Topic: An idea to move Bitcoin closer to everyday use (Read 1186 times)

Nothing about pegged value. A bit above I wrote:


Those POS solutions with automatic bank deposits (if it really works) may do only for so called civilized zone (SEPA or USA). Not bad share but there is 90% of the remaining world. And also entity should want to hold and use Bitcoin further, not rid of it immediately after income. This offered way is rather extensive for Bitcoin adoption process. 

Ok, but you're just talking about volatility.  Having an 'official rate' doesn't help that, unless you mean a pegged value which is impossible with Bitcoin.  Is that what you're suggesting?

And I think POS/ecommerce solutions like Bitpay and Coinbase do automatic conversion and automatic bank deposits already.

For 4 year I was working as an exchanger and a merchant, selling goods for Bitcoin. I did all my best to spread adoption of Bitcoin at least in my country. Therefore I got certain thoughts which I try to explain.

Firstly understand why such systems like PayPal adopted easily. Let put aside that convenient fact that PP-USD is almost equal to USD. "Almost" because due to fees on income and withdrawal PP-USD got less value than cash USD. Most important part that PayPal offers single point responsibility services to the merchant. Once POS plugged to merchant site it is PayPal who cares all from payment confirmation to exchange rate setting.

In Bitcoin especially in the first years from the merchant view what was offered was nightmare. Only geeks or total fans of Bitcoin would adopt it for business. Nowadays it looks much better while looking to POS system offers. But still they all have main problem which is looseness in exchange rate formation (which I explained in posts above). While in PayPal exchange rate is optional feature, in Bitcoin it is vital. Though situation improved but we have to admit that at the moment we can't offer merchant fully reliable POS solution. If it's self-contained box then it stores funds at a third party (which is anti-Bitcoin tendency). If it's privately held wallet then merchant gets whole load of headache to maintain POS system built on top of it.

Of course what I offer is not panacea which will make Bitcoin adopted everywhere immediately. I didn't promise that. It is just another step towards that direction.

And once more. Guys who sell things and exchange through forum (this one or others). No offense but it is not about you. I am talking about adoption by serial sellers. Small, medium, large.

Just because some currencies may be pegged doesn't change the validity of my point.
Bitcoin is obviously not pegged.

Anyway, I'm not sure why you think having some official rate would change much.
Let's say such a thing existed.  How does that substantially help Bitcoin adoption?

Exactly! it will be different on the next block. That is the point. It is not directive issued by someone. It is just "official" ascertaining or the market price snapshot.

What we need it for? Firstly it is convenience. Every single merchant don't have to analyse and calculate average price from different major exchanges. Merchant don't have to trust any third party website doing this work for him. As soon as this value is already average for the market and confirmed along with the block it may be well trusted.

Secondly there are two side effects which I found very nice. We say "market price". Who forms that market price? Stock exchange players. It means "Wall Street" of the Bitcoin community. Doesn't it look familiar and dull? If we allow any peer offer its price it is going to be more democratic (and fun). If you are fat wallet holder fine bully the price. If you are bitcoin-poor lower it hoping to buy more. Obviously all nonsense offers will be just dumped.

Another side effect is that in order to qualify peer's offer algorithm have to compare it with the last confirmed rate. Therefor huge sudden drops or raises due to technical problems in exchanges will be smoother and won't raise panic. It makes Bitcoin more stable.

You are incorrect in your thesis. In the USA where local currency is the world reserve currency obviously no "official" rate exchange. But in other countries which live in Bretton Woods/Jamaica monetary system local currency is tightened to USD. They do have "official" rate exchange of local currency to USD issued by the Central Bank of that country. It may have different status from strict to advised, allows wide or narrow margins for commercial operations. But it does exist. So whenever business entities negotiate they do not argue, let use rate of bank "A", or bank "B", or average of rates in banks "C" and "D". They always know that can open Central Bank website and get fair "official" rate.

i dont understand the point in adding exchange rate to each block as it will be different on the next block.  maybe op is confused on the notion of supply and demand and exchange rates from fiat to bitcoin.  no one sets these and the market would not use the "block rate" rather would still find its own rate.

Yep basically this.   Whats happened here is you believed the hype of government, who want you to believe in such things as official prices.   Or regulated markets with government official stamps, with tariffs and taxes of course are what BTC needs, too dangerous otherwise.  
 To me the whole point of BTC is it should be self regulating.   There is never an official price, capitalism is a free market and I'll give you however many dollars or euros for your BTC that I personally feel like and it is upto the other party to find the best price not a centrally dictated or controlled idea what is allowed
 
Some countries do have fixed exchange rates, usually these are communist or similar dictatorships with punishment possibly with death for those who have another price in mind.    Well meant ideas unfortunately turn to force to ensure their success.  Even in USSR their fixed exchange rate was false, people did use dollars and the price varied every day.   Nixon was a person who put in price controls at one point, you get the idea hopefully

The rate is the All-Time High, $1250 USD/BTC. Done. Nobody can sell at a loss anymore, it's now a currency.

Strike everything you just wrote. The issue is that the community at large can't understand that wage integration is paramount to success. Educate the bitcoin masses and you will see Bitcoin inch closer to general adoption.

Employees must rise up and demand BTC as their payment currency. You solve that riddle and fiat currencies around the globe will fall.

Those are good things you pointed out.
I won't look at the banking system the same way again after your words of insight of what they really do with your money.

Yes, rates can vary because an exchanger adds their own spread.  As you said, in an airport,you're going to pay a bit more
because you don't have easy access to other platforms.   

I have seen first hand the rate variation from the so called official rate, if you land in a country some airport has this exchanges that trade under the official say 5% even 10% under to sell 5% to 10% over the price just because they see a business opportunity when it comes to exchanging fiat for fiat.

ever since i decided to travel with only bitcoin it has been a re leave to not deal with this type of exchanges.

No offense, but you're absolutely incorrect.  Market prices are the only "real" prices.  Please understand the concept of "price discovery".
https://en.wikipedia.org/wiki/Price_discovery

Even Fiat like USD, has no "official" price in relation to other currencies.  Various exchanges and
banks trade currencies and rates are always floating.  Rates tend to converge on a single price at any given time
due to arbitrage.  This is true whether its dollars or Bitcoins.

I had a similar idea for a system to be used with a pegged currency called Dollarcoin (https://bitcointalksearch.org/topic/pre-ann-dollarcoin-earths-first-consensus-fixed-value-cryptocurrency-cfvc-702098). I envisioned the exchange rate determination to be a function in wallets, where the wallet holder could select from various API sources of exchange rates from something like a drop down list. Or, if they wanted, they could add in their own source. This would form a decentralized consensus exchange rate.

well you must centralized the data, to have an average estimate, otherwise you will be stuck in searching for various exchange to retrieve the final value

The problem is not on the banks, it is the government officials who set up this anti-money laundering/terrorist financing, know your customer law and applied it to financial institutions like exchanges and banks (banks are essentially an exchange)

Regulators put a heavy fine on those institutions who does not follow this law. If anyone can trade bitcoin like buying grocery, there will be many criminals use bitcoin to launder money (money comes from hacked bank account, cheated victim, smuggling, drug dealing...), and once money enter bitcoin, it is not traceable anymore(at least beyond the current ability of law enforcement due to no regulatory framework at all on blockchain), so it is very difficult to reverse the loss like in fiat money system (In fact the law enforcements are more interested in reversing the loss, capture the criminal is less important since they never cease to exist)

So far the best practice is to treat it like cash, and limit each customers daily transaction volume like in an ATM

Guys guys please hear me. With all my respect to preev.com and their work, who is that preev.com to believe in? We do believe in blockchain. We don't believe in Gox, Preev or any other centralized entity. Isn't it the main principle of Bitcoin? I offer to put such thing like rate under the same umbrella.

Well the coindesk Bitcoin price index chart shows the average price, to give you a clear indication of what is going on with the price.

Just select all of them:
Exchanges
CoinDesk BPI
Bitstamp
Bitfinex
BTC-e
OKCoin

http://www.coindesk.com/price/

And if you use http://preev.com/ the weighted average are calculated by default for :
Bitfinex
Bitstamp
BTC-E
LocalBitcoins

I would not touch exchange to fiat in this topic. It is different theme. My aim is to create Bitcoin environment and use to pay for goods and services. I think not that many say PayPal users (if they are not merchants) do ever deal with PayPal withdrawal procedure. PayPal money merely rotates in its own circle.

For obvious reason we can not assign stable price in BTC and always have to keep glance on other fiat currencies. As I said it is no problem with occasional deals. 3 major exchanges and blah-blah. But some guys probably don't understand when it comes from occasional to industrial flow it became different. If you are serious seller and you don't have absolutely reliable source of rate to set BTC  price you just won't deal with it.