Topic: bitcoin is failing in replacing fiat in physical shops - page 5. (Read 8586 times)

What I think is that it will be hard for bitcoin to replace fiat.

And I think bitcoin is not mentioned to do that!
This is cryptocurrency and it would be nice to buy potato 4 bitcoin, but I guess best world of bitcoin is around interweb

I've found bitcoin to be faster than credit/debit card, and I've personally made over 50 bitcoin purchases.  Anyone with bitcoins can confirm this for themselves right now by going to Gyft.com and purchasing an Amazon gift card.  The BitPay receipt will say "PAID" and the gift card will be credited to your account and ready to spend nearly instantly.  It is pretty slick.  

If you are near Vancouver, come and test out bitcoin PoS at one of the many brick-and-mortar venues shown on coinmap!    


Transaction propagation times and acceptance by the nodes' mem-pools have nothing to do with mining power.  Transactions typically propagate extremely quickly and, from my experience, faster than credit card transactions.  

Transaction propagation times are independent of network difficulty, which is dynamically adjusted so that block confirmation times target 10 minutes.   But we don't even want really fast block confirmation times, due to orphaning risk and other network organization problems.  

Bitcoin enthusiasts endlessly trying to workaround a gen 1 crypto-currency.

How about get with the times?  

Yeah I never understood how confirmation can be so slow when bitcoin has so much mining power. I mean it simply isn't logical if that power isn't used to make transactions faster. If we can't compete with credit cards then we'll be in trouble, at least in replacing fiat in physical shops, and I do think it is important that it happens if bitcoin is to become one coin.

Why can't the retailer send a real-time message to the customer with the bill to be paid and the customer clicks a button on their smartphone to pay it if the wallet is on the phone?

The new technologies change the ball game.




Depositing money with third parties either means we need accounts at many third parties, or we need one third party to become dominant, so we are right back to VISA monopoly again.

Rather seems to me we only need better integration of wallets and the web browser for online commerce and as you say NFC for physical retail.

We lower the block period to under a minute (for a better designed altcoin) as I explained in my upthread posts.

I was pointing out the fact that on-chain zero-confirm payments are already working in retail.  PoS transactions are scalable, and many of the "features" you described can also be carried out on-chain with the appropriate payment processor.  The transaction processing capabilities of bitcoin can scale greatly, even to Visa levels: https://en.bitcoin.it/wiki/Scalability.  We will remove the 7 tps /1 Mbyte block-limit when required.  

That being said, I agree that companies like Visa will continue to play an important role, by extending credit and offering consumer protections. And I also agree that in a "bitcoin future" more transactions would be done off-chain, and I gave an example of how Coinbase is already working towards this goal in an open and seamless manner.  

The vision that I have is bitcoin PoS similar to how franky1 just described one post above: if you have a BitPay or Coinbase account, you pay super quickly via NFC at the till, off-chain transaction, no miner's fee.  But if you don't have such an account, there will always be the option to pay "on chain" should that be required.  

the retailers currently use bitpay/coinbase. where you send coins to an address a retailer gives you, which bitpay/coinbase gave them..

in the near future what will happen is that you will put a pocketmoney amount into a bitpay/coinbase account and simply tell the cashier to debit your account for the total. this way the coins are verified (as they have been preconfirmed when u deposited) and is faster then the cashier getting a QR code, printing it, showing it to you and then you fiddling around with your phone to pay them.

this will be done simply by a nfc in your phone coded to you bitpay/coinbase account.

now imagine the speed of your bitcoins paying for your groceries..fully confirmed and no need to press a single button on your phone

 

As an actual vendor who accepts bitcoins, this fiasco is tremendous fun.

Cash doesn't bring the drama like bitcoins.

Bitcoin is not supposed to replace fiat. It is supposed to compete and put pressure on with credit cards, payment processors, collapsing banks, bail-ins, etc... I don't want to get rid of fiat (cash in hand) neither I want a cashless society.

IIRC I believe that BitPay runs a network of low-latency nodes that ensure that they can accept zero confirmation transactions.  Anyone using BitPay is unaffected.

No.  This would not require or imply "printing Bitcoins out of thin air".
Not only is that impossible, but that's not how the service would work.
They would more likely hold a stash of coins and enable immediate transaction within a system they've built.


Coinbase operates outside the blockchain for many of their transactions.
They are not an exchange, but moreso a broker.  They purchase in bulk ahead of time, and sell at their own prices.  
This enables additional features like (surprise) immediate availability of BTC purchases, before they've even taken the money out of your bank account (a process that takes 3-5 business days).

If your point is that it "could have been coded better for microtransactions" ?  I think everyone already agrees.
If your point is that Bitcoin is one big fail because it wasn't .. thats not rational.

"Might as well just use fiat"

That doesn't make any sense.  Why would all of Bitcoins benefits be nullified simply because certain aspects work better with 3rd party services built on top?
In the future Bitcoin is going to be 1% Bitcoin Protocol 99% 3rd party services built on top of it / latched into it.
Even for the things it already does well.  Just to add 100 more perks on top.

-B-

The blockchain's unsuitability for point-of-sale is not under debate. It is not a POS system. It's bank.

Why do you think the cryptocurrency exchanges don't do realtime blockchain transactions for their trades ? It's not just a question of speed (although no exchange would ever be able to work with trades which ran at 'blockchain' speed) it's a question of functionality.

Day to day trades and transactions need to happen one step removed from the banking system - whether it's fiat or crypto - and then be 'committed' to the associated bank accounts / blockchain accounts once completed. There is no blockchin transaction speed or functionality that could ever match what payment processors provide and even if it did, the way that the blockchain operates is far too inflexible for use at point of sale. It's great as a 'bank' but point of sale operations are simply not the same animal as bank transfers.

There are so many examples which spring to mind if you've ever worked in a retail operation. Here's another one of the top of my head - a hardware retailer takes an order from a known customer with an account. The order needs to be modified because some items weren't in stock and some were. The retailer calls the customer to see if they would accept a substitute product with a minimal price difference. The customer agrees but wants the retailer to complete the order, reverse the old and charge the new amount to their account.

So now the **retailer** has to do the charging. This type of stuff goes on ALL THE TIME in retailing and can only done using accounts (ok, it may be a cryptocurrency account but its not going to be a blockchain transaction because the retailer would then need access to the customer's blockchain address and could run off with coins untraceably).

There are millions of examples like this that demonstrate that blockchain will never get anywhere near retailing without payment processors. That isn't a bad thing - it's a good thing - I'm just saying, we should be realistic in our expectations of how cryptocurrencies will develop and who needs to be convinced abut their viability as a store of value. Payment processors are pivotal in this whole game.

Without them, cryptos are going nowhere.

Neither does cash. Bitcoin behaves rather like cash in this respect. It has advantages over cash for the vendor: it's easier for them to count; they don't have to physically take it to the bank; it's harder for their staff to steal it. (The main reason supermarkets offer cash-back is as a way to get rid of the cash and replace it with something digital, because cash is such a pain for them to handle.)

The main drawback here is that if someone hands you a £10 note, and then changes their mind, you can give them the £10 note back. With bitcoin, you can't do that: you can't send them the output of the transaction they just sent you, because it won't be in the block-chain with enough confirmations. You'll have to give them the output from an older transaction instead. You'll need to keep a pool of old transaction outputs ready, to handle change. Much as you need to keep a pool of notes and coins to provide physical change when customers pay with cash. (Again, it's easier with bitcoin because it's digital; it doesn't take up space and all your tills can share the same pool.)

I'm not saying payment processors won't happen, just that they aren't needed.

That is not necessarily true. If the network propagation delay and validation time can be guaranteed to be fast enough, the block time can be lowered to what ever value the values allow for.

The issue is that full nodes would have to commit to having certain levels of connectivity and hardware. Essentially peers would need to talk directly (fully connected mesh network topology) to each other and so peers with low connectivity would suffer, but not the other peers. Thus the number of full nodes would need to be limited.

My insight is that the fully connected mesh connections between pools can be very high quality, while the connections between pools and their miners can be of varying quality. We should not look at pools as bad, rather we only need to limit their sizes so they don't overly centralized the network. Balance.

Payment processors also have to commit to certain high standards of connectivity and hardware.

What's that got to do with processing times ?

Queues at supermarket checkouts are a problem that needs solved. It will be solved independently of whether payment processors do fractional reserve banking or not.

I don't agree with you that these concepts are "coupled" in the way that you suggest. Anyway, what you are alluding to is something called "leverage". Leverage has been around since the age of the Pyramids and won't be disappearing with the arrival of crypto currencies. It's not an option that's unique to payment processors - anyone who holds any money of any type can engage in leverage and, as I say, it has nothing to do with payment processing systems who's job it is to facilitate the functionality needed at the point of sale.


That doesn't change the fact that blockchain transactions are not scaleable at the point of sale. If any physical retailer of any significant size (e.g. a supermarket) had to do blockchain transactions at the point of sale, their operations would grind to an immediate halt. It's just not going to happen. I develop e-Commerce systems for a living and payment processors are essential to scaling any kind of retail operation. Consider the following scenario:

[1] - you are in a supermarket queue with 30 items
[2] - the cashier rings through your items
[3] - they ask you if you want "cashback" with your sale and if you have a points card
[4] - you pay for the transaction, receive £50 (or $50) cash, which gets charged to your card account along with the groceries
[5] - as you pack your items, the guy behind you realises that the cashier accidentally rang through one one of his items on your side of belt splitter
[6] - the cashier discounts your sale, refunding you the excess balance and asks you if you want the refund in cash or refinded to your charge account
[7] - you leave the chop, having storecard points added, received your "cashback" amount in fiat, and having the corrected amount charged to your account

Now, there isn't a snowballs chance in hell of all that happening on the blockchain in realtime. It's not what the blockchain was designed for. This is what payment processors are for - they handle all this stuff effortlessly and provide added value to the retailer at the same time, for example by insuring the transaction, supporting auxiliary products such as discounts and store cards etc.

So don't have any illusions that Visa and Mastercard are going to loose any business to Bitcoin. They will be needed more than ever if cryptos take off (which I think they will). In fact they will actually be part of what drives the crypto economy and if we don't get them on our side then there will be no "gateway" for big retailers to come on board.

Why and how to solve the slow block confirmation time.

https://bitcointalksearch.org/topic/m.5157380

Minumum 6 confirmation needed is general rule and should be implemented core code of Bitcoin

see retail doesn't really matter, its a drop in the bucket value wise, depreciating assets.

Store of value back bone currency, e.g. PeerCoin.

Bitcoin just celebrated it's 5th birthday.

M-Pesa has been going for 12 years and is fronted by major global corporations.. do you use it in physical shops where you live?

Visa was launched in 1958, it took over a decade to become used by some people, another decade or two to become mainstream.

Bitcoin is in early days, and it's already quite pervasive for such a young technology.