Topic: Serious Question about Bitcoin, please answer - page 2. (Read 1340 times)

I think it is interesting how few people want to talk about this issue. From where I'm standing this is probably the single biggest issue holding bitcoin from being adopted as a mainstream currency. CC's pay you to use them. Paypal is free. Bitcoin COSTS money. No one seems to want to admit that this is a problem.

I feel that your reasons for using BTC have an ideological tone, which I'm sure you know doesn't translate to mainstream users. Mainstream users love cash back and convenience, and they hate small fees. They don't know what you are talking about when you talking about the power of the banks and what fiat currencies are. My question is: What is going to make Joe Sixpack on the street corner buy and use bitcoin. Right now I just don't see a compelling argument.

Coinbase has the convenience, funding, and veneer of a respectable company that frankly others do not have. If BTC is to go mainstream, the BTC exhanges must have each of those three variables.

But lets forget about Coinbase. I have yet to see ANY exhange that doesn't charge a premium of some kind. Any premium, no matter how small, cannot compare to the BONUS that you get from dealing with CC's. Am I right?


This is an interesting argument. I'll have to think about this one.

Serious response.

Once Bitcoin's price stabilizes, why would anyone take federal reserve notes that can be instantly created digitally without limit, when you can have something that can't be created in the same manner?

Why? Because they always have and it's so darn easy.

Sure, I get my points on my card, but I encourage bitcoin because it takes the power from the banks who hold onto their money unless the "right" person wants it, I have a business, and product and experience, but that no longer matters to banks, because I am not their type... but I digress. The dollar is going down, so is the Euro and the Yen. It is unsustainable, you know it, we all do. When it goes down and we have that next big crash in the stock market, try to get some gas for $3, just try.

Right now crypto is in it's infancy, so it goes up and down pretty crazily, but it will stabilize, and when it does exchange rates will go down. Right now you have the ability to get in and be a part of something that finally can replace fiat currency, yes, it is going to cost you a little extra to get in, but so does getting into silver or gold. You can't get any at spot, but still many more people buy metals than bitcoin because they view it as a viable alternative to fiat, those same people will be buying bitcoin in the coming years, you can be ahead of them or with them or behind them, or you can hold your dollars till they are almost worthless.

Your starting with Coinbase is a bad premise.... There are better ways to obtain your bitcoin such as localbitcoins.com.

I have never bought a single bitcoin, nor do I intend to, but let's just say I've had a lot of bitcoin.

Edit:

There is more to worry about the price fluctuation in bitcoin anyways, then compared to a small percentage in buying.

Hopefully, it will go up.... but, as recent days as shown us, that is not always the case.

Thank you for the reply. I was more alluding to your second paragraph where you described the rational self interest of using CC instead of BTC. To me this is a complete deal breaker for widespread adoption of BTC as a currency. Not only is there not an upfront dollars and cents reason for a consumer to use these coins in transactions, but there is a small PENALTY in doing so, in the range of 2-2.5% (1% coinbase fee and 1-1.5% opportunity cost of not using a CC.

The reasons for a merchant to embrace BTC as a currency are there, but they aren't there for the consumer. All of your points in favor of BTC as a currency are overarching principles which, sound as they are, do not resonate with your average consumer who mainly looks at the face-value and immediate cost of doing business. I can see it working if merchants largely reward those using BTC, but not until then. Think about it, Credit cards generally charge 2-3% to merchants for doing business. Coinbase on the other hand charges 1% to the consumer and 1% to the merchant for a total of 2%. It doesn't really lessen transaction fees that much, it merely shifts it onto the consumer. This is a recipe for failure in my opinion.

To me, it is only when BTC is used as a currency that it will stabilize in price. It needs a stream of transactions constantly to stabilize. This won't happen until the consumer has reason to use BTC as a currency. Right now there isn't a reason.

I'd be interested to hear what you or anyone else thinks of this. I would love to be wrong, so let me know if you see a problem in my line of thinking.

Credit card fees by merchants are becoming increasingly common (it recently became legal in the US, though I think only gas stations generally charge them ATM). Credit card companies are effectively bribing consumers to use a credit card, but the irony is that it's factored into the prices at the store, so they aren't really saving that 2% or whatever (if they otherwise wouldn't have used the credit card), but effectively increasing the stores' costs, which goes right back into prices. This doesn't factor in the chargeback and other risks merchants need to factor into their costs, on top of the 30-60 day holding period they may have to wait to actually receive funds, which ends up translated into higher prices. Cash customers have it worst since they're subsidizing the plastic users. This is partially why so many sites offer discounts for paying in BTC (and for many large purchases, merchants/contractors are usually quite willing to offer a substantial discount if the customer pays in cash, too).


From a totally rational self-interest perspective, it is generally reasonable to use credit cards, especially when they have those $100 etc. sign-on bonuses (simply pay the balance off and cancel the account once you get the bonus). All of your transactions are tied to your legal identity and easily retrieved by various organizations, there's significant chance of a data breach compromising personal/financial data (the recent Target case, for example), there are harsh APRs if you don't pay your balance every month, and they sometimes charge you annual fees on top of that. There'll always be a place for credit cards for people using them wisely, though, but I don't think they're generally worth the costs and risks risks, especially for merchants as new options are coming out (even outside cryptocurrencies).

Thank you for reading. I'll make it short and sweet. Buying bitcoin costs 1% on America's most popular seller, coinbase. I have heard that others charge as low as .5%. From a consumers and currency standpoint, why would the consumer pay to buy bitcoin to use it as a currency when they could easily use their credit card and GET PAID upwards of 2% on every transaction. I understand that bitcoin is cheaper for the merchant, but it looks to me like it is more expensive for the consumer. I would really appreciate an answer thank you.