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Bitcoin
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Most of them will charge something. In most cases it will be minuscule compared to creditcard/paypal charges.Do they charge for the service?
I'm sure there have been cases of escrow companies vanishing off the web.Who monitors and regulates the escrow services? Haven't there been cases where bitcoin processing/transfer companies have just vanished off the web?
Bitcoin is a technology in its infancy. As adoption grows bigger and more trustworthy companies will emerge. The market and the users will eventually decide who is trustworthy and who is not.
As an example localbitcoins.com provide a very good escrow service for cash bitcoin sales.0 -
Most of them will charge something. In most cases it will be minuscule compared to creditcard/paypal charges.
I'm sure there have been cases of escrow companies vanishing off the web.
Bitcoin is a technology in its infancy. As adoption grows bigger and more trustworthy companies will emerge. The market and the users will eventually decide who is trustworthy and who is not.
As an example localbitcoins.com provide a very good escrow service for cash bitcoin sales.
And if there are 20 versions of bit coin, and if central banks or large banking groups develop their own concept in competition.
It's this notion that its free I can't get my head around, eventually there will be charges along way, and we already have something that works, called credit cards.
So far nobody has been able to show me how it's cheaper to send $50000 to china from my euro account in ireland than what I pay at the moment.0 -
And if there are 20 versions of bit coin, and if central banks or large banking groups develop their own concept in competition.
It's this notion that its free I can't get my head around, eventually there will be charges along way, and we already have something that works, called credit cards.
So far nobody has been able to show me how it's cheaper to send $50000 to china from my euro account in ireland than what I pay at the moment.
If you have a relationship with the person you are sending the money to and you trust them then the transaction is free. You will have no charges whatsoever for sending bitcoin to the person in China.
If you need to change Euros to bitcoins and if the seller needs to change bitcoins to Yuan then you will both have currency exchange fees as you currently do.0 -
So far nobody has been able to show me how it's cheaper to send $50000 to china from my euro account in ireland than what I pay at the moment.
Nobody needs to, thats not the primary use case...
It can be used for that relatively easily, but thats not where the real utility of BTC is...0 -
And if there are 20 versions of bit coin, and if central banks or large banking groups develop their own concept in competition.
It's this notion that its free I can't get my head around, eventually there will be charges along way, and we already have something that works, called credit cards.
So far nobody has been able to show me how it's cheaper to send $50000 to china from my euro account in ireland than what I pay at the moment.
These are great questions and the answers are important in order to understand the value of Bitcoin. First understand that Bitcoin is free (as in speech) and almost free to use (as in beer). There are already loads of Bitcoin clones, as the Bitcoin code is open source, so anyone can view, change it and release their own version. None of the competing coins have gained enough traction to threaten Bitcoin but it is possible that one could replace it, or that many competing crypto-currencies may co-exist (as many fiat ones do today).
Bitcoin is not a company, it's not a product, it's free software and it's de-centralised - no single person or company or government controls it. Any competing currency that is not open source, that is controlled by a company or government will struggle to compete as this is a step backwards - you would have to trust someone not to just print more whenever they chose.
Any advantages that a competing open source crypto currency may have can probably be integrated into Bitcoin anyway. Bitcoin can improve over time as long as the majority of the network agree to run software with such changes.
Credit cards were never designed for internet payments and are fundamentally flawed for this purpose as you must provide sensitive information to a 3rd party in order to make a payment, you do not have to do this when paying with bitcoin. You give them control of your card, and they take the money. With bitcoin you send the money.
If you think it's so easy to send large amounts of money around the world, ask yourself how do Western Union manage to charge such high fees for it and still have customers?0 -
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With regards to credit cards, fees make them a really bad option for small payment (say sub €10) this is why so many shops only accept cc payments above a certain value.
Also credit cards are a crap payment method for online purchases. It is a "pull" technology, by having someone's credit card number you can charge a payment.
Bitcoin on the other hand is a "push" mechanism. Having a bitcoin address only allows you to make a payment.
Bitcoin addresses do not need to be protected or secured the way credit cards do. Managing credit card info and PCI compliance comes at a massive cost to online retailers.0 -
And if there are 20 versions of bit coin, and if central banks or large banking groups develop their own concept in competition.
They might, but the popularity of BTC is partly built on a growing mistrust and significant hostility towards banks. So maybe they can reverse that, but again they'd have to be offering some significant advantages to convince people to accept their alternative.It's this notion that its free I can't get my head around, eventually there will be charges along way, and we already have something that works, called credit cards.
If you can explain to me how someone can put a charge on my bitcoin transaction without my consent I'd be very interested. There are no charges and currently no way to enforce them. As far as I know, no such change can be implemented without either 1) a consensus change to how BTC works or 2) using BTC in the context of a trusted party service.So far nobody has been able to show me how it's cheaper to send $50000 to china from my euro account in ireland than what I pay at the moment.
That's because we're trying to explain to you that if BTC works as intended, it makes your bank account irrelevant. Sending BTC to a wallet in China is an identical function to sending it to Canada, or to the Moon for that matter. The distance involved and the national barriers are simply not a factor and can't be by design. It's only when you try to move back into the traditional system that you run into the problems inherent in that system.0 -
Some interesting stuff in this article from the NYT http://dealbook.nytimes.com/2013/12/09/for-bitcoin-square-peg-meets-round-hole-under-the-law/?_r=00
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What sort of interest rate does bitcoin generate? If the Euro or US interest rate goes to 5 or 6% what will the implications be for Bitcoin.0
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And if there are 20 versions of bit coin, and if central banks or large banking groups develop their own concept in competition.
The main issue is one of trust and control. At the moment bitcoin isn't controlled by a central source and there is a finite amount of bitcoin that can be in existence. Ripple is an example of central control. If a third party develops a centrally controlled clone then it won't have the trust behind it. As for the 20 versions/clones of bitcoin, why deal with the crude when bitcoin is already there? The current altcoins don't offer anything new over bitcoin except for one or two.It's this notion that its free I can't get my head around, eventually there will be charges along way, and we already have something that works, called credit cards.
There are transaction charges, it's tied in to how transactions are processed by the network. If you don't pay the fee your transaction gets processed and confirmed at a slower rate, transactions that paid the fee are given priority.
Credit cards are just loan devices, spending money you don't have and the credit card companies are trying to figure out the mobile market still. At the moment bitcoin would be more like your debit card, expect if someone gets your bitcoin address they can't just charge you.
Sure gold is free! I can't believe that it's sitting in rivers just waiting for me to sift it out!So far nobody has been able to show me how it's cheaper to send $50000 to china from my euro account in ireland than what I pay at the moment.
You need a source for your bitcoin, that's where your cost is going and really, at the moment, your better off sticking to what works for you. It's going to be another while before it's ready for business transactions tbh.What sort of interest rate does bitcoin generate? If the Euro or US interest rate goes to 5 or 6% what will the implications be for Bitcoin.
Currencies do not generate interest rates, banks and central banks do. This goes back to the first point, there's a finite amount of bitcoin, what's left to be created appears at a set period of time and eventually all of it will be in the system. What happens when an item has a limited supply or is scarce? It's value goes up and that's where the divisibility comes in. A deflationary effect kicks in if the demand is there for it so your 1 mBTC stays at 1 mBTC but you might be able to get a loaf and a half of bread for it instead of just a loaf before.
That's not to say a bitcoin bank couldn't start a lending/deposit system with bitcoin and have their own interest rate.0 -
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That's not to say a bitcoin bank couldn't start a lending/deposit system with bitcoin and have their own interest rate.
This might be of interest (ho ho):
https://www.bitbond.net/
No idea if it's trustworthy mind you.0 -
This thread has really got me thinking over the past week. I had considered Bitcoin a lot over the past couple of years, but I've always sat on the fence on whether I thought it would be successful or not...
But after considering every post I have decided that beginning this weekend I will be investing a little bit every month in Bitcoin, while putting the bulk of my savings into more a more traditional credit union account.
This decision largely came from Pedronomix's post on how, like the housing market, the BTC market is very difficult to short. This is because in the housing market you have to be involved in the market to bet on its downward trajectory, by selling a house. Or maybe you could short the stock of a publicly traded property company... But most people just wouldn't think of that. As more people buy houses more people see other people's house prices going up and more people buy houses, particularly if you have cheap credit to buy them with...
With Bitcoins, the overwhelming weight on the market is that of buying INTO it, not shorting it... Almost anyone with a ****ty computer and a weak internet connection can buy into this market and the percentage of people who so far have already compared to those who can and might is minutely small... Also, a large percentage of people betting on BTC genuinely believe this is a long-term investment, unlike stocks & shares or private equity, which are largely driven by short term three-year cycles, trying to flip companies or turn them into money-making machines...
Imagine little guys with a few quid they get from the dole or a ****ty job they hate putting little bits into BTC every month because they just want that feeling that they might just catch a break and their money will increase 10-fold so they can quit their jobs for a couple of months and go traveling... Imagine how many of those people there are in the world and how trivially easy it is for people with lots of time on their hands and a tiny bit of extra cash to put into the potential of a new life, a new society, a new system not governed by financial analysts...
This has all the makings of an enormous bubble the size the world has never seen before... Its all about the accumulative effect of more people seeing the value of the bitcoins of their peers increasing, to a result that seems exponential! Of course its not exponential simply because there are a limited number of people in the world and, like all of the credible stats on human population growth, its logarithmic, which means a slow incline leading to rapid growth and then a slow incline again that goes flat approaching infinity...
And then you the pivotal point at which a speculative bubble just might turn into a real economy. Because as BTC become really known in society they will lose that sense of popular uncertainty that everything new has. And setting up a BTC shopping cart in your store is already as easy as setting up PayPal, maybe even easier... Its certainly easier than setting up Realex, with which you need to meet a load of conditions and have a merchant account, which might be easy to get but it takes a lot of back and forth with different parties, etc... Its a pain really and I work in a web agency...
If the BTC bubble really becomes as big as its potential, it would just need this acceptance from normal traders. This acceptance might be because BTC are worth so much that they could actually charge more for BTC prices. Suddenly you could have a lot of flush BTC early-adopters throwing bitcoins around like confetti and merchants might want in when they realise that there is no fraud threat or charge-backs... No chance of delivering a product and not getting paid...
But at the same time, this "exponential growth" may turn downwards if it suddenly becomes apparent that only a tiny percentage of people are going to accept BTC for real products & services... But I think it is human nature to be swept up in these things and people who supply real products & services are human beings as well... So I think it is perfectly valid that they would eventually accept this valuable cryto-currency.
But worst case scenario, it is a bubble and I can foresee it getting much much bigger very soon due to the ease of access into the market... And at the end of the day, some people make a lot of money from bubbles :-)
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some people make a lot of money from bubbles :-)
and pyramid schemes. These typically don't really buy/sell/produce anything (of tangible value) and only continue to make money for early 'investors' as new members are brought into the scheme.
Now I'm not suggesting that Bitcoin is a pyramid scheme but you have to admit it does have some startling similarities to one.0 -
and pyramid schemes. These typically don't really buy/sell/produce anything (of tangible value) and only continue to make money for early 'investors' as new members are brought into the scheme.
Now I'm not suggesting that Bitcoin is a pyramid scheme but you have to admit it does have some startling similarities to one.
Exactly, and every trait that BTC has in common with a pyramid scheme is shared with the entire financial system, including national pension funds, etc...
The key thing is that it is actually easy to accept BTC for real products and services online. It will probably be easier, or as easy, to set accept BTC in your shopping cart as it is to accept payment through PayPal or Realex... And at the top of the bubble normal service providers might start accepting BTC and developing a small cashflow each week/month in it... As soon as that happens then everything changes and the bubble becomes a market... It might not happen, but knowing how annoying the online payment system is at the moment, on balance, I would say it probably will...0 -
and pyramid schemes. These typically don't really buy/sell/produce anything (of tangible value) and only continue to make money for early 'investors' as new members are brought into the scheme.
Now I'm not suggesting that Bitcoin is a pyramid scheme but you have to admit it does have some startling similarities to one.
It's the best system for instant worldwide payments that's been invented, it's the best attempt we've ever seen at a digital money. The utility of this is huge. To participate you must own bitcoins and bitcoins are scarce., therefore bitcoins have value. The more useful the Bitcoin protocol is, the more valuable bitcoin units of account will be.0 -
At least there is no repetition on here! I must have a heightened sense of Vuja De !0
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Peterdalkey wrote: »At least there is no repetition on here! I must have a heightened sense of Vuja De !
If you want something more in-depth, here's one of the most interesting people involved in Bitcoin talking about it, and the future possibilities, in mostly lay-mans terms. https://www.youtube.com/watch?v=JP9-lAYngi40 -
It's the best system for instant worldwide payments that's been invented
No it's not, nobody can show me how it's cheaper to send $50000 to an account in China from a euro account here, than it is for me to use a bank.
You can also send a PayPal payment instantly Around the world for free.0 -
No it's not, nobody can show me how it's cheaper to send $50000 to an account in China from a euro account here, than it is for me to use a bank.
You can also send a PayPal payment instantly Around the world for free.
Paypal have a transaction limit of 8000 euro, Paypal also charge fees in many cases (though it seems some paypal-paypal transactions can be done free).
If this was true, Western Union who charge between 10% and 30% would not have a business model. From what people have said here it seems Irish banks are pretty good for sending money abroad, especially SEPA transfers in Europe, but it's not the case in other countries. Here's an account of the difficulties of a company in America dealing with payments from China, for example, http://www.reddit.com/r/Bitcoin/comments/1srxkg/why_our_business_will_begin_accepting_bitcoin/
I do concede that Bitcoin is likely to be adopted first in countries other than Ireland, as they have more to gain from it than the Irish do.
Even forgetting about C2B or B2B transfers, the remittance industry worldwide is huge and this (http://www.gfmag.com/archives/164-november-2012/12090-the-growth-of-international-remittances.html#axzz2nS1jimWh) says "Remittances tend to be small, but the fees are fixed. Dilip Ratha, an economist and consultant to the World Bank, estimates that fees run to between 10% and 12% of the remittance. The recipient does not pay for receipt."0 -
Ease and cost of transfer is almost irrelevant if Bitcoin fails in it's primary purpose in these cases.
Think about payment for a second, payment is the transfer of agreed value between two parties for goods/services. Bitcoin almost entirely fails in this regard as the value of Bitcoins changes so dramatically, the 'agreed value' now might be half/double/nothing in another two hours.
Classically it is said that money acts as a unit of account, a store of value, and a medium of exchange. As an accounting unit and a store of value, Bitcoin fails because of the complete lack of stability.0 -
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Yup it's still pretty volatile, but doesn't mean it always will be. As adoption grows and market cap grows the volatility should decrease. The current Bitcoin market cap is the same as the amount of new US dollars created every *4 days*.
No currency maintains constant value, a US dollar is worth about 20 times less goods than it was 100 years ago, and currencies fluctuate against each other daily. There are 2 differences with Bitcoin over the others though, 1) It fluctuates a lot more than typical currencies right now because the market cap is so small 2) Bitcoin supply is not being inflated at the whim of a central bank or government, so it remains relatively scarce and is, in general, gaining in value not dropping. Gold has a market cap in the trillions of dollars, is somewhat volatile, and is still one of the most commonly used stores of value in the world.
Bitcoin could fail and be worthless too, just like fiat currencies can fail and be worthless, and the risk of this happening is higher with Bitcoin than most other currencies. no risk no reward though, it's a decision everyone has to make for themselves. Even as Bitcoin advocate I still have more saving in Euro than Bitcoin, for the moment at least.0 -
Fiat currencies are backed by governments, nations, people, you and I. All of whom have a vested interest in; their survival, keeping their respective currencies relatively stable and convertible. Bitcoin does not have this support.
Bitcoins value is totally and completely reliant on the fact that it can currently be exchanged for real currencies, this is something that central banks could wipeout with the stroke of a pen.
Bitcoin MAY work but it is far, far away from a foregone conclusion. Bitcoin holdings should be viewed as a hugely speculative gamble, hold whatever 'value' you can afford to loose.0 -
Fiat currencies are backed by governments, nations, people, you and I. All of whom have a vested interest in; their survival, keeping their respective currencies relatively stable and convertible. Bitcoin does not have this support.
I want Bitocin to succeed because I don't want to have to trust any third party, I don't want to have to trust that a central bank won't quantative ease my savings away, or that Ulster banks ATMs won't go down for week, or that we won't have a bail in like Cyprus. Why use a money that is controlled and can be interfered with by a third party when we have a money that doesn't require one.
I don't want banks that are 'too big to fail' meaning I have to bail them out.
You won't find me in a tent protesting in an occupy movement, but I'll vote with my feet when it comes to a better alternative than fiat and traditional banking and payment mechanisms.
Do you really think the vested interests of the gov and banks are always to your benefit?
This is probably the biggest threat I saw, they can't stop it technically, but they can drive it under ground by legislating against it. The thing if some countries do and some countries don't it just drives the Bitcoin economy and companies to the ones that support it. So far Germany has legislated Bitcoin as private money, with no cap gains tax if you hold for a year!Bitcoins value is totally and completely reliant on the fact that it can currently be exchanged for real currencies, this is something that central banks could wipeout with the stroke of a pen.
I watched the US senate hearings (live online, awesome) about Bitcoin, it's a constitutional right for alternative currencies to exist there, and the US seems more concerned with seeing how they can make money from it than banning it. So far at least they are not hostile to it.
China is the only country so far taking any kind of a restrictive attitude, and even they have not banned it outright, Bitcoin exchanges are still legal and operational there.
I agreeBitcoin MAY work but it is far, far away from a foregone conclusion. Bitcoin holdings should be viewed as a hugely speculative gamble, hold whatever 'value' you can afford to loose.0 -
You keep comparing Bitcoins to banks and government backed currencies. This comparison just doesn't hold water. The fact that Bitcoin isn't controlled by a central body is a massive downside, not a positive. There is a reason why markets/currencies have evolved and become regulated over generations. This regulation brings law and stability which is a basic requirement for commerce.
Allowing a 'currency' to exist is one thing, permitting the exchange of it for a regulated currency is another. Forbidding the exchange of Bitcoins into other currencies will not drive it underground, it will end it. At nearly all points in the value chain of any product, real currency is an absolute necessity. Try manufacturing anything using nothing but Bitcoins, try buying necessary raw materials, labour etc. You can't, at some point you will need real money.0 -
Yup it's still pretty volatile, but doesn't mean it always will be. As adoption grows and market cap grows the volatility should decrease. The current Bitcoin market cap is the same as the amount of new US dollars created every *4 days*.
Assuming it does grow, and that somebody else doesn't develop a rival concept that does the exact same thing and wipes out a lot of Bitcoins value.No currency maintains constant value, a US dollar is worth about 20 times less goods than it was 100 years ago, and currencies fluctuate against each other daily.
Currencies do fluctuate against each other but once you go into your online bank account the rate is there in front of you and what you see is what you pay.
I think if I accept Bitcoin for a TV €300 for example, which I have bought from a wholesaler for say €200, by the time I get to do something with the Bitcoin it could have shrunk in value.0 -
very interesting points.
as an aside note - if i am applying for a mortgage and the bank sees a big withdrawal from my account to purchase bitcoins will that look very unfavorable in my application?
i would imagine so?0 -
The fact that Bitcoin isn't controlled by a central body is a massive downside, not a positive. There is a reason why markets/currencies have evolved and become regulated over generations. This regulation brings law and stability which is a basic requirement for commerce.
I disagree here, I think it is a positive. You think current markets and currencies are stable? Why do we keep having huge financial crashes? We're in a boom/bust cycle where an increasingly debt based society gets flooded with credit, goes into debt, fails to pay it back and then the government prints more money to start the cycle all over again. People get financially ruined by tihs, and the rich get richer. I don't think this is a perfect system, I don't think it's the best system possible. I'm ready to see if something else works better.
Dollars used to be backed by a scarce resource - gold, dollars were an IOU for gold. Gold was the real money it was just a pain to use in day to day life, as it's not easily divisible or very portable in large amounts, so using fiat as an IOU for it was a progression.
Now we have a technology which has all the properties which led to gold being used as money (de-centralised, fungibility, scarcity, easily recognisable, hard to counterfeit) and also has the advantages gold backed fiat had, portability, divisibility along with being instantly transportable anywhere in the world. The Bitcoin experiment has started, lets see if it works.Allowing a 'currency' to exist is one thing, permitting the exchange of it for a regulated currency is another. Forbidding the exchange of Bitcoins into other currencies will not drive it underground, it will end it. At nearly all points in the value chain of any product, real currency is an absolute necessity. Try manufacturing anything using nothing but Bitcoins, try buying necessary raw materials, labour etc. You can't, at some point you will need real money.
People will trade it in person for cash or online for goods, especially illegal goods as was seen with the Silk Road. The government can forbid it's very difficult to enforce such a law. But, I agree that if every government outlawed Bitcoin exchanges it would severely limit its utility.0 -
Allowing a 'currency' to exist is one thing, permitting the exchange of it for a regulated currency is another. Forbidding the exchange of Bitcoins into other currencies will not drive it underground, it will end it.
It would right now, though that would also be a very hard thing to ban effectively.At nearly all points in the value chain of any product, real currency is an absolute necessity. Try manufacturing anything using nothing but Bitcoins, try buying necessary raw materials, labour etc. You can't, at some point you will need real money.
That's true right now only because manufacturers and suppliers choose to accept real money and not bit coins. There are good reasons why that is so right now, but no reason at all that it can't change in the future. These are all businesses, just like the businesses that already deal in BTC. Give them good reason to accept BTC and they'll do so.0 -
I disagree here, I think it is a positive. You think current markets and currencies are stable?.
On the whole, a darn site more stable than Bitcoin.AtomicHorror wrote: »It would right now, though that would also be a very hard thing to ban effectively.
Nope, quite simple. Issue edict, job done. It wouldn't eradicate it completely but it would remove sufficient legitimacy that most right minded people wouldn't touch it. Bitcoin only started to increase in value when methods to exchange it for real money developed. Remove the means of exchange and Bitcoin has no value.AtomicHorror wrote: »Give them good reason to accept BTC and they'll do so.
Like security, stability, good store of wealth?People will trade it in person for cash or online for goods, especially illegal goods as was seen with the Silk Road. The government can forbid it's very difficult to enforce such a law. But, I agree that if every government outlawed Bitcoin exchanges it would severely limit its utility.
So you agree, if governments/central banks ban it's exchange it's useless. Even its utility for unlawful transactions ceases.0 -
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