Newegg is now accepting Bitcoin(promotions.newegg.com)
promotions.newegg.com
Newegg is now accepting Bitcoin
http://promotions.newegg.com/nepro/14-3540/index.html
210 comments
1) What are the best practises for having a bunch of bitcoin? You say you shouldn't keep it stored on your local machine but where? Keeping it stored on exchanges is kind of prone to failure in the bitcoin world. If you want to use a cold wallet you need a second computer that you don't plan to use for anything else and you need to learn linux or its pointless
2) Just because its new doesn't mean its better or makes more sense than the existing methods.
2) Just because its new doesn't mean its better or makes more sense than the existing methods.
There are a number of technological solutions to the security issues related to storage. BIP38 and multisig are both very promising innovations, and there will be more. We're really at the very early stages of Bitcoin's development. Think 1994 for the Internet.
1) Try this? https://www.bitgo.com
1) Best practice is typically separating it into "savings account"/ personal wallet. So cold storage and a hot/low security wallet.
2) Agreed. There are no guarantees, however strong indicators it will improve. Remember e-commerce didn't make sense either back in the day (no salesperson, can't touch goods, security - all “rational” reasons) -- but all solved.
On that point I don't even view BTC as currency actually (my personal view).
It is first of it's kind with no precedent (is it currency, asset, ledger, protocol…?). Is it all of above? Or something else? Reminds me of when first iPad came out and people just viewed it as a “large iPhone” (true, in some ways - but it’s definitely not defined that way anymore. It’s own unique category now. Public aware of nuances). No precedent. Still defining by analogy to old paradigms.
BTC is similarly nuanced. I actually view it as more buying a stock in protocol. Yup sounds crazy/doesn't make sense using old paradigms. But I’ll leave that for another post (the gist of the idea is here: http://btcgeek.com/dawn-of-autonomous-corporations/).
2) Agreed. There are no guarantees, however strong indicators it will improve. Remember e-commerce didn't make sense either back in the day (no salesperson, can't touch goods, security - all “rational” reasons) -- but all solved.
On that point I don't even view BTC as currency actually (my personal view).
It is first of it's kind with no precedent (is it currency, asset, ledger, protocol…?). Is it all of above? Or something else? Reminds me of when first iPad came out and people just viewed it as a “large iPhone” (true, in some ways - but it’s definitely not defined that way anymore. It’s own unique category now. Public aware of nuances). No precedent. Still defining by analogy to old paradigms.
BTC is similarly nuanced. I actually view it as more buying a stock in protocol. Yup sounds crazy/doesn't make sense using old paradigms. But I’ll leave that for another post (the gist of the idea is here: http://btcgeek.com/dawn-of-autonomous-corporations/).
>What are the best practises for having a bunch of bitcoin?
Given that it's designed as a digital replacement for cash (not savings and checking accounts - cash), keeping more than a few hundred dollars around at a time would seem to be as advisable as storing the equivalent $100 bills, with the same level of extraordinary security measures needed.
Given that it's designed as a digital replacement for cash (not savings and checking accounts - cash), keeping more than a few hundred dollars around at a time would seem to be as advisable as storing the equivalent $100 bills, with the same level of extraordinary security measures needed.
I've yet to have someone remotely steal money out of my wallet.
You've also not yet shoved a dollar bill down an Ethernet cable. Which is, more or less, what Bitcoin provides.
1) Store it on coinbase. And don't invest your life savings into bitcoin in the same way that you might not want to "invest" your life savings into Western Union Travelers Checks.
2) What is a way that I can transfer value to somebody in a far away place that is easier (if both parties already accept coins) than bitcoin?
2) What is a way that I can transfer value to somebody in a far away place that is easier (if both parties already accept coins) than bitcoin?
1) Given the history of exchanges is it really smart to store your bitcoin in one?
2) Is only easier if you ignore the process of getting bitcoins and the process of converting them to something else. If you do that then me sending you an email saying "IOU value" is easier.
2) Is only easier if you ignore the process of getting bitcoins and the process of converting them to something else. If you do that then me sending you an email saying "IOU value" is easier.
1) If you don't feel comfortable storing things in coinbase, and don't feel comfortable storing coins on your local machine, then you might not want to use bitcoins. This is fine, but there are plenty of people (like me) who are completely fine with coinbase.
2) If you had an easy way of converting that IOU into USD, or converting it into real goods (by, for instance buying something on newegg), then I would say that yeah, that would be just as good. In fact, that's a great analogy! Bitcoin is a very widely accepted system of IOUs (kindof like a banking system...or cash).
2) If you had an easy way of converting that IOU into USD, or converting it into real goods (by, for instance buying something on newegg), then I would say that yeah, that would be just as good. In fact, that's a great analogy! Bitcoin is a very widely accepted system of IOUs (kindof like a banking system...or cash).
there are plenty of people (like me) who are completely fine with coinbase.
As far as I know, Coinbase has no insurance for their users' coins. If they go bankrupt, you'll lose all your money.
Coinbase is a startup. Failure is the norm, not the exception. Until they get insurance, you shouldn't store more than you're comfortable losing.
Since most consumers can't afford to lose very much, and since most consumers aren't comfortable using an offline storage solution like Armory, they'll need to stick with cash or credit to stay safe. This harms bitcoin adoption among consumers, because they don't have bitcoin on hand with which to buy things on a whim.
As far as I know, Coinbase has no insurance for their users' coins. If they go bankrupt, you'll lose all your money.
Coinbase is a startup. Failure is the norm, not the exception. Until they get insurance, you shouldn't store more than you're comfortable losing.
Since most consumers can't afford to lose very much, and since most consumers aren't comfortable using an offline storage solution like Armory, they'll need to stick with cash or credit to stay safe. This harms bitcoin adoption among consumers, because they don't have bitcoin on hand with which to buy things on a whim.
>Until they get insurance, you shouldn't store more than you're comfortable losing.
Hey thanks for the tip.
BTW, you shouldn't keep more cash in your wallet than you feel comfortable keeping in your wallet.
Hey thanks for the tip.
BTW, you shouldn't keep more cash in your wallet than you feel comfortable keeping in your wallet.
1) look up paper wallets.
bitcoin is at a stage where it's not trivial to secure if you are not a technical person. There are companies that are working at making this easier by providing the security and even insuring the bitcoins if something happens. When services like this are out we will see a huge turning point IMO.
bitcoin is at a stage where it's not trivial to secure if you are not a technical person. There are companies that are working at making this easier by providing the security and even insuring the bitcoins if something happens. When services like this are out we will see a huge turning point IMO.
I've been looking for a liveCD based offline paper-wallet solution, but so far no luck. Perhaps someone can point me to one? The point is to generate a paper wallet on a machine with no capability of retaining the keys after the paper wallet has been generated - and the only way I know how to do that is through the removal of hardware (no hard drive, no USB stick, no networking. Maybe no speaker either.)
That would be the cold storage option I mentioned would it not?
AFAIK there is only one company that has claimed the insurance angle(Xapo) and if you read the policy you basically need to have the person that stole them be arrested before they will pay out.
AFAIK there is only one company that has claimed the insurance angle(Xapo) and if you read the policy you basically need to have the person that stole them be arrested before they will pay out.
1.) best practice is to store it in a paper wallet.
https://en.bitcoin.it/wiki/Paper_wallet
https://en.bitcoin.it/wiki/Paper_wallet
You can just store it on a usb...
Specifically, on a USB stick in a regular old safe-deposit box. Now your money is in a bank.
Unless the computer you used to move it to the USB was compromised in which case someone could still steal it.
Use a Live CD with a lightweight client that doesn't need to download the entire blockchain. Keep the wallet on a separate USB key so you can keep any generated change addresses (since a LiveCD is read-only). This should be pretty effective unless the hardware itself is compromised.. If you're worried about the machine being exploited while online performing the transaction, you could limit exposure somewhat by generating an offline transaction.
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Why would a consumer use it over a credit card? Especially when you need to use a credit card or other payment method to buy the bitcoin in the first place?
Some don't, like everybody who posts on the mining forums of bitcointalk.org and is generating their own coins, or converting alternative coins to bitcoin. All these miners want computer hardware, makes sense to directly market to them.
That's an incredibly small and relatively inconsequential market.
I do agree. However, i feel there won't be strong adoption without a great advantage for customers.
Let's see. I could pay for hardcore online pornography in a pretty anonymous way. I could board a flight with a flash drive containing $1million dollars in BTC. I don't have any draconian restrictions on who I can and can't exchange my "money" with. If you send me BTC and the network confirms I never have to worry about your cheque "bouncing". I could donate to Wikileaks without a company like MasterCard or Visa deciding who I can and can't send my money to.
I can do all these things on my own without having some third party potentially fucking me over or charging me a monthly fee. I consider all these things great advantages.
It also doesn't mean I need to abandon credit cards or other forms of value transfer. But in those cases I now have an alternative I did not have had BTC not existed. It's a weird black and white kind of logic that HN has where it seems for Bitcoin to succeed it must replace everything currently in use. That's a false dichotomy. They can mutually coexist. Right tool for the job.
I can do all these things on my own without having some third party potentially fucking me over or charging me a monthly fee. I consider all these things great advantages.
It also doesn't mean I need to abandon credit cards or other forms of value transfer. But in those cases I now have an alternative I did not have had BTC not existed. It's a weird black and white kind of logic that HN has where it seems for Bitcoin to succeed it must replace everything currently in use. That's a false dichotomy. They can mutually coexist. Right tool for the job.
> I could board a flight with a flash drive containing $1million dollars in BTC
lol. wat?
lol. wat?
>It doesn't do $things_credit_cards_do!
Boats are totally useless they only travel on water. Why would anyone prefer a boat to a truck for moving freight?
Boats are totally useless they only travel on water. Why would anyone prefer a boat to a truck for moving freight?
Pay 1% more(or 3%-8% more if you have a cash back card and depending on where you bought your coins) to save them 2% and lose all consumer protections in the deal.
It's no wonder there is almost no consumer growth in the bitcoin world while new merchants are announced every other day.
It's no wonder there is almost no consumer growth in the bitcoin world while new merchants are announced every other day.
You are wrong, there is tremendous consumer growth happening. The two biggest US processors (BitPay and Coinbase) release numbers every once in a while. One example:
"Since [...] October, along with the integration with Shopify in November, [...] the transaction volume has tripled." Source: http://blog.bitpay.com/2013/12/11/bitpay-exceeds-100-000-000...
"Since [...] October, along with the integration with Shopify in November, [...] the transaction volume has tripled." Source: http://blog.bitpay.com/2013/12/11/bitpay-exceeds-100-000-000...
https://blockchain.info/charts/n-transactions
I don't see any growth. Also, 70k transactions/day - one average shopping mall.
I don't see any growth. Also, 70k transactions/day - one average shopping mall.
Wow, that's amazingly low. Especially because I'm guessing most of these transactions are just mixing services. I wonder how much represent actual transfers of wealth between individuals? I would guess less than 1K per day, which would make it incredibly low compared to all the hype bitcoin has got.
Indeed. In searching around to find something to compare these numbers with, I found that Walmart alone processed 10 million register transactions in 4 hours on Black Friday in 2012[1]. Even if all 70k bitcoin transactions every day were actual purchases (rather than shifting money around), it'd take 5 months to do what Walmart did in 4 hours.
1. http://news.walmart.com/news-archive/2012/11/23/walmart-us-r...
1. http://news.walmart.com/news-archive/2012/11/23/walmart-us-r...
It has grown by a factor of 4 in the past two years (visible when you switch to the 2 year or 'all time' scale).
That hardly tells anything about consumer adoption though, but about trade volume.
That's true. Still 100% growth per year is not exactly 'no growth'.
Absolutely, but the numbers are still incredibly low. The customer adoption is only at a few thousand transactions per day. Those numbers would have to go up at least hundredfold for Bitcoin to be taken seriously as a currency.
Bitcoin is only 4 years old. Maybe it just takes a little longer to take over Visa in transaction volume? I really don't know what people like you expected.
If it proceeds to double in size every year then the numbers will stop being 'incredibly low' very soon.
If it proceeds to double in size every year then the numbers will stop being 'incredibly low' very soon.
The point is it isn't doubling every year. Averaged over 4 years it has but over the past 12 months it hasn't grown at all.
Apparently they don't have to go up at all for it be taken seriously by Newegg, Overstock, Dish, and Tiger Direct.
That's true, and every time a new company begins accepting it, there is a slurry of stories about it in tech publications.
I'm surprised more retailers, particularly those specializing in tech, haven't begun accepting bitcoin. They can accept it on terms they dictate and it's easy publicity.
I'm surprised more retailers, particularly those specializing in tech, haven't begun accepting bitcoin. They can accept it on terms they dictate and it's easy publicity.
You don't the publicity is more important than the amount of commerce transacted on it? Every one of these companies get the press when they indicate they accept bitcoin. I remain skeptical as to how many are doing any sort of volume in bitcoin transaction
The biggest problem with Bitcoin being taken seriously as a currency is its investment value. If there is anyone using it to pay for goods and services, then they are most likely buying back the amount they spent. So there is not much reason to use this on sites like newegg.
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A crucial missing data point is that Coinbase does all their transactions off-chain. If you send Bitcoin via Coinbase to a friend, it doesn't get reported on this chart. They have their own accounting system.
Bitcoin at its current stage cannot handle many transactions, as you point out. However, this doesn't mean there isn't a plan to make it handle many more transactions. See https://en.bitcoin.it/wiki/Scalability for more.
Bitcoin at its current stage cannot handle many transactions, as you point out. However, this doesn't mean there isn't a plan to make it handle many more transactions. See https://en.bitcoin.it/wiki/Scalability for more.
And coinbase stopped reporting their volume after they were caught out fudging the numbers. I think people vastly overestimate how much off block chain stuff they do.
Note that many Coinbase/Bitpay/whatever transactions will be off-chain - much like PayPal, you can have an account balance that is just transferred in Coinbase's ledger but doesn't actually appear to be transferred on the block chain.
I thought transactions like that weren't supported by the bitcoin protocol. Are there any resources that explain how this works with the general blockchain?
It doesn't work with the general blockchain. If I have 1btc in my coinbase account and I send it to your coinbase account then it never shows up on the block chain.
I think people hugely overestimate how much volume is happening with this though.
I think people hugely overestimate how much volume is happening with this though.
Of course it doesn't have that much growth. Everyone is trying to get rid of their overvalued dollars and euros :).
https://blockchain.info/charts/estimated-transaction-volume-...
this looks like a typical exponential curve to me
this looks like a typical exponential curve to me
It's hard to accurately measure adoption level mostly because of the decentralised nature of Bitcoin, but looking at the transaction volume is a really bad approach. One individual sending money back and forth can generate tremendous volume (similarly with exchange moving their funds between hot wallet and cold storage). Same goes for transactions count (if you are moving big enough funds you don't have to pay fee), plus there are things like satoshidice or reddit tip bot that tend to move towards off-blockchain transactions now.
> One individual sending money back and forth can generate tremendous volume
Which is what the "days destroyed" measurement looks to compensate for https://blockchain.info/charts/bitcoin-days-destroyed https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed
Which is what the "days destroyed" measurement looks to compensate for https://blockchain.info/charts/bitcoin-days-destroyed https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed
Yeah, it's a very nice metric. But I don't think it's related to adoption. I mean if bitcoin is used as a currency and quickly changing hands you wouldn't expect many "bitcoin days destroyed" (as opposed to when e.g. exchange is reorganizing its funds)
You would actually expect to still see it climbing week over week though with the odd spike.
That looks like the price spiking and lots of trades happening, or alternatively a major individual player moving their coins around.
It definitely says nothing about consumer adoption.
It definitely says nothing about consumer adoption.
Moving coins is almost-free, but not 100% free. Why would a major player want to lose money?
https://blockchain.info/address/12sENwECeRSmTeDwyLNqwh47Jist...
Transparency reasons, for example?
Transparency reasons, for example?
Where are you seeing it? Overstock the most regularly promoted name as a retailer has only seen dropping numbers since they started.
Notice bitpay stopped reporting 7 months ago?
Coinbase has also been called out on posting contradictory numbers on their blog posts in the past which lead to them deleting most of their posts related to numbers.
Notice bitpay stopped reporting 7 months ago?
Coinbase has also been called out on posting contradictory numbers on their blog posts in the past which lead to them deleting most of their posts related to numbers.
Overstock is just one merchant, one data point. Not enough to draw a conclusion. On the other hand, BitPay represents 30k merchants.
And they did not stop releasing numbers. They recently announced processing $1 million every single day. This is 3.3x their daily average of 2013. Source: http://www.pfhub.com/bitpay-processing-1-million-per-day-ove...
And they did not stop releasing numbers. They recently announced processing $1 million every single day. This is 3.3x their daily average of 2013. Source: http://www.pfhub.com/bitpay-processing-1-million-per-day-ove...
Your source is a link to a story which sources some random bitcoin news blog which sources...nothing but their own claim that they were told that. Every other news source references it or doesn't give a source for the claim. This is common in bitcoin reporting. One blog makes something up, misunderstands something, or makes a mistake and the rest report it as fact.
This milestone ($1M/day) was widely disseminated in a business wire 2 weeks before the newsbtc.com blog post: http://finance.yahoo.com/news/bitcoin-payments-pioneer-bitpa...
Notice how it is burried in the announcement of the $30M funding round. This is probably why the fact was not picked up by more people.
Notice how it is burried in the announcement of the $30M funding round. This is probably why the fact was not picked up by more people.
I'll believe it when I see numbers for multiple days over multiple months. Both bitpay and coinbase have been caught in the past using spikes and holiday volume to make their overall volume look much higher than it is.
BitPay processed $5k/day in May 2012 [3], $18k/day in Sep 2012 [3], $160k/day in March 2013 [1], $300k/day average through 2013 [2], and now $1.0M/day [4].
BitPay had 1k merchants in Sep 2012 [3], 10k by Sep 2013 [5], 30k by May 2014 [6].
BitPay raised $2M in May 2013 [7], and $30M in May 2014 [4].
They had a single office in Atlanta in 2012, now they have 8000 sq ft in Atlanta [8], plus offices in Amsterdam, San Francisco, New York City.
BitPay had 7 employees in April 2013 [9], and 40 by May 2014 [8], and plans to have 100 by end of 2014 [8].
You can bury your head in the sand as much as you want, but their growth is obvious... Have you been to any Bitcoin conference? The number of new startups, flury of projects, funding rounds, etc, is mind-boggling. You belong to the super-minority who believes that "Bitcoin is seeing no consumer growth" (!)
[1] http://www.maxkeiser.com/2013/04/bitpay-processes-5-million-...
[2] http://www.paymentssource.com/news/the-companies-signing-up-...
[3] http://bitcoinmagazine.com/2298/bitpay-exceeds-1000-merchant...
[4] http://finance.yahoo.com/news/bitcoin-payments-pioneer-bitpa...
[5] http://paymentweek.com/bitpay-reaches-10k-merchants-mileston...
[6] http://blog.bitpay.com/2014/05/04/merchant-spotlight-sendowl...
[7] http://bitcoinmagazine.com/4626/bitpay-raises-2-million-led-...
[8] http://blog.bitpay.com/2014/05/21/bitpay-s-office-grand-open...
[9] http://blog.bitpay.com/2013/04/22/bitpay-expands-staff-to-se...
BitPay had 1k merchants in Sep 2012 [3], 10k by Sep 2013 [5], 30k by May 2014 [6].
BitPay raised $2M in May 2013 [7], and $30M in May 2014 [4].
They had a single office in Atlanta in 2012, now they have 8000 sq ft in Atlanta [8], plus offices in Amsterdam, San Francisco, New York City.
BitPay had 7 employees in April 2013 [9], and 40 by May 2014 [8], and plans to have 100 by end of 2014 [8].
You can bury your head in the sand as much as you want, but their growth is obvious... Have you been to any Bitcoin conference? The number of new startups, flury of projects, funding rounds, etc, is mind-boggling. You belong to the super-minority who believes that "Bitcoin is seeing no consumer growth" (!)
[1] http://www.maxkeiser.com/2013/04/bitpay-processes-5-million-...
[2] http://www.paymentssource.com/news/the-companies-signing-up-...
[3] http://bitcoinmagazine.com/2298/bitpay-exceeds-1000-merchant...
[4] http://finance.yahoo.com/news/bitcoin-payments-pioneer-bitpa...
[5] http://paymentweek.com/bitpay-reaches-10k-merchants-mileston...
[6] http://blog.bitpay.com/2014/05/04/merchant-spotlight-sendowl...
[7] http://bitcoinmagazine.com/4626/bitpay-raises-2-million-led-...
[8] http://blog.bitpay.com/2014/05/21/bitpay-s-office-grand-open...
[9] http://blog.bitpay.com/2013/04/22/bitpay-expands-staff-to-se...
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I'd like to see a source for your claim that "Overstock ... has only seen dropping numbers since they started." I think you're probably getting it from the FOX Business interview in May, but that's not really as cut-and-dried as you're making out.
[1] http://www.coindesk.com/overstock-ceo-patrick-byrne-1-6m-bit...
[1] http://www.coindesk.com/overstock-ceo-patrick-byrne-1-6m-bit...
http://onbitcoin.com/2014/01/31/bitcoin-executives-testify-i...
http://www.coindesk.com/overstock-million-bitcoin-sales-futu...
http://www.coindesk.com/overstock-ceo-patrick-byrne-1-6m-bit...
Jan 1 - 170K
Jan 2-29 - $15K/day average
Next 36 days to March 4th they do $400K - $11K/day average
Next 83 days to May 27th they do $600K - $7200/day average
http://www.coindesk.com/overstock-million-bitcoin-sales-futu...
http://www.coindesk.com/overstock-ceo-patrick-byrne-1-6m-bit...
Jan 1 - 170K
Jan 2-29 - $15K/day average
Next 36 days to March 4th they do $400K - $11K/day average
Next 83 days to May 27th they do $600K - $7200/day average
Thanks! Hmm. It is only to be expected that the initial spike would drop off. It'll be interesting to see if that downwards trend continues or not.
Transaction volume and consumer growth aren't even close to the same thing.
Yes it is! The numbers I posted ($1M/day today, up from $300k/day in 2013) are transactions made on BitPay's platform for services and goods sold by BitPay's merchants, 99% of which are B2C companies (see https://bitpay.com/directory). Real stuff sold to real customers, in bitcoins.
I think you are confused and thought I was talking about transaction volume on the Bitcoin p2p network.
I think you are confused and thought I was talking about transaction volume on the Bitcoin p2p network.
Bitcoin is still mostly a speculative vehicle. 9/10 links about bitcoin are not real news and are just propped up by people with a stake in it. Nobody else cares.
I wonder this too - I rarely use cash right now, because I get:
1) Cashback (1-3%)
2) Chargebacks if needed
by using a credit card. Bitcoins are basically like cash in my mind - very easy to move around, but no protections in case of it being stolen, and no cashback. I think Bitcoin is very neat technology, and has some useful features (transferring money between people quickly and easily with basically no fees), but I fail to see the incentive for me to use it to replace my credit card. The business receiving it receives all of the benefits.
If stores passed the savings onto the consumer with 2 or 3% cashback, I could potentially see people using it. Especially if this was returned as points or something, similar to how it's treated for credit cards.
1) Cashback (1-3%)
2) Chargebacks if needed
by using a credit card. Bitcoins are basically like cash in my mind - very easy to move around, but no protections in case of it being stolen, and no cashback. I think Bitcoin is very neat technology, and has some useful features (transferring money between people quickly and easily with basically no fees), but I fail to see the incentive for me to use it to replace my credit card. The business receiving it receives all of the benefits.
If stores passed the savings onto the consumer with 2 or 3% cashback, I could potentially see people using it. Especially if this was returned as points or something, similar to how it's treated for credit cards.
Please consider using cash at small and local businesses when possible. You pay the same amount either way, and the extra 2-3% goes to the local business instead of to Visa.
Additionally, I've been to one or two stores that will actually give a small discount on cash purchases. I hope that trend continues.
Additionally, I've been to one or two stores that will actually give a small discount on cash purchases. I hope that trend continues.
OTOH it is certainly better for me to pay with credit. I get 2% cashback plus I have to go to the ATM less plus I get a free 30 day loan.
I do tend to somewhat favor cash when using food trucks, and other small stores - I figure it's a little faster than waiting for them to fiddle with their phone, and it saves them a little bit of money.
Yeah but the other night I stopped at a Mexican food truck and was without cash. They didn't have Square or anything. I drove 3 blocks to the ATM only to buy something next to the ATM vs go back. So for my family of 4 I put $50 into one store vs the food truck. So a $50 lost sale is a lot of 2-3% to make up by not accepting cards at all.
It's not like they were selling digital copies of something, that they lost all of it. It all depends upon how much is their margin? Maybe they go home every night after selling all their stock. How long did they have to wait to sell that $50 worth of stock that you didn't buy? 5 minutes? 10 minutes? Were those 10 minutes worth $1.50 they saved on fees?
It's a great point to add that it's nuanced. But a lost sale is a lost sale and should be avoided if you're in the business of selling things. Unless your margins are under 3% (the reason why Overstock is say an early Bitcoin champion)
I'm wondering why Coinbase doesn't offer a cashback program where they would charge the merchant the typical 2-3% and pass it on to the payer as a discount. This would hugely incentivize paying with BTC. The merchant should be indifferent about this fee since he has to pay it already 95% of the time.
Kind of done already: http://blog.coinbase.com/post/88587641102/announcing-merchan...
I don't think any merchant is indifferent about fees.
>lose all consumer protections in the deal.
Well I don't care about the ability to do chargebacks from newegg, and I care a lot about the ability to not get my financials stolen by hackers, so the "consumer protection" Bitcoin offers here looks pretty good to me.
Well I don't care about the ability to do chargebacks from newegg, and I care a lot about the ability to not get my financials stolen by hackers, so the "consumer protection" Bitcoin offers here looks pretty good to me.
True there's no advantage to paying with bitcoin currently and most people are just using it for the novelty value. But enough growth and merchants will just have to offer discounts with bitcoin purchases to stay competitive.
If the numerous and massive data breaches, and subsequent credit card theft and fraud events of the last few years have taught us anything, it is that yes paying in bitcoins has one fundamental advantage: you are never handing the store your full billing info which can be stolen and reused by fraudsters.
Now, Bitcoin also has its own security challenges (eg. how to secure a wallet), but there are solutions (hardware wallets) making it a fundamentally more secure way of transacting online.
Now, Bitcoin also has its own security challenges (eg. how to secure a wallet), but there are solutions (hardware wallets) making it a fundamentally more secure way of transacting online.
I would much rather spend 10 minutes on the phone with my credit card company once every couple years contesting fraudulent transactions than have the potential for all of my money to be stolen if I make one security fuck up ever.
The number of "I had all my bitcoins stolen, here is the list of 25 security precautions I've taken, where did I fuck up" articles is terrifying. I'm willing to sacrifice the 1% savings or whatever it is I'd theoretically get from bitcoin for that peace of mind.
The number of "I had all my bitcoins stolen, here is the list of 25 security precautions I've taken, where did I fuck up" articles is terrifying. I'm willing to sacrifice the 1% savings or whatever it is I'd theoretically get from bitcoin for that peace of mind.
You completely ignored my 2nd paragraph. NONE of the theft victims you read about used hardware wallets.
They'll be replaced by people that forgot their PIN and lost the paper backup.
If you refuse to take any responsibility in life, Bitcoin is not for you.
So.... it's not for most people then?
Because we've evolved a hell of a lot of ways for people to offload responsibility over the last hundred or so years, particularly where money is involved.
In general I think it's a pretty good thing.
Because we've evolved a hell of a lot of ways for people to offload responsibility over the last hundred or so years, particularly where money is involved.
In general I think it's a pretty good thing.
Why take responsibility when a credit card company will do it for you? That's a MAJOR selling point of credit cards.
Because there's no such thing as a free lunch.
Sure, the bank/CC company will take responsibility for fraudulent charges. In return, they:
1. Randomly cancel your cards and mail you new ones to limit their risk. (No explanation other than 'security')
2. Refuse to let you use your cards to deposit on gambling sites (which are legal in Canada). They also charge extra fees for 'cash-like' transactions on things like forex sites.
3. Reject large purchases that are 'out of the ordinary' making you look like a jackass. This one happened to my dad while he was booking flights.
4. Skim 2-3% or more of each transaction.
5. Maintain onerous requirements for merchants. Square has helped a lot with this in the first world but in the rest of the world they don't even bother taking electronic payments because it's such a hassle to get approved, lease the machines, maintain a security deposit, etc.
Sometimes it makes more sense to just take the risk of getting scammed than deal with all of the above.
Sure, the bank/CC company will take responsibility for fraudulent charges. In return, they:
1. Randomly cancel your cards and mail you new ones to limit their risk. (No explanation other than 'security')
2. Refuse to let you use your cards to deposit on gambling sites (which are legal in Canada). They also charge extra fees for 'cash-like' transactions on things like forex sites.
3. Reject large purchases that are 'out of the ordinary' making you look like a jackass. This one happened to my dad while he was booking flights.
4. Skim 2-3% or more of each transaction.
5. Maintain onerous requirements for merchants. Square has helped a lot with this in the first world but in the rest of the world they don't even bother taking electronic payments because it's such a hassle to get approved, lease the machines, maintain a security deposit, etc.
Sometimes it makes more sense to just take the risk of getting scammed than deal with all of the above.
So what happened when credit cards went toe-to-toe with bitcoin? Bitcoin got its ass handed to it. http://pando.com/2013/08/27/an-expensive-lesson-against-sell... Ebay had to ban bitcoin sales because sellers were getting ripped off so often by credit card owners.
How so? The whole scam was predicated on abusing the chargeback feature of credit cards. This just proves that credit cards are terrible at cash-like transactions (buying cash/gold/bitcoins/gambling).
No it proves they are great at cash like transactions for buyers and awful for sellers.
This is exactly why Credit Cards are so popular, and Bitcoin will never ever take off.
Cash works, so hardware wallets will work.
See, people are used to, and are already pretty good at securing valuables such as cash (in a safe, at home, or on themselves). A paper backup presents to additional complexity to store securely. And Bitcoin offers extra advantages: losing your paper backup does not affect you ability to use the wallet, and you can have multiple backups, etc. So a hardware wallet is at least better than or equal to cash in terms of security.
See, people are used to, and are already pretty good at securing valuables such as cash (in a safe, at home, or on themselves). A paper backup presents to additional complexity to store securely. And Bitcoin offers extra advantages: losing your paper backup does not affect you ability to use the wallet, and you can have multiple backups, etc. So a hardware wallet is at least better than or equal to cash in terms of security.
Of course they don't - there's no such thing as a hardware wallet yet. It's irrelevant to the discussion to say that a theft might not have happened if the victim had been using a fictional technology.
>you are never handing the store your full billing info which can be stolen and reused by fraudsters.
And you have to use a hard to obtain (bureucratic nightmare to exchange), volatile, dealing with shady "institutions" with no real history or assurances behind them (MtGox anyone?), and use a novelty currency for that?
There are "one use" recharchable virtual credit cards used all over the world, you can "fill up" one from your online banking and have it handle as much or as little money as you want (e.g just for one transaction).
This can be done wholly online, and takes like 1 minute.
And you have to use a hard to obtain (bureucratic nightmare to exchange), volatile, dealing with shady "institutions" with no real history or assurances behind them (MtGox anyone?), and use a novelty currency for that?
There are "one use" recharchable virtual credit cards used all over the world, you can "fill up" one from your online banking and have it handle as much or as little money as you want (e.g just for one transaction).
This can be done wholly online, and takes like 1 minute.
Except when that happens with credit cards you're protected from loss so it doesn't matter as a consumer.
In fact, you aren't out the money at all, ever.
If someone steals my credit card and runs up $8000 in charges on it, I'm not out $8000. There is a piece of paper somewhere that says I owe $8000, but that's not being out the money.
One might have a model of "net worth" as "total assets minus total debts," and normally it's a decent model, and this makes net worth go down. But illegitimate debts put a wrinkle in that model.
Never underestimate the advantage of having money versus being owed money. (This is a start-up lesson, too.)
If someone steals my credit card and runs up $8000 in charges on it, I'm not out $8000. There is a piece of paper somewhere that says I owe $8000, but that's not being out the money.
One might have a model of "net worth" as "total assets minus total debts," and normally it's a decent model, and this makes net worth go down. But illegitimate debts put a wrinkle in that model.
Never underestimate the advantage of having money versus being owed money. (This is a start-up lesson, too.)
How naive you are. You could basically be arrested and branded as a pedophile if your CC info is stolen: http://news.bbc.co.uk/2/hi/uk_news/magazine/7326736.stm
I recognize this is an extreme story, but you cannot claim that CC info theft "does not matter". When it happens, there are many ways in which it can turn in a big pile of hassle for you.
I recognize this is an extreme story, but you cannot claim that CC info theft "does not matter". When it happens, there are many ways in which it can turn in a big pile of hassle for you.
For better or worse MRB there are literally millions of cards stolen and compromised each year. And the biggest inconvenience 99% of these people suffer is waiting 4 days for a new one in the mail and having to remember to update their various subscriptions. So there might always be a horror story or two like the above but it's not really an effective rebuttal against the main point which is credit card fraud is not borne by the individual.
This is a BS, extremely naive argument in favor of bitcoin.
For one, you can very much have the same happen to any bitcoin user, using their personal details online in such sites.
For one, you can very much have the same happen to any bitcoin user, using their personal details online in such sites.
No. The point is that Bitcoin does not require you to share your billing info with the merchant. Therefore no info shared = no data leak possible = higher security.
All those high profile merchants who accept bitcoins do require you to share your "billing info" so the argument is moot.
Understand this is an issue in the merchant's processes, not with Bitcoin.
Your argument is like saying "seat belts in cars don't always make drivers safer, for one people may forget to buckle up and not benefit from increased safety".
Your argument is like saying "seat belts in cars don't always make drivers safer, for one people may forget to buckle up and not benefit from increased safety".
>Understand this is an issue in the merchant's processes, not with Bitcoin
Sure, but the end result is the same. It's irrelevant whose fault it is.
Or, reversely, nothing prohibits buying with credit cards online to be done differently and be safe from such fraud (e.g one-off credit card numbers with token generators).
But in the real world, credits cards are used the way we know, and merchants accepting bitcoin still ask for those details.
Sure, but the end result is the same. It's irrelevant whose fault it is.
Or, reversely, nothing prohibits buying with credit cards online to be done differently and be safe from such fraud (e.g one-off credit card numbers with token generators).
But in the real world, credits cards are used the way we know, and merchants accepting bitcoin still ask for those details.
"the end result is the same"
No it is not: with Bitcoin, an attacker knowing your billing info cannot steal your coins. With your CC info, he can make fraudulent purchases (obviously).
Even virtual credit cards are not safe from fraud. Some transactions over the maximum spending limit or expiration date might still go through [1]. This makes none of them truly single-use since multiple charges can go through. Also, they are a PITA to use especially if you want to regenerate a one-off CC number for every transaction (which nobody does - there is no such thing as a "token generator" as you claim). For these reasons banks have been in fact discontinuing virtual CC services over the last few years, eg. see [2].
By contrast, a Bitcoin transaction is truly a one-time payment that is cryptographically authorizing a specific payment amount to a specific address, and nothing more.
[1] http://lifehacker.com/5831160/use-virtual-credit-card-number... [2] http://slickdeals.net/f/6614180-discover-is-discontinuing-th...
No it is not: with Bitcoin, an attacker knowing your billing info cannot steal your coins. With your CC info, he can make fraudulent purchases (obviously).
Even virtual credit cards are not safe from fraud. Some transactions over the maximum spending limit or expiration date might still go through [1]. This makes none of them truly single-use since multiple charges can go through. Also, they are a PITA to use especially if you want to regenerate a one-off CC number for every transaction (which nobody does - there is no such thing as a "token generator" as you claim). For these reasons banks have been in fact discontinuing virtual CC services over the last few years, eg. see [2].
By contrast, a Bitcoin transaction is truly a one-time payment that is cryptographically authorizing a specific payment amount to a specific address, and nothing more.
[1] http://lifehacker.com/5831160/use-virtual-credit-card-number... [2] http://slickdeals.net/f/6614180-discover-is-discontinuing-th...
Credit card fraud is a problem for credit card companies, but as a user I couldn't care less. The last time someone copied my credit card I've got a call from Amex within a few days, they reversed the transactions and sent me a new card.
Of course Bitcoin would be more secure (I own some myself). But from a users point of view this additional security doesn't really matter too much. I rather pay with my credit card and get 1% cashback.
Of course Bitcoin would be more secure (I own some myself). But from a users point of view this additional security doesn't really matter too much. I rather pay with my credit card and get 1% cashback.
>> If the numerous and massive data breaches, and subsequent credit card theft and fraud events of the last few years have taught us anything, it is that yes paying in bitcoins has one fundamental advantage: you are never handing the store your full billing info which can be stolen and reused by fraudsters.
This is also the case with ICC/EMV cards, though the USA hasn't caught up to that for some reason.
--edit-- of course this only applies to physical transactions, online transactions are still vulnerable, yes.
This is also the case with ICC/EMV cards, though the USA hasn't caught up to that for some reason.
--edit-- of course this only applies to physical transactions, online transactions are still vulnerable, yes.
> paying in bitcoins has one fundamental advantage: you are never handing the store your full billing info which can be stolen and reused by fraudsters
This is why I use PayPal whenever I can
This is why I use PayPal whenever I can
That's not true, it's cheaper for me to buy things on Amazon with Bitcoin via Gyft (3% cashback) than using my credit card (1% cashback) or debit card (nada).
You're ignoring the cost of acquiring bitcoins in that 3%.
Also cheaper still to buy gift cards via raise, cardpool, giftcardgranny, hundreds of other results for "discount gift cards" which are 3%-6% off AND get your 1% cash back.
Also cheaper still to buy gift cards via raise, cardpool, giftcardgranny, hundreds of other results for "discount gift cards" which are 3%-6% off AND get your 1% cash back.
Please link me to a site that has Amazon gift cards at a greater than 3% discount. I tried searching last time someone gave me that reply and couldn't find one.
Who pays 3% markup to get their bitcoin? (coinbase is 1%)
I didn't say 3%. I said he didn't include it when saying he saved 3%.
Your own specious arguments also ignore the cost over exchange quoted prices in acquiring Bitcoin, and make a lot of incorrect assumptions to boot. You seem very vested in making this sound like bad news. I guess your job as a shill is in jeopardy? Better post more.
Isn't that illegal?
Credit card companies use to dictate that you couldn't charge different prices for them but they were sued and lost so now you can.
The Dodd-Frank act, 2010, with the Durbin Amendment, made it so that vendors could impose a restriction on credit card purchases up to 10 dollars. http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_...
Citation please. I've been charged extra at my favorite Chinese restaurant for using a card, so it's not that I don't believe you, but I would really like to know the relevant decision. (Upvoted)
Visa and Mastercard settled so there was no decision needed.
http://www.justice.gov/atr/public/press_releases/2010/262867...
I believe American Express settled later.
http://www.justice.gov/atr/public/press_releases/2010/262867...
I believe American Express settled later.
Paying in Bitcoin makes a lot of sense:
1) You don't have to provide private info like CC number.
2) If you bought bitcoins at X and now they are valued at 10X you may effectively enjoy 90% discount on all purchases.
All these mythical user-protecting chargebacks are almost never used by consumers for refunds (companies who care about brand help them settling refunds) and almost always for the cases when you CC details got stolen and used by someone else. Of course, bitcoin payments do not leak your private keys, so the entire class of problems goes away.
1) You don't have to provide private info like CC number.
2) If you bought bitcoins at X and now they are valued at 10X you may effectively enjoy 90% discount on all purchases.
All these mythical user-protecting chargebacks are almost never used by consumers for refunds (companies who care about brand help them settling refunds) and almost always for the cases when you CC details got stolen and used by someone else. Of course, bitcoin payments do not leak your private keys, so the entire class of problems goes away.
And if you bought bitcoin at 10X and they are now valued at X you may effectively enjoy paying 1000% of asking price on all purchases.
The vast majority of Bitcoin purchases happened at below the current market value. Which I guess is what makes people so bitter they didn't buy earlier?
>> All these mythical user-protecting chargebacks are almost never used by consumers for refunds (companies who care about brand help them settling refunds) and almost always for the cases when you CC details got stolen and used by someone else.
Companies who don't care about brand and companies who have not yet established a brand are, however, somewhat indistinguishable.
The chargeback facility (among others) provides a cushion and safety net to allow consumers to transact in cases where they are less than 100% certain who they are dealing with.
Removing it would kill the ability of smaller businesses to transact as people like me would never give them any cash, and I would advise my non-technical friends and family to behave similarly.
I know this disagrees with your view on the world, sorry.
Companies who don't care about brand and companies who have not yet established a brand are, however, somewhat indistinguishable.
The chargeback facility (among others) provides a cushion and safety net to allow consumers to transact in cases where they are less than 100% certain who they are dealing with.
Removing it would kill the ability of smaller businesses to transact as people like me would never give them any cash, and I would advise my non-technical friends and family to behave similarly.
I know this disagrees with your view on the world, sorry.
1) You're ordering something to be delivered you have to provide the same info.
2) True, but now once you've spent them does it make sense to buy them back and do it again?
Because most companies are afraid of chargebacks and will take steps to avoid them. Bitcoin payments don't but any minor lapse in personal computer security likely will.
2) True, but now once you've spent them does it make sense to buy them back and do it again?
Because most companies are afraid of chargebacks and will take steps to avoid them. Bitcoin payments don't but any minor lapse in personal computer security likely will.
For 2), surely you would have to pay capital gains tax on the increase in value. To be fully compliant with the law, it may be hard to enforce in reality.
Depends on your country of residence. In the US, I believe this is the case, in Denmark, this isn't the case (http://taxinsights.ey.com/archive/archive-news/danish-assess...).
Of course. It does vary on a country to country basis. I believe most countries consider BTC an asset rather than a currency, thus incurring the capital gains tax.
Sweden for example does, and I believe Norway as well. Funny that, Scandinavian countries usually have similar legislation. ( http://blog.btcx.se/bitcoin-nytt/dags-att-deklarera-bitcoin-... )
Sweden for example does, and I believe Norway as well. Funny that, Scandinavian countries usually have similar legislation. ( http://blog.btcx.se/bitcoin-nytt/dags-att-deklarera-bitcoin-... )
And if you bought Bitcoins at X and now they're valued at .1X... now what? A revolutionary new way to gamble on the price of an online purchase?
That never happened since 2011. Consider also investing for at least a year or two: in such case you have a 99,9% chance to be in a big fat profit. Wishing to buy BTC and get rich quick is a huge gamble. Or if you are not interested in holding BTC at all and only buy it to access certain markets (e.g. where CC do not work), then it's stable enough on an hourly basis. You'd waste more money on exchange fees anyway.
A credit card number is vaguely sensitive. It certainly isn't meaningfully private. A home address is similar, except it is less sensitive.
> lose all consumer protections
Nonsense. Consumer protection laws apply no matter the payment method.
Nonsense. Consumer protection laws apply no matter the payment method.
"Consumer protections" - not "Consumer protection laws" - All of the "consumer protections" I have actively used were given to me not by law, but by the credit card company. (some of those are mandated by law, of course.)
Of course, I have been passively protected by consumer protection laws, and yes, I would receive the same passive protections when paying via cash or bitcoin.... but when those laws are violated, it's almost never worth it to bring up a legal case. If I pay cash, and I get screwed, I complain to the vendor. However, if the vendor does not give me satisfaction, it's usually just not worth paying a lawyer.
It /is/ however, often worth it for me to call my credit card and get them to take the charge off.
While the credit card might not get me many (or any) more legal rights, it certainly gives me rather a lot more practical power if I have a dispute with a retailer (vs. using cash or bitcoin)
Of course, I have been passively protected by consumer protection laws, and yes, I would receive the same passive protections when paying via cash or bitcoin.... but when those laws are violated, it's almost never worth it to bring up a legal case. If I pay cash, and I get screwed, I complain to the vendor. However, if the vendor does not give me satisfaction, it's usually just not worth paying a lawyer.
It /is/ however, often worth it for me to call my credit card and get them to take the charge off.
While the credit card might not get me many (or any) more legal rights, it certainly gives me rather a lot more practical power if I have a dispute with a retailer (vs. using cash or bitcoin)
Not true in all places.
In the UK part of your protection is the fact that there is a third party involved (your credit card issuer) who has a variety of responsibilities to the consumer over and above the responsibilities of the retailer. In practice this means you get better protection as the money can be taken back from the retailer by a third party with a big stick.
In the UK part of your protection is the fact that there is a third party involved (your credit card issuer) who has a variety of responsibilities to the consumer over and above the responsibilities of the retailer. In practice this means you get better protection as the money can be taken back from the retailer by a third party with a big stick.
Credit card chargebacks have nothing to do with consumer protection laws. It is just a feature of the credit card payment system (good or bad, depending on point of view).
False.
Here in the UK the credit card company, as a party to an incurred debt, has a legal responsibility to the consumer that encompasses various things like product quality and returns/refunds. If the retailer does not live up to their responsibilities then the CC provider has a legal responsibility to return the money.
This is under section 75 of the Consumer Credit Act.
Here in the UK the credit card company, as a party to an incurred debt, has a legal responsibility to the consumer that encompasses various things like product quality and returns/refunds. If the retailer does not live up to their responsibilities then the CC provider has a legal responsibility to return the money.
This is under section 75 of the Consumer Credit Act.
More info on these protections here:
http://www.moneysavingexpert.com/shopping/section75-protect-...
http://www.moneysavingexpert.com/shopping/section75-protect-...
You get no additional protections regarding quality/returns/refunds when paying by credit card, that you wouldn't have if paying by bitcoin, or cash.
You get the option of pulling the payment back unilaterally, but this is subject to those same consumer protection laws, so the merchant can still come after you if you do so without a valid reason as stipulated by the law.
You get the option of pulling the payment back unilaterally, but this is subject to those same consumer protection laws, so the merchant can still come after you if you do so without a valid reason as stipulated by the law.
>> You get no additional protections regarding quality/returns/refunds when paying by credit card, that you wouldn't have if paying by bitcoin, or cash.
I'm sorry, this is just not true here in the UK (which is what I originally said, it's not the same everywhere), you get assurances from another party in case the merchant disappears, goes bust or just finds a way not to play ball.
This goes well beyond chargebacks and can include things like the CC company being on the hook for repair charges etc. if the goods are not up to scratch, long after the original transaction.
If you need further information then try looking up Section 75 of the Consumer Credit Act. It's all in there and there are loads of consumers' rights guides on the net that will give you the layman's interpretation of the law.
Yes, chargebacks are the usual method a CC company uses in a variety of circumstances, but that doesn't change the validity of my statement - in some places some payment methods will get you a whole load of extra rights compared to BTC or cash.
I'm sorry, this is just not true here in the UK (which is what I originally said, it's not the same everywhere), you get assurances from another party in case the merchant disappears, goes bust or just finds a way not to play ball.
This goes well beyond chargebacks and can include things like the CC company being on the hook for repair charges etc. if the goods are not up to scratch, long after the original transaction.
If you need further information then try looking up Section 75 of the Consumer Credit Act. It's all in there and there are loads of consumers' rights guides on the net that will give you the layman's interpretation of the law.
Yes, chargebacks are the usual method a CC company uses in a variety of circumstances, but that doesn't change the validity of my statement - in some places some payment methods will get you a whole load of extra rights compared to BTC or cash.
Yes I meant payment system features and reversibility without having to go to court(if its even an option for you on international orders).
The Bitcoin scripting language actually does provide a great foundation for payment reversibility and solutions for this do exists. I'm working on one such solution, https://www.bitrated.com/.
Edit: We're about to re-launch Bitrated in about a month, with a new system that's been written from the grounds up. If anyone reading this is interested in seeing what we've been working on and would like to provide some feedback before the public launch, please contact me (email in my profile). </shameless-plug>
Edit: We're about to re-launch Bitrated in about a month, with a new system that's been written from the grounds up. If anyone reading this is interested in seeing what we've been working on and would like to provide some feedback before the public launch, please contact me (email in my profile). </shameless-plug>
To be honest, for some merchants (Amazon) I really don't need my credit card protections and I'd rather get the 2% back.
> almost no consumer growth in the bitcoin world
There are quite a few metrics on http://www.bitcoinpulse.com/ that seem to indicate otherwise.
There are quite a few metrics on http://www.bitcoinpulse.com/ that seem to indicate otherwise.
Which ones? The number of accounts on a website? The number of transactions is flat as is the transaction volume.
I was going by the number of wallets & some of the repo stats.
You're right though, it's not gaining consumer adoption, but it is gaining merchant, infrastructure and developer interest.
You're right though, it's not gaining consumer adoption, but it is gaining merchant, infrastructure and developer interest.
Yup, definitely gaining merchant adoption(its awesome for merchants) and developer interest(its really interesting technology).
I think a lot of the merchant adoption is driven more by marketing than anything; newegg will get a spike of sales from enthusiastic bitcoiners because of this.
I don't need consumer protection at Newegg. I don't know anyone that's ever had an issue with them.
LOL.
Until one day it all goes wrong, or management change and don't care about service so much.
And that also acts as a barrier for new entrants into the market, stifling competition. When you have to just trust that a new market entrant won't run off with your cash, why would you ever risk it?
There's a hell of a lot that consumer protections and existing payment instruments give us.
Until one day it all goes wrong, or management change and don't care about service so much.
And that also acts as a barrier for new entrants into the market, stifling competition. When you have to just trust that a new market entrant won't run off with your cash, why would you ever risk it?
There's a hell of a lot that consumer protections and existing payment instruments give us.
So use Bitcoin where you trust the seller or the amount is small enough that you don't care and pay the 2-3% credit card insurance premium everywhere else. Win-win.
Agreed. I've had to return things, replace damaged shipments, etc. Newegg has always been extremely helpful. I guess dishonest people can't imagine a scenario where merchants behave that way to, I don't know, retain customers instead of being forced to because their payments are being held hostage.
>> I guess dishonest people can't imagine a scenario where merchants behave that way to, I don't know, retain customers instead of being forced to because their payments are being held hostage.
There are literally thousands of years of history to look at that will show you how naive and ridiculous this view is. Try doing a quick web search on "Caveat Emptor".
And for more recent examples, well try reading anything much about the last few years of bitcoin.
There are literally thousands of years of history to look at that will show you how naive and ridiculous this view is. Try doing a quick web search on "Caveat Emptor".
And for more recent examples, well try reading anything much about the last few years of bitcoin.
Great. So, when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
This is exactly a "schlep blindness" problem that a startup could be solving. Deliver a turnkey solution for consumers to store their own coins. Don't make them learn a labyrinthian set of rules, or worry about what's dangerous or what isn't. Protect consumers, and bitcoin adoption will follow. Large-scale bitcoin adoption can't occur until bitcoin is made safe.
Did you hear about the guy who took his macbook into an Apple store for some routine repairs, and one of their employees made off with his 15 BTC? The employee hooked his harddrive up to a different computer, scanned it for a "wallet.dat" file, saw it was unencrypted, and robbed him. Was it dumb of this customer not to be using encryption? Yes. On the other hand, was it dumb of him to be storing so much wealth in bitcoin right now, given how easy it is to lose your money? Objectively, yes.
This isn't an insurmountable problem, but people have to start working on it in order to solve it.
This is exactly a "schlep blindness" problem that a startup could be solving. Deliver a turnkey solution for consumers to store their own coins. Don't make them learn a labyrinthian set of rules, or worry about what's dangerous or what isn't. Protect consumers, and bitcoin adoption will follow. Large-scale bitcoin adoption can't occur until bitcoin is made safe.
Did you hear about the guy who took his macbook into an Apple store for some routine repairs, and one of their employees made off with his 15 BTC? The employee hooked his harddrive up to a different computer, scanned it for a "wallet.dat" file, saw it was unencrypted, and robbed him. Was it dumb of this customer not to be using encryption? Yes. On the other hand, was it dumb of him to be storing so much wealth in bitcoin right now, given how easy it is to lose your money? Objectively, yes.
This isn't an insurmountable problem, but people have to start working on it in order to solve it.
I think hardware wallets (like the Trezor), or smartphones with a TPM module is the solution.
This will take time, however (the latter more than the former).
The reason it will take time is that the concept of storing your own money digitally, like is the case with Bitcoin, is an entirely new concept that software and hardware needs to adapt to. With all other solutions (VISA, PayPal, bank wires), you're asking someone else to transfer your money, with Bitcoin you're doing it yourself. Basically, each user needs a greater level of security than PayPal, VISA and banks have internally, since Bitcoin payments are generally irreversible after an hour or so (and often much sooner).
This isn't something that is done overnight, and people have started working on it, but it takes time to, first of all, develop the hardware, and, second of all, develop and implement the interface between the hardware wallet and the actual payment request (ie. when I arrive at a BitPay invoice payment page, how do I pay using my hardware wallet?).
This will take time, however (the latter more than the former).
The reason it will take time is that the concept of storing your own money digitally, like is the case with Bitcoin, is an entirely new concept that software and hardware needs to adapt to. With all other solutions (VISA, PayPal, bank wires), you're asking someone else to transfer your money, with Bitcoin you're doing it yourself. Basically, each user needs a greater level of security than PayPal, VISA and banks have internally, since Bitcoin payments are generally irreversible after an hour or so (and often much sooner).
This isn't something that is done overnight, and people have started working on it, but it takes time to, first of all, develop the hardware, and, second of all, develop and implement the interface between the hardware wallet and the actual payment request (ie. when I arrive at a BitPay invoice payment page, how do I pay using my hardware wallet?).
Your question doesn't make sense to me.
> when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
As you point out in your own statement, there are companies meeting the need for a "turnkey solution": you list Coinbase and they are an excellent example of a company doing that well and being quite successful at it.
You apparently reject them because working with Coinbase requires the customer to "trust their coins to a third party service". Trusting the third party service is pretty much mandatory for using ANY third party service. Imagine a hypothetical service that provided "turnkey" software to store wallets on your own computer -- you would still need to fully trust the provider of this service to ensure that they actually stored the money rather than siphoning it off someplace else.
The only way to (mostly) avoid having to trust a third party is to avoid using a "turnkey" solution that is fully packaged without user serviceable parts. You would instead need to learn on your own how to safely store the coins yourself. Which is ALSO a choice, and many people do it. You complain that it takes "a solid week" to learn how to do this -- and indeed, it does take a few days to become an expert on any subject; there are 10 minute tutorials, but I presume you (rightfully) reject them as being insufficient to really teach a user enough to be fully safe.
Honestly, I think that you are just being unreasonable in your expectations.
> when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
As you point out in your own statement, there are companies meeting the need for a "turnkey solution": you list Coinbase and they are an excellent example of a company doing that well and being quite successful at it.
You apparently reject them because working with Coinbase requires the customer to "trust their coins to a third party service". Trusting the third party service is pretty much mandatory for using ANY third party service. Imagine a hypothetical service that provided "turnkey" software to store wallets on your own computer -- you would still need to fully trust the provider of this service to ensure that they actually stored the money rather than siphoning it off someplace else.
The only way to (mostly) avoid having to trust a third party is to avoid using a "turnkey" solution that is fully packaged without user serviceable parts. You would instead need to learn on your own how to safely store the coins yourself. Which is ALSO a choice, and many people do it. You complain that it takes "a solid week" to learn how to do this -- and indeed, it does take a few days to become an expert on any subject; there are 10 minute tutorials, but I presume you (rightfully) reject them as being insufficient to really teach a user enough to be fully safe.
Honestly, I think that you are just being unreasonable in your expectations.
there are companies meeting the need for a "turnkey solution": you list Coinbase and they are an excellent example of a company doing that well and being quite successful at it.
And if Coinbase goes bankrupt, all their users lose all their money.
I've written about this extensively several times before, so I won't rehash the old points. But the summary is, if you trust your money to an entity that doesn't have insurance, you're being very, very brave. Coinbase can go bankrupt for a multitude of reasons, some of which aren't fair.
One could counter this with, "Don't store very much money in Coinbase." Sure, but then consumers don't have much money on hand to buy things on a whim, which reduces consumer adoption. That's why I've been saying: Make bitcoin safe, and adoption will follow.
And if Coinbase goes bankrupt, all their users lose all their money.
I've written about this extensively several times before, so I won't rehash the old points. But the summary is, if you trust your money to an entity that doesn't have insurance, you're being very, very brave. Coinbase can go bankrupt for a multitude of reasons, some of which aren't fair.
One could counter this with, "Don't store very much money in Coinbase." Sure, but then consumers don't have much money on hand to buy things on a whim, which reduces consumer adoption. That's why I've been saying: Make bitcoin safe, and adoption will follow.
So can a bank and you will loose all your money just ask the people of Cyprus.
Bitcoin has been around for 4 years banks for several hundreds.
Your point is true but trivial and hardly says anything conclusive or useful other than you don't trust 3rd parties.
With time you wont have to.
Bitcoin has been around for 4 years banks for several hundreds.
Your point is true but trivial and hardly says anything conclusive or useful other than you don't trust 3rd parties.
With time you wont have to.
> So can a bank and you will loose all your money just ask the people of Cyprus.
This is a silly comparison. In the USA, all deposits under $200k are guaranteed by the FDIC [1]. If the bank folds, you still get your money from the federal government. I imagine many similar institutions exist in other countries.
Why there was no such institution in Cyprus baffles me. Perhaps they haven't had to deal with institutional bank failures before. The point is that deposits in Coinbase or other bitcoin institutions are not covered by any such insuring body. They are hence inherently far riskier.
It all comes down to likelihood of failure. When institutions like coinbase fail, we call that "thursday". But if the FDIC folds, you should be less worried about your money and more concerned about hoarding ammo and cigarettes.
1. http://en.wikipedia.org/wiki/FDIC
This is a silly comparison. In the USA, all deposits under $200k are guaranteed by the FDIC [1]. If the bank folds, you still get your money from the federal government. I imagine many similar institutions exist in other countries.
Why there was no such institution in Cyprus baffles me. Perhaps they haven't had to deal with institutional bank failures before. The point is that deposits in Coinbase or other bitcoin institutions are not covered by any such insuring body. They are hence inherently far riskier.
It all comes down to likelihood of failure. When institutions like coinbase fail, we call that "thursday". But if the FDIC folds, you should be less worried about your money and more concerned about hoarding ammo and cigarettes.
1. http://en.wikipedia.org/wiki/FDIC
The Cyprus banks didn't fail, the government confiscated a fraction of account balances. The FDIC guarantee wouldn't help you in that situation or many other types of national calamities.
You could use multisig transactions so that you don't put your trust centrally in one third party service, for example you could trust three independent services to each hold a private key, that way 2/3 would have to be compromised at the same time in order to for something bad to happen. For more robust security you could add services and need 3/5, 6/10, etc. I'm not sure of the exact implementation details, but in theory I think that would be one solution.
> https://en.bitcoin.it/wiki/Contracts#Theory
> https://en.bitcoin.it/wiki/Contracts#Theory
Unfortunately, the naive implementation of this precludes day trading.
> Your question doesn't make sense to me.
It is because you don't understand the nature of bitcoin or it's colorful history with third party services like Coinbase. The question is a good one and not at all unreasonable if you understand bitcoin. The system is supposed to be trustless, and one aspect of this is that you don't need a trusted third party to conduct safe and fast transactions with another individual. Another aspect is that you don't have to trust someone else to hold your money, but then of course the security is up to you, which has so far been something of a problem.
As others have mentioned, multi-sig addresses are one part of the solution (doesn't BitGo support these now?), and another is potentially a hardware solution. But the current Coinbase offerings are inadequate, and those types of solutions will eventually be replaced or people will continue to lose their money when they trust someone else with their private keys.
There is no insurance for stolen, hacked, or otherwise lost keys. In the banking system, when money is "lost", the loss is spread out among everyone, which is nice if you were the affected party but is a pretty raw deal for everyone else (cf. banking crisis of the past 5+ years). When bitcoins are lost, there is no recourse.
It is because you don't understand the nature of bitcoin or it's colorful history with third party services like Coinbase. The question is a good one and not at all unreasonable if you understand bitcoin. The system is supposed to be trustless, and one aspect of this is that you don't need a trusted third party to conduct safe and fast transactions with another individual. Another aspect is that you don't have to trust someone else to hold your money, but then of course the security is up to you, which has so far been something of a problem.
As others have mentioned, multi-sig addresses are one part of the solution (doesn't BitGo support these now?), and another is potentially a hardware solution. But the current Coinbase offerings are inadequate, and those types of solutions will eventually be replaced or people will continue to lose their money when they trust someone else with their private keys.
There is no insurance for stolen, hacked, or otherwise lost keys. In the banking system, when money is "lost", the loss is spread out among everyone, which is nice if you were the affected party but is a pretty raw deal for everyone else (cf. banking crisis of the past 5+ years). When bitcoins are lost, there is no recourse.
> So, when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
Given the huge amount of developer interest, I'd be pretty surprised if several groups of smart people aren't kept awake at night by their awesome ideas about how to fix this.
Given the huge amount of developer interest, I'd be pretty surprised if several groups of smart people aren't kept awake at night by their awesome ideas about how to fix this.
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There is people working on that issue. For example Trezor is an easy to use bitcoin safe. I think it's headed in the right direction: http://www.bitcointrezor.com/
Here's the Bitcoin theft reference: https://news.ycombinator.com/item?id=7233230
This seems pretty huge for Bitcoin. Newegg sells much more than computer parts now. Glad to see that Newegg is headed back more to their roots though
i would rather see they dump the crappy products that now dominates their catalog and amazon's.
the world does not need yet another 500 models of USB powered ventilators.
the world does not need yet another 500 models of USB powered ventilators.
Newegg itself is not accepting Bitcoin, it is not keeping a balance in Bitcoin, and it has no exposure to Bitcoin related risk.
It has a payment processor, Bitpay, that accepts Bitcoin. As long as you have a competent engineer on staff, it's about as difficult as accepting PayPal.
It's nice that this is happening, but the headline should be, "BitPay lands Newegg as client". The maturity of the services around Bitcoin helps everyone that holds them, so it's not unimportant. It's just a very, very far stretch from a merchant directly accepting and holding a currency balance in BC.
It has a payment processor, Bitpay, that accepts Bitcoin. As long as you have a competent engineer on staff, it's about as difficult as accepting PayPal.
It's nice that this is happening, but the headline should be, "BitPay lands Newegg as client". The maturity of the services around Bitcoin helps everyone that holds them, so it's not unimportant. It's just a very, very far stretch from a merchant directly accepting and holding a currency balance in BC.
> it's about as difficult as accepting PayPal
Hah! Bitpay fails often, and it fails in mysterious ways. Manual intervention on up to 10% of payments is no beuno.
Hah! Bitpay fails often, and it fails in mysterious ways. Manual intervention on up to 10% of payments is no beuno.
A lot of people are missing the point with these large sellars accepting bitcoin. It's not that they expect sales to explode but rather they want to experiment and get a feel for how it works.
There will be a time where crypto-currency will be as normal as paying with credit card or cash.
There will be a time where crypto-currency will be as normal as paying with credit card or cash.
Or they see overstock getting a lot of press out of it and want on board.
Coinbase and BitPay signing up new retailers doesn't provide me additional belief that bitcoin is viable. The retailer doesn't believe in bitcoin. They get cash out ASAP.
For a retailer, if they think they can move units by partnering with someone who will convert BC to cash, sure whatever. It's like adding PayPal.
You don't see the 10,000,000 new consumers bought bitcoins!!! Who knew cryptocurrency could burn holes in pockets!??!?! articles because that's not happening.
The real problem was never "people don't have a place to spend bitcoin." It was "people don't have time or risk tolerance to manage bitcoin."
For a retailer, if they think they can move units by partnering with someone who will convert BC to cash, sure whatever. It's like adding PayPal.
You don't see the 10,000,000 new consumers bought bitcoins!!! Who knew cryptocurrency could burn holes in pockets!??!?! articles because that's not happening.
The real problem was never "people don't have a place to spend bitcoin." It was "people don't have time or risk tolerance to manage bitcoin."
Every time Bitcoin makes a first step, haters will ask "but where is the second step?".
By the way, Overstock is now holding bitcoins (about 3% of their Bitcoin sales). I wouldn't be surprised if Newegg did the same after some time.
By the way, Overstock is now holding bitcoins (about 3% of their Bitcoin sales). I wouldn't be surprised if Newegg did the same after some time.
Pretty amazing - I went and made a purchase on NewEgg using CoinPocket on my iphone - total time for transaction was under 10 seconds, including the time to scan the QR code, click send, and have Newegg recognize I'd sent payment.
CoinPocket / NewEgg were within $0.15 of their exchange amounts on a $31.89 purchase. So, CoinPocket thought it was $31.89 that I was sending, and NewEgg thought I was sending $31.74.
All in All - Bitcoin made purchasing a lot more easy than having to type in a Credit Card number or login to Paypal.
CoinPocket / NewEgg were within $0.15 of their exchange amounts on a $31.89 purchase. So, CoinPocket thought it was $31.89 that I was sending, and NewEgg thought I was sending $31.74.
All in All - Bitcoin made purchasing a lot more easy than having to type in a Credit Card number or login to Paypal.
Could somebody explain the reasoning behind "customers have 15 minutes to complete their bitcoin payment before their invoice expires"
Bitcoin is decentralised, so, from Neweggs perspective, the transaction is never completed 'online'. Their payment processor (I'm guessing it's going to be Bitpay) has to wait until they see your transaction on the Bitcoin network before they tell Newegg that it's paid. Think of it as waiting for a cheque to arrive. A timeout is just sensible so you're not reserving stock.
That's not what the timer is referring to. The 15 minute timer is in place due to the exchange rate. Newegg prices their items in dollars, BitPay converts it to a BTC price and presents that price to the user. They can't show that same BTC price forever, becasue if the price of bitcoin drops by 50% over 24 hours, and you decide to leave your window open and order then instead of now, you will get whatever you are buying for half the price. Bitpay guaranteed the USD price that was set on the item to the merchant. Now they owe it, but have only collected half. Thus Bitpay would be out hundreds of dollars (or whatever half your order is). Similarly, if the price rose by 100% over 24 hours you could accidentally pay double. So they put a timer on it.
If it's a moving spot price that lasts just 15 minutes, is the exchange market deep enough to keep people from abusing this?
By placing a huge number of buy orders at a time when the market is quite shallow, all within a few minutes (temporarily driving the exchange price up sharply) the BTC-denominated price of goods on Newegg can become very low in a 15-minute windows.
Huge numbers of orders ($millions) could then be placed at that low BTC price, included by a distributed group of people.
What protects against this? Moving the price for 15 minutes seems quite plausible but I don't know the details - and am not an expert.
By placing a huge number of buy orders at a time when the market is quite shallow, all within a few minutes (temporarily driving the exchange price up sharply) the BTC-denominated price of goods on Newegg can become very low in a 15-minute windows.
Huge numbers of orders ($millions) could then be placed at that low BTC price, included by a distributed group of people.
What protects against this? Moving the price for 15 minutes seems quite plausible but I don't know the details - and am not an expert.
Honestly, the price of the BTC is decently stable, I wouldn't expect anything to happen which would effect their prices enough to make a difference within a 15-minute window.
Ex. The Bitcoin is on an uptrend and went up 30$ in the window between when I checked it ~8 hours ago and just now. Even if it managed to do that in a 15-minute window of time, that's only 30-dollars off of every 600 dollars you spend. A 100$ dollar order will only see a 5 dollar 'discount'. And if it goes the other way, they make a bit more, so over time I'm guessing it'll mostly even out, Maybe a bit more in the consumers favor if we assume the BTC price will end-up going up.
Ex. The Bitcoin is on an uptrend and went up 30$ in the window between when I checked it ~8 hours ago and just now. Even if it managed to do that in a 15-minute window of time, that's only 30-dollars off of every 600 dollars you spend. A 100$ dollar order will only see a 5 dollar 'discount'. And if it goes the other way, they make a bit more, so over time I'm guessing it'll mostly even out, Maybe a bit more in the consumers favor if we assume the BTC price will end-up going up.
I mean, e.g. buying $800K worth of bitcoin in 15 minutes, so that you can increase the price and then buy $5M worth of goods NewEgg - would $800K in fifteen minutes press newegg's btc-denominated price well below wholesale on those same electronic goods?
The lower graph here shows the depth of the market. Right now, for $800k USD, you can move the price from $656/BTC to $665/BTC. So you might get a $67,700 discount on your $5,000,000 order.
Edit: spaced the link https://bitcoinity.org/markets
Edit: spaced the link https://bitcoinity.org/markets
This is good, let's analyze a bit more. It sounds like you know what you're doing. (I don't.)
1. Note you get bitcoins during your manipulation as well - so how much did you overpay for the bitcoins that it took to get you the $67K discount? I count that you achieved a 1.37% rise in price, so even if you put in your full $800K at the higher price, that cost you $10,960 in overpayment. There is a direct relationship between the amount of move that you cause, and the amount that you overpay. So the question is, what that relationship is - we have to compare it with the profits from the NewEgg orders at the manipulated price.
1b. Also note that there is a chance you can sell some of them back at a slightly increased price if NewEgg confirms your order quickly, as you've just filled all the lower-price bids on the exchange you just manipulated.
If nobody knows about your manipulation directly, you might even cause a bull run where people think the price is just going to go up and up - you only meant to manipulate it to a brief target price, not caring about the price fall after, but maybe you can sell at a profit as a follow-on effect.
2. On the other hand, $67,700 discount on $5M order is nothing – it doesn’t cause the price to fall below wholesale, so there’s no reason to do the manipulation, since NewEgg isn’t offering cash, it’s offering product. The question then becomes: how much would we have to increase „1a” (the $10K ”fee” you paid for a 1.37% drop) by, to cause an, e.g., 15% drop, 20% drop, 25% drop, 30% drop, 35% drop, 50% drop, 75% drop, 80% drop, 95% drop. That would be interesting in table form. The drop would have to be high, as the manipulator would have to get product below wholesale price.
3. $5M is not an upper limit. In a distributed way, there’s no way many customers couldn’t place $10M in orders together. However, they would to coordinate and play ball with each other: if any of them knows that manipulation will happen trying to corner a shallow exchange market, they can take the other side of the transaction. If they know that at a certain time, $15M will be spent on manipulating the spot price for 15 minutes, they can just set aside $15M to place on asks on the other side. So it’s quite dangerous, especially if the price movement is intended to be high. The element of surprise would have to be high.
This seems mostly a theoretical exercise, as in practice NewEgg could fail to honor prices that are outside the previous day’s intraday, or that sort of thing.
Still, I'm curious how the numbers would work.
1. Note you get bitcoins during your manipulation as well - so how much did you overpay for the bitcoins that it took to get you the $67K discount? I count that you achieved a 1.37% rise in price, so even if you put in your full $800K at the higher price, that cost you $10,960 in overpayment. There is a direct relationship between the amount of move that you cause, and the amount that you overpay. So the question is, what that relationship is - we have to compare it with the profits from the NewEgg orders at the manipulated price.
1b. Also note that there is a chance you can sell some of them back at a slightly increased price if NewEgg confirms your order quickly, as you've just filled all the lower-price bids on the exchange you just manipulated.
If nobody knows about your manipulation directly, you might even cause a bull run where people think the price is just going to go up and up - you only meant to manipulate it to a brief target price, not caring about the price fall after, but maybe you can sell at a profit as a follow-on effect.
2. On the other hand, $67,700 discount on $5M order is nothing – it doesn’t cause the price to fall below wholesale, so there’s no reason to do the manipulation, since NewEgg isn’t offering cash, it’s offering product. The question then becomes: how much would we have to increase „1a” (the $10K ”fee” you paid for a 1.37% drop) by, to cause an, e.g., 15% drop, 20% drop, 25% drop, 30% drop, 35% drop, 50% drop, 75% drop, 80% drop, 95% drop. That would be interesting in table form. The drop would have to be high, as the manipulator would have to get product below wholesale price.
3. $5M is not an upper limit. In a distributed way, there’s no way many customers couldn’t place $10M in orders together. However, they would to coordinate and play ball with each other: if any of them knows that manipulation will happen trying to corner a shallow exchange market, they can take the other side of the transaction. If they know that at a certain time, $15M will be spent on manipulating the spot price for 15 minutes, they can just set aside $15M to place on asks on the other side. So it’s quite dangerous, especially if the price movement is intended to be high. The element of surprise would have to be high.
This seems mostly a theoretical exercise, as in practice NewEgg could fail to honor prices that are outside the previous day’s intraday, or that sort of thing.
Still, I'm curious how the numbers would work.
IIRC someone implemented this attack (buying or selling small amounts could move the price on BitStamp and Coinbase would offer to buy/sell large amounts at that price), notified Coinbase, and now it's fixed.
Interesting :) Do you know what the fix was?
I think they were using the "last price" instead of the "weighted average", or some stupid mistake like that, and obviously without any sanity checks. Meaning someone could manipulate Coinbase's price by placing a tiny buy order for a very high price or a tiny sell order for a very low price.
What protects against this is that if you put in a bunch of buy orders for BTC at high dollar amounts, a rash of people would rush to sell their BTC.
You might temporarily drive up the exchange price sharply, but at the cost of buy a ton of BTC at an inflated price.
You might temporarily drive up the exchange price sharply, but at the cost of buy a ton of BTC at an inflated price.
Of course, that's the cost. But how much do you have to spend in bitcoins to drive the price up that much?
e.g. buying $800K worth of bitcoin in 15 minutes, so that you can increase the price of BTC and then buy $5M worth of goods NewEgg - would $800K in fifteen minutes press newegg's btc-denominated price well below wholesale on those same electronic goods? (including to cover what you overpaid for the btc to execute your position.)
e.g. buying $800K worth of bitcoin in 15 minutes, so that you can increase the price of BTC and then buy $5M worth of goods NewEgg - would $800K in fifteen minutes press newegg's btc-denominated price well below wholesale on those same electronic goods? (including to cover what you overpaid for the btc to execute your position.)
Taking into account the potential for extreme value fluctuation seems a reasonable guess to me.
I'd say it's because bitcoin transactions are not instant. To fully 'verify' that a transaction has taken place, they need 6 confirmations. The transaction may within a few seconds show up on the bitcoin blockchain, but it can't be fully trusted until it has at least 6 confirmations. Waiting for that can take some time.
I'm pretty sure Bitcoin payment processors like Bitpay aren't waiting for 6 full confirmations.
yeah. Looks like it's configurable.
https://bitcoin.stackexchange.com/questions/12033/how-many-c...
https://bitpay.com/downloads/bitpayApi.pdf “transactionSpeed” - "medium" An invoice is considered to be "confirmed" after 1 block confirmation (~10 minutes).
https://bitcoin.stackexchange.com/questions/12033/how-many-c...
https://bitpay.com/downloads/bitpayApi.pdf “transactionSpeed” - "medium" An invoice is considered to be "confirmed" after 1 block confirmation (~10 minutes).
BitPay doesn't wait for anything; it's the merchant that chooses how many confirmations to wait for (and incurs the risk of this choice).
It's something normal among bitcoin payment processors because of high price volatality (you could start a payment and only finish it if the bitcoin value goes down).
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To some of the common bitcoin concerns:
1) They're easy to steal! Look at this person who did $something_stupid and had all their coins stolen!
Yeah, sure...and if you had left $10,000 in cash just sitting on your table, the same thief could have stolen that as well. There are stories every single day of people having cash stolen from them. The people keeping that much value stored on their local machine are usually pretty crazy bitcoin evangelicals. These are not normal people who bought some coins on coinbase.
2) It doesn't do $things_credit_cards_do!
No, it doesn't! What you people seem to be missing is that it's a totally new way of transferring value. It has its own quirks, requires its own security models, etc. It also does $things_credit_cards_dont_do! That's why people have an interest in it!