# Does anyone actually use Bitcoin to pay for things?



## cremeegg

Sarenco said:


> I might well think that crypto currencies are total nonsense but I'm open to being convinced otherwise.



Careful not to throw the baby out with the bath water. Crypto currencies are a brilliant idea, if they make payment easier. That does not make a bit coin worth anything per se. How much is a visa debit card worth per se.


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## cremeegg

Does anyone, not just aam posters, anyone anywhere, use bitcoin to make payments for goods and services, at present. I suspect not.


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## odyssey06

I understand they are very handy for paying online for services of 'grey' legality, or sites of uncertain security, where one would not wish to divulge credit card information.

In the far east, they can be used in thousands of retail stores, or at least were being used for that purpose.


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## MrEarl

Hi,

I know they can be used for various online payments (incl. Microsoft and Expedia), but I personally have not used Bitcoin to pay for anything to date.  

In truth, I am not sure if I would currently use them as a method of payment, because the temptation to speculate on their future value might discourage me from spending them.  I think that's what is happening with about 99% of people currently holding Bitcoin, which sadly may well lead to Bitcoin's failure as a future worldwide payment method.

There's a list of some of the more well known online retailers who accept Bitcoin  here, in case anyone is  curious.


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## Merowig

I would guess that buying illegal stuff on the dark net is one common usage, and also computer hijackers are demanding bitcoins.

200k - 400k transactions per day is not that much as displayed there:
https://blockchain.info/charts/n-transactions


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## michaelm

Some guy apparently paid 10,000 bitcoins for two pizzas in 2010. Seem like magic beans to me.


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## MrEarl

Merowig said:


> I would guess that buying illegal stuff on the dark net is one common usage, and also computer hijackers are demanding bitcoins. .....



While I think that many of us would suspect similar to you, the simple fact is that we do not have the slightest idea... 

By their nature, illegal activities cannot be accurately counted or monitored, so for all we know there may be little or no illegal activity in relation to Bitcoin, and most of what we hear or suspect is no more than malicious rumours being circulated by those opposed to Bitcoin  (note:  I am not saying this is the case btw )


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## Merowig

MrEarl said:


> While I think that many of us would suspect similar to you, the simple fact is that we do not have the slightest idea...
> 
> By their nature, illegal activities cannot be accurately counted or monitored, so for all we know there may be little or no illegal activity in relation to Bitcoin, and most of what we hear or suspect is no more than malicious rumours being circulated by those opposed to Bitcoin  (note:  I am not saying this is the case btw )



It is already proven that it is not the case that there is *no* illegal activity in relation to Bitcoin as the US seized 50,000 Bitcoins in one go on Silk Road as per Article here: http://www.telegraph.co.uk/technolo...ons-50000-Bitcoins-seized-from-Silk-Road.html
In 2013 the FBI seized 144,000 Bitcoins


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## MrEarl

Merowig said:


> It is already proven that it is not the case that there is *no* illegal activity in relation to Bitcoin as the US seized a substantial sum alone in one go ...



In fairness, I did indicate that I don't believe that there's zero illegal activity.

As memory serves, I think the Gardai also recently discovered some funds held in Bitcoin, during one of the large drug busts that they were recently involved in.

The point is that we don't know and can never evidence how much of the Bitcoin activity is illegal, because if we could then we'd have caught everyone involved in the illegal activities and so have an accurate count. 





> ...so Google yourself:



Excuse me ?  


.


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## Jim2007

cremeegg said:


> Does anyone, not just aam posters, anyone anywhere, use bitcoin to make payments for goods and services, at present. I suspect not.



I know a couple of clients who used it to get their hard disks unlocked.  And one looper who had to do so twice in the same week!


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## Brendan Burgess

There was an interesting snippet on Moneybox on BBC Radio 4 yesterday. It's at the end of the programme if anyone wants to listen back to it. 

http://www.bbc.co.uk/programmes/b006qjnv

This guy convinced a victim to transfer thousands of euro into a variety of bank accounts. 

The owners of those bank accounts then transferred the money to the fraudster. 

The owners of the bank accounts claimed that they were not involved in the fraud. They were just asked to accept some money and pass it on. The 4 innocent owners of the bank accounts were all Bitcoin traders and were paid in Bitcoin for this service to the fraudster. 

Moneybox Live next Wednesday will have a phone in about Bitcoin and other cryptocurrencies.

Brendan


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## TheBigShort

The thing about criminality and bitcoin is that alleged hoaxes, frauds, extortion, laundering etc, is supposed to diminish the confidence of would-be buyers and sellers of bitcoin.
The fact that the vast, vast majority of hoaxes, frauds, extortion, laundering and criminality in general, involves fiat currencies doesn't appear to diminish confidence in those currencies.


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## ant dee

I bet you these criminals used the internet to commit those frauds .


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## PaddyBloggit

ant dee said:


> I bet you these criminals used the internet to commit those frauds .



and bitcoin ATMs => http://www.dailymail.co.uk/news/art...s-using-bitcoin-cashpoints-launder-money.html


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## STEINER

some other users
http://www.thejournal.ie/bitcoin-mine-cash-kinahan-3597575-Dec2017/


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## ant dee

STEINER said:


> some other users
> http://www.thejournal.ie/bitcoin-mine-cash-kinahan-3597575-Dec2017/


Here we see a reason why its a bad idea to use bitcoin for criminal activities. Transactions are public. One mistake and its all traced back to you. You don't know whos watching.
There are people analysing blockchain transaction of hack - stolen bitcoin for years. They caught that Russian bitcoin-money-launderer in Greece this summer, they tied him to the MtGox theft that happened 3-4 years ago.
Its kinda like leaving fingerprints everywhere, kinda like using the same gun everytime.


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## MrEarl

I think people are also forgetting the amount of cash - Euro, USD$ etc that criminals handle....


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## cremeegg

So no one can point to any actual use of Bitcoin in transactions. Whatever the Kinahans are up to I don't think that they are using Bitcoin for transactions.


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## landlord

I use Bitcoin (indirectly) every day to pay for everything and anything. I have a Xapo card which is affiliated with VISA.  So I can use this in any shop that accepts Visa. On purchase my bitcoin is automatically converted to euro for a very small fee.


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## cremeegg

Thank you for telling us about this I was not aware that Bitcoin was being used like this. 

Does the volatile price of Bitcoin not make using it, unsettling


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## landlord

I don’t even notice the price to be honest.  It is a means and ways of realising profit.  It is just as easy to use this card as any other card.   Coincidently when purchasing something in a local newsagent recently with my Xapo card I asked the girl at the till who I knew quite well if they took Bitcoin there.  She knew what it was but said no. I joked “you do now!!”


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## MrEarl

landlord said:


> I don’t even notice the price to be honest.  It is a means and ways of realising profit.  It is just as easy to use this card as any other card.   Coincidently when purchasing something in a local newsagent recently with my Xapo card I asked the girl at the till who I knew quite well if they took Bitcoin there.  She knew what it was but said no. I joked “you do now!!”




Hopefully your next joke with that young lady in the shop won't be something along the lines of.....

Bitcoin:   They think it's all over .... Well, it is now 



...Jokes aside, interesting card you mentioned there btw !


.


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## john luc

if a Bitcoin is priced at $15,000 how do you pay for a small item costing say $20


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## ant dee

john luc said:


> if a Bitcoin is priced at $15,000 how do you pay for a small item costing say $20


That would be 0.00133333 btc sir. Or 133333 'satoshis', which is the smallest unit of account.
Each bitcoin is divisible 100 million times, or up to 8 decimal points


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## MrEarl

john luc said:


> if a Bitcoin is priced at $15,000 how do you pay for a small item costing say $20



Simple, just break off the bit from a bitcoin


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## Merowig

Valid Question I saw on FB: Would Bitcoin be worth anything if drugs were decriminalized, weapons legal to buy anywhere and money laundering non existent?


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## ant dee

Merowig said:


> money laundering non existent


This is all thats needed for bitcoin to fail. Is that really failure though?


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## Duke of Marmalade

landlord said:


> I don’t even notice the price to be honest.  It is a means and ways of realising profit.  It is just as easy to use this card as any other card.   Coincidently when purchasing something in a local newsagent recently with my Xapo card I asked the girl at the till who I knew quite well if they took Bitcoin there.  She knew what it was but said no. I joked “you do now!!”


Of course they didn’t actually take BTC.  But there is one more reason to add to my list for transacting in BTC, it must impress the girls


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## tecate

firefly said:
			
		

> Bitcoin is synonymous with the Dark Web where drugs, guns and the worst form of trade in materials realting to children take place.In addition to the Dark Web, there seems to be a few token, trendy coffee shops accepting Bitcoin......Now, I've heard it argued here that the baddies use FIAT money to trade in illicit goods too. But there's a difference......only a tiny portion of the global FIAT currencies are used in this way by a moniority of people.



Fed up with this 'dark web' nonsense.  Firstly, who gives a fiddlers - let people buy what the hell they want and they can deal with Law Enforcement thereafter - that's their problem.   All of these people use cash, cars, etc. etc. - are we to ban them too?  or tar and feather bitcoin?  The idea that more people proportionately use bitcoin for illicit purposes than cash is semantics.  A savage amount of cash is used for a multitude of illegal purposes day in, day out.  In any event, those dark web people you're talking about (if they're not using usd or euro) are using monero now (given that it is truly anonymous whereas bitcoin isn't.)


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## Brendan Burgess

Hi tecate 

Sure, criminals use cash, credit cards and other forms of money for their activities.   But the vast majority of uses of cash and credit cards was for legitimate purposes.

The point in this thread is that it doesn't appear that Bitcoin is used for its original purpose very much. The main "practical" use as distinct from speculative use, is for illicit activities. 

So, I would give a fiddlers. One could not ban cash in an attempt to defeat criminals, as it would affect so many other people. But a ban on Bitcoin wouldn't affect anyone other than criminals.  I am not suggesting a ban by the way, just pointing it out.

Brendan


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## TheBigShort

Japanese company to pay staff in bitcoin.

https://www.theguardian.com/technology/2017/dec/15/japanese-company-paying-employees-bitcoin

"We hope to get a better understanding of bitcoin by using it"


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## Brendan Burgess

Hi Shortie

This is a Bitcoin company. "The company started a Bitcoin trading and exchange business in May. And next month, it will join the so-called “Bitcoin mining” business – gaining the right to receive new Bitcoins as a reward for helping keep the network secure by approving transactions."

It will give the employees a choice of whether to receive up $890 a month in Bitcoin 

It will start in February. I guess that Bitcoin will probably still be around then. 

Brendan


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## TheBigShort

Yes, it is.

The topic title is "Does anyone actually use Bitcoin to pay for things?".

That question has now been answered. And as you point out, it is a bitcoin company. It stands to reason that the company would have faith in bitcoin and effectively practice what it preaches, no?


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## Duke of Marmalade

_Boss _you are being absolutist again.  A bitcoin company in Japan gives its employees the option of being paid in bitcoin.  Does that not answer your question?

But look again - it is not actually giving its employees a salary in BTC.  It is still contracting them on salaries denominated in Yen which will be converted to BTC at spot.  In fact this is rather damning of BTC.  I wonder how many employees would actually accept a salary denominated in BTC at today's price.  I have asked arch evangelist _fpalb _would he work for a salary denominated in BTC.  Given his short term prognosis for the exchange rate I presume the answer is "No".


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## tecate

Brendan Burgess said:


> Sure, criminals use cash, credit cards and other forms of money for their activities.   But the vast majority of uses of cash and credit cards was for legitimate purposes.


Sure, Brendan.  I take on board the proportionality argument.  The reason being that there are several technological impediments to bitcoin payments as it stands right now.  Furthermore, the role of government  is getting in the way of same.  Japan has become the first (and only??) country to officially recognise Bitcoin as a fully fledged currency (as opposed to commodity) since a few months ago.  In the direct aftermath of that, a number of high profile chain stores in Japan  started to accept bitcoin as a means of payment.



Brendan Burgess said:


> The point in this thread is that it doesn't appear that Bitcoin is used for its original purpose very much. The main "practical" use as distinct from speculative use, is for illicit activities.


Bitcoin faces a number of technological issues that is holding it back as a currency right now. In fact, due to the level of transactions, it's regressed in this regard.  Validation of transactions has slowed.   Cost of transactions has increased.   These two factors are the very opposite of how bitcoin was pitched as a currency.

What people seem to be forgetting is that Bitcoin is being road tested and is being refined and improved in iterations - time after time. I alluded to lightening network.  If you have an interest, please google it.   It will be a game changer in terms of the application of bitcoin as a currency.

As regards the proportionality argument, your comparing currencies that are fully matured with a technologically based currency that is still being developed. The scammers will still use it. Bitcoin should be nourished and encouraged.  Regulation should be sympathetic as the social good that bitcoin can achieve for society is immense should it be fully realised.



Brendan Burgess said:


> So, I would give a fiddlers. One could not ban cash in an attempt to defeat criminals, as it would affect so many other people. But a ban on Bitcoin wouldn't affect anyone other than criminals.  I am not suggesting a ban by the way, just pointing it out.


  See above. A ban on bitcoin would stiffle innovation - and if anything, it would encourage scammers  to use it all the more.

USD/GBP/EUR are matured and established currencies.  Bitcoin is still being developed.   If its given the oxygen and space to do so, it will overcome some of its current shortcomings.

ps. I have bought goods and services via Bitcoin (and not grey-market goods/services!) although I admit that it is difficult to seek out BTC as a means of payment.  Any item on amazon.com/co.uk can be bought using bitcoin by way of purse.io - a convoluted manner to buy - but you get rewarded with cheaper goods than someone that buys directly through amazon with visa/mastercard.


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## MrEarl

House in UK sold for Bitcoins !

See  here


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## Firefly

tecate said:


> Fed up with this 'dark web' nonsense.


It's inconvenient isn't it?



tecate said:


> Firstly, who gives a fiddlers - let people buy what the hell they want and they can deal with Law Enforcement thereafter - that's their problem.


I like your posts in general but that's almost as lame as someone else who said there are plenty more energy users than Ireland/Bitcoin - like that makes it OK or something 



tecate said:


> All of these people use cash, cars, etc. etc. - are we to ban them too?


Of course not. FIAT is used by the vast majority of people for legitimate purposes. I wouldn't ban something just because a tiny proportion use if for illegal purposes. 



tecate said:


> The idea that more people proportionately use bitcoin for illicit purposes than cash is semantics.


I disagree. In fact, if bitcoin wasn't used for illicit purposes there would be very little users of it anywhere...


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## Firefly

ant dee said:


> That would be 0.00133333 btc sir. Or 133333 'satoshis', which is the smallest unit of account.
> Each bitcoin is divisible 100 million times, or up to 8 decimal points



Thanks for that. I'll try it in my local over Christmas.."How about a couple of thousand Satoshis for that pint?"


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## Brendan Burgess

Hi Firefly. If I calculate it correctly, it would be around 30,000 Satoshis. 

http://satoshitobitcoin.co/satoshi-to-usd/  30,000 is $5.63 

Most people have problems with percentages.  This would be even more difficult. As I have said before, the very high price is a deterrent to its wider adoption.  Dividing a Bitcoin by 20,000 would make more sense because then one, let's call it an iddybiddy, iddybiddy would be worth $1, which people would understand without needing a calculator. 

But maybe by dividing it by 100m instead of 20,000, they were waiting for the price to rise to $100m each. In which case one Satoshi will be worth $1. 

Brendan


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## Firefly

Brendan Burgess said:


> Hi Firefly. If I calculate it correctly, it would be around 30,000 Satoshis.
> 
> http://satoshitobitcoin.co/satoshi-to-usd/  30,000 is $5.63
> 
> Most people have problems with percentages.  This would be even more difficult. As I have said before, the very high price is a deterrent to its wider adoption.  Dividing a Bitcoin by 20,000 would make more sense because then one, let's call it an iddybiddy, iddybiddy would be worth $1, which people would understand without needing a calculator.
> 
> But maybe by dividing it by 100m instead of 20,000, they were waiting for the price to rise to $100m each. In which case one Satoshi will be worth $1.
> 
> Brendan



Too confusing Brendan, but thanks. I'll stick to paying with the fiver!


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## ant dee

'Bits' = micro-bitcoins = μBTC = 0.000001 btc
So at the current prices, its about 1,5 cent of a euro.
Wallets and exchanges should be starting to show bits as default unit of account.
So like, 333 bits for a pint? 

Anyhow, euro is our unit of account, so if anyone wants to accept payment in something else there would be some math involved to figure out exchange rates, be it bitcoin, kronas or whatever.
A fiver will be pretty much the easiest solution, let the bartender serve the next customer already!


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## Duke of Marmalade

And if you think bitcoin is worthless those are cheap pints


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## Firefly

MrEarl said:


> House in UK sold for Bitcoins !
> 
> See  here



_ There’s no word on what the final price in Bitcoin is to be paid, but we do know that the buyer is a Bitcoin miner who made a great deal of money on the cryptocurrency by getting in on it early and is now looking to convert the digital cash into brick-and-mortar reality._

The miner probably can't convert it to real money!

In fairness to the miner, s/he has done very well, getting a house for nothing! That seller better sell quick...


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## Firefly

ant dee said:


> A fiver will be pretty much the easiest solution, let the bartender serve the next customer already!



And that's my point! Why would anyone bother going to the trouble of paying in Bitcoin :

Doing the calculation
Checking if I have enough Satoshis (trying to keep a straight face) in my account
Making the payment & checking that it went true correctly
When I can slip my barman a fiver and start enjoying my pint

Why bother with Bitcoin????


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## ant dee

Well, maybe we shouldn't bother.
Buying pints isn't really gonna work with bitcoin... at the moment.

A fiver is easier than paying with a €50 and waiting for the change.
Does that make €50 notes useless? Why bother with €50? Well, a €50 note can serve more purposes.

Same with a credit card, right? A fiver beats a credit card for paying for a pint!
At least until the banks innovated and made contactless payments.
Now, after some setup from the merchant and the customer, a contactless card is even easier than a fiver.
It required a lot of work from the banks and we had fivers already, why did the banks bother?
Because the initial work put into it doesn't matter to us using it, banks enjoy the increased volumes and we just enjoy the end product. (by the way I don't even use contactless, but it sounds like the fastest easiest way to pay exactly for a pint).

Now, we had to wait for the banks to innovate and improve credit cards.
With bitcoin we don't have to wait for anyone. Anyone can start creating an app that makes paying for pints easier.
And you can even use hardware technology that's already in place, like the current smartphones that are circulating. There might be no need to buy a new POS or order plastic cards.

Overly simple example.
Although the current high network fees make it  all useless, lets assume network fees are like €0.05. The merchant will be happier to pay that 1% than the banking fees.
It is possible to make an app that does the following:

Merchant app

Tie the price to the unit of account of your choice, be it € or oz of gold or whatever
Real time convert the equivalent in bitcoin ( or other cryptocurrency)
Broadcast a payment request
Customer app

Store money, arguably not very securely but your cash in your pocket isnt really secure either
Display in your choice of unit of account (maybe I believe in 'North Korean won' and account my net worth there  )
Read a payment request, maybe convert it on display in your choice of currency, using live markets data.
Pay it, or not.
Of course you need to add more functions, details, add limits, require prompts, different broadcast methods, like displaying QR code, or simply tapping a phone to one another (NFC?)
Point is it will happen, because bitcoin is programmable money and people will be building apps for it non stop. Its all open source, people will build and others will build on top and improve.
And once someone makes it good enough, if its easier then the fiver or the contactless card, we can simply start using it.
Or not.
Bitcoin is voluntary, noone is forced to use it.


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## Firefly

ant dee said:


> Well, maybe we shouldn't bother.
> Buying pints isn't really gonna work with bitcoin... at the moment.
> 
> A fiver is easier than paying with a €50 and waiting for the change.
> Does that make €50 notes useless? Why bother with €50? Well, a €50 note can serve more purposes.
> 
> Same with a credit card, right? A fiver beats a credit card for paying for a pint!
> At least until the banks innovated and made contactless payments.
> Now, after some setup from the merchant and the customer, a contactless card is even easier than a fiver.
> It required a lot of work from the banks and we had fivers already, why did the banks bother?
> Because the initial work put into it doesn't matter to us using it, banks enjoy the increased volumes and we just enjoy the end product. (by the way I don't even use contactless, but it sounds like the fastest easiest way to pay exactly for a pint).
> 
> Now, we had to wait for the banks to innovate and improve credit cards.
> With bitcoin we don't have to wait for anyone. Anyone can start creating an app that makes paying for pints easier.
> And you can even use hardware technology that's already in place, like the current smartphones that are circulating. There might be no need to buy a new POS or order plastic cards.
> 
> Overly simple example.
> Although the current high network fees make it  all useless, lets assume network fees are like €0.05. The merchant will be happier to pay that 1% than the banking fees.
> It is possible to make an app that does the following:
> 
> Merchant app
> 
> Tie the price to the unit of account of your choice, be it € or oz of gold or whatever
> Real time convert the equivalent in bitcoin ( or other cryptocurrency)
> Broadcast a payment request
> Customer app
> 
> Store money, arguably not very securely but your cash in your pocket isnt really secure either
> Display in your choice of unit of account (maybe I believe in 'North Korean won' and account my net worth there  )
> Read a payment request, maybe convert it on display in your choice of currency, using live markets data.
> Pay it, or not.
> Of course you need to add more functions, details, add limits, require prompts, different broadcast methods, like displaying QR code, or simply tapping a phone to one another (NFC?)
> Point is it will happen, because bitcoin is programmable money and people will be building apps for it non stop. Its all open source, people will build and others will build on top and improve.
> And once someone makes it good enough, if its easier then the fiver or the contactless card, we can simply start using it.
> Or not.
> Bitcoin is voluntary, noone is forced to use it.



That is an excellent post.

I think you have outlined how Bitcoin could be used in the future. By making it cheaper for shops, there will be very interested as POS charges are very high. By developing an easy-to-use and secure app there is a willing end user..... 

I am probably looking at the current uses of Bitcoin without looking down the road. If the Bitcoin value does stabilise then what you have outlined could well work.

Firefly.


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## ant dee

Firefly said:


> That it an excellent post.
> 
> I think you have outlined how Bitcoin could be used in the future. I am probably looking at the current uses of Bitcoin without looking down the road. If the Bitcoin value does stabilise then what you have outlined could well work.
> 
> Firefly.


Thank you.
I would go as far as to say that while the volatility would prevent me and you from using this app, it doesn't mean it cant work.
All you need really is one person to develop it, one merchant who is not bothered by the volatility (a believer??) and one customer willing to spend cryptocurrencies.
And the network can grow from there.


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## Duke of Marmalade

Contactless credit card is brilliant.  I don't think I have used any M0 in weeks.  I toddle each day to my local shop and buy the IT for €2.  Contactless credit card suits us both.  Sure BTC might come to be nearly as slick,  but it will never be a cause for demand for BTC, at best it will reduce a current serious disadvantage it has over conventional money transmission.

Just to reaffirm a one liner in _ant dee'_s post.  Current transaction costs for a cup of coffee are over $20.  So transactions in BTC are limited to one miner buying a house in Essex and possibly some underground stuff we don't get to hear about.

Don't confuse transactions in BTC with transactions involving BTC to fiat to retailer.


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## ant dee

Duke of Marmalade said:


> Current transaction costs for anything are over $20.


The size of a transaction is measured in bytes. Keeping it simple, it probably wont matter if you send €5 or €5k in bitcoin, you pay the same fee. Negligible fee to buy a house, yes.



Duke of Marmalade said:


> Don't confuse transactions in BTC with transactions involving BTC to fiat to retailer.


I don't get this line, currently in order to get fiat you have to make a BTC transaction to the entity willing to give you fiat for it. There is no practical solution at the moment to transfer ownership of a certain BTC amount without using the BTC network and paying for at least one transaction.


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## Duke of Marmalade

ant dee said:


> I don't get this line, currently in order to get fiat you have to make a BTC transaction to the entity willing to give you fiat for it.


I was preempting any folk saying some online retailers are accepting BTC.  They are not.  They are facilitating the conversion of BTC at spot into the currency they are pricing at.  Is anybody (significant) quoting BTC prices?

I understand Richard Branson will accept BTC for space travel when he gets it up and running.  That all sounds very cool but watch his interview - he is careful to say that he is not sure he would hold on to it.  So RB the great champion of BTC will accept it as a gimmick but will quickly exchange for real currency.

What about the other supposed champion, Bill Gates?  I watched his interview also.  He sees possibilities for the blockchain technology to provide financial services to the unbanked in the Third World (one of his pet causes).  He already champions mobile banking for that constituency and from what I read BTC _per se _has no edge over that.  Au contraire,  it is difficult to see a Kenyan farmer having the same confidence in a virtual currency that some Western nerds seem to have.


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## Duke of Marmalade

There are fundamental contradictions here.  BTC proponents argue that ultimately it will have value as a transactional currency.  They admit that it certainly has no traction in that role at present.  And with $20 a transaction it has no hope of getting traction.  But, the argument goes, these high transaction fees are because of the current price and the current cost of puzzle solving.

Once the BTC stabilizes (i.e. falls to stable levels) the transaction fees will become manageable - this is only a temporary blip.  Doesn’t that say that BTC will only be the success its fans predict when the price falls to levels that transaction fees are reasonable.  That all looks contradictory to me.


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## fpalb

Duke of Marmalade said:


> And with $20 a transaction it has no hope of getting traction.  But, the argument goes, these high transaction fees are because of the current price and the current cost of puzzle solving.


No! and this is important, the high transaction fees are due to the transaction limit per block. Imagine the bus comes every 10 minutes and has a limited number of seats, those waiting at the bus stop willing to pay the most get the seats. 



Duke of Marmalade said:


> Once the BTC stabilizes (i.e. falls to stable levels) the transaction fees will become manageable - this is only a temporary blip.  Doesn’t that say that BTC will only be the success its fans predict when the price falls to levels that transaction fees are reasonable.  That all looks contradictory to me.


The market price of bitcoin going down won't necessarily affect the number of transactions people are making, except that it might signal that some users are leaving. 

The hard cap of about 400k transaction per day is a fixed cap until a solution to support more is developed. This is regardless of the price of a bitcoin.


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## Brendan Burgess

fpalb said:


> No! and this is important, the high transaction fees are due to the transaction limit per block. Imagine the bus comes every 10 minutes and has a limited number of seats, those waiting at the bus stop willing to pay the most get the seats.



That sounds like a fairly fundamental design flaw.  

A bus which charges people the same price would get my business. 

Brendan


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## ant dee

Its a free market, no one is forcing anyone to ride that bus.
There are other busses to choose from.


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## BreadKettle

Firefly said:


> The miner probably can't convert it to real money!



How did you make that leap? It's incredibly easy to turn Bitcoin into fiat currency (even millions), literally a few mouse clicks. Considerably easier than property, shares, etc etc.


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## Duke of Marmalade

MrEarl said:


> House in UK sold for Bitcoins !
> 
> See  here


Over 1 million houses sold in UK each year.  One sold in Essex to a puzzle solver for BTC hits news. Wow this bitcoin is really catching on.


----------



## MrEarl

The point being it was the first transaction of it's type ... not to say it was or will be the only one.


----------



## john luc

so if I had say 10 bitcoins could I be able to exchange them for $ at the rate of exchange on offer at the moment.


----------



## fpalb

john luc said:


> so if I had say 10 bitcoins could I be able to exchange them for $ at the rate of exchange on offer at the moment.


yes


----------



## Brendan Burgess

Yes, but if you wanted publicity for your self or your business why not look for something costing $180k and pay in Bitcoin? 

Brendan


----------



## tecate

Duke of Marmalade said:


> There are fundamental contradictions here.  BTC proponents argue that ultimately it will have value as a transactional currency.  They admit that it certainly has no traction in that role at present.  And with $20 a transaction it has no hope of getting traction.  But, the argument goes, these high transaction fees are because of the current price and the current cost of puzzle solving.


Not really.  The current issue in terms of transaction fees is a relatively recent one.  If they can bring 'lightening network' into the mix, then that will be a game changer.  That won't come fast - as the BTC developers put the security and integrity of the network above all else.  However, this is not a short term project.

In terms of volatility, personally - I don't know how that can be sorted out in the short term.  However, it wouldn't be so much of an issue for small ticket items in real time IF transaction fees and time taken to confirm transactions (similarly, that has deteriorated whereas it was an advantage before) are sorted out.  Perhaps, over time - if there was adoption for the day to day use for smaller items by more people, gradually greater uptake would smooth out volatility.


Nobody is suggesting for a second that Bitcoin is the finished article.  Nobody is suggesting that it will end up being the cryptocurrency of choice (albeit that I would wager that there will not just be one single crypto 'winner' for all purposes). However, it does have potential.


----------



## PaddyBloggit

Bitcoin Investors may be banned from using funds to buy properties in the UK:

http://www.dailymail.co.uk/news/article-5265605/Bitcoin-investors-face-BANNED-using-gains.html
http://www.dailymail.co.uk/news/article-5265605/Bitcoin-investors-face-BANNED-using-gains.html
" .... one public sector worker who made £40,000 from investing in digital currencies was refused a mortgage as he was unable to prove where he got obtained the money."


----------



## Jim2007

PaddyBloggit said:


> Bitcoin Investors may be banned from using funds to buy properties in the UK:
> 
> http://www.dailymail.co.uk/news/article-5265605/Bitcoin-investors-face-BANNED-using-gains.html
> " .... one public sector worker who made £40,000 from investing in digital currencies was refused a mortgage as he was unable to prove where he got obtained the money."



The Daily Mail, seriously!!!  He was refused a mortgage because he was unable to show the source of his funds.  It does not matter what the source of ones funds are, if you can't provide documentation the same thing will happen.


----------



## PaddyBloggit

Jim2007 said:


> He was refused a mortgage because he was unable to show the source of his funds.



I thought the whole jist of Bitcoin was anonymity? .... How can one prove where funds/profits etc. come from if associated with Bitcoin?



Jim2007 said:


> The Daily Mail, seriously!!!



Would you be happier with the Financial Times?

https://www.ft.com/content/40c64992-f606-11e7-88f7-5465a6ce1a00


----------



## landlord

landlord said:


> I use Bitcoin (indirectly) every day to pay for everything and anything. I have a Xapo card which is affiliated with VISA.  So I can use this in shop that accepts Visa. On purchase, my bitcoin is automatically converted to euro for a very small fee.



Unfortunately this card and many others like it have been cancelled.


----------



## PaddyBloggit

Is there a move on to curtail the use of Bitcoin ?


----------



## landlord

I don’t think so but visa are unhappy with the association/partnership with WaveCrest due to a breach of visas regulations.


----------



## MrEarl

This story is a couple of days old now, but thought it was worth mentioning here....

 KFC Canada's 'bitcoin bucket'

Some interesting observations came out of this "experiment" such as the transaction costs for small payments being prohibitive, and the time delay in processing the payments.  A shame to read that both were issues, as both are fundamental to the success of bitcoin as a payment mechanism imho.  

That said, it does raise the question about whether an alternative crypto with faster payment processing and cheaper transaction fees might be more suited to high volume, low value transactions than Bitcoin ?


----------



## Leo

MrEarl said:


> That said, it does raise the question about whether an alternative crypto with faster payment processing and cheaper transaction fees might be more suited to high volume, low value transactions than Bitcoin ?



I think that is the only way to go. To be successful as a means of payment, a crypto is going to have to be able to scale to the transaction volumes and times of the credit card processors, and at a similar or lower cost per transaction. Bitcoin is currently trending around 3 tps, with a theoretical maximum of 7 tps, Visa currently process ~2,000 tps, and have hit 47,000 tps in the past. Transaction fees of $25-30 at the moment also rule it out for smaller purchases, but do offer an advantage for higher transaction values over the traditional percentage fees of the card processors. 

To gain mass appeal, there will need to be a tangible benefit to the consumer.


----------



## jman0war

Things are really looking good for 2018. Layer2 scaling solution coming online now : Lightning network.
Making instant payments for basically zero fees.
https://www.youtube.com/watch?v=48uSd4eQfZs

Schnorr signatures next.


----------



## jman0war

Forgot to mention, someone made a cool graphic that shows the history of bitcoin github contributions.
It's basically a visual representation of the contributions to the open source project.
Shows the organic growth nicely.

https://www.youtube.com/watch?v=DjYbsq3FXfM&feature=youtu.be


----------



## Duke of Marmalade

jman0war said:


> Things are really looking good for 2018. Layer2 scaling solution coming online now : Lightning network.
> Making instant payments for basically zero fees.
> https://www.youtube.com/watch?v=48uSd4eQfZs
> 
> Schnorr signatures next.


Watched the video.
So this is the game changer _fpalb _was talking about.  For a start Visa swipe works far better, no messing around to align QR codes.  But I can see the big advantage to Starblocks - they don't have to trust their bank.  Not so sure that Alice or Bob are too impressed at having to open a BTC account with Starblocks just because the latter don't trust their bank,  unless Alice or Bob have something to hide in the source of funds for their coffee.

I note that the video illustrates a price of an espresso at .017 mBTC.  Let's say $3 is the going rate at Starbucks then this puts a price tag on 1 BTC of $176,000.  The makers of the video are clearly bullish on the price prospects for bitcoin.  What will the price be when we get Schnorr signatures?  The mind boggles


----------



## ant dee

Come on Duke, just because someone values his privacy does not mean he has something to hide in the source of funds.

If the QR codes really bother you, don't worry. As soon as the back-end of the Lightning Network proves to be solid, there will be many UI improvements, and mimicking the current card technology will the most boring of them all!

And who cares what the video maker thinks of the bitcoin price, its absolutely irrelevant...


----------



## Duke of Marmalade

ant dee said:


> And who cares what the video maker thinks of the bitcoin price, its absolutely irrelevant...


I think it is quite relevant.  They went to some effort to produce this video.  I see them as almost evangelists who are in pursuit of a promised land.  These are not greedy speculators, their dream is a bitcoin that truly acts like a currency. The price they are using is aligned with Investopedia's thought piece around adoption rates of 15% or more of the World's currency needs, that is as important as the mighty dollar.  This is their vision.


----------



## ant dee

I am sorry, I still do not understand...
What does the price estimation / prediction of the person who made this video got to do with the reliability of the code written to facilitate lightning transactions?


----------



## Duke of Marmalade

ant dee said:


> I am sorry, I still do not understand...
> What does the price estimation / prediction of the person who made this video got to do with the reliability of the code written to facilitate lightning transactions?


Are you trolling?  I never question any of the technologies at play here.  The topic is about the use of bitcoin as a currency.  _fpalb h_as alluded to scalability being an issue for bitcoin which this lightening thing will solve.  The video is informative in letting us see what the advocates (as opposed to speculators) for bitcoin see as its final destiny as a transactional currency.  The choice of the prices in the video illustration was not a casual oversight but a genuine reflection of where these folk see that destiny.


----------



## ant dee

Perhaps I am just dumb...


----------



## jman0war

Duke of Marmalade said:


> For a start Visa swipe works far better, no messing around to align QR codes.


Apple Pay is already using QR Codes too.
And they are probably one of those big corporate-owned, centralized payment providers you prefer.

Think about those plastic cards:  every merchant till requires a dedicated piece of hardware, whose sole function is to receive the card and take up space.
It's going to be redundant within 5-10 years.


But if that's your thing, where there is a demand there is a product to sell you.
https://paycent.com/paycent-debit-card/


----------



## jman0war

Duke of Marmalade said:


> I think it is quite relevant.  They went to some effort to produce this video.  I see them as almost evangelists who are in pursuit of a promised land.  These are not greedy speculators, their dream is a bitcoin that truly acts like a currency. The price they are using is aligned with Investopedia's thought piece around adoption rates of 15% or more of the World's currency needs, that is as important as the mighty dollar.  This is their vision.


In a nutshell, yes.
Different people have different opinions of what Bitcoin is and what Bitcoin should be.
For some, the ability to use it as a currency for day-to-day transactions is a priority.
For others, an immutable, censorship-resistant store of value, used to move large sums, not small.

One is not more right than the other, and like a pendulum, bitcoin through the years and decades may swing between use cases.


----------



## Firefly

According to the Guardian, Bitcoin is being used by the far-right to fund all sorts of nefarious activities..

_more than 200 “alt-right” bitcoin wallets, finding that “some folks are getting straight off rich from their bitcoin accounts, which will fuel their ugly activities”

Similarly, pro-Islamic State groups have managed to fund their activities from their bitcoin revenues. For example, a German jihadist Telegram channel that trains its members to carry out cyber-attacks, and was probably involved in the hacks of hundreds of US schools last November, was able to generate enough money to reward its “cyber-jihadists“. _

https://www.theguardian.com/comment...currency-far-right-neo-nazis-cryptocurrencies

This along with the crazy waste of energy and resultant pollution should mean the end to this at some stage.

I wonder will the banks of the world somehow unite and refuse to cash in Bitcoins for the exchanges / private sellers?


----------



## tecate

Firefly said:


> According to the Guardian, Bitcoin is being used by the far-right to fund all sorts of nefarious activities..


There's a lot of misinformation being bandied about.  Cash is the biggest medium of exchange in the global drugs business.  HSBC had a bespoke laundering service for one of the Mexican Drugs Cartels - for which they paid a 'settlement'. 

Bottom line - cash or BTC can be used for good or bad.  Don't throw the baby out with the bathwater.




Firefly said:


> I wonder will the banks of the world somehow unite and refuse to cash in Bitcoins for the exchanges / private sellers?


Well, the Davos club have trotted out - one after the other - preaching the same stuff.  Cryptocurrency needs to be regulated, it's not fair that it's not...yada, yada.  There's no doubt in my mind they want to bring it down.  As someone who used bitcoin over a number of years, I know at first hand that banks were trying to squeeze out Bitcoin.  Certain banks (in both Ireland and the UK) would prevent consumers transferring cash into bitcoin exchanges.  Certain banks pulled banking facilities of various exchanges and countless others were refused access to banking in the first instance.  In the UK, a niche German bank was being used by a number of exchanges. 
We're seeing it again right now with both (credit/debit..) card companies and card issuing banks blocking the means for people to buy bitcoin with a card.  They suggest this is for peoples protection.  Why then can you use a card to gamble at Paddy Powers?  Make no mistake  - it's blatant protectionism.
Folks here can have their own views on the merits or lack of - with regard to cryptocurrencies.  However, what these banksters get up to is far from wholesome (it feeds into the narrative as to why many of us became interested in crypto in the first place).



Firefly said:


> This along with the crazy waste of energy and resultant pollution should mean the end to this at some stage.


 If it ends up being renewable, then it may not be such a big deal.  Granted, that's not the case in China - but miners are now looking to move facilities to Quebec - where there is a wealth of cheap renewable energy.
In tandem with that, Lightning Network will mean that the bitcoin system will be much more efficient proportionately in a lot of respects - including energy usage.


----------



## RobFer

I don't think someone needs to believe bitcoin will replace fiat currencies to participate in it. In fact, many people who see bitcoin as a bubble that will burst still see an argument for gaining some exposure. For example if someone is a passive investor there is a good argument to have some proportional exposure, unless you know when it will burst.


----------



## Delboy

50cent was using Bitcoin years ago and forgot about it!

http://www.bbc.com/news/business-42820246


> 50 Cent has discovered that he is a Bitcoin millionaire, thanks to some long-forgotten album sales.
> 
> In 2014, he released the album Animal Ambition and became the first artist to accept Bitcoin as payment.
> 
> The rapper received more than 700 Bitcoins under the deal, but then forgot about the cryptocurrency, according to celebrity news site TMZ.
> 
> The hoard is worth $7-$8m, although the currency's price volatility means that could change fast.
> 
> In 2014, one Bitcoin was equivalent to about $662, but was worth about $11,200 on Thursday according to Coindesk.
> 
> "Not bad for a kid from South Side, I'm so proud of me," 50 Cent - whose real name is Curtis Jackson - wrote on Instagram, confirming the news in a post that featured a screenshot of the TMZ article.


----------



## TheBigShort

tecate said:


> We're seeing it again right now with both (credit/debit..) card companies and card issuing banks blocking the means for people to buy bitcoin with a card. They suggest this is for peoples protection. Why then can you use a card to gamble at Paddy Powers? Make no mistake - it's blatant protectionism.



I agree. The money-laundering, criminality, energy waste cards are over played.
How many convictions are there for money-laundering using bitcoin? Relative to using cash, off-the-book accounting, art, property, gambling etc.
The energy usage is a drop in the ocean in global energy use and if, as you say, its sourced from clean renewable energy, whats the issue?

We are supposedly living in a free world. Unless bitcoin is made illegal, then I should be free to buy and sell as I wish. If I use bitcoin to launder money, then fair enough prosecute me - dont penalise others who have done nothing wrong.

This type of thinking, of banning, blocking bitcoin you would expect from centrally command economies like China, NK, but not in free democratic countries.
To ban something in EU democracies you first need a basis as to why it should be banned, then back it up with evidence, allow for contradictory evidence, and finally a mandate to authorise a ban.

How can you ban a mathematical equation or algorithm?


----------



## Brendan Burgess

TheBigShort said:


> The energy usage is a drop in the ocean in global energy use



Hi Shortie

I don't think that should be the comparison. 

It's the energy efficiency of the transactions. If Bitcoin costs more in energy than a transaction is worth, then that transaction won't go ahead. 

I think Bitcoin is worth zero. But let's say that it's worth $300.  If transactions "use up" that $300, then it becomes worth nothing. Of course, if Bitcoin is truly worth $20,000 then the energy cost per transaction is very small proportionately.

Brendan


----------



## TheBigShort

Brendan Burgess said:


> Hi Shortie
> 
> I don't think that should be the comparison.
> 
> It's the energy efficiency of the transactions. If Bitcoin costs more in energy than a transaction is worth, then that transaction won't go ahead.
> 
> I think Bitcoin is worth zero. But let's say that it's worth $300.  If transactions "use up" that $300, then it becomes worth nothing. Of course, if Bitcoin is truly worth $20,000 then the energy cost per transaction is very small proportionately.
> 
> Brendan



I agree with all of that. As it currently stands, to best of my knowledge, bitcoin is being mined for far less than what it is currently being bought and sold for. So the 'energy waste' financial arguement doesnt stand.
On the otherhand, its energy usage has being referred to as a pollutant - that is, its actual waste is more costly in environmental terms than merely its ESB bill. But again, in environmental terms, its pollution wouldnt even register against the pollution of say, the transport industry.


----------



## Brendan Burgess

TheBigShort said:


> But again, in environmental terms, its pollution wouldnt even register against the pollution of say, the transport industry.



But this is a false comparison. 

We get a huge benefit from the transport industry.

Apart from the craic, we get no benefit from Bitcoin. 

Brendan


----------



## TheBigShort

Brendan Burgess said:


> But this is a false comparison.
> 
> We get a huge benefit from the transport industry.
> 
> Apart from the craic, we get no benefit from Bitcoin.
> 
> Brendan



Its not a false comparison.

If you want to compare the costs relative to benefits from a financial point of view, then fair enough.

If you compare the environmental costs between bitcoin and transport (ie pollution) it simply doesnt register.
Its like having a herd of cattle in a china shop and instead of focusing on the damage they are causing, you spend your time trying to swat a fly.


----------



## Firefly

Brendan Burgess said:


> We get a huge benefit from the transport industry.
> Apart from the craic, we get no benefit from Bitcoin.



I think this is important. So too the fact that Bitcoin uses so much energy. More than Ireland it has been reported. Perhaps in the grand scheme of things this is insignificant, however this does not mean it is right. We are all being tasked with reducing our emissions and the fact that so much pollution will be caused for such a futile exercise is immoral in my opinion. Some have suggested that renewable energy sources are / will be used, but even so, this will mean that other demands for energy that could be satisfied by these same renewable energy sources won't be.


----------



## ant dee

Firefly said:


> Some have suggested that renewable energy sources are / will be used, but even so, this will mean that other demands for energy that could be satisfied by these same renewable energy sources won't be.


Transporting the renewable energy is the problem.
In a lot of cases there just isn't enough local demand for, say a solar farm, wind farm, hydro dam etc.
What else can we do in these cases? 
As far as I know, we just turn the plant off because there is nothing else to do that makes sense.


----------



## TheBigShort

http://www.bbc.com/news/technology-42265728

According to the above BBC article, the methods used to determining how much energy is used for bitcoin is, at the very least, highly dubious.
From my understanding of the detail in the article, mining costs are all estimated! And are estimated on bitcoins value!!
So if bitcoin price goes up - that results in higher energy cost. If it goes down, it reduces estimated energy cost.
In other words it is a daft way of measuring costs.
The article also points out that there are no actual authoritive sources that actually back the assertions of bitcoins energy use.

So along with zero convictions for bitcoin money-laundering, its energy use has never actually been measured. 
It is just click bait.


----------



## jman0war

Firefly said:


> I think this is important. So too the fact that Bitcoin uses so much energy. More than Ireland it has been reported. Perhaps in the grand scheme of things this is insignificant, however this does not mean it is right. We are all being tasked with reducing our emissions and the fact that so much pollution will be caused for such a futile exercise is immoral in my opinion. Some have suggested that renewable energy sources are / will be used, but even so, this will mean that other demands for energy that could be satisfied by these same renewable energy sources won't be.


It's market driven.
If less people mined bitcoin then the difficulty of the puzzle would lower and it would require less computational power to solve.
The reason it's using so much power is because people are investing in mining.
If you prefer they didn't, perhaps someone will propose a state subsidy to lure miners toward renewables.
Or even to pay them not to mine.

All the miners are not mining Bitcoin all of the time.
Yet it seems that reporters assign the total cost of electric consumption to Bitcoin alone.
Miners constantly switch to mining various coins depending upon what they deem can win them the greatest reward.


----------



## jman0war

Since mining is the subject, there's an interesting read of recent interview with a clandestine miner in Venezuela:
https://hackernoon.com/extortion-po...-venezuelan-bitcoin-mining-world-6e97a25e7402

Evidently mining is not strictly illegal, and allegedly can be done with government approval. 
But nobody trusts the government; for good reason as it is a fairly brutal, repressive regime there.
No doubt the government wants to commandeer the profits.

The interviewer talks about the government confiscating miners hardware, and then forcing the miner to set it up for the gov.
Or if not the gov, at least for that corrupt officials sake.


----------



## tecate

Firefly said:


> Some have suggested that renewable energy sources are / will be used, but even so, this will mean that other demands for energy that could be satisfied by these same renewable energy sources won't be.


It doesn't necessarily work like that.  As ant dee alluded to above, the energy is there and can't otherwise be used in certain cases.  For example =>  LINK


----------



## tecate

More Bank Interference ->  LINK

It's crazy stuff that a bank can turn round and dictate what you can or cannot consume.  They are doing it under the guise of 'protecting customers' - but we all know that it's to protect themselves.  If people are going to be irresponsible with money, they will find something else other than cryptocurrency to make unwise buying decisions with....and no doubt that will be fuelled by the very same credit card.

Whilst I have no doubt there are people being reckless and buying crypto via credit card, there are also those that use this method so that they can purchase quickly.  This allows them to take advantage of whatever opportunity they see at that moment in time - whereas if they wait for a sepa transfer, the opportunity (as they see it) may have passed.  The other option is to leave money on account with a crypto exchange and that's not savvy practice.

I'd love to see this turn full circle on the banks and their disgusting practises.


----------



## RETIRED2017

tecate said:


> More Bank Interference ->  LINK
> 
> It's crazy stuff that a bank can turn round and dictate what you can or cannot consume.  They are doing it under the guise of 'protecting customers' - but we all know that it's to protect themselves.  If people are going to be irresponsible with money, they will find something else other than cryptocurrency to make unwise buying decisions with....and no doubt that will be fuelled by the very same credit card.
> 
> Whilst I have no doubt there are people being reckless and buying crypto via credit card, there are also those that use this method so that they can purchase quickly.  This allows them to take advantage of whatever opportunity they see at that moment in time - whereas if they wait for a sepa transfer, the opportunity (as they see it) may have passed.  The other option is to leave money on account with a crypto exchange and that's not savvy practice.
> 
> I'd love to see this turn full circle on the banks and their disgusting practises.


coincheck hacked 378 million stolen


----------



## tecate

RETIRED2017 said:


> coincheck hacked 378 million stolen


That's correct.  However, not sure why you quote my post in relation to that?  The exchange is at fault.  Those behind the NEM token/coin (it was NEM that was stolen - not any other crypto) have criticised Coincheck for not implementing stronger security.

The general advice is don't hold cryptocurrency in an exchange account for longer than you have to (move it out to your own wallet) and the same with FIAT.


----------



## Leo

TheBigShort said:


> So along with zero convictions for bitcoin money-laundering,



Ah, Silk Road?


----------



## tecate

Leo said:


> Ah, Silk Road?


More cash has been money laundered than bitcoin.  Things can be used for good or bad - that shouldn't mean that we throw the baby out with the bath water.


----------



## Brendan Burgess

RETIRED2017 said:


> coincheck hacked 378 million stolen



From the report: 

_Coincheck said on Sunday it would repay about 90 percent, though it has yet to figure out how or when._


----------



## Brendan Burgess

tecate said:


> The general advice is don't hold cryptocurrency in an exchange account for longer than you have to (move it out to your own wallet) and the same with FIAT.



So how does it work in practice if I want to buy a pizza with Bitcoin?  

Do I bring my wallet with me and pay for it out of my wallet? 

Or do I need to use  an exchange? 

Brendan


----------



## tecate

Brendan Burgess said:


> So how does it work in practice if I want to buy a pizza with Bitcoin?
> 
> Do I bring my wallet with me and pay for it out of my wallet?
> 
> Or do I need to use  an exchange?
> 
> Brendan


If you purchase bitcoin through an exchange, you transfer FIAT into the exchange and purchase immediately.  Upon receipt of your bitcoin, you transfer the bitcoin out of their system into either a hardware or software wallet.  Significant amounts of bitcoin you would place in cold storage i.e. a hardware wallet.  For day to day use, (i.e. your example of buying a pizza), you would have loaded some funds into a software wallet on your mobile.

Exchanges are a point of weakness.  The fact that they are relatively new and the tech is nascent (together with the nature of the tech) means that it's not good practice to entrust your wealth in their care.


----------



## Brendan Burgess

Thanks

I get it now. 

The only need for an exchange is when you are buying or selling Bitcoin? 

The exchange is not involved in my transaction with Pizza Hut?  Even if it were, it wouldn't be a big issue, as I presume it's like having my current account in the bank cleared out. I wouldn't like it, but I would not lose my life's savings.

When these hacked Mount Gox and Coin Base, how come they got so much money if everyone moves their cryptos out of the exchange? 

Brendan


----------



## tecate

Brendan Burgess said:


> I get it now. The only need for an exchange is when you are buying or selling Bitcoin?


Precisely.


Brendan Burgess said:


> The exchange is not involved in my transaction with Pizza Hut?


Correct.  If you use your own software wallet, then they don't have to be.  The only difference is personal responsibility.  It's decentralised so if you lose the seed key for your wallet, you lose those funds.  If you leave them on the exchange, then they can assist you in re-establishing access to your funds (in the same way as a bank would).



Brendan Burgess said:


> Even if it were, it wouldn't be a big issue, as I presume it's like having my current account in the bank cleared out. I wouldn't like it, but I would not lose my life's savings.


True - although you don't even have to risk those funds either (by using your own wallet.  You can install a wallet on your phone in a couple of minutes).



Brendan Burgess said:


> When these hacked Mount Gox and Coin Base, how come they got so much money if everyone moves their cryptos out of the exchange?


Mt. Gox was a particularly acute hack as that exchange dealt with 80% of all exchange transactions at that point in time.  The Coincheck hack is no small thing.  However, the cryptocurrency ecosystem has moved on - meaning that although it's significant, it's not as detrimental to the sector overall (proportionately).
As regards why there's funds there to be stolen, I'd say that's 2 fold;
1. Regardless of how savvy you operate, if you use an exchange you are going to put your funds at the mercy of the exchange for a certain period of time at least.  Therefore, there's always going to be a certain level of funds held by an exchange.
2. I'd imagine that a lot of folks have not cottoned on to good practice in this regard.  Perhaps they are concerned about taking responsibility for their own crypto wallet or they just assume that it won't happen to their funds and their exchange.


----------



## Leo

tecate said:


> More cash has been money laundered than bitcoin.  Things can be used for good or bad - that shouldn't mean that we throw the baby out with the bath water.



100% agree, but it's false to say there have been no Bitcoin fraud convictions, 10 seconds on Google will point to other examples.

I believe cryptos have a future, but I'd like to see them move in the direction where they make the likes of fraud and money laundering more difficult. There's an opportunity here for an evolution beyond the flaws of the past, should we be happy with a solution that just mimics fiat's weak points?  It seems some of the cryptos that have emerged since Bitcoin are deliberately heading down a path that will greatly enhance their appeal to criminals.


----------



## tecate

@Leo:  I get what your saying.  Yes, there are coins that are truly anonymous eg. Monero & Zcash.  It would be correct to say that they are now more likely to be used by those involved in illicit activity.  However, they are also used by proponents of privacy.  Remember separate from the whole crypto thing, governments were leading us (at varying rates) down the road of a cashless society.  Only 2% of transactions in Sweden are now made with cash (expected to be 0.2% by 2020). I don't think it's healthy that every single transaction you make is recorded for posterity - and accessible to authorities.  Say you make a donation to some politically sensitive group - as an example.
I get the whole fight against illicit activity - but it needs to be balanced against personal privacy.  AML/KYC requirements are a drag for consumers (I can only imagine how much of a headache they are for the entity that is forced to apply these regs).  Is there not a point at which the price paid is too much and illicit activity should be combated in another way...


----------



## TheBigShort

Leo said:


> but it's false to say there have been no Bitcoin fraud convictions



I stand corrected on convictions for fraud and money laundering using bitcoin.


----------



## jman0war

Samsung a global giant, is now officially getting into the bitcoin/crypto mining business.


> Samsung, the largest company in South Korea which is accountable for a large portion of the country’s economy, has started the production phase of bitcoin and cryptocurrency mining equipment and ASIC mining chips.
> 
> Local media outlets reported that Samsung partnered with a Chinese bitcoin mining equipment manufacturer last year and finished the development of its ASIC chips. Samsung, which operates one of the largest semi-conductor manufacturing plants in the world, will manufacture and supply cryptocurrency mining equipment to the Chinese market first.
> 
> In the long-term, Samsung plans to expand its mining equipment venture from China to other regions like South Korea and Japan that have a stronger demand for cryptocurrencies than other countries.


https://www.newsbtc.com/2018/01/30/...pany-manufacturing-asic-chips-bitcoin-mining/
Taken from:   http://www.thebell.co.kr/free/content/ArticleView.asp?key=201801290100056740003492

This suggests to me that they know that China is not about to ban bitcoin mining, and they see a future in this asset class and are positioning themselves accordingly.


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## TheBigShort

I think China's issue is not with bitcoin itself, but rather it being used as a means to transfer capital out the country. I think they have restrictions on how much money you can take out of the country. Bitcoin provides a convenient way to by pass regulations.


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## Duke of Marmalade

Why are Samsung not getting into the mining business themselves?  If they truly believed they would keep the technology to themselves and mop up the lion's share of the remaining 5 million bitcoin yet to be mined; that's a seam worth 50bn dollars at today's prices.  In fact is this not in general the dog that is not barking?  Why are the big guns not getting into bitcoin mining?


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## Brendan Burgess

Duke of Marmalade said:


> Why are the big guns not getting into bitcoin mining?



Maybe they just don't have the energy for it?


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## TheBigShort

Off topic, but with fines alone amounting to $321bn (never mind the value of the actual fraud) since 2008, this is actually around 60% of the entire market cap of the cryptocurrencies.

https://www.rte.ie/eile/brainstorm/...ffenders-why-banks-engage-in-illegal-conduct/


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## fpalb

Duke of Marmalade said:


> Why are the big guns not getting into bitcoin mining?



Because it's highly specialised and very risky. It's not just the risk of Bitcoin succeeding or not. Bitcoin could continue to increase in value and you could still make a loss by mining. You don't know what the future mining difficulty will be among other unknowns, so you can't make any kind of reliable predictions about the return.


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## tecate

Duke of Marmalade said:


> Why are Samsung not getting into the mining business themselves?


There's plenty of $ in asic chips - chip manufacturing being a core business of theirs.  Mining is not a core activity of theirs.  There are plenty of big interests in mining - maybe not of Samsungs size - but big nonetheless (too big in fact).



Brendan Burgess said:


> Maybe they just don't have the energy for it?


Energy requirement is being tackled in innovative ways;
_"Oil and gas explorer Iron Bridge Resources Inc. (IBR.TO), for one, recently announced plans to launch a cryptocurrency mining division that will use excess energy from its oil and gas operations in northern Alberta."_
The same excess from Quebec Hydro to be utilised in the same way.
Other than that, development of the bitcoin tech will lead to a reduction in the energy requirement.


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## Firefly

fpalb said:


> Because it's highly specialised and very risky. It's not just the risk of Bitcoin succeeding or not. Bitcoin could continue to increase in value and you could still make a loss by mining. You don't know what the future mining difficulty will be among other unknowns, so you can't make any kind of reliable predictions about the return.



I would say it's almost infinitely more risky to develop a new processor that has the capability of mining rather than doing the mining activity itself. New chips cost a fortune to develop and roll out.


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## Firefly

Duke of Marmalade said:


> Why are the big guns not getting into bitcoin mining?



I've asked this before. Look at Amazon with AWS. They have all the hardware they would ever need and some of the best technical minds in the world. No way some nerd in a cabin in Siberia could compete...


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## DeclanDublin

I heard an item on Sean O'R. earlier with two fellahs betting everything they had on the 'sure thing' (the only way is up) cryptocurrency including all salary and OT, I kid you not. In the same program they had a TCD professor warning this was a definite bubble. I wouldn't put my lunch money on them.


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## RETIRED2017

Firefly said:


> I've asked this before. Look at Amazon with AWS. They have all the hardware they would ever need and some of the best technical minds in the world. No way some nerd in a cabin in Siberia could compete...


Of Cork


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## jman0war

It's one of the unspoken benefits of bitcoin and crypto. 
PoW is driving innovation.


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## RETIRED2017

DeclanDublin said:


> I heard an item on Sean O'R. earlier with two fellahs betting everything they had on the 'sure thing' (the only way is up) cryptocurrency including all salary and OT, I kid you not. In the same program they had a TCD professor warning this was a definite bubble. I wouldn't put my lunch money on them.


I see plenty of fellahs  going into the likes of paddy powers every day who do the same  not to mention on line betting,


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## Duke of Marmalade

DeclanDublin said:


> I heard an item on Sean O'R. earlier with two fellahs betting everything they had on the 'sure thing' (the only way is up) cryptocurrency including all salary and OT, I kid you not. In the same program they had a TCD professor warning this was a definite bubble. I wouldn't put my lunch money on them.


The TCD professor was none other than Brian Lucey.  That's the genius who suggested Anglo should sell their deposit book of €30bn for €25bn pay back their NAMA bonds of €20bn and hand the €5bn profit back to the taxpayer.  He didn't realise that deposits are a liability and NAMA bonds are an asset  Hearing the good prof call bitcoin a bubble caused me pause but just for a second, this time he has it right.


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## DeclanDublin

Yep Duke, I know there was a q mark over the prof. but didn't quite recall the circumstances as to why! Either way, I think this crypto business is a classic  Dutch tulip bubble in disguise. It worries me tho to hear people who seem quite reasonable, bet the house on them. I'm all for a calculated risk, provided it doesn't involve me losing my shirt on it.


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## Brendan Burgess

I have heard of people remortgaging their homes to buy Bitcoin. 

They did well if they did it over 6 months ago and sold out, but not good if they are doing it now or if they did it when it was $20k.

Brendan


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## DeclanDublin

Agreed Brendan, one fellah today was talking about  funding early retirement. He had, up to this point, invested €1,000 or so in the darn things.  I think people can talk themselves into anything. What's frightening is the psychological 'pull' to, imo, gamble like this.  The other chap had his own business and had put everything into bitcoin. Scary stuff.


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## TheBigShort

Brendan Burgess said:


> I have heard of people remortgaging their homes to buy Bitcoin.



Ah yes, and the pizza guy, the taxi driver etc...urban myth tends to spread fast with mania. 
Did you hear which bank financed the mortgage?


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## Brendan Burgess

TheBigShort said:


> Ah yes, and the pizza guy, the taxi driver etc...urban myth tends to spread fast with mania.



But so do manic decisions. 

I heard of it second hand, so the bank was not mentioned.  But come to think of it, it's unlikely any Irish bank would give such a remortgage unless he was claiming it was for house refurbishing. 

Brendan


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## TheBigShort

Brendan Burgess said:


> I heard of it second hand, so the bank was not mentioned. But come to think of it, it's unlikely any Irish bank would give such a remortgage unless he was claiming it was for house refurbishing.



Ah c'mon, don't tell the banks haven't learnt their lessons? Don't tell me they are still lending out large amounts of money on the back of 'refurbishing' loan applications?

Is it that easy to con a bank?


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## Firefly

This thread has meandered a bit.

As far as I can tell, there are three _primary _groups who buy Bitcoin:

Those wishing to launder money and/or commit illegal trade
Those speculating on the value of Bitcoin itself
Those wishing to get money out of their country (despot, socialist states where the vast majority of people are poor anyway)
I would very much welcome some solid links showing people in large numbers using Bitcoin to do what most people do on a daily basis with a currency........"buy stuff"


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## tecate

DeclanDublin said:


> It worries me tho to hear people who seem quite reasonable, bet the house on them.


People who borrow to buy crypto (or any other high risk asset class or currency) are not reasonable.  I've just cashed out after a 4275% gain and I've only ever had one form of financing (my mortgage).



Brendan Burgess said:


> I have heard of people remortgaging their homes to buy Bitcoin.


These are the exceptions - and of course, it makes for better copy - so they'll be the ones they wheel out for interviews like this, articles on the subject, etc.



Firefly said:


> This thread has meandered a bit.
> 
> As far as I can tell, there are three _primary _groups who buy Bitcoin:
> 
> Those wishing to launder money and/or commit illegal trade
> Those speculating on the value of Bitcoin itself
> Those wishing to get money out of their country (despot, socialist states where the vast majority of people are poor anyway)
> I would very much welcome some solid links showing people in large numbers using Bitcoin to do what most people do on a daily basis with a currency........"buy stuff"


There was a modest level of 'buying stuff' happening until bitcoin became a victim of it's own success and hit a scaling problem (resulting in high tx times and costs).  It's back to the drawing board.  Do you believe in giving innovation a fighting chance?

This technology is not the finished article.  You can smother innovation - or allow it to take it's course and see what comes of it.  Which is the more enlightened path....


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## TheBigShort

tecate said:


> This technology is not the finished article. You can smother innovation - or allow it to take it's course and see what comes of it. Which is the more enlightened path....



I think this is an important point that alot of detractors fail to grasp. Bitcoin has _potential _to be used widely. No-one is declaring it is the done deal. There are outlandish claims that it _will _replace cash, gold etc. 
Because peoples groceries are not priced in bitcoin some people think it is worthless.

Outside of bitcoin, it is fascinating to listen to tech heads and the confidence they have in future technologies that are gearing to disrupt the order of today. 
I cant say I understand all of what they are talking about, but Im left in little doubt that technological advances are hurtling our way that will fundamentally alter the way we go about our business. 
Bitcoin may, or may not, be part of that. For now, I suspect it will.


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## Firefly

tecate said:


> There was a modest level of 'buying stuff' happening until bitcoin became a victim of it's own success and hit a scaling problem (resulting in high tx times and costs).


I'm not being smart, but do you have a source for that? My understanding is that this scaling problem has been caused by the huge demand in Bitcoins for capital appreciation purposes rather than for buying stuff.



tecate said:


> Do you believe in giving innovation a fighting chance?



Of course. I work in the IT sector....innovation puts bread on the table round my place!



tecate said:


> This technology is not the finished article.  You can smother innovation - or allow it to take it's course and see what comes of it.  Which is the more enlightened path....


I totally agree and I am not against Bitcoin per se. I do see _some_ potential for Bitcoin and its uptake will likely increase over time. The difficulty I have is in reconciling this potential against the current price, which I don't believe anyone has been able to justify. Why has the value of Bitcoin gone up over 10 times in a year? Where's this sudden potential? It should be really obvious to justify this growth in value.


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## jman0war

Firefly said:


> Why has the value of Bitcoin gone up over 10 times in a year? Where's this sudden potential? It should be really obvious to justify this growth in value.


Subjective Theory of Value.
The reason the price went parabolic is due to people entering a space that has a finite supply.


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## Duke of Marmalade

parabolics


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## jman0war

i meant vertical.
not sure why i used that word.


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## tecate

Firefly said:


> I'm not being smart, but do you have a source for that? My understanding is that this scaling problem has been caused by the huge demand in Bitcoins for capital appreciation purposes rather than for buying stuff.


I don't think we are arguing here at all. I fully acknowledge that there was very little day to day 'buying stuff' going on.  However, it's a process and it was grinding out a slow progression.  That got destroyed when transaction times and costs became an issue - so the tiny bit of momentum it had made resulted in it going back the way (many that were offering the opportunity to pay via bitcoin have reversed that decision).  Had there not been a scaling issue, I'd imagine BTC would have made greater inroads since then in that respect.  That's all I'm saying.



Firefly said:


> I totally agree and I am not against Bitcoin per se. I do see _some_ potential for Bitcoin and its uptake will likely increase over time.


We're on the same page then....although it may be another crypto.  I - and others - here have been going on about Lightning Network.  If that doesn't come through in a timely fashion or if it is flawed, that could spell the end for bitcoin.  There's a lot riding on it - and it's a concern as nobody really knows if it will make the grade. That said, if that occurs, then another crypto will come in and fill the void.



Firefly said:


> The difficulty I have is in reconciling this potential against the current price, which I don't believe anyone has been able to justify. Why has the value of Bitcoin gone up over 10 times in a year? Where's this sudden potential? It should be really obvious to justify this growth in value.


Nobody knows how to price it (except Brendan  ) but I guess it's a combination of what people perceive it's value to be and the fact that it's finite.  What gives gold the value it has?...and yes, I know that you can say that it can be used for a handful of things but at the end of the day it's public sentiment and perception.  Tulip bulbs is what someone usually shouts at this point.  However, I disagree that it has no intrinsic value - it has a set of characteristics that gives it some intrinsic value.  
Of course, the value of gold has been established since the year dot but everything starts somewhere.  I guess as a store of value, I still see that it can work over time - and yes, it's understating it to say that its imperfect in this regard due to the crazy volatility.  However, there is a rationale that suggests that over the fullness of time, this will dissipate.

I suppose there is a concern in the way it surged before Christmas.  I was away on holiday for 3 weeks.  Before I left, most people hadn't heard of Bitcoin.  When I came back, everyone had heard of it (even if they didn't understand it).  I wasn't tuned in to what was at play during that time that lead to that surge - but I suppose I have reconsidered my position a little and believe that these were people with little genuine understanding and therefore belief in BTC ...so that made those newcomers fickle.
For those who looked at it as a currency, it's being traded on a possibility of it being able to function - as it currently can't scale in a functional way in that respect.  I'm not sure if the fickle set have the patience to wait around for a solution - and on the flip side, there may be technical difficulties in delivering that solution in any event.

I guess that's why I moved from being a 'Hodl-er' to closing out my position (at least for the moment)....that and concern I have about the whole Tether situation.


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## MrEarl

Hi,

For what it's worth, I think quite a few of the people behind Bitcoin have lost their initial focus (or perhaps just moved on altogether) with regards to using it as a day to day payment mechanism. 

There are a few popular "alternative currencies" offering transactions at far lower fees and partnering up with various large companies to progress their business plans. As things stand, these alternative currencies look far more likely to be future payment mechanisms and particularly for small size, or high volume, transactions, than Bitcoin does.

Convenient and efficient methods of payment are still a little bit of a stumbling block for all of the currencies though and that needs to be attended to, otherwise I can't see anyone being able to pay for a pint, or their supermarket goods with a cypto currency.


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## Firefly

Hi,

I have what must surely be a very basic question. Say I agree to pay someone in Bitcoin for a job (presumably I have an app or something). If I make the payment in error and it goes to someone else's account, how is this rectified? In normal banking I think the back could reverse the transaction. What happens with Bitcoin though? Also, say I do pay into the correct account. What's stopping the person I am paying telling me that he didn't get the funds? How can I prove it?

Not knocking Bitcoin at all, just wondering how it hangs together.

Thanks.


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## Firefly

tecate said:


> I don't think we are arguing here at all. I fully acknowledge that there was very little day to day 'buying stuff' going on.  However, it's a process and it was grinding out a slow progression.  That got destroyed when transaction times and costs became an issue - so the tiny bit of momentum it had made resulted in it going back the way (many that were offering the opportunity to pay via bitcoin have reversed that decision).  Had there not been a scaling issue, I'd imagine BTC would have made greater inroads since then in that respect.  That's all I'm saying.



That's fair enough. I am not trying to knock Bitcoin / Blockchain at all (but it must come across that way). I really just have no expertise in this area and trying to pick holes in its suitability as a medium of exchange. For what it's worth, I think the technology is here to stay. I also think a few things could happen, creating a perfect storm where all of a sudden lots of people start using some crypto to buy things (once the current mining inefficiencies are ironed out). For those who are interested it will be very tempting to think about avoiding tax. How many people who have made gains from Bitcoin do you think will voluntarily make a tax return on their profit, especially if the profit is only something like 10-20k?

For those dependent on taxes (people on the dole, retired people and public servants) and for public services generally, governments could face a mounting battle trying to get their share of tax. I think this is a bigger worry than any perception of inflation via QE..


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## Leo

Firefly said:


> If I make the payment in error and it goes to someone else's account, how is this rectified? In normal banking I think the back could reverse the transaction. What happens with Bitcoin though?



The Bitcoin stays where you sent it, there is no mechanism for reversing errors. If you were able to identify the person you sent it to (very unlikely unless you have access to nation state level tools), you could ask them to return it, but they would be under no obligation to do so.



Firefly said:


> Also, say I do pay into the correct account. What's stopping the person I am paying telling me that he didn't get the funds? How can I prove it?



As the ledger is public, everyone will be able to see that you have transferred the bitcoin to the other party. So proving they received it is not an issue. Your ability to enforce such a contract through the courts might be hampered by lack of legal recognition of Bitcoin as a currency.


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## Firefly

Leo said:


> As the ledger is public, everyone will be able to see that you have transferred the bitcoin to the other party. So proving they received it is not an issue. Your ability to enforce such a contract through the courts might be hampered by lack of legal recognition of Bitcoin as a currency.



Will the other party be listed though with their name, address, company details etc., or will it be just an account?


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## ant dee

If you do not trust each other, you should use an escrow service and release the funds when the job is done.
If you can't find a party that you both trust then business cannot be done.


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## fpalb

Or perhaps a contract/receipt with the receiving address on it. The contract proves the address is the merchant, the blockchain proves you made the payment.


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## Firefly

Makes sense. Thanks!


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## Leo

Firefly said:


> Will the other party be listed though with their name, address, company details etc., or will it be just an account?



Just an account that is very difficult if not impossible for your average Joe to tie to an individual. And that's with Bitcoin, more recent cryptos have gone even further to make transactions truely anonymous.


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## MrEarl

Hi,

Anyone fancy buying their coffee with cryptocurrency on Aungier Street ?

Introducing Dublin's new Crypto Cafe 

I am dying to see how this works out, because from a practical point of view I think that making payments via cryptocurrency is a little too slow and cumbersome.


.


----------



## MrEarl

Cosgrove Gaynard Solicitors to begin accepting payment in Bitcoin

(it's mentioned about 75% of the way down the article that I have linked to, after commentary on the banks)

So, is this a once off, or the start of various professional firms accepting Bitcoin as a method of payment ?

I can see it drawing a level of suspicion, but I can also see it offering a potential payment method for those who may not have a cheque book, or have money coming in from other parts of the world (so have it transferred by Bitcoin to facilitate fast payments) etc.


----------

