BITCOIN

Adyinvestment

Personally, I have a little under 10% of my Bitcoin earning yield, although I wouldn't recommend this until regulation is implemented (I am okay with a small amount of risk). The rest is safely tucked away.

If/when there is fully regulated platform, I would probably consider more but at this time the saying "not your keys, not your crypto" holds true.

Malthusian

Full regulation is not enough to make lending out Bitcoins safe in the same way that lending out GBP is safe for depositors. London Capital and Finance was fully regulated, as was lending GBP to Northern Rock and Halifax (in retail bonds as opposed to deposit accounts). 
To get comparable security, you would not only need Bitcoin lending platforms to be regulated, but for the platforms to join the FSCS or a new crypto equivalent, and pay in a proportion of their BTC, in order to build up a big enough stockpile of BTC that could credibly cover depositors' losses if a lending platform went bust.
With the FSCS the taxpayer is in reality the lender of last resort, and the Government is far more likely to print money than to let retail depositors lose it (which would mean queues round the block of every single bank and a genuine economic collapse). That isn't possible with a BTCFSCS because the Government can't print BTC, and in order to prop up a Bitcoin compensation scheme, the Government would have to buy lots of Bitcoins with taxpayers' money, which is going to be tricky if they've gone to the moon.
Still I'm sure crypto platforms will figure all this out, it is the future of money after all.

P1Fanatic

Hexane said:

Currently watching "Cryptocurrency: Has the Bubble Burst?" on Channel 4. Ade Adepitan talks to experts and has a lot of deep insights. He says "wow" and  "wowwwwwwwwwwwww" a lot. Worth viewing on catch-up on All4 if that's your thing.

He gambled £500, mainly on Bitcoin and Ethereum, and managed only to be down around 32% after six weeks.

I watched this last night and found it a bit vague in all areas tbh. First guy he met with that Lambo, Ade was like Crypto must work right, I mean look at his house? Which the guy already said was from previous businesses. He put £1m into Crypto it went up to £2m then dropped to £1.5m but never said what it was currently. Then there was the rapper who made an undisclosed "killing" of possibly 100-200k from Crypto and was sorted for life looking after his family but went on on to say its not about the money its the freedom crypto gives you....the same freedom you just said you had because you made some money on it.

As for that coffee shop offering crypto as a payment option - they didn't explain that very well. There is an exchange rate i.e. the cost of the drink = 0.000xxxx Bitcoin but how is the transaction made and is bitcoin exchanged towards GBP or is it a straight transfer of part of your bitcoin to the shop owner or is there some third party company charging a transaction / exchange fee? What is the benefit other than "look at me" using this unusual payment method?

Frequentlyhere

As for that coffee shop offering crypto as a payment option - they didn't explain that very well. There is an exchange rate i.e. the cost of the drink = 0.000xxxx Bitcoin but how is the transaction made and is bitcoin exchanged towards GBP or is it a straight transfer of part of your bitcoin to the shop owner or is there some third party company charging a transaction / exchange fee? What is the benefit other than "look at me" using this unusual payment method?

I'd be interested in understanding this aspect of bitcoin too. For the rare retailers that accept it, what rate do you get and are there any additional charges?

My assumption has always been that one would either be caned with a £ transaction fee, or otherwise receive the live market price minus a fairly chunky %, or possibly both. Happy to be educated by our resident experts if that's not the case though.

Oh, for an added bonus, for anyone who's done it, how long does the transaction take for end-to-end compared to contactless?

Malthusian

Vague rambling is an upgrade on the usual standard of mainstream media crypto coverage. At least they managed to avoid promoting crypto scams and accepting their claims at face value, like a recent BBC documentary.

Frequentlyhere

No replies to my question I see. 

I did try googling it, but was of course immediately swamped by thousands of SEO paid puff pieces breathlessly exclaiming that "yes, you CAN!" with strangely zero mention of whether you're also going to be paying lots of fees to do so.

I gave up on finding UK material, and did find this from the US from last year.

"Currently on bitinfocharts.com, the average transaction fee is $15. Two weeks ago, it was around $30."

"Using a popular service, I was able to buy a $5 gift card to use on Amazon by connecting my crypto wallet. The process was slightly time-consuming and the transaction page did not break out the service fee.

Future of money.

But, god the amount of bilge, and so sad to see it from some reputable sources. This nerdwallet article for example has a guide for retailers accepting bitcoin. I thought it might be well balanced but then came across these gems:

Pros to accepting bitcoin: "If you choose to hold Bitcoin, the payments you accept could potentially become more valuable over time." Hmm.

Convenience of credit card compared to BTC "Transactions are quick and how-to is well known, but underlying processes can be hairier."

Yes indeed, every time I use contactless I'm always thinking "well, this is superficially fast and convenient, but just think of those underlying processes!"

Adyinvestment

I don't use one because I don't want to spend my Crypto, but a common way is a Visa/MasterCard based card linked to an exchange.

You would use it in the same way as a debit card linked to your account, and it accepted everywhere your bank card is, the retailer does not know the card is using Bitcoin.

Most cards are free with no/little fees, and some give crypto cashback.

Think of it as using a uk debit card abroad, the price of the cup of coffee in Euro's/GBP/whatever is converted at the current bitcoin to that currency price without any exchange fees.

P1Fanatic

Adyinvestment said:

I don't use one because I don't want to spend my Crypto, but a common way is a Visa/MasterCard based card linked to an exchange.

You would use it in the same way as a debit card linked to your account, and it accepted everywhere your bank card is, the retailer does not know the card is using Bitcoin.

Most cards are free with no/little fees, and some give crypto cashback.

Think of it as using a uk debit card abroad, the price of the cup of coffee in Euro's/GBP/whatever is converted at the current bitcoin to that currency price without any exchange fees.

Thanks for the reply but I am still confused. Buying a coffee for £2.99 I know exactly what its going to cost me on my credit card. If I use a Crypto card my first coffee could be one price and the 2nd coffee could cost me more of less as the rate of crypto fluctuates so much. I get the comparison to foreign card purchases as even with a regular credit card its hard to know the exact exchange rate at the time of purchase but its not likely to deviate much. Mastercard publish their rates and banks who don't charge for foreign purchases are usually in line with those rates. Whilst some Crypto cards offer no fees, I would be surprised if they are not building a charge into their exchange rate.

I still don't understand how its all recorded either. For arguments sake I own one bitcoin. How do I enable a crypto card to use it e.g. do I have to buy credit on the card by selling part of my Bitcoin? Or do I associate my crypto card account with my bitcoin and the exchange takes off X value at the current GBP rate?

Adyinvestment

I don't know how all the cards work, but I have a friend who uses one all the time (he paid for my fish and chips some time ago in this thread). As far as I understand it if he buys a coffee for £2.99 then the exchange converts/sells the equivalent £2.99 of his Bitcoin holding at whatever the GBP/Bitcoin exchange rate is at that time, there are no exchange fees for this.

As Bitcoin is volatile the amount of Bitcoin used is likely to vary a little minute to minute. I guess the exchange is making its profit from the buy/sell spread, similar to selling an individual stock which will be at a lower sell price than the buy price.

HCIMbtw

Couple of questions raised here.

Why would retailers use BTC over standard GBP payment? better payment fee's is the most obvious reason for me. I'm not sure on the detail of visa/mastercard/amex rates for companies being paid, but there is big opportunity to disrupt here for crypto in general (not necessarily BTC). 

Speed of bitcoin payment? when transferring money between wallets you typically get a pretty quick, within 30s response of a pending transfer, but the actual transfer happens on the network in about 10 minutes or so. This obviously wouldn't be good for normal shopping, which is why things like the lightning network have been developed, to provide an effectively instant settlement process for Bitcoin. 

Other crypto assets (e.g. Ethereum) have challenges operating as payment layers as well, for example with ethereum the more people who use it, the more congested the network is, the more it costs to transfer and use the network, so what started out cheap platform to transact on was ending up close to $100 per transaction?!. Ethereum is trying to solve some of these issues with the development of its own network, but you might have heard people talk about layers 2's or L2's and these are networks built to provide different/improved functionality to layer 1 network, e.g. make transactions cheaper, faster, provide improved security etc.