit card payments. this has happened historically in some juristictions, but is really pretty hard to justify for any sane reason so will be unlikely to stick.
This will either really marginalise credit card companies significantly, or really force them to put the screws on their interchange fees (and greatly reduce their rewards programs).
The other thing that can stop this is a bidding war, where credit card companies restructure their business model and lower their fees to the point where the inherent advantages of credit cards (such as chargebacks and lower inherent overhead due to lack of currency volatility and mining) stop the advancement of Bitcoin.
In either case, Bitcoin isn't going to take over the world, but whoever can figure out a good way to deal with the problem of how regular people could easily obtain Bitcoin in the first place has a chance to skim some profit in the interim.
This might be a US-centric perspective. In France, to my knowledge, there are no such rewards, and no chargebacks. Still, there are transaction fees, so merchants would have everything to gain by proposing Bitcoin payment and sharing the savings with the customer.
Swiss Air charges $11 for a credit card transaction. The annoying thing is their other supported methods of payments don't work for me, even though I live in Switzerland and have a Swiss bank account.
Last time I booked a flight, I did it with Bitcoin via btctrip.com. It worked out a little bit cheaper.
Would you do it for a percentage greater than your CC rewards if you trusted the seller?
For example, Amazon has never screwed me on a single purchase. If I have an issue they fix it, which is a large part of why I often pay 5-10% more for products on Amazon.com instead of XYZ.com. Would you use BTC for a 2% discount with sellers like this?
Purse.io provides 25% discounts to shop on Amazon with bitcoin. Pretty incredible - discount comes from liquidating Amazon gift cards ($15b in circulation).
This is potentially amazing for me. I just started a consulting business in Japan. Credit cards are hard to come by, especially for foreigners. I need to pay for various services: domain name registration, etc, etc. At the moment I'm constrained to using Japanese companies who will accept bank transfer payments. If this becomes popular, I could buy services anywhere. There service fees are very reasonable. This is what I have been waiting for with Bitcoin (and wondering if it would ever emerge).
> I need to pay for various services: domain name registration, etc, etc. At the moment I'm constrained to using Japanese companies who will accept bank transfer payments.
Why not buy a refillable Visa at a convenience store?
Also apply online for the Rakuten card, and try applying for the store card at Marui. Also if you have an account at Shinsei try to get their credit card.
Yep, my friends will definitely accept Bitcoin for everyday transactions (splitting bills, etc) if they know they can spend it on the sites they use often.
Have you tried to get a credit card? It's easier than getting a bank account (some banks will refuse to open an account for you if you have been here for less than 6 months).
In the last 24 hours, Bitcoin has been worth between $232 and $238, so that could be called a 3% fee on top of the 0.5% fee, and that 3% is just from the last 24 hours. If you look at the last week, the fee could be considered even higher (more than double or quad that).
The problem with Bitcoin is that it is extreme volatile. So you may gain or lose money. So while a 2.9% free on dollars is fairly predictable, you really don't know what the final "fee" would be on Bitcoin.
He's probably more referring to the customers side.
Why should I buy bitcoins for let's say $300 and risk them being worth $200 in a few weeks (which would cost me 33%) instead of keeping my money and paying directly (maybe 3% fees for the seller)?
It's a much more nuanced question if you don't hold USD in the first place. Here I have a choice between holding BTC and holding CAD. Both fluctuate compared to the prices of stuff I want to buy from US retailers.
They both fluctuate, but not that much. If you saw that much fluctuation in CAD to USD conversion, no US based company would sell goods in Canada. Just look at what happened due to the ruble value fluctuations last month.
If you are in Canada that isn't really true. It is extremely easy to open a USD denominated bank account and credit card. Couple banks have Euro accounts as well.
Yeah, but if you get paid in CAD, it's still a question of when you want to deal with the volatility—point of sale, or point of forex-exchange-during-account-transfer. You still have to deal with timing it right (possibly waiting months) if you want to avoid losing tens of cents on the dollar.
And if you're already thinking like that, Bitcoin isn't nearly as scary.
Bullshit. And this is not a matter of opinion or speculation. There is data and history. Take a look: http://imgur.com/FmpI0HY
That's the past year. The flat blue line around 0% is CAD vs USD. The crazy red line that's all over the place, swinging by as much as 100% in a matter of weeks, is CAD/BTC.
Unless you're planning on holding the currency, those graphs are irrelevant - what would matter would be short term changes (1-2 days, perhaps). And while USD might still come out better, your graph grossly distorts how this would affect someone wanting to use USD or BTC primarily purchases while holding their assets in CAD.
Cheaper fees are moot points in the context of what costs the end user will incur at the end of the day. Anonymity? Are we still keeping our talk limited to "BC payments for VPNs" and "BC payment for those seedboxes in the DMCA agnostic parts of the EU" (not that it's not a valid use case)? I guess not, at least that's not the popular argument around.
Volatility of Bitcoin prices puts stock market rate fluctuations to shame. Think of it from the market price point of view and from the point of view of an end user, like me - who'll buy Bitcoins (yes, one who didn't win the gold rush lottery or couldn't afford the mean machines or wasn't just aware) to buy a pair of jeans which has its price fixed at, let's say, $59.99 since last 7 months. When I bought the Bitcoins it cost me $1200/b.c, but the next day when I went to buy that jeans with my Bitcoins - or maybe I just wanted to convert it back to dollars, it was at $800/b.c or let's just say $1100/b.c if you find the former rate too far fetched.
Trust me, it just doesn't make any practical financial sense to me and no, I am not in the minority, I am part of the majority. If you say that "Bitcoins were never meant for the majority in the first place" then it's a different story altogether.
Also, if I would have had the 1000s or even 10s or maybe 100s of Bitcoins from the initial gold rush (given I was able to afford an able and mean mining rig) it would have been a different story - I mean my "different" point of view then.
And just to be clear I value my privacy just like I know my affordability and financial limits too.
bitcoin's not really that anonymous. Sure, the ledger doesn't contain identities, but it's not extremely difficult for the mapping between addresses and identities to "leak" and once they do, it's anything but anonymous.
The currency itself is not anonymous. In fact it's a huge mistake to suggest such a thing. That would be like saying keeping a ledger at a currency trade makes the currency 'anonymous'.
Since there are more avenues of trade available than say, with cash, laundering and other clever tactics can be used as tools to cover your tracks.
As always, the only way to keep yourself safe is through GOOD OPSEC. Bitcoin is an evolution of the currency concept, a tool for moving and representing wealth; nothing more.
there is no mapping to leak, there is no join between your identity and the bitcoin ledger, there may be some sites such as coinbase that can say "well coins were sent from this address controlled by Mr. Bob, to a new address". Mr. Bob says he sent it to a gambling website, exchange, merchant, localbitcoin sale, in person trade etc. After that he has no idea where it has gone or no way to link the identity of the current owner of those bitcoins, add in 3 or 4 more steps and it doesnt become difficult to obfuscate the trail enough that there is no conclusive link.
that says nothing for coins mined directly, wjere there is no link to any real world identity held anywhere, just a bitcoin payment address.
When I spend money with a vendor I often reveal my identity to them intentionally (so that they can ship me goods!). There's the join right there. You can argue that I shouldn't have sent money to this vendor but I think that eliminates an enormous existing use case for cryptocoins.
There are benefits to anonymity, which arguably outweigh disadvantages.
I was just pointing out that bitcoin is anonymous when used by someone with a brain. (I.e not Ross Ulbricht, who apparently sent money to an assassin from his personal wallet, without using a mixer.)
I understand that there are benefits to anonymity, but I don't think anonymous transactions are really a priority at this time, except for people doing illegal business. I certainly don't want politicians to be able to receive anonymous funding.
It's different with something like speech, where we have a rational principle that says "people can speak as a general proxy for hypothetical positions." But you can't make hypothetical purchases, and you can't represent a general population with anonymous purchases. So anonymous purchases don't have a social basis for the same protections.
People need free speech to speak freely. Your Wikileaks example is cherry-picking: it is not illegal to donate to Wikileaks. It might be illegal to donate to a drug cartel, or somebody like ISIS. Or to that police officer who wanted to give you a ticket. Or that government agent deciding who to give a big contract to.
I think think of far more cases where anonymous transactions are harmful than I can where they are beneficial.
No, I don't think all free speech should be with identity. I would anticipate that it is hard to have free speech under such conditions.
I wouldn't care if my spending history were public, but that's obviously not relevant. I don't believe spending should be anonymous. I don't believe people should be allowed to make any purchase they desire without penalty. I do believe people should be able to speak without penalty, as people are better able to ignore bad words than they are bad money. Money corrupts people far more effectively and quickly than speech.
>It's not illegal per se to donate to wikileaks, but you may be put on a list somewhere.
So? You're already on a list somewhere. Are you arguing that you have a right not to be on lists, and that this has anything to do with currency?
>In most of your examples, you can easily pay with cash, which is anonymous.
No, not "easily." You have to go to a bank and sit in front of their cameras while they hand you money. That's not the same as anonymous internet transactions. And the person you are giving money to will see you hand it to them, unless you jump through some hoops. And jumping through hoops is shady when you're doing something illegal. And someone cannot steal your cash without being physically present, and thus requiring knowledge of your location and opportunity to leave a trail of evidence.
I mean, if it were so easy to pay cash, what value does bitcoin even bring to the table? Why are all these bitcoin advocates not just using cash, if they are so similar?
What if it gets sent through a mixer, then sent to an exchange, traded for an alt-coin, that's sent through its own mixer, then sent to a different exchange and traded back, then sent to another mixer? All you need is one link on the chain to not keep logs (which many mixers claim not to anyway), and you've hit a dead end.
Look at Tor. It's never been broken by tracing back each relay, even though there are usually only 3. All the hacks were vulnerabilities in other things, like browsers or websites.
Mixing large amounts is pretty damn hard, there's not enough volume to hide large transactions. Trading massive amounts of BTC to an altcoin would be even harder, concealing the movements of that altcoin would be pretty much impossible.
In the end the process of money laundering ends up being significantly more complicated than with "real money".
Don't go and compare Tor to BTC, just don't. They share nothing from a technical PoV.
I'm not so sure about what you say about large mixing. https://bitmixer.io/faqs.html claims to have 2000 btc available, around $500,000. I argued that exchanges function as a mixer of sorts, and they're going to have a lot more btc lying around.
The comparison of Tor to BTC was mainly comparing mixers to relays. Just like you need every relay to store logs if you're going to go after all of them to break the chain, the same holds true by mixers.
2000BTC isn't very much at all, especially since the mixer having 2000BTC doesn't mean they can securely mix 2000BTC.
Exchanges will most definitely be storing logs, so that won't help much.
Comparing mixers to relays isn't valid either, with BTC the attacker will have access to the blockchain, which is basically the worst possible attack scenario for Tor.
And in any case, there isn't enough BTC transaction volume to reliably hide large amounts of BTC.
is it that different from buying bitcoins by meeting physically with someone and paying cash? or do you buy bitcoins from your personal computer? I guess no way will be truly anonymous
The seller has your mailing address. Mining is probably the most anonymous way to do it, and by far the least cost-effective. There are, however, ways to launder your bitcoins if you really want them to be anonymous, regardless of how you acquired them.
You can mine another cryptocurrency with your GPU and use that to convert to BTC. That's actually mildly profitable if you choose the right currency and your electricity costs are not too high.
I mean, imagine you go in with a baseball cap, and you go to a store that's nowhere near where you live. Is anyone really gonna be able to pull that up and ID you in 6 months? A year?
I don't want to give my CC details and/or my personal information to every merchant. This usually means I either buy from fewer merchants, or pay with bitcoin if allowed. Obviously, if the merchant is going to require my info anyway then it's pointless, so it depends.
That's one of the main points about bitcoin for me. As a tool for privacy. On the surface it may seem trivial, and corporations living off mining your information will always try to pretend it's not even an issue by simply avoiding mentioning it. While at the same time push for their payment solutions as either compulsory or cheaper ("soft pressure"). But make no mistake, this is one of the most effective tools for mining your data reliably and the likes of Google, Facebook, Amazon, etc are just not going to give up on it easily. Authorities also won't give up on "follow the money" as a tool, or even snooping and hacking into your communications legally or not, inside of their jurisdiction or not. It's basically no rules for some, all the rules for you.
> "I don't want to give my CC details and/or my personal information to every merchant. This usually means I either buy from fewer merchants, or pay with bitcoin if allowed. Obviously, if the merchant is going to require my info anyway then it's pointless, so it depends."
This is the entire value of bitcoin in my opinion for the average CC holder in the US. I simply don't trust people with my details. It seems like I get a new CC every few months because of some data breach, which entails me having to change any subscription services etc. Anon transactions may be a big point for some, but you are entirely correct when I will more than likely be providing my address to people who I pay with bitcoin. However, they won't have my CC details. I think it will be a better "payment buffer" than paypal. Hopefully cheaper also.
The point is that even if you're credit card number is stolen, you are not responsible and get a new card. Compare that to the data hacks of bitcoin exchanges...
Bitcoin and bitcoin exchanges are a completely different thing.
When my CC data is stolen, criminals everywhere have access to my current personal information, often even address, phone, picture. I cannot possibly undo that damage. Losing a regular payment for me is NOTHING compared to that. Just having Google have all that next to other data mined about me from people using gmail accounts to mail me etc, it's massive. I just do not trust corporations to deal with my personal data so I take at least a modicum of measures against these dangers. By simply paying through CC you are giving everything away in one swoop.
How does your picture get stolen along with credit card data? And isn't your phone quasi public information anyway? Nowadays, unless you have a very common name, it's not that hard to find someone's details (picture, phone, ...)
I've had my credit card "scammed" several times and I just fill in a piece of paper and the bank refunds me the money and each time it's cost me exactly zero euros.
I've used Bitcoin a few times and love how it works, but my lack of understanding of the security precautions required to handle hot & cold wallets + the volatility of it makes me just averse to it. I prefer my credit card getting scammed anytime to the uncertainty of what will happen if I convert a large amount of euro to btc.
I don't think you need to buy them (unless you want to gamble on their value going up) - just be willing to accept them as payment in the future. As more people see they can easily spend bitcoin, they become more willing to accept it as payment, and the userbase grows (bringing more price stability, hopefully)
I don't think userbase has much of a correlation to price stability. Even commodities like gold or oil have exhibited periods of high volatility even with a large "userbase"
Also, while we're talking about price, people sometimes conflate bitcoin transaction volume with bitcoin price, forgetting that for every buyer there is a seller. As a means of transacting, bitcoin is great, especially for small amount or across borders. It makes no difference what the price of bitcoin is as long as the buyer and seller are immediately converting out of bitcoin and into their local currencies - and that has no long term impact on price.
Unless of course many people notice rising transaction volume, confuse the trend, and then invest in bitcoin, which then becomes a self-fulfilling prophecy.
"bitcoin transaction volume" is worthless. Anyone could easily make a new record in btc txs for a thousand dollars. If I send money to myself, it counts as a tx.
The real concern with bitcoin is that it can only support 3 transactions a second with the current codebase. Gavin wants to fork it to get rid of the block size limit, but there's been opposition.
It may not be that appealing for a dollar/euro economies, but for emerging markets where their currency is not that stable and average inflation is around 3-5% it could have great potential.
If I were to work in Argentina I would rather get paid in BTC than ARS, due to liquidity constrains. I would probably convert most of the money to USD, EUR o CHF, but I would keep some bitcoin if I had where to spend them.
BTC is not an investment for stability [1]. And the OP is still asking a valid question, why pay BTC when that's several extra steps rather than pay debt or credit?
Mass adoption of bitcoin would certainly lower volatility, however bitcoin won't be massively accepted until volatility gets lower. It's a catch 22 game. So you are right, bitcoin doesn't seem such a good option for now, I was thinking a little bit down the road.
Do you mean like a currency that was worth $650 against the US dollar a year ago, and today is worth $250 against the US dollar? That kind of stability?
Right, the Argentina straw man. Worst inflation example you can find is the Argentina peso, and it's lost 10% in a year where the bitcoin dropped 63%, and bitcoin's volatility over the same time period has been much, much higher.
Even the most mismanaged government manages its currency. No one is managing bitcoin, it's price reflects the volatile market whims of a cryptocurrency backed by nothing but computation and beset by fraud. The volatility is not going away.
I don't ser bitcoin right now as a tool for savings, maybe for transactions.
Lets say you work from Argentina for a company abroad. You have three options to get paid:
1. Wire transfer, the compay send you dollars or euro and you get pesos at the oficial rate.
2. There is always people trying to pay things outside, you can give him your dollars outside in exchange of dollars inside arg por pesos at the blue rate.
3. Buy bitcoins outside sell inside.
1. You lost 30% exchange rate, you will not be able, to buy dollars back at the oficial rate.
2. Is 3%
3. Is 10%
Since 2 and 3, are not 100% legal, you will have problems buying things since you cant justify your income.
Argentina, Venzuela, Russia, Ukraine, Sudan, Belarus... I haven't done the math, but we are probably talking about a couple of hundred million. If they all adopted bitcoin, it would probably become the 5th or 6th currency by people using it in the world.
>Even the most mismanaged government manages its currency.
Governments don't manage currencies.
>No one is managing bitcoin,
No one managed gold when all currencies were gold backed and it did not see bitcoin's price volatility.
>it's price reflects the volatile market whims of a cryptocurrency backed by nothing but computation and beset by fraud.
I know what a Central Bank is and how they are supposed to work. Check this out: Who owns the Federal Reserve? [1]
>As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.
If you include the very next paragraph, it is clear that the US federal government manages the Federal Reserve.
> However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as "independent within the government" rather than "independent of government."
The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
Well, then we both know what we are talking about. Do governments manage currency? Yes and no. On paper they don't, in reality they have a lot to say about a country's monetary policy. However, if you look at the world's second strongest currency, the Euro, it's apparent that the European government doesn't have that much control.
I wouldn't be saving in US Dollars, they conder all US dollars their proterty so if they ever had the chance to intercept your money and did take it, they would feel justified keeping it because it was theirs to begin with.
There was a case where a money transfer was seized between two european countries over Cuban cigars because at the time, the US had a trade embargo against Cuba.
Why shouldn't you invest in Bitcoin for savings? Look at a one month chart. Or look at a three month chart. Or look at a one year chart. Or look at a chart from the beginning of bitcoin and ask yourself: "is this what I want the value of every dollar in my savings to be worth?
>no, the only crutch is why should I buy bitcoins with my dollars when I can just pay with my dollars directly?
(By dollars directly, I assume you mean by credit card or paypal.)
Credit cards and paypal come with the ability to do chargebacks which are useful if you don't fully trust whoever you're paying, but credit card companies and paypal are middlemen who must be trusted too. If I trust the company I'm giving money to more than I trust paypal to not fuck up or delay the transaction, then I'll immediately choose to use Bitcoin.
PayPal and Visa are additional layers of trust. It's not them or the merchant, it's them and the merchant. Meaning that if something goes wrong, you can ask the merchant to make it right. If the response is unsatisfactory, you can then go to PayPal or Visa to essentially overrule the merchant. The additional layers of trust are a good thing for consumers to take up unless merchants apply surcharging based on payment methods.
I guess that's the rub. As a customer (not a merchant) I will always trust paypal or visa over the person I am paying. If something doesn't get delivered, I get my money back.
Also Stripe is now the middleman. I'm not giving BTC to a merchant, I'm giving it to stripe to give to the merchant. That's good also, because I trust stripe more than merchant XYZ.
I'll note that Stripe will likely not refund you if the merchant refuses to. They do do some minor checking that the entity you're paying actually exists, though.
Worse are the tax implications of using large amounts of Bitcoin, since it's treated as property and not a currency. Good luck keeping track of your cost averaging over the year.
Which only really happens if the customer files a dispute, the dispute is valid, which in turn means the customer is aggrieved. Why would I want to forfeit that ability again?
I legitimately wanted to use my Canadian credit card to buy something in the US and have it shipped to me in Vietnam but the merchant naturally was unwilling to take on the chargeback risk and I was unable to complete the purchase.
A SWIFT wire transfer costs $40 a pop and requires me to visit a branch (which is especially hard to do when I'm 10,000 km away from home). It's also much more annoying for the merchant to accept vs. changing one line of code in their Stripe checkout.
Western Union is also expensive and inconvenient (although somewhat less so than the bank).
I think all of them here in Canada (unless you have some special merchant account). The banks all claim that you won't be held responsible for any fraudulent use of your account online. They wouldn't be able to claim that if you could do irreversible wire transfers.
I live in Finland, and the whole concept of not being able to send wire transfers from your online banking (or even a phone app) sounds utterly ridiculous.
This seems to be the norm in most of Europe. AFAIK the big US banks let you do wire transfers online too.
There are 7 billion people in the world, so your numbers suggest that about half the people in the world neither have nor do not have access to modern banking facilities.
Additionally, those with the least access to modern banking facilities probably don't have the best access to facilities for efficiently making use of bitcoins, either.
so that you don't have to give your CC info to companies who don't protect it and then have it stolen, so that some jack off in Texas can go buy 200 rolls of TP from wal-mart. That's enough reason. Push payments > Pull Payments
or people living in a country different than the US (one problem with that is that banks/credit card companies take a MAJOR hit on the exchange rate that's very hard to overcome without having bank accounts in different jurisdictions).
The problem with Bitcoin though is it isn't a currency. If it was a currency, if $1 USD was paid for a Bitcoin, that USD would be destroyed, not pocketed. The only people promoting Bitcoin are those who have something massive to gain, e.g. they own a lot of Bitcoin or they have vested interest in the ecosystem. Stripe facilitating this would allow them to start gathering Bitcoin, at a rate of .5% per transaction, and if perhaps will have the impact of increasing Bitcoin's value - further increasing the value of Bitcoin they own.
> The problem with Bitcoin though is it isn't a currency.
You mean it isn't a fiat currency. All that means is that Bitcoin's value isn't backed by a government, but is instead derived purely from the ability for someone to spend it.
> If it was a currency, if $1 USD was paid for a Bitcoin, that USD would be destroyed, not pocketed.
What? Since when? If you spend USD to buy EUR, the person on the other side of the transaction is giving you EUR and pocketing the USD. No value is destroyed.
Bitcoin still doesn't fit the definition of currency on its own. The fact that Bitcoin has a value is more because of speculation. People early on mined it and therefore own larger amounts for relatively little effort or cost. Now it's worth more and they have reason to perpetuate its growth. Investors now have joined gamble and speculating by putting in $100s of millions of real cash in hopes they can help stabilize it and make their current Bitcoin worth 10x to 100x more just by getting more people to adopt it. There are some people who accept Bitcoin in exchange for services, and more accepting it for goods, however it's those base Bitcoins that were mined that are the problem.
Re: USD for EUR - As you mentioned above those are at set rates between fiat currencies, and therefore there is practical reasons for the currency having a value. Bitcoin's value is mostly dependant on demand, which is being pumped up and perpetuated by investors and those with vested interest in the ecosystem including those who own Bitcoin and larger amounts of Bitcoin - who all want the value to go up 10x - 100x.
Lots of places take Bitcoin as a method of payment--therefore, it's a currency. Sure, its exchange rate is volatile due to speculation, and its future is relatively unknown right now, but that doesn't mean it's not a currency at all. Bitcoin has real value as a form of digital cash, and lots of people are using it that way.
> Bitcoin's value is mostly dependant on demand, which is being pumped up and perpetuated by investors and those with vested interest in the ecosystem including those who own Bitcoin and larger amounts of Bitcoin - who all want the value to go up 10x - 100x.
You're absolutely right: since Bitcoins aren't backed by anything real, their value is purely based on demand. But I disagree with the notion that speculation is the only reason they have any demand. Plenty of people are using Bitcoin in the real world, e.g. to make purchases anonymously or to easily send money overseas.
In real economics, the word "fiat" simply means "not backed". So Bitcoin is "fiat", and to a considerably greater degree than governments (who can declare a currency legal tender in a given geographical area).
The special Bitcoin usage of "fiat" stems from goldbug pamphlets from a century ago. But it is a misuse of the word.
There is no such direct causality. The value of a currency (in the sense of exchange rates and prices of goods) is determined by supply and demand, and nothing else.
People with the mindset of "USD government printing money => value of USD goes down" have been predicting QE-based inflation for years, and they were wrong. When you drop this incorrect mindset and adopt the correct one (supply and demand!) it's easy to see why: QE did not make people richer, so it did not lead to the kind of significant increase of demand that would be required to trigger a rise in inflation.
A better or more accurate example I realize would be pointing out that if the US government prints money then the overall value per unit of the of the currency goes down. Bitcoin is mined which is akin to printing money. I'm not sure I am using the correct terminology, though trying to better articulate. Currency gets destroyed buy governments. They say take $1 million of cash and burn it/remove it from circulation.
i think you dont understand bitcoin or money at all. that is not meant to be dismissive, i think a lot of people dont understand how money creation actually works, just that it does. for some reason people think bitcoin is so strange that they could not use it but if they stopped to think about how fiat currencies work they would be equally confused.
so the first thing you say, about the US government printing money and the existing money becoming worth less, this is known as inflation.
Yes mining bitcoin is similar to printing money, however you cannot 'print' bitcoin infinitely as you can with US dollars. This is why bitcoin is known as a deflationary currency and many people think this is a negative aspect to its adoption, but if there was no artificial scarcity i.e you could make as many bitcoins as you wanted when you wanted then there would be no value to them whatsoever.
>currency gets destroyed buy (sic) governments
Do you mean by inflation or do you mean they are putting it all in a furnace somewhere?
They destroy old used notes yes, but that doesnt take it out of circulation. if they burn $100million then they have $100million in fresh notes to go back out into circulation. That money comes from banks, those banks are holding it as deposits for customers. If the government 'destroyed' it then those people would not have any money in their bank accounts.
Far from destroying money or removing it from circulation many governments have been printing money like nobodys business over the last half a decade. Google Quantitive Easing to see the offical description of it and what they hope to achieve as a result.
Governments certainly do take more money (or money-like instruments) out of circulation than they're putting in under some circumstances, for equal and opposite reasons to quantitative easing. It's rare, because normally the economy is growing (at what you assume is a sustainable rate) and so you want the currency base to grow as well. But I believe the US took at least a little out of circulation in an effort to damp the "irrational exuberance" of 2001.
While this may be helpful, I can't see it being a game-changer at all. Have retailers like NewEgg or Overstock seen any sort of drastic revenue increases or activity from accepting Bitcoin?
The problems with Bitcoin are almost entirely on the acquiring -side and not spending side. Getting a Bitcoin is a PITA and I don't think the demand from most consumers is there to overcome the pain.
The game-changer for Bitcoin will be when someone answers the question: "Why should I switch from paying with my credit card to Bitcoin?" with something compelling.
I think Bitcoin is the Linux of payments. Everyone always talked about the potential to completely change the desktop (consumer use) but the real impact was the network/backend (Sun/NT machines) So Bitcoin is exciting to me but not as a payment method. But as a backbone it gets really interesting.
Less bitcoin itself, but the blockchain technology that backs the currency has a number of novel uses. The idea of a public, cryptographically secure and verifiable ledger could be used in everything from voting to domain name registration.
Difficulty of integration is not the main thing holding back Bitcoin adoption.
The main thing holding Bitcoin from being adopted more broadly today is that many consumers who are aware of it don't think it will be adopted more broadly!
Even in the HN community (which has a high concentration of early adopters of new technology), there are a lot of folks who don't think it will be adopted more broadly, as evidenced by the comments on this thread.
I agree. If you insist on having it be animated make it a video. I'd actually just prefer a few screenshots showing the key things that I can go back and forth between so I don't have to sit and watch something that could be summed up in 3 or 4 slides that are digested in a few seconds.
Ditto. Too fast. For me this isn't an exemplar of effective communication. It's a complete failure to deliver whatever that animation was trying to communicate because I only got 1 second each to absorb the text and the slide. Maybe I'm just slow, but a few stacked section tags with the same information presented statically would've been so much more effective.
Javascript for it's own sake, hampering effective communication; it's the Flash splash page all over again.
This is great news for Bitcoin. If all it takes is one extra line of code for online retailers to start accepting the currency, widespread adoption could sky rocket. That's always been Bitcoin's crutch, simple integration. Others like Coinbase and Bitpay have made it much easier to accept Bitcoin, but usually more services are required to accept other forms of payment. This simple catch-all solution is a game-changer. Congratulations Stripe.