Bitcoins

[Deleted User]

vectistim wrote: »

What benefit will using xcoin give me over that?

Although some people talk about Bitcoin as if it's going to replace banks, I don't agree. I think that if Bitcoin is going to succeed it will need to be treated as a financial layer that other companies build on top of. Think of your bank, or even PayPal, imagine that they operate on top of Bitcoin and provide their own transaction security to you -- as they do now.

You're right that the irreversible transactions is great for merchants but awful for consumers and I think that will be a big sticking point. That said, it's not a point that cannot be dealt with, and Bitcoin still provides huge value to those that don't want to use a bank.

Hypothetically if there are consumer layers on top of Bitcoin (eg: PayPal, Natwest, Coinbase) it would be the case that everyone had access to the security of a "dumb" system, but could if they wanted trade in security for control. You could say "actually I'm confident in my ability to manage my money, therefore I want to retain control of my wallet".

How it will happen, I don't know, but I'm convinced that Bitcoin will not be what everyone interfaces with, it'll be the underlying layer that controls everything. You could interface with it directly, or you could use to pay someone else (through fees or whatever) to do it for you. Bitcoin still has huge value in that scenario... even if your mother and my mother are paying a bank to give them consumer protections that the protocol itself can't provide.

csm888

Price is currently at £471 ($763) per Bitcoin, the sum of the bids (total of all people trying to buy coins) on the exchanges is at all time high, with so much money coming into Bitcoin over the last few days, and people stuck with fiat (thinking the could sell into the last mini crash a few days ago and re-buy cheaper, but missed their chance), there really is only one way for the price to go now, up $1000 looks like the next major pressure point.

Marazan

Inflation adjusted, people who bought gold at the 70s/80s peak have been nursing a real terms loss for decades

dryhat

Bitcoin can act as a conduit for the transfer of value.

For example, using a Bitcoin payment processor, a shopkeeper can accept bitcoins as payment and have local currency deposited straight into their bank account without ever holding any bitcoins. The charges for this are tiny when compared to visa or similar and so could lead to lower prices.

Another area where Bitcoin is strong is in international remittances. Companies like Western Union make up to 30% per transaction for sending money and the poorer the country they send to the higher the fees.
This transfer could be done using Bitcoin for a fraction of the cost and, again, the people at either end do not even need to know that Bitcoin was used.
These types of firms are likely to be the first major casualties of Bitcoin.

vectistim

Surely, charges are only tiny at the moment because there is in essence such a bid-offer spread that explicit charges are not needed (and also protection against bad transactions doesn't seem to be priced in)

BoracicLint

vectistim wrote: »

Surely, charges are only tiny at the moment because there is in essence such a bid-offer spread that explicit charges are not needed (and also protection against bad transactions doesn't seem to be priced in)

Interesting argument. Although that does make some sense, it isn't the real reason for low transaction charges. There is no third party between the sender and the recipient, the transaction charge is allocated to incentivise the mining pool to verify the transaction in the blockchain.

This transaction charge will likely increase once the mining difficulty increases and new coins become more scarce, but there will always be a great deal of competition amongst miners which should keep the transaction charges down.

Satoshi

Its interesting people say they can make money trading bitcoins, wonder when people will talk about bitcoin as money and fiat as currency?

csm888

vectistim wrote: »

Surely, charges are only tiny at the moment because there is in essence such a bid-offer spread that explicit charges are not needed (and also protection against bad transactions doesn't seem to be priced in)

There seems to be some confusion here.
The charges you seem to be referring to are the exchange transaction charges, which are usually less than 0.5%.
This is the fee that is involved when converting fiat to/from Bitcoin, and is levied just like in a forex transaction.

The charges or fee that is involved when transferring bitcoins from one address to another are minimal at maybe 5pence per transaction, however you can send transactions without a fee (especially large transactions) and they usually go through but may take a little longer.

The fees will probably stay low because as the profits from mining decrease the miners will be making more of a profit from fees, however the volume of transactions will increase so the total earnings per block will still be sufficient for the miners.

BoracicLint

This article shows a real concern regarding the volatility, how long will this remain a speculative investment and not a medium of exchange?

There must be many vendors such as this who are waiting for things to settle down.

http://www.stltoday.com/business/columns/david-nicklaus/bitcoin-entices-speculators-but-will-no-longer-buy-a-meal/article_12d79e69-6d73-5859-a42f-a3cc9f965cf7.html

dryhat

The exchange rate is slowly approaching £500.

Up about £80 in 24 hours.