Reading these comments is depressing. Bitcoin isn't a few geeks trading bits over IRC anymore, guys.
To some of the common bitcoin concerns:
1) They're easy to steal! Look at this person who did $something_stupid and had all their coins stolen!
Yeah, sure...and if you had left $10,000 in cash just sitting on your table, the same thief could have stolen that as well. There are stories every single day of people having cash stolen from them. The people keeping that much value stored on their local machine are usually pretty crazy bitcoin evangelicals. These are not normal people who bought some coins on coinbase.
2) It doesn't do $things_credit_cards_do!
No, it doesn't! What you people seem to be missing is that it's a totally new way of transferring value. It has its own quirks, requires its own security models, etc. It also does $things_credit_cards_dont_do! That's why people have an interest in it!
1) What are the best practises for having a bunch of bitcoin? You say you shouldn't keep it stored on your local machine but where? Keeping it stored on exchanges is kind of prone to failure in the bitcoin world. If you want to use a cold wallet you need a second computer that you don't plan to use for anything else and you need to learn linux or its pointless
2) Just because its new doesn't mean its better or makes more sense than the existing methods.
Why would a consumer use it over a credit card? Especially when you need to use a credit card or other payment method to buy the bitcoin in the first place?
Pay 1% more(or 3%-8% more if you have a cash back card and depending on where you bought your coins) to save them 2% and lose all consumer protections in the deal.
It's no wonder there is almost no consumer growth in the bitcoin world while new merchants are announced every other day.
You are wrong, there is tremendous consumer growth happening. The two biggest US processors (BitPay and Coinbase) release numbers every once in a while. One example:
Bitcoin is still mostly a speculative vehicle. 9/10 links about bitcoin are not real news and are just propped up by people with a stake in it. Nobody else cares.
I wonder this too - I rarely use cash right now, because I get:
1) Cashback (1-3%)
2) Chargebacks if needed
by using a credit card. Bitcoins are basically like cash in my mind - very easy to move around, but no protections in case of it being stolen, and no cashback. I think Bitcoin is very neat technology, and has some useful features (transferring money between people quickly and easily with basically no fees), but I fail to see the incentive for me to use it to replace my credit card. The business receiving it receives all of the benefits.
If stores passed the savings onto the consumer with 2 or 3% cashback, I could potentially see people using it. Especially if this was returned as points or something, similar to how it's treated for credit cards.
Well I don't care about the ability to do chargebacks from newegg, and I care a lot about the ability to not get my financials stolen by hackers, so the "consumer protection" Bitcoin offers here looks pretty good to me.
True there's no advantage to paying with bitcoin currently and most people are just using it for the novelty value. But enough growth and merchants will just have to offer discounts with bitcoin purchases to stay competitive.
1) You don't have to provide private info like CC number.
2) If you bought bitcoins at X and now they are valued at 10X you may effectively enjoy 90% discount on all purchases.
All these mythical user-protecting chargebacks are almost never used by consumers for refunds (companies who care about brand help them settling refunds) and almost always for the cases when you CC details got stolen and used by someone else. Of course, bitcoin payments do not leak your private keys, so the entire class of problems goes away.
Great. So, when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
This is exactly a "schlep blindness" problem that a startup could be solving. Deliver a turnkey solution for consumers to store their own coins. Don't make them learn a labyrinthian set of rules, or worry about what's dangerous or what isn't. Protect consumers, and bitcoin adoption will follow. Large-scale bitcoin adoption can't occur until bitcoin is made safe.
Did you hear about the guy who took his macbook into an Apple store for some routine repairs, and one of their employees made off with his 15 BTC? The employee hooked his harddrive up to a different computer, scanned it for a "wallet.dat" file, saw it was unencrypted, and robbed him. Was it dumb of this customer not to be using encryption? Yes. On the other hand, was it dumb of him to be storing so much wealth in bitcoin right now, given how easy it is to lose your money? Objectively, yes.
This isn't an insurmountable problem, but people have to start working on it in order to solve it.
I think hardware wallets (like the Trezor), or smartphones with a TPM module is the solution.
This will take time, however (the latter more than the former).
The reason it will take time is that the concept of storing your own money digitally, like is the case with Bitcoin, is an entirely new concept that software and hardware needs to adapt to. With all other solutions (VISA, PayPal, bank wires), you're asking someone else to transfer your money, with Bitcoin you're doing it yourself. Basically, each user needs a greater level of security than PayPal, VISA and banks have internally, since Bitcoin payments are generally irreversible after an hour or so (and often much sooner).
This isn't something that is done overnight, and people have started working on it, but it takes time to, first of all, develop the hardware, and, second of all, develop and implement the interface between the hardware wallet and the actual payment request (ie. when I arrive at a BitPay invoice payment page, how do I pay using my hardware wallet?).
> when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
As you point out in your own statement, there are companies meeting the need for a "turnkey solution": you list Coinbase and they are an excellent example of a company doing that well and being quite successful at it.
You apparently reject them because working with Coinbase requires the customer to "trust their coins to a third party service". Trusting the third party service is pretty much mandatory for using ANY third party service. Imagine a hypothetical service that provided "turnkey" software to store wallets on your own computer -- you would still need to fully trust the provider of this service to ensure that they actually stored the money rather than siphoning it off someplace else.
The only way to (mostly) avoid having to trust a third party is to avoid using a "turnkey" solution that is fully packaged without user serviceable parts. You would instead need to learn on your own how to safely store the coins yourself. Which is ALSO a choice, and many people do it. You complain that it takes "a solid week" to learn how to do this -- and indeed, it does take a few days to become an expert on any subject; there are 10 minute tutorials, but I presume you (rightfully) reject them as being insufficient to really teach a user enough to be fully safe.
Honestly, I think that you are just being unreasonable in your expectations.
> So, when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
Given the huge amount of developer interest, I'd be pretty surprised if several groups of smart people aren't kept awake at night by their awesome ideas about how to fix this.
There is people working on that issue. For example Trezor is an easy to use bitcoin safe. I think it's headed in the right direction: http://www.bitcointrezor.com/
Newegg itself is not accepting Bitcoin, it is not keeping a balance in Bitcoin, and it has no exposure to Bitcoin related risk.
It has a payment processor, Bitpay, that accepts Bitcoin. As long as you have a competent engineer on staff, it's about as difficult as accepting PayPal.
It's nice that this is happening, but the headline should be, "BitPay lands Newegg as client". The maturity of the services around Bitcoin helps everyone that holds them, so it's not unimportant. It's just a very, very far stretch from a merchant directly accepting and holding a currency balance in BC.
A lot of people are missing the point with these large sellars accepting bitcoin. It's not that they expect sales to explode but rather they want to experiment and get a feel for how it works.
There will be a time where crypto-currency will be as normal as paying with credit card or cash.
Coinbase and BitPay signing up new retailers doesn't provide me additional belief that bitcoin is viable. The retailer doesn't believe in bitcoin. They get cash out ASAP.
For a retailer, if they think they can move units by partnering with someone who will convert BC to cash, sure whatever. It's like adding PayPal.
You don't see the 10,000,000 new consumers bought bitcoins!!! Who knew cryptocurrency could burn holes in pockets!??!?! articles because that's not happening.
The real problem was never "people don't have a place to spend bitcoin." It was "people don't have time or risk tolerance to manage bitcoin."
Pretty amazing - I went and made a purchase on NewEgg using CoinPocket on my iphone - total time for transaction was under 10 seconds, including the time to scan the QR code, click send, and have Newegg recognize I'd sent payment.
CoinPocket / NewEgg were within $0.15 of their exchange amounts on a $31.89 purchase. So, CoinPocket thought it was $31.89 that I was sending, and NewEgg thought I was sending $31.74.
All in All - Bitcoin made purchasing a lot more easy than having to type in a Credit Card number or login to Paypal.
Bitcoin is decentralised, so, from Neweggs perspective, the transaction is never completed 'online'. Their payment processor (I'm guessing it's going to be Bitpay) has to wait until they see your transaction on the Bitcoin network before they tell Newegg that it's paid. Think of it as waiting for a cheque to arrive. A timeout is just sensible so you're not reserving stock.
I'd say it's because bitcoin transactions are not instant. To fully 'verify' that a transaction has taken place, they need 6 confirmations. The transaction may within a few seconds show up on the bitcoin blockchain, but it can't be fully trusted until it has at least 6 confirmations. Waiting for that can take some time.
It's something normal among bitcoin payment processors because of high price volatality (you could start a payment and only finish it if the bitcoin value goes down).
[+] [-] blhack|11 years ago|reply
To some of the common bitcoin concerns:
1) They're easy to steal! Look at this person who did $something_stupid and had all their coins stolen!
Yeah, sure...and if you had left $10,000 in cash just sitting on your table, the same thief could have stolen that as well. There are stories every single day of people having cash stolen from them. The people keeping that much value stored on their local machine are usually pretty crazy bitcoin evangelicals. These are not normal people who bought some coins on coinbase.
2) It doesn't do $things_credit_cards_do!
No, it doesn't! What you people seem to be missing is that it's a totally new way of transferring value. It has its own quirks, requires its own security models, etc. It also does $things_credit_cards_dont_do! That's why people have an interest in it!
[+] [-] sanswork|11 years ago|reply
2) Just because its new doesn't mean its better or makes more sense than the existing methods.
[+] [-] foobarqux|11 years ago|reply
[+] [-] pauletienney|11 years ago|reply
[+] [-] EthanHeilman|11 years ago|reply
Boats are totally useless they only travel on water. Why would anyone prefer a boat to a truck for moving freight?
[+] [-] sanswork|11 years ago|reply
It's no wonder there is almost no consumer growth in the bitcoin world while new merchants are announced every other day.
[+] [-] mrb|11 years ago|reply
"Since [...] October, along with the integration with Shopify in November, [...] the transaction volume has tripled." Source: http://blog.bitpay.com/2013/12/11/bitpay-exceeds-100-000-000...
[+] [-] soup10|11 years ago|reply
[+] [-] xur17|11 years ago|reply
1) Cashback (1-3%)
2) Chargebacks if needed
by using a credit card. Bitcoins are basically like cash in my mind - very easy to move around, but no protections in case of it being stolen, and no cashback. I think Bitcoin is very neat technology, and has some useful features (transferring money between people quickly and easily with basically no fees), but I fail to see the incentive for me to use it to replace my credit card. The business receiving it receives all of the benefits.
If stores passed the savings onto the consumer with 2 or 3% cashback, I could potentially see people using it. Especially if this was returned as points or something, similar to how it's treated for credit cards.
[+] [-] wyager|11 years ago|reply
Well I don't care about the ability to do chargebacks from newegg, and I care a lot about the ability to not get my financials stolen by hackers, so the "consumer protection" Bitcoin offers here looks pretty good to me.
[+] [-] asdfaoeu|11 years ago|reply
[+] [-] oleganza|11 years ago|reply
1) You don't have to provide private info like CC number.
2) If you bought bitcoins at X and now they are valued at 10X you may effectively enjoy 90% discount on all purchases.
All these mythical user-protecting chargebacks are almost never used by consumers for refunds (companies who care about brand help them settling refunds) and almost always for the cases when you CC details got stolen and used by someone else. Of course, bitcoin payments do not leak your private keys, so the entire class of problems goes away.
[+] [-] sfjailbird|11 years ago|reply
Nonsense. Consumer protection laws apply no matter the payment method.
[+] [-] aianus|11 years ago|reply
[+] [-] user24|11 years ago|reply
There are quite a few metrics on http://www.bitcoinpulse.com/ that seem to indicate otherwise.
[+] [-] walden42|11 years ago|reply
[+] [-] awt|11 years ago|reply
[+] [-] sillysaurus3|11 years ago|reply
This is exactly a "schlep blindness" problem that a startup could be solving. Deliver a turnkey solution for consumers to store their own coins. Don't make them learn a labyrinthian set of rules, or worry about what's dangerous or what isn't. Protect consumers, and bitcoin adoption will follow. Large-scale bitcoin adoption can't occur until bitcoin is made safe.
Did you hear about the guy who took his macbook into an Apple store for some routine repairs, and one of their employees made off with his 15 BTC? The employee hooked his harddrive up to a different computer, scanned it for a "wallet.dat" file, saw it was unencrypted, and robbed him. Was it dumb of this customer not to be using encryption? Yes. On the other hand, was it dumb of him to be storing so much wealth in bitcoin right now, given how easy it is to lose your money? Objectively, yes.
This isn't an insurmountable problem, but people have to start working on it in order to solve it.
[+] [-] runeks|11 years ago|reply
This will take time, however (the latter more than the former).
The reason it will take time is that the concept of storing your own money digitally, like is the case with Bitcoin, is an entirely new concept that software and hardware needs to adapt to. With all other solutions (VISA, PayPal, bank wires), you're asking someone else to transfer your money, with Bitcoin you're doing it yourself. Basically, each user needs a greater level of security than PayPal, VISA and banks have internally, since Bitcoin payments are generally irreversible after an hour or so (and often much sooner).
This isn't something that is done overnight, and people have started working on it, but it takes time to, first of all, develop the hardware, and, second of all, develop and implement the interface between the hardware wallet and the actual payment request (ie. when I arrive at a BitPay invoice payment page, how do I pay using my hardware wallet?).
[+] [-] mcherm|11 years ago|reply
> when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?
As you point out in your own statement, there are companies meeting the need for a "turnkey solution": you list Coinbase and they are an excellent example of a company doing that well and being quite successful at it.
You apparently reject them because working with Coinbase requires the customer to "trust their coins to a third party service". Trusting the third party service is pretty much mandatory for using ANY third party service. Imagine a hypothetical service that provided "turnkey" software to store wallets on your own computer -- you would still need to fully trust the provider of this service to ensure that they actually stored the money rather than siphoning it off someplace else.
The only way to (mostly) avoid having to trust a third party is to avoid using a "turnkey" solution that is fully packaged without user serviceable parts. You would instead need to learn on your own how to safely store the coins yourself. Which is ALSO a choice, and many people do it. You complain that it takes "a solid week" to learn how to do this -- and indeed, it does take a few days to become an expert on any subject; there are 10 minute tutorials, but I presume you (rightfully) reject them as being insufficient to really teach a user enough to be fully safe.
Honestly, I think that you are just being unreasonable in your expectations.
[+] [-] user24|11 years ago|reply
Given the huge amount of developer interest, I'd be pretty surprised if several groups of smart people aren't kept awake at night by their awesome ideas about how to fix this.
[+] [-] ogig|11 years ago|reply
[+] [-] swimfar|11 years ago|reply
[+] [-] twodayslate|11 years ago|reply
[+] [-] gcb0|11 years ago|reply
the world does not need yet another 500 models of USB powered ventilators.
[+] [-] throwaway5752|11 years ago|reply
It has a payment processor, Bitpay, that accepts Bitcoin. As long as you have a competent engineer on staff, it's about as difficult as accepting PayPal.
It's nice that this is happening, but the headline should be, "BitPay lands Newegg as client". The maturity of the services around Bitcoin helps everyone that holds them, so it's not unimportant. It's just a very, very far stretch from a merchant directly accepting and holding a currency balance in BC.
[+] [-] aroch|11 years ago|reply
Hah! Bitpay fails often, and it fails in mysterious ways. Manual intervention on up to 10% of payments is no beuno.
[+] [-] ThomPete|11 years ago|reply
There will be a time where crypto-currency will be as normal as paying with credit card or cash.
[+] [-] sanswork|11 years ago|reply
[+] [-] pistle|11 years ago|reply
For a retailer, if they think they can move units by partnering with someone who will convert BC to cash, sure whatever. It's like adding PayPal.
You don't see the 10,000,000 new consumers bought bitcoins!!! Who knew cryptocurrency could burn holes in pockets!??!?! articles because that's not happening.
The real problem was never "people don't have a place to spend bitcoin." It was "people don't have time or risk tolerance to manage bitcoin."
[+] [-] jafaku|11 years ago|reply
By the way, Overstock is now holding bitcoins (about 3% of their Bitcoin sales). I wouldn't be surprised if Newegg did the same after some time.
[+] [-] ghshephard|11 years ago|reply
CoinPocket / NewEgg were within $0.15 of their exchange amounts on a $31.89 purchase. So, CoinPocket thought it was $31.89 that I was sending, and NewEgg thought I was sending $31.74.
All in All - Bitcoin made purchasing a lot more easy than having to type in a Credit Card number or login to Paypal.
[+] [-] BenC88|11 years ago|reply
[+] [-] nly|11 years ago|reply
[+] [-] dingdingdang|11 years ago|reply
[+] [-] tuntematon|11 years ago|reply
[+] [-] comboy|11 years ago|reply
[+] [-] rickbrown|11 years ago|reply
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[+] [-] unknown|11 years ago|reply
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