Topic: Why bitcoin? - page 2. (Read 3020 times)

This is true, but it's harder to be scammed by cash based merchants. It's possible, but generally if you walk into an office, store, or artist you can get a feel for the quality of work/product. There is also a lot more work involved on the scammers part, and the potential rewards are nominal for most products/services. Excluding unsolicited salesmen approaching me (the physical equivalent of wealthy Nigerian widows), I can shop with some faith that my cash isn't going to end up just vanishing.

And yes, bitcoin does have to be either/or to see the benefit. The main selling point of Bitcoin- what I've seen time and time again, is that If i am a merchant, I will never have to deal with chargeback fraud. But if i accept Bitcoin and PayPal, the people who are honest enough to use Bitcoin wouldn't scam me in the first place. As long as I accept Paypal, I have to worry that I will be given false chargebacks. I would want to encourage people to use BTC, if not outright exclude PayPal.

Also, Googled and looked into bitcoin-police. It looks very new- two posts on a blog, wiki with a lot of info on the mybitcoin scandal. Have they successfully helped anyone recover funds? Or at least, brought any bitcoin scammers to some form of justice? 

Bitcoin shifts damage exclusively to the consumer. I have no economics background, but aren't there more consumers then merchants? Aren't merchants themselves consumers? PayPal is not a perfect system. Bitcoin does not offer improvements to the consumer- just to the seller.

I have a problem with this logic. Yes, large companies have influence over the market. However, most of these companies are successful because they understand their markets. Paypal is a big deal because paypal courts those looking for buyer-security. Why would a big company adopt Bitcoin? A company the size of amazon experiences minor fraud, but If they wanted to see the benefit of switching to Bitcoin, they would have to turn around and sell their customers on the idea of Bitcoin. They would have to push people to Bitcoin rather than paypal. And the concern I would see for them is the association. The first time a customer is scammed, their thought would be 'I never had this problem with paypal. Why did tell me this is better?' And negative press spreads so much faster then positive.

From an outside perspective, I think it's a huge mistake for you to tell me that you don't want my business. I wouldn't bring a huge amount of money into the market, sure. but what about anyone else who is looking for the pros and cons of Bitcoins to the consumer and find this thread? I'm giving you a chance to make Bitcoin appealing to more people, and so far the most attractive thing I've heard is using it as a Western Union alternate.

Right. And with Bitcoin if someone steals my wallet and spends all the coins in it I'm screwed. No recourse. All my money is gone. With Credit cards I'm not liable and all my money is still there.

See what I did there? Still have money in the bank.

That concerns me. It again seems as though bitcoin is specifically prohibitive to casual investors and low-income people. Or, more to the point, it prioritizes the rich and those who were early adopters.

Chargebacks exist to protect the consumer. They are a good thing.

I would say that's a bit of hyperbole, but I get your point. I think a better way to put it is:

Yes, Bitcoin at it's current level of adoption is more of a hassle than a benefit for the completely average person who doesn't do any sort of transaction other than paying bills, buying groceries and gas, buying some stuff off Amazon every once in a while, etc. However, these are also certainly not the "shot callers" of the world, and definitely have a miniscule influence in adoption of new currencies. They go wherever the market pushes them.

you can use it to become a pioneering entrepreneur I guess

if you even have to ask that question youre probably just a consumer that will eventually be forced to use bitcoins by companies like the ones you mentioned.

Painpal and similar entities not so much "protect" against fraud as shift the damage to almost exclusively the established merchants (since scammers run for cash out pretty fast, they hardly care that much, it's basically them vs. time after you send them a Paypal transfer, and with proper skills and prep, they easily outrun an average person's ability to realize the fact of fraud and file complaints), which strikes me as somewhat perverse (though I could definitely see how some people might find that setup comforting)

As for due diligence, well, we have #bitcoin-police @ freenode. Do check those guys out ( Google  bitcoin police IRC if you don't know what the love Freenode is)


I suspect that deflation does not work like that.

Deflation and different economic schools links can be found here:
https://bitcointalksearch.org/topic/deflation-and-bitcoin-the-last-word-on-this-forum-11627

Yes. What we need is an easy way for consumers to acquire bitcoins and for merchants an easy way to accept payment in bitcoins. For the latter I really like what Bit-Pay are doing, for the former I still think it's too complicated.

When it comes to actual clients I stay away from showing people the Satoshi client completely in favor of Andreas' Bitcoin Wallet for Android. A quick demonstration of how easy payment via the QR code system is and most merchants respond by wanting Bitcoin to replace their current credit card system immediately.


True. I've personally only traded once on MtGox, all my other BTC purchases have been P2P through Bitmarket.eu for that very reason.

In addition to the arguments above, here's a little anecdote.

My wife is a banker and having seen the innards of the dominating system, she's always been supportive about the idea of a free method of value transfer (we made an unsuccessful attempt to make use of Ripplepay before). She was very enthusiastic when we first found out about Bitcoin last year, but never had a motive to use the currency herself. Last Friday, she opened a VoIP account and made the transfer using Bitcoin. She was more than impressed, which made me realize again how awesome the system actually is. Since then we've been shopping online and having lots of fun.

I guess the main reason we get this liberating feeling is that banks have always been problematic for us. Credit cards getting cancelled for "security" reasons (like having used them "abroad"), passwords getting locked, having to actually travel to the banks for various proofs of identity, ridiculous measures of security (like having to have a mobile phone registered in the coutry where the bank is) and of course account fees, card fees, and whatnot. On top of that, since we are expatriates, letters of credibility are requested which we need to get from banks from where we have citizenship. Paypal is very convenient but you need to have jumped through these hoops before you are able to use it, and then some (like having to open a new paypal account for each different jurisdiction, yet additional fees, etc.). And last, but not the least, transferring money in and out of the country is costly and is a major pain legally.

Not that Bitcoin has helped us do away with all this, but the mere fact that it has the potential to relieve some of this burden is enough.

Granted, I have a good setup where it's pretty convenient for my wife to send/receive money without having to worry about concerns like security. She would probably have done it using an online wallet if I wasn't here, which isn't that exhilarating. You don't really consciously get it but having to trust a third party causes mild amounts of anxiety. That's why I think we need a secondary lightweight network on top of Bitcoin to be used by mobile devices for small transactions, but I digress...

EDIT: Ah, and also, having been in discussions about block generation intervals lately, I told to her apologetically: "It takes a lot of time to confirm doesn't it?". She looked at my face as if I was an idiot.

That's the point- Bitcoins really don't offer any security against scammers. Paypal has flaws, but bitcoins don't offer leaps and bounds of improvements. Also just noting that due diligence is hard in a younger community like bitcoin merchants. Easy to get into, easy to run with a profit.  

Sorry for the intrusion. Another newbie here. I originally heard of bitcoin something like a year ago, but I didn't have any money to put into it then. I kind of wish I had. But that's the past. I was reading this thread, and I have to say I've had the same question as the premise, and you guys seem to have some answers, so I figured I'd ask here.

I do have a couple of questions, though. I'm halfway decent at understanding finance, despite being a relative layman, and there are some things I wa wondering about.


I agree that bitcoin is supposed to be decentralized in theory, but it really seems to me that a very large amount of traffic and funding is in the hands of a very small number of exchanges. If one goes down (and they have periodically) then the market is shaken, and could easily crash completely. You get enough money into one exchange, and it goes down because of black hats or poor planning or what have you, a lot of people could be ruined.

So it actually seems quite centralized in practice, and that concerns me.


This is another thing. Inflation is a constant thing. It always has been, and without artifical devaluation of currency, it always will be. Without regulatory bodies presiding over bitcoin to artificially control values (which we all know will never happen), then once the limit of 21 million is hit, prices can only go up. It's a system that favors early adopters and wealthy people far too heavily to make me comfortable.


This I actually completely agree with. Companies and governments should never be able to tell you how you want to spend your money, so long as it's a legal action. And while I'm sure somewhere out there are people using bitcoin for illegal purposes, that's not a valid indictment of the currency as a whole, as many more people use USD for criminal activities.

The fees are slightly different, usually they are charged because the centralized authority has hundreds of employees to pay living wages. I don't know how the exchanges work, but I'm assuming that they're mostly low-employee operations. Please, correct me on that if I'm wrong.

Anyway, I am interested, but I admit a little wariness, and would like more information before I jump. Thanks!

Technically, giving someone $3000 in Bitcoins isn't different from sending someone them via Western Union - there are still traces for law enforcement to pursue, but more often than not, when your $3000 via Western Union has departed, it is departed as surely as if it was Bitcoin.

Also, assuming you take care and do due diligence (as you would probably do before forking over a large sum in plain dead tree USD cash) the scammer has to invest a lot of effort to build up a profile to deceive you (hard), while a reverse-transaction scam requires the scammer either to have many fake-ID paypal accounts (easy) or do the scams relatively rare (easy).

Basically, think of bitcoins as cash that can be forked over via internet.

Doing something with bitcoins that you would not have done with dead tree dollars is not advisable.

And I am somewhat dubious as to where would losses go if someone scams a person for 3000$ via paypal and those 3000$ are already out of scammer's account by the time fraud complaints are filed (there are ways to rapidly cash paypal out without exposing yourself to LEAs. They cost dearly, but the scammer is likely ready to pay a significant portion of his illegally earned money to pull them out of paypal ASAP)

Would Paypal still reverse it and suck up the damage ?


It might be dependent on how your bank works, but where I live online transactions, even with "propper" credit cards (not debit ones) and not resulting in any overdraft shenanigans, are still subject to a special "card not present risk fee".

You speak about paypal in your thread.

That alone is a GOOD reason to use bitcoin. Why? Fees, account closing, chargebacks and whatelse...

Look up Credit Card Merchant fees. Visa and Master Card siphon 2 1/2% out of the economy.
The main reason for BTC is the are basically electronic cash with a transfer network controlled by no one. They are not counterfeitable.
The #2 reason is the BTC is more secure than any other electronic transfer of data bar none.

I am aware of those fees, I've known a couple small business owners. But for those fees to disappear- That would require bitcoin being adopted to a universal standard in which these businesses did not need to process credit cards at all. So me, as a consumer wouldn't see this particular benefit until the 'why bitcoin' question in this thread became a moot point.

I do. Next time you buy something from a local store owner whom you believe own their own business, ask them how much they have to pay in fees to be able to accept credit cards. Do the math on how that affect their profit margins on low cost items.

Those fees are passed on to you, the consumer.

Other three simple scenarios that I experienced myself with the current broken banking systems:

* Friend wants to buy some thing online - only 1 left in stock. Friend asked me for some money until his next paycheck - we were not in the same town then, so no cash option for us. Since it was a saturday, he could not buy the item then and had to pay +30% a week later.

* I wanted to send some money to a friend in another country. The fees? 30 EUR + 2%. Time? 2+ working days.

* Since I'm from Romania, my debit cards were not accepted online in a lot of places, so I had to go get a "real" credit card - with more than 4 times the fees.

And so on...