(Replying to PARENT post)
- Getting rid of charge back fraud also gets rid of charge backs - an important consumer protection.
- I don't need 10 currencies I'd be comfortable holding, but any of these - http://fxtrade.oanda.com/analysis/currency-volatility have far lower volatility than BTC.
- Bankless people need banks, not cryptocurrencies. There's no difference to a bankless person between a mobile app to an online bank and a bitcoin gateway.
- My credit card pays me back a chunk of that "1-3% tax on everything," my bitcoin wallet doesn't. Until bitcoin gains market share and the tax goes away, I'm just paying more to use bitcoin.
- My credit card company provides fraud protection for when my card is stolen, my BTC wallet does not.
Looking to the future doesn't make me want to transact in BTC right now.
(Replying to PARENT post)
Fraud is as applicable to credit cards as to bitcoin. You store bitcoin with a third party service means you rely on them to keep their servers secure and hope that hackers don't obtain your credentials/identity information to log in and steal your bitcoin. I would argue it's even worse with BTC because their is no fraud protection.
Chargebacks are an issue for merchants, but a huge advantage for consumers. Ultimately the economic demand comes from the consumer and not the merchant, that is why chargebacks are still omnipresent in ecommerce today.
Two areas bitcoin could have addressed are remittances and smart contracts, yet better systems are emerging to solve those problems (Ripple, Stellar, Ether).
Your arguments could be valid in a world where everyone uses bitcoin and doesn't touch fiat. This is not the case. Bitcoin is a great technology in theory but its practical applications are quite limited.
(Replying to PARENT post)
http://www.reddit.com/r/BitcoinMarkets/comments/2ftfti/bitsh...
Bitshares X only launched a couple of weeks ago, it’s really only at an alpha stage at the moment and it has already hit the number 4 spot for market cap at http://coinmarketcap.com. It has had days in the last week where volume has surpassed that of Litecoin. The on-chain exchange built in to the wallet client cannot be shut down or manipulated/debased (like Mt Gox), I think this is one of the first things that grabs peoples attention. Especially Chinese investors or those burnt by Mt. Gox.
The most interesting thing is that on this distributed on-blockchain exchange you can trade your Bitshares (BTSX) for BitAssets pegged to real world assets such as the $ or BTC or even gold. I think I understand how it all works and if the market pegs work, which it seems to be at the moment for BitUSD, then it’ll provide great utility. It’ll promote the ability to actually hold you wealth securely in crypto in a less volatile way rather than cashing out in to real fiat for its relative security like many crypto traders do. BitShares X is an experimental DAC, like Bitcoin, but if it works then it avoiding the issue of having to cash out to real fiat gives it a significant plus point over Bitcoin in my opinion.
Citi bank recently pointed out that news often touted as being ‘great news’ for Bitcoin (e.g. Dell accepting Bitcoin) actually puts downward pressure on the price if they immediately cash out to $ using a services such as BitPay. Dell use this service to protect themselves from Bitcoin's price volatility, but this is liquidity that leaves the Bitcoin/crypto ecosystem. This is not good. It’s only if these companies such as Dell hold their crypto or at least part of it (i.e. like Overstock does) that the liquidity in the Bitcoin ecosystem grows and so does Bitcoin with it. Read up on the details about what Citi had to say here:
http://www.coindesk.com/citi-miners-merchants-keeping-bitcoi...
If the BitShares derived BitUSD actually tracks the $, and it seems to be doing so, then you, or Dell, would have no reason to move money out of the crypto ecosystem. This is of huge benefit for the crypto currency/equity ecosystem because it means that wealth stays within the system and does not leak back out to fiat. Holders of BitUSD also get paid a yield/interest for holding BitUSD and some have speculated that the amount may be as much as 10%. Add to this that the guys behind Bitshares are actively talking to the guys at Ethereum an the future look really bright I think,
I recommend reading the AMA above and follow some of the links to the FAQs about BitShares. I think they are on to something significant. Please feel free to shoot me down in flames if I’ve missed something or if you have a different view. Like I say I’ve been following the BitShares story for over a year now and it’s great to finally see the vision of the distributed exchange and BitAsset market peg make it from theory to reality.
Disclaimer : Very recently I moved a significant percentage of my BTC holdings (more than 50%) in to the BitShares X ecosystem with the intention of going long. Naturally I personally would like to see more people share my views. But do your own homework on this one and never invest more than you can afford to lose!
(Replying to PARENT post)
Cash has no fees and debit has negligible fees (a few cents plus up to 0.05% in the US). Most B2B transactions aren't done with credit cards either.
(Replying to PARENT post)
Name me 10 currencies you'd be comfortable holding. It'll probably be very difficult. Fact is, billions use currencies with high inflation rates and with relatively short lifespans. And it's not just places like Zimbabwe that have many problems besides insane inflation the past decade. It's also relatively developed countries like Argentina that suffer from insane inflation. It's also small stable countries with a nice standard of living ($27k GDP PPP) with an educated population like Cyprus where many lost their savings as bank deposits were frozen or seized.
And that's just protection from governmental malfeasance that hundreds of millions have to be aware of. But it's also the fact that billions are unbanked. We at HN know more than anyone that providing a physical service (like mail delivery) is 1 million times more expensive than a digital service (like e-mail). Same for banking, for vaults, for ATMs, for services like lending, payments, remittance or money transfer. A digital version can be much cheaper, as well as more accessible. (for a bank you often need proof of identity, residence and employment. Good luck when you have no birth certificate, when you live in a slum, when you have an off-the-record job like selling fruit on the corner of the street). Digital banking can bring cheap financial services to hundreds of millions who don't have it, yet have (intermittent) access to networks as simple as SMS or radio, which can plug in to gateways to the bitcoin network.
Next up is us, the wealthy who enjoy relatively nice financial services. Bitcoin can save 1-3% in fees on any transaction. Imagine that there's a 1-3% tax on everything, not value added, everything, every transaction, whether B2C or B2B, and you have a way to remove that. That's very significant. Entire industries run on margins of 1-5%. Amazon's 2013 margin was 0.35%, imagine they could shave off even 0.5%.
Now that doesn't mean we all should actually buy and hold bitcoin. As you say, the volatility dwarfs this percentage. But volatility can be exclusive to investors. For example, Bitreserve (founded by the founder of CNET) lets you lock in the price. That means you can buy $100 of bitcoin, and see $100 on your account, as if it was Paypal. And then you can spend that $100 anytime you want, and it'll always be worth that much. On the backend the service then lets investors create a market to lock in that price, where various investors make short or long bets, a derivatives market can take out the volatility for the customer, thereby allowing people to use bitcoin, save costs, yet be shielded from volatility. That means business to business payments, too.
Besides that there's lots of other things. Like the fact it can be much more secure. Creditcard fraud is rampant as your password is essentially on the card and you have to share it everytime you pay, it's crazy. Chargeback fraud is an issue. Identity theft is therefore an issue. And you can envision crazy things like a Google driverless car paying, on the fly, to another driverless car infront of it, to move away, so that it can take that lane and go faster, because the one in the back is willing to pay extra for speed, and the one in front is okay with arriving a little later. Those kinds of thing can almost only be built on a global, permissionless protocol layer. So indeed none of us may use bitcoin, it may just be a machine to machine currency, it's too early to tell, it can have an impact in many different ways.