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guyht | 12 years ago

I assume they are using a bitpay or similar which allows merchants to instantly convert bitcoin to USD (or equiv) funds at the time of purchase. Using this system, the merchant always receives the correct fiat amount, while still benefiting from the other advantages that bitcoin brings (low fees, no chargebacks).

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misterbwong|12 years ago

Wow. No chargebacks? I know almost zip about BTC but this seems a bit dangerous for the consumer, though VERY merchant friendly. If BTC goes mainstream, do we expect a middleman-type escrow service to arise for everyday purchases?

bdcs|12 years ago

You can do clever things with BTC to make them reversible in cases where reversibility is nice. First, you can implement a centralized PayPal-type company that clears after X days to implement chargebacks. Boring, but easy to understand and effective. The clever way to do it is with M-of-N transactions, http://www.bitescrow.org/

PS. When I order from Amazon, etc. I trust them. I get 2% back using bitcoins (from Coinbase.com (-1%) -> Gyft (+3%)). I like the 2% discount more than the credit risk of Amazon not making me happy at the end of the day : )

kolev|12 years ago

You can't reverse an ACH or a wire, yet, both are widely used. Once company duped an ACH payment for nearly $1,000 and then they went out of business (one can wonder if this was done on purpose), and I couldn't do anything to get it back working with Bank of America. So, every time you write somebody a check, think twice!

haakon|12 years ago

Bitcoin definitely favours the merchant/receiver in this aspect. Escrow can be used where desired, though it probably won't make sense for all everyday purchases (escrow for a cup of coffee over the counter is probably a bit overkill). The upcoming payment protocol in Bitcoin 0.9 explicitly allows the merchant to issue refunds if he wants to.

mpg33|12 years ago

it's basically "electronic cash"

antr|12 years ago

then the other risk here is liquidity. how deep is BTC liquidity so that prices are not affected by businesses instantly exchanging to USD, EUR, etc.?

oscilloscope|12 years ago

There was a prolonged dip in the price in this weekend, and I was wondering if this had an effect. There've been many large Bitcoin transactions recently, especially on Bitcoin Black Friday. For instance, Amagi Metals apparently sold $900,000 worth of gold and silver for Bitcoin using Bitpay as their processor.

That alone is currently a significant volume to liquidate. Enough to move the price 4-5% on some exchanges. Bitpay only takes a ~1% fee, but I assume their exchange rate is padded to absorb some of that risk. They may also sell bitcoin off the exchanges, which doesn't have a direct impact on the price.

bdcs|12 years ago

The payment processor (eg BitPay) takes that on. Markets are still razor thin by fiat currency standards, but are 10x to 100x thicker than a year ago. For example, buying 1.5 million USD instantly would raise the price about 4% (using just one exchange, Bitstamp)