Accepting Bitcoin as a Small Business – 4 Years In, No Customers

https://seymour-locksmiths.co.uk/bitcoin-locksmith/

by tim333 • 7 years ago

185 226 7 years ago

seymour-locksmiths.co.uk

Cypher• 7 years ago

Well bitcoin is better for store of value, just use a CC for spending - more protection.

godzillabrennus• 7 years ago

Has your local currency been so awful at storing value that it lost more than 75% of its value in a little over a year?

In Venezuela you’re probably better offer with Bitcoin. If you live in a developed free market economy then probably not.

nybble414• 7 years ago

Bitcoin did not lose "more than 75% of its value in a little over a year". You're conveniently picking the peak price during a short-lived bubble as the baseline for your comparison, as if $20k were the normal price. No one with any sense purchased significant amounts of Bitcoin at that price. (Obviously quite a few people did buy at that price—but that's not the point. Buying after a sharp rise in the price is a losing strategy for almost any investment.) I could just as easily draw your attention to the fact that even now Bitcoin has nearly tripled in value (+190%) over the last two years.

Right before the run up to $20k Bitcoin was around $6k; now it's at $3700. That's only a loss of 40%, not 75%, if you bought at the pre-bubble price. And it reached $3700 for the first time only about a year and a half ago, in July of 2017. It's hardly the only investment to show no net gain (or loss) over that time period.

theandrewbailey2• 7 years ago

Bitcoin is terrible for storing value.

jondubois4• 7 years ago

It's been a great store of value over the past 6 years. It has outperformed every major index and currency. If you had invested just $10K in Bitcoin in May 2013, by July 2013 you would have lost almost half of your money... But if you were smart and had held on to it, today you would have over $350K!

As Warren Buffet would say, you just have to buy when everyone else is selling and sell when everyone else is buying. You have to keep your eye on intrinsic value... and the other eye on the Lambo. Easy peasy.

onomics• 7 years ago

Why would you 'store value' in something that's so new and volatile? If you want something impractical that serves to store value, buy Gold.

acdha4• 7 years ago

The only value Bitcoin has is group consensus. If nobody has a need to use it, the values of otherwise-meaningless numbers will trend to zero.

dnautics4• 7 years ago

Literally true for every currency at some level. I suppose you could use a greenback as very poor toilet paper.

jondubois4• 7 years ago

'Need' is a relative term. If you ask me what I need, I'll say I need a house to live in, air to breathe, water to drink and food to eat. If you ask Mark Zuckerberg what he needs, he'll say "All that can be counted".

Mark Zuckerberg has much more money than you or me. So when it comes to valuing things on the open market, his opinion of what 'Need' means matters a lot more.

jessaustin• 7 years ago

obvious sarcasm, people.

lenticular• 7 years ago

That's the latest line since transaction costs of bitcoin have become out of this world. But it's more volatile than any non tin-pot dictatorship currency. It's vulnerable to hacking, hardware failure, or fraud by exchanges. I swear every 2 weeks a hear about another $100 million vanishing.

How is this not just an utterly useless technology for anything except illegal transactions?

nybble414• 7 years ago

That's the latest line since transaction costs of bitcoin have become out of this world.

You should update your FUD. The average cost to have your transaction accepted in the next block is currently about 31 cents. If 1-2 hours is acceptable (6 blocks) then you can reduce that to less than a quarter. There was a period when the transaction fees were much higher (because the network was undergoing DOS attacks) but that passed some time ago.

Bitcoin is vulnerable to hacking, hardware failure, or fraud by exchanges in much the same way the USD or EUR or any other currency is vulnerable to theft, physical destruction, or fraud by exchanges (or banks)—except that Bitcoin offers ways to protect yourself against theft or hardware failure which are not available for physical currencies, and there is no particular reason to maintain a balance at an exchange. People have no problem accepting that it's unsafe to carry around large amounts of physical currency but won't take simple measures like using a hardware wallet with a PIN to store their private keys. Don't blame the Bitcoin protocol for people failing to take obvious and recommended security precautions.

I'll grant that it's more volatile than most other currencies, but that's hardly unexpected for something new and experimental. It's less volatile now than it used to be, though, and that trend is likely to continue.

api2• 7 years ago

It's a terrible store of value. It requires a constant massive electricity expenditure to keep it up. Gold, property, etc. do not and are much better if you just want to park money in something other than a financial instrument.

cwyers• 7 years ago

The original Bitcoin paper is all about payments:

https://bitcoin.org/bitcoin.pdf

If Bitcoin isn't any good for that, it's kind of a failure.

spectramax3• 7 years ago

Bitcoin has the same sort of issues that plague Linux Desktop and why Linux never took off as the defacto standard for PC OS.

It’s the lack of user focus. Setting up a bitcoin account, understanding the security implications, hardware wallet, secret keys, the whole enchilada is too big for an average consumer to digest.

Somewhere in Jobs’ biography by Walter Isaacson, there is a snippet about how products often fail when they’re designed by geeks, engineers and technology people - they make products to sell to customers that are like themselves. I’m an engineer myself and I also think the contrary is also true - products and services developed by “MBA” kinds often fail because the people in charge of the company roadmap have no fucking clue about the technical details and trade-offs of the product.

Bitcoin transaction process is designed for the most part for the nerds, not for the average Joe. I know there exists Coinbase and other “easy” setups for Bitcoin. But I’m talking about what happens when an average joe Googles “How to setup a bitcoin account”. Instant “nope” - I don’t have time for this shit and my personal money is at stake if I mess this up.

joshstrange2• 7 years ago

This is a really good comparison that I had never thought of. You are 100% right, the user experience for BTC is terrible and not likely to get a whole lot better. Even coinbase can be a PITA sometimes, it's really the Ubuntu of the crypto-currency world IMHO.

Also quick question: When was the last time you thought about the swipe-fees for your CC? I'll answer for you: Never. Yet with BTC and other crypto's this is a concern. And please, don't even talk about "Oh it's gotten better with the lightning network" or "The new QRS spec will speed this up", it's really just embarrassing.

ecwilson2• 7 years ago

Depends on the industry. For very large transactions, like if you are paying a home improvement contractor for something, they will often make you eat the fees if you want to pay with a credit card. So you end up having to figure out where your checkbook is (probably collecting dust in a box somewhere).

I give Bitcoin and LN a continuous pass on UX for now. We're in the infrastructure phase -- growing trust and improving reliability matters far more than UX. Before you know it, there will be 20 years of development and battle-testing behind the tech. The UX can come at any point in the future, while a breach of trust would be fatal. It's a question of ruthless prioritization. Thankfully, the open source devs behind these projects are long-term thinkers, not ponzi-scheme enablers.

Lastly, the UX need not come from Bitcoin/LN. They are a protocol, not a product.

cal5k5• 7 years ago

I have a better analogy: Bitcoin has the same sort of issues as TCP/IP. It's weird that people are expected to interact with it on the protocol level.

I think the term "cryptocurrency" is the "Big Data" of 2018. The term itself has been somewhat tarnished, but the underlying technology is super useful and will find its way into a lot of applications.

And no, I don't mean "blockchain". I mean Bitcoin... it's rather nice as a business or individual to be able to send large amounts of money around the world without snaking through the nightmare that is international banking. Inherent in that idea is the notion that the coin itself has value independent of a particular application.

fyfy18• 7 years ago

Most of the issues with "international banking" are infact just issues with North American banks.

I can transfer large sums of money around Europe and it will arrive in few days at the very latest. Within the same country transfers mostly arrive the same day (often it's under 1 hour), and sometimes that happens internationally too. Oh and I don't need to pay anything for that.

A few years ago I was working in the Middle East, and before I moved back I transferred my savings from there (~€50k) back to Europe without any questions from either bank. I just did the transfer online, and it arrived in a few days.

Now I'm working for a US company, and it took them a few weeks to setup paying me with their bank. It usually takes at least a week from when they tell the bank to pay me, until I receive the money in my account - to a USD account also in the US.

CPLX• 7 years ago

I have a better analogy. Bitoin has the same issues as Flooz. It’s a more complicated and convoluted solution to a nonexistent problem.

The only people who have problems with spending money the normal way that are serious enough to accept the horrible user experience and unreliability of bitcoin are those conducting illegal transactions or evading currency controls. The market has no reason to rise beyond that narrow use case despite mass speculation to the contrary.

xkcd-sucks• 7 years ago

A closer analogy might be credit card transactions, it's a protocol that tons of people use on a daily basis but the complexity has been wrapped up into a product offered by a several companies

xiphias2• 7 years ago

I would say Bitcoin has the same issues as TCP/IP in 1984. It's just 10 years old. Developers know what to do (Eltoo, Schnorr signatures, better multisig for hardware wallets, watchtowers, better routing, AMP, Lightning support for exchanges), but implemention speed is limited, and just simply adding more developers or even complaining about lack of UX won't make it faster. Also people with Bitcoin don't accept the ,,move fast and break things'' mantra, because it's money. I like the cautious speed of development, it helps build my trust in Bitcoin.

appsonify3• 7 years ago

underlying technology is super useful and will find its way into a lot of applications.

I can't think of any other use cases other than illegal black markets.

jcfrei• 7 years ago

send large amounts of money around the world without snaking through the nightmare that is international banking

This has little to do with technology but with regulation. If you think bitcoin can solve this then you either envision a future where these regulations don't apply (in some sort of technologically independent anarchistic society) or you expect bitcoin to cause a reduction in the high regulation surrounding international asset transfers - which is very unlikely, regulators around the world are pushing for more stringent AML policies.

This is where a blockchain (the technology) could actually come in handy. If every asset is tokenized and controllable through some smart contract (and every transfer needs to be authorized by the responsible financial regulator) then such a system would make any kind of international asset transfer much more frictionless. But of course this runs contrary to the idea of most current crypto currencies (whose proponents mostly hope for the aforementioned scenario).

foobiekr• 7 years ago

I don't understand the TCP analogy. TCP is incredibly straightforward and scales from a knowledge-required level of almost nothing to very advanced usage like paying attention to ECN markings. Most of the layers above TCP have, over the last 20+ years, had many many problems that related directly to people not wanting to understand TCP, from RMI and similar RPC schemes to things like BEEP/BXXP where the head-of-line blocking problem somehow surprised people.

In the end people working with technologies do need to understand their semantics. I don't mean you should be able to write a competent TCP implementation from scratch, but you do need to understand how the protocol layer makes itself an issue in every layer above it in practice.

dnautics4• 7 years ago

Yet today, half the world with computer access uses Linux, directly. And the entire world uses it indirectly.

dtech• 7 years ago

But ~0% of them know or care that they use Linux, it's either is a functional device for them or has a rebranded OS (Android)

zeroxfe2• 7 years ago

Nobody is disputing that Linux became an overwhelming success.

spectramax was comparing it to Linux on the desktop (which never really became mainstream).

laurentdc• 7 years ago

It's branding, it's more about perception than raw usage statistics.

I wouldn't call my Android phone or smart TV a Linux box, and when I browse a website there's no "served by Linux" logo :) end users simply have no idea nor care about any of this.

wheelie_boy• 7 years ago

He's specifically talking about Linux on the Desktop, which is hovering around 2% market share ( http://gs.statcounter.com/os-market-share/desktop/worldwide/... )

It might be that bitcoin is similar to linux - used as a backbone, but not customer friendly enough to ever be used directly by customers. Like maybe banks use it to transfer large amounts of money between each other or something.

api2• 7 years ago

I don't think you are wrong, but in the case of Bitcoin I think a lack of user focus is a secondary problem. The primary problem is that Bitcoin's economics don't work.

If it becomes popular, its nominal value explodes due to deflationary effects. This makes it inconvenient to use for money and rewards speculation and Ponzi type behavior. This drives people away from using it as money and it crashes. Repeat.

Bitcoin was getting some adoption in 2016 and early 2017, but the late 2017 bubble led to many retailers dropping it due to price instability. The late 2017 Bitcoin bubble was actually a deflationary collapse of the currency. After it there were only speculators left holding bags and trying to gradually get out before other speculators realized it was time to get out. That's where we still are today.

root_axis4• 7 years ago

It's worse than that; there is no compelling reason to use it for the vast majority of people. It's a strictly worse experience in nearly all respects compared to centralized options except in the case of dark net commerce where it's the only option.

beatgammit• 7 years ago

It could be easier for tourism, online transactions, and person to person transactions. However, it's not, largely because of a chicken and egg problem similar to that which plagues Linux.

People don't use Bitcoin because it's complicated and unstable. It's complicated and unstable because the types of people that use it want to speculate with it or use it for illegal purposes. Just making it more approachable won't fix the stability issues, so it likely won't increase the number of users in a meaningful enough way to get it to take off.

The same is true for desktop Linux. And installing Linux is often easier than installing another OS (Windows or macOS). Take Ubuntu or Mint, for example. They're the most popular among users new to Linux, and installation is as easy or easier than Windows since drivers come preinstalled and the user is prompted if proprietary drivers are available. The problems arise when trying to use software not deigned for Linux (e.g. MS Office), and this is getting better all the time with investment into the Windows compatibility layer by Valve.

However, the chicken and egg problem will always be there. A decentralized system like Bitcoin can't really be saved by investment from a third party since it can't solve the volatility problem without centralization.

For this reason, I think looking at centralized, but not government run, systems is interesting. For example, GNU Taler is a centralized cryptocurrency that can be used for anything (one example was currency used at conferences) with incredibly low transaction costs. I think it's interesting because it gets people used to using something digital (and not government provided/managed) to make transactions, but without having to deal with volatility inherent in cryptocurrencies, and once cryptocurrencies stabilize, perhaps they can be a drop-in replacement.

I really want decentralized currencies to work out (largely to make traveling less of a pain), but nothing I've seen is worth making more user-friendly.

LiquidSky2• 7 years ago

centralized options

This seems to be the crux of all of these discussions and why they inevitably go nowhere.

For a small but passionate core of libertarian-minded crypto/Bitcoin boosters, decentralization is a good unto itself. All other issues caused by it are irrelevant.

Hard for normal people to use? But it's decentralized! Not useful for anything normal people want to do? But it's decentralized! Massive price fluctuations render it largely unusable? But it's decentralized! Rife with scams and fraud? But it's decentralized!

This makes it impossible to discuss because this small group's focus is so different from everyone else's. Unfortunately, this small group also has outsize influence in the crypto scene so the concerns of users will probably never get addressed, since they don't matter from that POV.

asdgionbionio• 7 years ago

Bitcoin has a lot of problems which are individually fatal to the whole enterprise. It would be a terrible idea even if it were so intuitive a goldfish could use it.

AnIdiotOnTheNet2• 7 years ago

While I can agree about the lack of user focus, I disagree with the precise way in which lack of user focus is the failure point for both Linux Desktop and Bitcoin.

See, neither of these things can be presented to a user as a tool that can make their lives better, which is what users actually want. Strip away all the hype and math and crypto jargon and what is Bitcoin to someone? An inconvenient currency they can't pay taxes with and have to jump through hoops to use for nebulous benefit. Where did Bitcoin actually find traction amongst users? As a way of transferring money overseas, because it could do it with a lot less hassle than traditional methods.

spectramax3• 7 years ago

See, neither of these things can be presented to a user as a tool that can make their lives better

Did you read the article?

Quoting: "In 2014 a large school of thought suggested that the main breakthrough use case for Bitcoin would be peer to peer transactions. That being customers and businesses paying for goods and services directly between one another without having to rely on payment networks such as Visa."

The use case is certainly for consumers. Direct consumers. Same with Linux Desktop. Just go to Ubuntu.com - what are they pitching?

In my view, there is no question whether there is a lack of user focus. It is one of the major reasons (if not the top reason) for lack of traction.

bastawhiz• 7 years ago

It’s the lack of user focus. Setting up a bitcoin account, understanding the security implications, hardware wallet, secret keys, the whole enchilada is too big for an average consumer to digest.

I respectfully disagree. Bitcoin solves problems that the average consumer didn't care about, plus it introduces new problems.

I would never make an everyday purchase with Bitcoin. If I don't get the product I was promised, I can file a dispute with my credit card company. If the product I purchased breaks, it may be covered by a warranty from my card company. If my card number is stolen, I get reimbursed for the fraudulent charges and get a new card in the mail. None of these conveniences come with cryptocurrency. Cryptocurrency solved a problem with moving money ~anonymously with no interference from authorities. Most average folks want the exact opposite of that.

aeternus• 7 years ago

I would never make an everyday purchase with Bitcoin.

I used to think the same, but there is a coffee / snack shop nearby that accepts bitcoin/bcash/ethereum, and offers $1 off if you pay with it. A surprising number of people pay via cryptocurrency.

For a small purchase like that, cryptocurrency is perfect. Amounts are small enough that you don't need to wait for blockchain confirmations, risk is low. Credit card fees are high in-part because they are providing that fraud protection. For a purchase like this, both the merchant and I save money by not having to worry about transaction reversals and fraud.

TomMckenny• 7 years ago

The other issue which kills wide adoption is price fluctuation.

People using it as a regular currency need their account value to remain what they expect it to be. High viability strongly repels regular users and attracts high risk speculators. And maybe that is a fun outcome but it does make it unusable as currency.

It's still worth accepting on principle of course.

joshstrange2• 7 years ago

It's about time we admit the emperor has no clothes. BTC/ETH/XYY/123 can store value (I don't care to get into the fluctuations right now) and moving it around can be a lot easier than outdated systems like ACH but they are terrible for paying for things. Maybe something like the lightning network or similar will be able to solve part of that but accepting BTC has always been more of a fad/PR-move than an actual business decision.

Unless you are running in the gray/dark web (Silk Road-type, Torrent/nzb trackers, seedboxes, etc) your customers are not going to jump through the hoops required to spend BTC.

eropple• 7 years ago

moving it around can be a lot easier than outdated systems like ACH

To be specific: a lot easier than outdated systems in the United States.

If you do any work outside the United States, this is much less of a thing.

legionof7• 7 years ago

Gray/dark web stuff is different in America/most European countries than in other parts of the world though.

Just because something is perfectly legal here, doesn't mean that it's the same elsewhere.

tim33311• 7 years ago

Maybe something like the lightning network or similar will be able to solve part

The article mentions they also take Dash which transacts pretty much instantly for less than 1c but still hasn't taken off apart from maybe a few outlets in Venezuela.

Ruphin5• 7 years ago

Users that already have a Bitcoin wallet don't have to jump through any hoops to spend BTC. It's just as easy as any kind of digital money transfer.

Obviously using BTC to pay for anything is a huge hassle if you don't already have a wallet with some BTC in it. But that's like saying Apple Pay is inconvenient because your customers have to go to and buy an iPhone first.

scrumbledober• 7 years ago

except i don't need to wait for blockchain confirmations on apple pay, it's instant.

observer12• 7 years ago

ACH is slow by design. It could take milliseconds if desired.

jelling• 7 years ago

Of possible interest, Moon, a company in our our accelerator cohort, lets people pay with crypto on any website that accepts credit cards: https://paywithmoon.com/

jstanley• 7 years ago

Why does it require a Coinbase account?

oarsinsync5• 7 years ago

Most likely because intra-coinbase payments are instant, as they don't occur on the blockchain, but in the coinbase local database only

this_user2• 7 years ago

And why would you choose a slower, more expensive, more cumbersome and less secure method of payment when you can just use a credit card?

mateuszf• 7 years ago

There is still a pretty good chance that with Lightning it will change, because of minimal transaction costs, speed and scalability.

futureastronaut• 7 years ago

I've been hearing about Lightning for a couple years now, is this the new Duke Nukem 3d/Perl 6 or what?

hrdwdmrbl4• 7 years ago

No, Lightning has been released. It works. There are multiple implementations. It isn't perfect. Version 1.1 should fix a lot of the shortcomings.

zeroxfe2• 7 years ago

Lightning does assuage those problems, but it exacerbates the bigger and more relevant problem, which is user experience.

It is still ridiculously hard for a layperson to acquire, secure, and transact with Bitcoin.

foepys• 7 years ago

An on-chain transaction is required to create a lightning channel which holds funds.

For every person in the world to open just a single channel in their lifetime, it would take just about 34 years (with 7 transaction per second, 7.5 billion people, and a block every 10 minutes).

This doesn't include the transaction necessary to close the channel to receive the funds back in the Bitcoin wallet.

thefounder• 7 years ago

Bitcoin is the most expensive method of payment when you factor the difference between exchangers and merchant gateways(i.e try using bitpay). It is more expensive than gift cards. Not to mention that the volatitlity puts the clients in a pretty bad situation.

stevenjohns• 7 years ago

The only time I ever paid with bitcoin was for likely-illegal pharmaceuticals. And that’s only because that’s all the online pharmacy accepted.

I can’t imagine it’s much useful as a payment system for much other than that.

DiseasedBadger• 7 years ago

I personally never got into, because it's not private. No regular person can verify their transactions without joining a public vehicle that requires a credit card. Even bitcoin atms require a photograph of your face. Mining is a huge loss of value.

Bitcoin itself was simply never a good idea for most people.

hrdwdmrbl4• 7 years ago

You can verify your transactions on many websites like https://blockchain.info/ ...

You can buy semi-anonymously in-person using something like localbitcoins.com

throwaway77384• 7 years ago

Bisq sort of solves that problem.

hanniabu2• 7 years ago

Bisq uses centralized intermediaries

hrdwdmrbl4• 7 years ago

I also run a small clothing business. We have received about bitcoin 6 sales over 5 years. Only 1 was offline though.

Bitcoin is too valuable to spent. Hopefully something like Grin or Dai will make more sense for spending day-to-day.

andirk2• 7 years ago

How many sales were purchased through gold bars? Probably only like 1 or 2 per year.

mattferderer2• 7 years ago

I find accepting it & having to pay US taxes to be a pain unless I convert it into USD immediately. Otherwise I have to use special software to figure out the USD price at the time of receipt & then the USD price at the time of conversion into anything else.

I would imagine for large businesses this probably isn't to big of a concern. I also wonder if they could get away with making significant amounts of money by picking the price highs & lows of the day of receipt and day of conversion to USD when reporting taxes.

On the consumer side, I can't imagine keeping track of BTC prices to pay for stuff if I used it as an every day form of currency. I would need special software to help me file taxes. It would need to keep track of every purchase of BTC and then the price of BTC/USD whenever I purchased something. To me this is a huge issue & would create a giant spreadsheet to turn in with my taxes. On the bright side, if more people did this maybe we would have different tax laws regarding cryptocurrencies in the US.

oarsinsync5• 7 years ago

I would imagine for large businesses this probably isn't to big of a concern. I also wonder if they could get away with making significant amounts of money by picking the price highs & lows of the day of receipt and day of conversion to USD when reporting taxes.

Nope. The daily spot price is determined and that's the value you need to use in your accounting with currency conversion for tax purposes. It's set by taking the value at a particular time of the day, and that's the value set for the day. That also happens to be the busiest time of day in the Fx markets, unsurprisingly, as minor fluctuations in the price can have massive positive (or negative) impacts on banks businesses.

mattferderer2• 7 years ago

Good to know. I was under the assumption you were to use the price at the time of the transaction.

The daily spot price seems like a huge risk for businesses.

ausbah• 7 years ago

until cryptocurrencies are able to be as accessible, easy to use, and fast as everyday debit or credit cards, i fail to see any significant future for their usage beyond people well versed in tech

ecwilson2• 7 years ago

They never will be. I think people misunderstand cryptocurrencies because of the mania that surrounds them. Bitcoin, for example, is a protocol, and should be judged as such. The most important thing for the protocol is trust, reliability, and scalability. Not UX and convenience. That could/should come from the layers/products that get built on top of the protocol.

criddell• 7 years ago

Satoshi Nakamoto did say this:

The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost.

He clearly expected Bitcoin to cheaper and faster than credit cards and I've often wondered how he could have been so wrong about that.

Nursie6• 7 years ago

And Bruce Schneier says the trust thing is a bust - it moves trust, rather than eliminating it. Usually to parties that I have far fewer reasons to trust.

larry_mulgrave• 7 years ago

Because Bitcoin is optimized for speculative investment, not as an actual currency.

jrumbut• 7 years ago

Regardless of what it was, it is really cool to see someone do a follow up on their experience being an early adopter of a technology in their business.

You see so many "why we're choosing this" and not so many "how it went a few years down the line" posts.

ykevinator• 7 years ago

Agreed. I love retros too. Amazing that some people in this thread don't want to hear it.

tamaharbor• 7 years ago

Solar panels and electric cars are not as prevalent as the media would have us believe either.

endless1234• 7 years ago

Did you comment to the right article?

krzkaczor• 7 years ago

ITT: Bitcoin as a store of value not a medium of exchange.

They should look into decentralized stablecoins like DAI (1 DAI = 1$). Particularly xDAI and BurnerWallet https://medium.com/gitcoin/burner-wallet-at-ethdenver-was-fa... are interesting.

miguelrochefort• 7 years ago

I've been given some xDAI at an event, and spent hours trying to get them out of the burner wallet, to no avail. This left a very bad impression to many people there.

They're still stuck there.

magnamerc2• 7 years ago

xDAI is no more than a few months old, and DAI itself is a little over a year old. Give it some time... Come back in a decade or two if you're looking for super smooth user experiences.

Kaotique• 7 years ago

Bitcoin is more like gold or diamonds. Expensive to mine. Interesting as an investment and to store wealth outside normal currencies.

But nobody pays in the store with diamonds or gold. It's not practical.

vortico• 7 years ago

Great analogy, I'll remember that one. BTC is only really useful to me when other payment methods surpass ~$100 of effort. For example, when paying contractors tens of thousands of $ internationally, it's impossible to avoid $50-300 fees from bank wires, TransferWise, or Xoom. So if both parties are fine with sitting down and figuring out how to send/receive BTC on their computer, only then it is worth my time.

pjc50• 7 years ago

I'm reminded of the guy who lost $400k by trying to do an international transfer of his own money through Quadriga at the point they collapsed.

kbody3• 7 years ago

Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize.

https://news.ycombinator.com/newsguidelines.html

Actual title is "Accepting Bitcoin as a Small Business – 4 Years In"

gvb• 7 years ago

Since that day over four years ago and the time of writing, we have not had one customer ask to pay in Bitcoin, Dash or any other cryptocurrency.

I viewed it as a useful summary of the article, quoting from the article, not editorializing.

amenod• 7 years ago

Should my small business accept Bitcoin?
We think accepting Bitcoin is a positive move for your small business. While you may not get anyone paying in it now, it does come with other added benefits

The change of title clearly misrepresents author's message by picking a single fact without context. It doesn't matter if you agree with the author, the message conveyed in modified title is very different from what the article talks about. Don't like the message? Write your own blog post. But don't misrepresent others' intentions.

appsonify3• 7 years ago

The actual title is link bait. On HN, people don't want to have to read through the whole article to reach a conclusion. In this case, it's perfectly valid to include the main point of the article - Bitcoin failed.

Do I sense another ulterior motive for you to force the title to change? I've definitely seen this behavior on Reddit.

kbody3• 7 years ago

It misrepresents the point of the actual author, the author focuses on everything other than the lack of transactions with crypto. The focus on the number was given by the submitter.

If the case is valid for the rule, motives or biases like mine, yours or anyone's are irrelevant.

moonbug• 7 years ago

Bitcoin needs to die in a fire.

dr_win• 7 years ago

IMO, UX is a minor issue. Why would anyone spend hard money before fiat money? (Gresham's law) Also each spending could trigger a separate taxable event (depending on your jurisdiction) and that would be a serious accounting nightmare if done willy-nilly for casual payments.

Bitcoin is a store of value and a payment rail for significant sums. Currently it is not suitable for casual/small retail payments.

In near/mid-term future I expect new banking services to allow people to stay in bitcoin for "savings accounts" and offering traditional fiat credit in "current account" for daily spending (backed by bitcoin in savings account as a collateral). Settlement and transfers between savings and current account to be less frequent and easily trackable for tax purposes. This would allow a person to completely stay out of fiat while still having access to fiat payment infrastructure - this would cost some interest on borrowed fiat which I expect to go pretty low thanks to collateral (bitcoin) liquidity. See companies like BlockFi which are getting close to this model.

zcopley• 7 years ago

I think Gresham's Law explains it. I could pay a locksmith in bitcoin, but I would rather keep my bitcoin and pay with USD. Bitcoin is harder to get and can be used for purposes that USD cannot (e.g.: donating to financially censored people and organizations).

turkeytotal2• 7 years ago

This should come as no surprise, but not for the reasons the author thinks.

I could list 50 different reasons why but for us it boils down to two main facts. A very small percentage of our customers posses Bitcoin in a hot wallet ready to transfer and secondly, Bitcoin can be slow and expensive for small payments.

The main reason is that no one needs to use Bitcoin to pay for their locksmithing. Bitcoin is not your neighborhood Visa competitor. Bitcoin is your last resort payment method/store of value--for when you don't have access to traditional financial infrastructure (for whatever reason). This article is a signal only that people are not ideologically using Bitcoin as a payment (which is a good thing, I don't care to store payments on my node that would be better served by Visa).

amanaplanacanal• 7 years ago

Bitcoin is your last resort payment method/store of value

This is what people have traditionally held gold for. It feels to me like there are very few use cases that aren't already served by physical gold.

turkeytotal2• 7 years ago

You can't use gold online in an trust-minimized way. One counterexample are industries with high chargeback/fraud rates. Bitcoin is perfect for merchants exposed to friendly fraud, it completely removes the leverage customers have over them.

argo_3• 7 years ago

Bitcoin on-chain transactions are almost on its historical peak again:

https://www.blockchain.com/charts/n-transactions?timespan=al...

This forum has been denying bitcoin since the first time someone posted about it:

first time: https://news.ycombinator.com/item?id=463793

second time: https://news.ycombinator.com/item?id=599852

wcoenen• 7 years ago

I'm not sure on-chain transaction rate approaching new highs is cause for celebration. Last time the rate of new transactions exceeded bitcoin's capacity, confirmation times became erratic and fees unpredictable. Why do you think this won't happen again?

argo_3• 7 years ago

The bitcoin software is not the same as before, updates have happened in the meantime. Now, 40% of all transactions happening are SegWit transactions, a lighter format which enables the network to handle a higher volume of transactions simultaneously. SegWit transactions are also cheaper in terms of fees.

So, the number of transactions can exceed the previous high without colapsing the confirmation time or fees.

dmitriid3• 7 years ago

Less than 10 transactions per second while spending more electricity than several medium-sized countries.

Yup. Technology of the future that we are fools to dismiss.

argo_3• 7 years ago

The technology still evolving. 10 transactions is not and will not be the limit. The Lightning Network already proved that a much higher volume of bitcoin transactions can be made without slowing down the bitcoin network.

I like to think the energy consumption of the bitcoin network is an "idle energy":

10 transations/s = mid-size country

100 transations/s = mid-size country

10.000 transations/s = mid-size country

An increase in transations do not directly increase energy consumption.

andirk2• 7 years ago

Is there hard evidence that shows the energy consumption of bitcoin? How is that calculated? I do believe it's "a lot" when I see those giant farms churning. And how do we compare it to fiat where the security is via vaults and sharks with lasers and other types of security?

tim33311• 7 years ago

It's interesting that that is the case while interest in Bitcoin as evidenced by twitter activity seems to have dropped back to levels seen in 2014 and 2016 https://bitinfocharts.com/comparison/bitcoin-tweets.html

I'm not quite sure why. More algo trading perhaps?

IAmEveryone• 7 years ago

We got a regular trickle of three to ten orders per month for about three years, until the rally to 5-digits broke the system because transaction costs started to surpass our order values.

...which was excellent, because we had forgotten the entire system even existed. We had accrued a few hundred orders in the $80 range, many paid at exchange rates < $100.

boznz• 7 years ago

The only advantage and attraction of bitcoin to date to the lay person has been capital gains, not so much lately but at least its semi-stabilised to most holders relief.

I suspect that was the secret attraction of most businesses who set up to accept it.

However in real life it is too awkward for the average joe or joan and if you want to "go dark" cash or gold much easier to use and understand.

Cryptocurrencies day will come but not until it is as easy to use as a credit card or cash

mnort9• 7 years ago

A shift in consumer habits require orders of magnitude in improvement over previous solutions to achieve mass adoption and become the new true "normal".

The reality is bitcoin and crypto are not much of an improvement (if any) for the avg consumer compared to cash/debit/credit card.

Ruphin5• 7 years ago

Many posts here about how Bitcoin is not user friendly, and how it can't compete with existing (digital) payment solutions in terms of UX. My experience with it is quite the opposite, and I prefer paying with Bitcoin/cryptocurrencies in most (but not all) situations.

My phone has a wallet app with some small amount of Bitcoin on it. If I have to pay for something, all it takes is opening the app, scanning a QR code, and clicking ok. For paying beers at a bar (which I have done) the setup is slightly less convenient than NFC touch-to-pay solutions but not significantly worse. But for things like purchasing digital goods or other items online, the process is sometimes significantly better than alternatives. If I purchase something from an online vendor it's the same process; QR code shows up, I scan it with my app, and press ok. For this scenario it is almost always more convenient than having to enter some payment information, or logging in to some payment processor like PayPal or whatever solution my bank has implemented.

The downsides are that my phone effectively has a bundle of cash strapped to it, and when I lose the phone my cash is gone too. Getting the money onto my phone is also not the most convenient process as I need some external service like an exchange to acquire the coins first.

Not all the problems have been solved, but things are slowly getting better. Just like Linux on the Desktop, people will keep repeating the same story that it's never going to happen, but the reality is that modern Linux distributions have nearly the same install-and-go ergonomics as Windows, with many happy users.

exit2• 7 years ago

The downsides are that my phone effectively has a bundle of cash strapped to it, and when I lose the phone my cash is gone too.

you should have the root mnemonic of the wallet stored separately, in which case you would be able to regenerate the private keys and access your funds again.

i can recommend the eclair wallet, by acinq, for android. as well as traditional on-chain transactions, it also supports spend-only lightning channels. receive functionality is being tested on testnet and should arrive on mainnet soon.

Ruphin5• 7 years ago

It's exactly narratives like that, "you have to store this passphrase somewhere secure or you risk losing all your money", that makes anything in this space so much less accessible to normal people.

You can choose to ignore those complexities and just treat a wallet like a simple app that just sends and recieves money without understanding anything about how it works, and the UX is way better. You just have to live with the consequence that your money is gone if you lose the phone (which is the same as losing the cash in your physical wallet when you lose that). In my experience that narrative works much better for onboarding people, because it doesn't place any burden on them to do anything. They just have to choose their level of acceptable risk, which is something they are familiar with (carrying cash in their physical wallet).

microtherion• 7 years ago

For paying beers at a bar

So you order the beer, wait for an hour or so to get 6 confirmations, then drink the beer? Sounds like a great recipe to limit your alcohol intake.

stakhanov2• 7 years ago

The biggest argument against bitcoin, in my mind is this:

Regulators really only get involved in allowing/prohibiting innovations very late in the game. I'm thinking of how Air BNB and Uber were allowed to grow really huge despite being blatantly in violation of a lot of laws in a lot of places (for example restrictions around subletting in contracts between tenants and landlords, regulations around running businesses that are hotels or taxis, etc). Only after they had gotten really big did regulators start to think about whether or not they like what's going on, and then they shut down large parts of the sharing economy.

For bitcoin there are only two scenarios in my mind: Either it dies right now for the problems it is facing right now (network externalities around lack of merchants/customers outside darknet/illegal stuff, volatility etc), or it overcomes those problems, gets really big, and is then killed by regulators.

For the most part the trend in regulation of financial services and financial reporting has been: erosion of banking secrecy (even Switzerland and tax havens in the Carribean are now sharing data with law enforcement), anti-money laundering regulation tightened (FATCA/CRS), increased requirements around creating transparency about ownership of legal entities in cross-border corporate structures (e.g. "persons of significant control" register introduced in the U.K. and many European countries), increased reporting obligations around cash transactions even for small businesses (parts of Europe are now mandating the introduction of electronic cash-registers capable of reporting on a transaction-by-transaction basis even for small businesses like a self-employed taxi driver), etc. etc.

Allowing bitcoin to happen would not fit into that regulatory trend AT ALL.

It's just that bitcoin isn't big enough yet for regulators to even be thinking about it. But it'll happen.

Ruphin5• 7 years ago

Bitcoin and cryptocurrencies are an active issue for regulators right now. Statements have come out from several parties that confirm networks like Bitcoin and Ethereum are not securities. The SEC is actively shutting down ICO schemes that are deemed securities. Things are moving slowly because it's a complicated topic, but we are seeing more and more guidance from regulators like the SEC and others.

AirBnB and Uber are doing pretty fine for companies that got killed by regulators.

tim33311• 7 years ago

It's fairly hard to buy Bitcoin or ETH for fiat without uploading your passport and then subsequent transactions are logged on the public blockchain so it's not that bad for the regulators.

stakhanov2• 7 years ago

I did not say AirBnB and Uber "got killed" by regulators. I said that it had, at one point, reached a level that was clearly beyond what was within legal limits, and that afterwards "large parts" of that got shut down. BTW: This is a trend that is still ongoing and we have by no means reached the end of it, especially in Europe where there is a lot more regulation around who gets to be a taxi or a hotel (see Madrid taxi strike raising awareness about Uber's illegal role in the market there)

The SEC ruling that bitcoin is not a security is not really saying anything much as there are many facets to it (should the law treat it as being somehow equivalent to cash? equivalent to transactions carried out by banks?). It's also not saying anything about this pesky little thing that Americans keep forgetting about called "the rest of the world" and even if bitcoin is not in voilation of any laws that exist now, that doesn't mean that new laws won't be brought in to outlaw bitcoin etc. etc.

acabal• 7 years ago

At Scribophile, I set up an option to pay for a membership upgrade directly with Bitcoin, i.e., without an intermediary to USD like Coinbase. Customers would be given a Bitcoin address to send a certain amount of Bitcoin to for a 1-year upgrade purchase, and once the transaction was verified, their account would be upgraded.

In the ~5 years we had the option, I think we had about 3 purchases with Bitcoin.

I kept it as an option for a long time because I was mildly interested in the philosophy of Bitcoin. That is, its use as an alternate currency for everyday transactions, not its use as an intermediary for USD transactions or its use as a Ponzi scheme to separate the stupid from their savings.

But with such a poor sales rate I finally removed it some time last year. It was interesting while it lasted but Bitcoin is clearly nowhere near being useful for e.g. buying a bag of flour.

After some thought I decided that the entire cryptocurrency space, in its current pump-and-dump/outright scam incarnation, is mostly stupid, and unethical at best and criminal at worst. I could have kept Bitcoin payment as an option indefinitely--it's not hard to keep a static page up--but I felt that doing so would be in some small way promoting an unethical industry. (Unethical not because of what people are buying with crypto, but because today crypto is being used as a thinly-veiled scam to trick gullible people out of their investment money.)

minikites• 7 years ago

Are the drawbacks of Bitcoin (massive global electricity usage, makes email/malware extortion scamming much easier) worth the advantages (the ability to anonymously buy things online at a small number of places) overall?

I'm of the opinion that Bitcoin is a net negative (Bitcoin mining has wiped out all of the gains we've made from the recent renewable energy boom), but perhaps there a useful purpose that I'm unaware of.

sparkie9• 7 years ago

Bitcoin is going to drive research into renewable (cheaper) energies faster than all of the G20 combined. The reason is simple: Mining profitability is measured in Hashes per Joule. Increasing hashes means bringing down the price of mining equipment, which is happening already, and it is reaching the limit of Moore's Law, meaning that the mining equipment will have a much longer lifetime, and the amount of energy it will burn in that lifetime will dwarf the cost of the chip. In effect, the "Hashes" in the above equation will become negligible - mining profit will be measured solely in Joules.

If miners want to remain competitive, their profit will be the difference between the bitcoin reward and the cost of their electricity. The mining reward is unpredictable, but the subsidy is going to decline over time. The clear path to increasing profitability then, is to reduce expenditure on energy!

Miners have an absolute requirement to invest in cheaper energies, because if they don't their competition will, and they will go out of business. Industrial mining is a race to see who can develop the cheapest, most abundant, lowest maintenance energy solutions.

xd3• 7 years ago

It shows your customers that you are a forward thinking company.

Bit of a loaded assumption that; accepting bitcoin has nothing to do with being forward thinking.

Bitcoin appeals to human greed, that's it. The comments comparing this to Linux and TCP/IP is apples and oranges.

Why would I as a hard working member of my society with a house and kids invest money into a system completely unregulated. I'm all ears.

exit2• 7 years ago

at a base level its regulation is completely transparent and algorithmic, unlike the closed-door regime of central banking.

xd3• 7 years ago

You invest in bitcoin and lose your key or it's stolen.. how does that work out in the end?

Edit: don't get me wrong, I have crypto currency I've blown many a kw/h on. But you can not as a society rely on a currency with such flaws. Hell maybe insurance startups will popup to handle the issue but I'm not holding my breath.

blancheneige• 7 years ago

because it's not your society. it's that of your elites.

Barrin92• 7 years ago

The distribution and concentration of bitcoin and its mining resources makes even decidedly unequal societies look like socialist utopias.

tim33311• 7 years ago

Bitcoin appeals to human greed, that's it

Much of the motivation of the founders and enthusiasts was that governments and existing financial systems are flawed so it may be valuable to have a peer to peer financial system outside of that.

xd3• 7 years ago

Flawed how? This is a problem solving furum keep in mind.

pjkundert3• 7 years ago

"Why does no one want to pay their local locksmith with Bitcoin?"

The reasons given (few customers have it in a hot wallet ready to use, slow and expensive for small payments) are not the reasons! Even if many people had it, and the expense was lower -- few people would use it.

The real reason? Gresham's law: a monetary principle stating that "bad money drives out good".

Given 2 forms of commodity money in circulation, the more valuable commodity will eventually disappear from circulation.

A fixed-issuance token is designed to Deflate (go up in value), if its uptake and utilization increases. Hence, Bitcoin will "disappear from circulation" as money, vs. almost any alternative form of money!

Who's going to spend something that the believe is likely (barring catastrophic failure) to go up in value?

It is astonishing to me that this topic is even a question that people actually have...

paulgb2• 7 years ago

You're mixing up two things. Gresham's law applies when the conversation rate is fixed, not when it is set by the market. It's not the same as a currency being deflationary.

Hayek wrote about the confusion: https://fee.org/resources/denationalization-of-money/#VI.%20...

pjkundert3• 7 years ago

Its original application was to coinage with a fixed face value and a fluctuating inherent (market) value, of course.

The "spirit" of Gresham's law applies to any money that is (or is likely) to become more valuable in the future than it currently it. The same mental process applies in the holder of the money: "why would I spend this potentially more valuable money, when I have this other less valuable money to spend?"

edit: the article mentions the German Weimar inflation as a counterexample; in fact, it is a prime example of this concept: if a vendor accepts either the Weimar Papiermark or the US Dollar as payment, who in their right mind would pay that vendor with US Dollars? That vendor would probably never see a single US Dollar in payment! Bad money would have totally chased out good, from their perspective.

The real issue is not fixed exchange; in a free market, where vendors accept multiple forms of payment: unless forced, payors will always pay with "bad" money, and will keep the "good" money for themselves.

classicsnoot2• 7 years ago

Back in early 2016 I told myself that if BTC dropped below $200 I would buy one. The lowest I saw was $203. When it went meteor a few years later, I felt Fold remorse. Perhaps it is sour grapes, but every time I walk by the BTC machine at my corner store, I relish in seeing how low it has gone, though still well higher than $200. :/

More on topic, the only action the corner store BTC machine gets, apart from drug addicts, is scams. That I can attest to, twice some tech ignorant soul has walked in, dumped their savings, then asked the cashier for a receipt.

Unless crypto currency can be inoculated from speculation (impossible IMO) it will be some time, if ever, before it becomes a viable mechanism for general economic exchange.

skinnymuch3• 7 years ago

What’s a BTC machine? What happened to the money the poor souls dumped into it?

classicsnoot2• 7 years ago

Your guess is as good as mine. It looks like a MTO kiosk. It feels like an ATM. According to [redacted] their money went straight ether.

nybble414• 7 years ago

It's a vending machine for exchanging BTC and local currency. Depending on the type it may be linked to an account at an exchange or else rely on scanning QR codes for the receiving address (either the users or the machine's). Some only sell BTC, while others support both buying and selling.

I imagine that this was one of the models that was linked to an exchange account, since the QR-based versions make it fairly obvious where the funds are going and won't work unless you first set up a receiving account and present the QR code for the machine to scan.

jakobegger• 7 years ago

A handful of people have requested that I add Bitcoin as a payment option to my store. But when I offered these people to purchase my app with Bitcoin, none of them actually bought a license.

As much as I like the idea of Bitcoin, it just doesn't seem like people really use it for buying legal things.

Accepting Bitcoin as a Small Business – 4 Years In, No Customers

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