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BitInstant Continues Bitcoin Paycard Plan

samzenpus posted about a year and a half ago | from the pretend-plastic-money dept.

Bitcoin 152

judgecorp writes "Virtual currency exchange BitInstant says its BitCoin credit card is still on track. even though Mastercard denied any involvement with the plans yesterday. BitInstant says it is applying through a third party bank which will broker a Mastercard application. BitInstant is still taking signups for the card. Oh, one clarification: the card will not be anonymous."

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152 comments

the card will not be anonymous (4, Insightful)

fustakrakich (1673220) | about a year and a half ago | (#41105653)

And the advantage using it is what then? If this catches on, I'll be watching intently how the revenuers treat this.

Re:the card will not be anonymous (1)

GuldKalle (1065310) | about a year and a half ago | (#41105879)

You can get much lower fees than standard account->account fees.

Re:the card will not be anonymous (0)

Anonymous Coward | about a year and a half ago | (#41106787)

You can get much lower fees than standard account->account fees.

How much lower? I don't pay any fees on my MasterCard. I'd pay interest if I didn't pay off the credit card balance each month but direct debit handles that for me. On the debit card there isn't even that as a potential issue. So how does this have lower fees?

Re:the card will not be anonymous (1)

MightyYar (622222) | about a year and a half ago | (#41107477)

This isn't a replacement for a credit card - it's a way to convert transacted currency into cash. To do that through a regular credit card company will cost several percent and possibly a transaction fee. Same with PayPal.

Re:the card will not be anonymous (1)

Bill, Shooter of Bul (629286) | about a year and a half ago | (#41107975)

They've only talked about what they want to charge, until they have the agreement in place, no one really knows what the fee structure will be for this card.

Re:the card will not be anonymous (2)

metacell (523607) | about a year and a half ago | (#41105919)

I guess the advantage is that you can use the same expense account for both your anonymous and your ordinary purchases. You don't need to transfer money manually between two accounts.

Re:the card will not be anonymous (2)

mug funky (910186) | about a year and a half ago | (#41106171)

bitcoin will never be accepted if it's anonymous. money laundering and what not. it's just too easy to take all scrutiny away from currency - both good and bad.

bitcoin pushes all the right anarchistic buttons with me, but my pragmatic side says that it's just too easy for arseholes to avoid justice (arseholes who just want to shit all over everyone).

where the security v freedom tradeoff is a soft threshold, bitcoins sort of require a hard threshold at 100% freedom 0% security, and not negotiable by design.

if people didn't have a tendency to be such cunts, bitcoins would already be the standard.

Re:the card will not be anonymous (0)

Anonymous Coward | about a year and a half ago | (#41106375)

if people didn't have a tendency to be such cunts, bitcoins would already be the standard.

I think it's time to put that pipe down.

Re:the card will not be anonymous (1)

mug funky (910186) | about a year and a half ago | (#41106627)

you mean the pipe that the first half of the sentence you quoted negated? i'd have to reach for it first.

maybe you shouldn't have rolled all those joints with your reading comprehension notes :)

Re:the card will not be anonymous (1)

kelemvor4 (1980226) | about a year and a half ago | (#41108925)

you mean the pipe that the first half of the sentence you quoted negated? i'd have to reach for it first.

maybe you shouldn't have rolled all those joints with your reading comprehension notes :)

I think his reading comprehension is fine. You were asserting that the only reason bitcoin is not "the standard" is that people are cunts. He indicated that you must be on drugs because your assertion was very unrealistic. I agree with him.

Re:the card will not be anonymous (1)

Anonymous Coward | about a year and a half ago | (#41107415)

Replace 'bitcoin' with 'cash', and re-read that. Do you really think "Cash will never be accepted if it's anonymous"??

Re:the card will not be anonymous (1)

petermgreen (876956) | about a year and a half ago | (#41107561)

Use of small ammounts of cash is tolerated by the powers that be because people have always done it.

AIUI use of large ammounts of cash is very likely to draw unwanted attention from law enforcement. In the US at least banks are required to report all transactions of $10000 or more and any suspiscious transactions to the government.

Re:the card will not be anonymous (0)

Anonymous Coward | about a year and a half ago | (#41107447)

that's not entirely accurate. it's pseudo anonymous. there are many research papers which refute the statement of anonymous

Re:the card will not be anonymous (1)

pla (258480) | about a year and a half ago | (#41107527)

bitcoin will never be accepted if it's anonymous.

You realize, of course, that the US "cash" economy dwarfs the "real" economy?

Do you remember why soooo many people had trouble putting in claims for damages after the BP spill? Because people pulling in six figures had no way to prove their income (ie, they bought and sold everything cash, then rolled 300d100 to decide what to report to the government in April). I have no sympathy for that situation, but use it only to provide some context.

People have no problem with anonymous currency. Banks and governments do, but currently, people hate banks, and don't feel much warm-and-fuzzier about governments.

Re:the card will not be anonymous (1)

kelemvor4 (1980226) | about a year and a half ago | (#41109027)

bitcoin will never be accepted if it's anonymous. You realize, of course, that the US "cash" economy dwarfs the "real" economy? Do you remember why soooo many people had trouble putting in claims for damages after the BP spill? Because people pulling in six figures had no way to prove their income (ie, they bought and sold everything cash, then rolled 300d100 to decide what to report to the government in April). I have no sympathy for that situation, but use it only to provide some context. People have no problem with anonymous currency. Banks and governments do, but currently, people hate banks, and don't feel much warm-and-fuzzier about governments.

I don't believe I've ever met someone that spends 10k or more a year in cash. Unless they were hiding the fact. Whenever I go out (business meetings in particular) everyone uses debit or credit cards. Occasionally someone will take cash out of an ATM and use it, but that's more the exception than the norm these days. My gut feeling on someone claiming to have done $100,000 in cash transactions is that they are lying. In this case, they have a good motive to lie - a potential payout from BP!

Re:the card will not be anonymous (0)

Anonymous Coward | about a year and a half ago | (#41106315)

And the advantage using it is what then?

That nobody will be able to tell where the money you're spending on it came from. That you can avoid paying both a bitcoin->actual currency and a credit card service charge by combining them both in the same transaction.

Besides, if it's like a traditional prepay credit card, what they mean by "not anonymous" is "we ask you for your name and address when you sign up, but make no effort to validate those unless you try to load more than [£500/$1000/whatever local KYC threshold [pwc.com] applies in the jurisdiction the card is issued] onto the card".

Re:the card will not be anonymous (1)

Intrepid imaginaut (1970940) | about a year and a half ago | (#41106765)

The point of the entire operation is to get more people to use bitcoins so those who stocked up on them can sell them. It matters not a whit whether a real credit card is in the offing as long as the word is circulating that it might be. Its like watching a stock being pumped by rumours.

Re:the card will not be anonymous (1)

fuzzyfuzzyfungus (1223518) | about a year and a half ago | (#41107405)

And the advantage using it is what then? If this catches on, I'll be watching intently how the revenuers treat this.

Isn't it obvious? It combines the convenience, stability, and wide acceptance of a weirdo cypherpunk crypto-currency with the privacy, security, and freedom of a credit card! How could you not love it?

Re:the card will not be anonymous (1)

pla (258480) | about a year and a half ago | (#41107871)

And the advantage using it is what then?

You can't anonymously use it. FTA, however, "Each card will bear a QR code on the front and a printed BitCoin address on the back, allowing instant transfers to and from the account."

Let's take a pie-in-the-sky view of BitCoin adoption. You can buy anything with it, perhaps even a major retailer like Amazon or Walmart starts taking it. Perhaps you run such a store yourself, and take BTC.

Come April, you suddenly have a problem - You have a tax burden based on your income (and yes, non-dollar-denominated transactions count), but very little in dollar-denominated assets with which to pay.

Presently, all the means by which you can convert BTC to USD only work for relatively small amounts, a few hundred here and there. Even a small-scale retail operation will realistically have a tax bill in the tens of thousands, at which scale direct currency conversions send red flags up throughout the system.

Well, guess what? The IRS takes plastic!


More generally speaking, Amazon and Walmart won't take BitCoin any time soon. The BTC economy has gotten reasonably large to the point that you can buy an awfully lot of things that appeal to geeks and survivalists directly, but at some point, if you interact with the rest of the world you need a way to use the local currency. And even though you can do it cheaper through the likes of Gox->Dwolla, you probably don't want to wait up to 10 days for it to clear through to your bank account (with no fewer than five manual steps required to complete the transaction).

Re:the card will not be anonymous (0)

Anonymous Coward | about a year and a half ago | (#41109097)

. The BTC economy has gotten reasonably large to the point that you can buy an awfully lot of things that appeal to geeks and survivalists directly

Especially if those geeks and survivalists are into buying black tar heroin!

Exchange rates? (1)

prehistoricman5 (1539099) | about a year and a half ago | (#41105669)

How would these be determined? I'm a little ill-informed about how bitcoin gets converted into "real" money so it seems to me that BitInstant can fiddle with these all it wants in order to maximize its profits.

Re:Exchange rates? (3, Informative)

retep (108840) | about a year and a half ago | (#41105917)

Like any other tradeable thing: on an exchange. If you don't think the exchange rate BitInstant gave you is fair, it's easy to go to a site like BitcoinCharts [bitcoincharts.com] and look at the spot prices at the time on any of the exchanges in existence for the currency you were converting too. After all, the back-end of BitInstant is just a computer program that automatically submits sell orders as required to meet their float requirements. Buyers then buy the Bitcoins, giving BitInstant fiat currency in return, which they then send to the bank handling the debit card backend via wire transfer.

The key thing from BitInstant's point of view is to have solid reliable backend software that submits orders fast enough, and statistically understands the volatility well enough, to figure out what instantaneous exchange rate they can make a profit on while still giving a good enough rate that their users don't feel ripped off. This is easy if the price of Bitcoins is rising, but if it's dropping they could easily be in a situation where they give you too much fiat currency for too little Bitcoins. Part of the issue too is that spreads between buy's and asks on Bitcoin exchanges tend to be much larger than you'd find in government-issues currency exchanges, simply because the market is smaller. They're looking at spreads in the region of one percent, rather than hundredths of a percent.

Ultimately though the process is no different from what your bank does if you use a USD denominated debit card in Europe.

Re:Exchange rates? (1)

metacell (523607) | about a year and a half ago | (#41105935)

Much like when Americans buy something in Euro with their credit card, or Europeans buy something in US$, in other words. The currencies are automatically exchanged, and the rates are usually a bit worse than you can get at an exchange kiosk. Your bank pockets the difference.

Re:Exchange rates? (2)

Havenwar (867124) | about a year and a half ago | (#41106061)

I don't think the ability to fiddle with the exchange rates is really something unique to this situation: a common way to get shafted when you travel abroad is that companies allow you to pay in your "home currency" on your credit card, thereby saving you the currency exchange surcharge from your card provider... and instead putting you on the hook for a price calculated with an incorrect exchange rate, giving the vendor or atm a direct profit.

Also I wouldn't speculate too much about how this would look because it isn't here yet, but there are bitcoin exchanges where you exchange your money for bitcoin or vice versa - if the card had bad exchange rates that would be an avenue to simply sidestep or even profit from that.

Re:Exchange rates? (0)

Anonymous Coward | about a year and a half ago | (#41107001)

Yes but as the fed wont accept bitcoin as collateral for new dollars(witch is how the interbank currency exchanges work) the money they issue is backed from some other fiat currency ie your not actually paying with bitcoin someone is paying real money(where does that come from) for your bitcoins before it even gets entered into this creditcard, so in reallity it's just another "store" branded mastercard.

Bitcoin is a lot similar to RMT in games, or "gift cards" issued by stores in that it's not an actual currency and cannot be treated as such.

People have tried with bullion backed private currencies and never gotten out of the niche marked and so far bitcoin dont seam to exit the "techno-anarchist with too much money" market segment either.

Re:Exchange rates? (1)

Havenwar (867124) | about a year and a half ago | (#41107095)

A general suggestion would be to first stop thinking about "the fed" in the context of this, since whatever country's version of "the fed" you think of, you fall short of reality in one very important way: The internet isn't a country. Bitcoin is not a countrybound currency, and such no one country or banking system can or should back it in it's entirety. Now that being said I agree that a fiat currency on top of a fiat currency is a risky thing in a manner of speaking, but only in the respect of the issuing company going bankrupt. Say for instance the second life currency, L$, would be worthless if Second Life was to vanish. However bitcoin isn't backed by an entity, it's a distributed currency, and as such it's in theory pretty resistant to such things. That's half the point of it.

Yes, in reality this is just a store branded debitcard, by whatever card company it ends up being connected to... But that's not a bad thing. The big thing about this particular card is that it's the theoretical solution to exactly the problem you address in the rest of your message: limited userbase and usability of the currency. By having a debit card that you can fill up with bitcoins and use to pay real money with anywhere a "mastercard" or whatever is accepted, you suddenly increase the usability of the currency immensely. No need to go through a processor on the internet, getting your funds transferred to your bank or whatever... just whip out your card and pay.

One of the main reasons bitcoins don't really take off is that there is very little you can do for them, besides novelty items, hosting, vpn and such techno services, and of course the large black market segment. This card would essentially increase the potential use for the currency to EVERYTHING.

I'm curious... (1)

TWX (665546) | about a year and a half ago | (#41105675)

...as to how many actually use Bitcoin, and how not being either a government-supported fiat currency and also not being specie with some inherent material value it can have value not intensely tied to being a trend.

After all, we've seen a lot of other essentially worthless things become very valuable, and then crash, and we've even seen valuable things like real estate also crash. In the end, bullion and real estate have tangible value. A string of characters does not, and without the backing of a government I don't see how it'll work.

Re:I'm curious... (0)

Anonymous Coward | about a year and a half ago | (#41105787)

Bullion doesn't have tangible value. You are waiting for the next sucker to come buy it for more than you did. That said people tend to gravitate to it as a currency if none exist. Land is the big one for tangible value unless property rights keep getting trampled. Actually property rights are probably the most important thing for an money economy to function. Why play nice when you can just take it?

Re:I'm curious... (2)

dadioflex (854298) | about a year and a half ago | (#41105805)

Gold is quite useful stuff, so you can't really say bullion has NO tangible value.

Re:I'm curious... (3, Insightful)

SuricouRaven (1897204) | about a year and a half ago | (#41106311)

Not really. It's too soft for engineering with. Copper is more conductive. No really special useful properties. In terms of what you can do with it, anything you can use gold for you could do with lead as well. The only use for gold is in very small quantities for some niche things like semiconductor hookup wires (Is it even still used for that) and reflector foil, and decorative. It's valuable because it's so rare, and thus decorative use became a status symbol millenia ago. It's like a brand-name clothing line: If it wasn't expensive, no-one would want it.

Re:I'm curious... (3, Informative)

Tapewolf (1639955) | about a year and a half ago | (#41106585)

AFAIK it's used for connectors a lot because it doesn't corrode.

Re:I'm curious... (0)

Anonymous Coward | about a year and a half ago | (#41108939)

AFAIK it's used for connectors a lot because it doesn't corrode.

Even then the connectors are only plated with a thin layer of gold to protect the underlying metal.

Re:I'm curious... (0)

Anonymous Coward | about a year and a half ago | (#41106341)

OTOH its financial value far outstrips its tangible value. The demand for actual useful applications of it falls far below actual production levels.

Re:I'm curious... (2, Interesting)

retep (108840) | about a year and a half ago | (#41106469)

...and if you are using it for an actual application, it's frustrating how expensive the damn stuff is. As an electronics designer I'd much rather just gold plate everything for durability, rather than having to fight the cost-engineering department every time.

Gold bugs are a very real part of the reason why consumer electronics are unreliable. Remember that every time a crappy tin-plated connector fails. Heck, silver bugs too: for high-current connectors and RFI shielding silver is usually the best option, but again it's unaffordable for a lot of applications.

Re:I'm curious... (-1)

Anonymous Coward | about a year and a half ago | (#41106127)

Yup bullion has no value. So if ever you see a gold bar lying around, you won't pick it up and try to sell it since it's as valueless as a pebble. The value in gold lies in people's perception of the value of gold. You can go ahead and pretend it has no value, but the world will move on without you.

Re:I'm curious... (3, Funny)

dadioflex (854298) | about a year and a half ago | (#41105799)

...as to how many actually use Bitcoin, and how not being either a government-supported fiat currency and also not being specie with some inherent material value it can have value not intensely tied to being a trend. After all, we've seen a lot of other essentially worthless things become very valuable, and then crash, and we've even seen valuable things like real estate also crash. In the end, bullion and real estate have tangible value. A string of characters does not, and without the backing of a government I don't see how it'll work.

It's identical to any other economic system. Basically, it's Tinkerbell. So long as you believe, everything will be okay...

Re:I'm curious... (2)

circletimessquare (444983) | about a year and a half ago | (#41106763)

Well duh.

As long as enough people believe in their society, society will still function.

So why believe in society?

Because the alternative is far worse.

  Currency is just a subset of this truth.

Meanwhile, Bitcoin isn't backed by any society. Therefore, it is simply a playground for that perennial sort, the cranks who have a hobbling deficit of trust or faith in anything. Bitcoin is a simply a new ghetto for such age-old types of fringe characters.

Well power to you crackpots. Have fun with your new toy. Just understand why Bitcoin will always just be a ghetto for the fringe and is not poised to take over the world. No sovereign society backs it.

Re:I'm curious... (1)

Anonymous Coward | about a year and a half ago | (#41105831)

Very few people use Bitcoins today, many of them for using Silk road (and some other sites which only use Bitcoins; gambling anyone). There is also a growing number who simply buy coins to speculate on their value.

It's very possible that you are right and that, without some "backing" or "intrinsic value", Bitcoin is doomed to become worthless in the long term. However, this only hurts it's usefulness today as a store of value, not as a wealth transfer protocol. The people most involved in Bitcoin would love to be able to prove something about the value of Bitcoin but all they (or anyone else for that matter) have is theories. At best we can think of Bitcoin as a serious and much needed experiment in economics.

As interesting as I find this experiment, I do think Slashdot is overdoing it with what now appears to be daily updates. Bitinstant actually releasing a Bitcoin/MasterCard would be news but all these recent stories are for announcements and rumours. Watch this space for the monetary inflation halving story near the beginning of December.

Thank God (4, Funny)

tooyoung (853621) | about a year and a half ago | (#41105691)

I hadn't seen a BitInstant story since Tuesday [slashdot.org] so I assumed that it was no more. Thanks for reminding me that I care.

Well, actually, there was the story on Wednesday [slashdot.org] that was able to keep my hopes up. If you can subtly work a few more BitInstant stories into the next few days, I'll be compelled to get a card and those advertising dollars will have been well spent.

Re:Thank God (5, Insightful)

GuldKalle (1065310) | about a year and a half ago | (#41105847)

It's called "follow-up on your stories". We're sorry if you don't want to read about it, next time you might try not clicking the link.

Re:Thank God (0)

Anonymous Coward | about a year and a half ago | (#41108451)

Or maybe someone could not link in EVERY FUCKING BITCOIN STORY that comes out.

Oh sure "News for Nerds"; then let's link in EVERY FUCKING STORY about sasquatch, what was in Linus' latest bowl movement, and whether HARP has finished creating global warming yet.

Far from 'not clicking the link', how about 'not posting the link' in the first place?

Re:Thank God (0)

Anonymous Coward | about a year and a half ago | (#41105893)

I think you mean advertising bitcoins. I would expect BitInstant to want to pay for their advertising in bitcoins and, as we all know by now, the Slashdot editors are heavily invested in the currency. This utterly transparent advertising tactic won't work on any half-way intelligent people.

Disclaimer: I pre-ordered one of the cards yesterday.

If someone makes a product... (2)

thePowerOfGrayskull (905905) | about a year and a half ago | (#41105749)

If someone makes a product and nobody uses it, does its failure make a sound?

Faxes, anyone? (4, Insightful)

Okian Warrior (537106) | about a year and a half ago | (#41105845)

Who bought the first fax machine?

I mean, the very first fax machines were expensive (around $2000), and the first person to get one had no one to send things to, and no one to receive from. Were fax machines ever really that unlikely to succeed?

There's lots of things that have value in proportion to the number of people who use it - it's called the network effect [wikipedia.org]. In a few instances (fax machines, telephones, the internet) the value is zero if no (or very few) people are actually using it. That doesn't mean that telephones or fax machines or the internet didn't come into common, everyday usage.

Is this a valid concern? Should I, as an intelligent adult, claim that something will never be of value simply because no one uses it right now?

It 'kinda seems like there's a flaw in that reasoning. Wouldn't you be better off with a different argument?

Re:Faxes, anyone? (1)

prehistoricman5 (1539099) | about a year and a half ago | (#41105945)

In the case of the fax machines, they probably were used internally by their manufacturer, then their manufacturer may have subsidized them for business contacts etc.

I know for a fact that Ma Bell did a similar thing for phone service; if you worked for them you got free phone service for life. Because of this my grandparents still don't pay anything for their service.

Re:Faxes, anyone? (3, Insightful)

Dunbal (464142) | about a year and a half ago | (#41106141)

Fax machines were useful at sending printed material immediately over a phone line. This was a new way of doing things. Bitcoin is trying to replace something that already exists - money, and the electronic form of money in interbank transfers. In order for people to adopt it there would have to be an overwhelmingly compelling reason to do so. So far there are many reasons not to. The bitcoin "crash". The bitcoin robberies. Bitcoin's association with drugs (wait till the governments of the world start regulating this). Yeah, no thanks.

Re:Faxes, anyone? (1)

twistedcubic (577194) | about a year and a half ago | (#41106173)

Here's one real-life example. I purchased two fax machines--one for myself, and one for my brother who was in high school at the time. Since I lived 2000 miles away, it was a lot easier helping him with geometry homework--he would draw the diagrams and fax them over. Doing geometry over the phone was painful. (Note: This was years before Skype and all that other shit.) I'm sure businesses found faxes useful from the outset.

Re:Faxes, anyone? (0)

Anonymous Coward | about a year and a half ago | (#41106373)

Who bought the first fax machine?

I mean, the very first fax machines were expensive (around $2000), and the first person to get one had no one to send things to, and no one to receive from. Were fax machines ever really that unlikely to succeed?

I know your question was probably rhetorical, but the answer is that the earliest commercially sold fax machines were used by journalists to send reports to their newspapers' offices. They would buy an incoming fax machine at its head office at the same time it purchased sending machines for its branch offices and/or reporters' homes, thus removing any requirement for a network effect. I believe governments may also have been early adopters, installing them at places that handled a lot of incoming documents (e.g. courts) in an effort to promote what they foresaw would be a useful system. Earlier than this, telegraph companies installed them in their offices as a public service to customers.

Re:Faxes, anyone? (1)

retep (108840) | about a year and a half ago | (#41106453)

Who bought the first fax machine?

If anything, BitInstant's paycard is an attempt to avoid this problem by giving you a way to easily spend Bitcoins with people who haven't adopted it. If they can eventually find a way to somehow allow you to deposit funds from a bank machine onto the card in the future, even better.

What they're doing is kinda like an early fax machine company setting up a nice fax-to-postal-mail service. Imagine being able to skip days of letter delivery overseas by simply faxing an office in the same country and city as your recipient...

Actually, excuse me, I need to find some investors and a time machine...

Re:Faxes, anyone? (0)

Anonymous Coward | about a year and a half ago | (#41107895)

What they're doing is kinda like an early fax machine company setting up a nice fax-to-postal-mail service. Imagine being able to skip days of letter delivery overseas by simply faxing an office in the same country and city as your recipient...

Actually, excuse me, I need to find some investors and a time machine...

Make sure those investors don't realize the telegraph existed, and the business world had already adapted to use it (especially with the recent advent of telex) for almost all overseas work, or they might be as skeptical of your business plan as many people are of this card when you can already buy prepaid debit cards with bitcoins.

Re:Faxes, anyone? (0)

Anonymous Coward | about a year and a half ago | (#41107103)

The first fax machines were used by oil rig companies to send design specifications from base out to the rig.

Re:Faxes, anyone? (1)

thePowerOfGrayskull (905905) | about a year and a half ago | (#41108535)

Nope. I felt that one stands on its own. Unlike a fax machine this has no practical use, particularly since it negates the one potentially redeeming aspect of bitcoins. It's a product from someone who give his interviews on an irc channel, designed to meet a need that isn't held by anybody.

Of course he should try it - we should always try things, it's how progress happens - but he's not terribly likely to succeed with this one.

Re:If someone makes a product... (0)

Anonymous Coward | about a year and a half ago | (#41105933)

My computer is set up to go "beep" with every new Slashdot story (genius, I know). For me the sound of BitInstant failing is:

Beep beep, ..., beep. Beep, beep, .... beeeeep. Beep!

Beep.

Wish it was yesterday (4, Interesting)

Penurious Penguin (2687307) | about a year and a half ago | (#41105769)

Some very talented folks I once had the pleasure of meeting just went out of business. They had formed Bitcoin Harbor [bitcoinharbor.com], an exchange for buying and selling items strictly in bitcoins. I suspect the undue lack of popularity for bitcoin is to blame, but there has been some pretty fierce efforts against bitcoin which might also influence the stagnation of what I consider a great system. One example of government hostility against alternative currencies I think is no better illustrated than in the case of Bernard von NotHaus [boilingfrogspost.com].

Some fear the forced introduction to a "cashless society", and maybe I do as well. However, If such is the unavoidable future, I'd rather it be in bitcoin. It's peculiar the vehement government defense of what might reasonably be considered amongst the most unstable and fantastical currencies in the world, in contrast to their hostility toward arguably less deformed competitors. When speculation suggests bitcoin may be more worthy of confidence than the euro [zdnet.com], I pay at least one ear of heed. But when Alan Grayson asks Lord Ben where $500,000,000,000 [youtube.com] went and he can't reply, I reach for my Adult Depend Undergarment.

Re:Wish it was yesterday (0)

Anonymous Coward | about a year and a half ago | (#41105815)

Calling a lack of popularity "undue" is like blaming water for being so wet.

Re:Wish it was yesterday (1)

dadioflex (854298) | about a year and a half ago | (#41105829)

I find your ideas fascinating and your argument compelling. I have one question. We speak of the value of Bitcoin, but relative to what? If the other cash systems collapse and only Bitcoin is left, will it be traded relative to its worth in goats or chickens?

Re:Wish it was yesterday (1)

Penurious Penguin (2687307) | about a year and a half ago | (#41106025)

That's a pretty butch question. In my current state, I'd have trouble answering it with any chance of respectful reception. What I can say immediately, is how the bloody hell is the current system going to hold? I also don't believe bitcoin has reached maturity yet. Like a beaten and resented prodigy, it's growth has been hindered by various factors. Maybe the way it would work under such circumstances is a matter of additional innovation, adaptation, or redesign. I hope it never comes to that, but if it does, it would be nice to see things get the hell out of its way with anything but positive input. I am sure some fellow slashers will do a brilliant job taking this in 360 degrees, and far beyond what I am capable of.

On the subject of goats, [gardens] and chickens, that's another manipulated value, considering that in many locations throughout the US and other nations it's illegal to have them.
http://www.huffingtonpost.com/2011/07/08/woman-jailed-for-vegetable-garden_n_893516.html [huffingtonpost.com]
http://www.theatlanticcities.com/neighborhoods/2012/04/illegal-curbside-garden-flourishes/1728/ [theatlanticcities.com]
http://www.huffingtonpost.com/2012/07/20/illegal-kitchen-garden_n_1687558.html [huffingtonpost.com] - CA
http://www.aolnews.com/2010/09/15/cabbagegate-ga-man-fined-5k-for-home-garden/ [aolnews.com]
http://www.economist.com/blogs/democracyinamerica/2010/10/weird_zoning_laws [economist.com]
http://www.newson6.com/story/18802728/woman-sues-city-of-tulsa-for-cutting-down-her-edible-garden [newson6.com]
And so on and so on.

Re:Wish it was yesterday (0)

Anonymous Coward | about a year and a half ago | (#41106253)

Haha, around here (pacific northwest) if the city notices a particularly nice vegetable garden they give the owners a certificate and put a sign in the yard.

Re:Wish it was yesterday (3, Insightful)

retep (108840) | about a year and a half ago | (#41106071)

Really the value of Bitcoin is based on the velocity of money, and speculation. The latter is just a matter of supply and demand, it's the former that's more interesting. Suppose Alice, in the USA, wants to transfer value to Bob, who lives in Germany, using Bitcoins. The actual exchange of value is going to look like this:

  • Alice gives Charlie, who runs an exchange, some US dollars. Charlie gives Alice some Bitcoins.
  • Alice sends her Bitcoins to Bob.
  • Bob gives Dan, who also runs an exchange, his new Bitcoins, and Dan gives Bob Euros.

Now if this goes on over and over again, Charlie is going to be short of Bitcoins, and Dan short of Euros. So on Charlie's exchange the price of Bitcoin relative to the US dollar will rise, and on Dan's exchange, it'll fall. Enter Anna, are arbitrage trader:

  • Anna sells US dollars on the Forex market, buying Euros.
  • Now Anna wires those Euros to Dan's bank account in Germany, and Dan gives Anna Bitcoins
  • Anna then gives Charlie Bitcoins, getting US dollars back.

Why didn't Alice just wire Euro's? Well, bank wires have high fixed fees, so Anna can amortize the fees over one huge wire transfer in a way that Alice can't. Also, Anna doesn't care if either side know who she is, but Alice might.

The key thing is that all these steps take time, which means Bitcoins are tied up in the system, reducing the supply. So by basic supply and demand, the price goes up, based on how useful it is to use Bitcoins to transfer value between people, and how fast the whole process can happen. Some people find them very useful to do this, especially pseudo-anonymously, notably the drug trading site Silkroad. Note how curiously a more efficient Bitcoin market, in terms of fiat conversion, will lead to a lower Bitcoin price.

The key thing is that Alice and Bob don't actually care that much what the price of Bitcoin relative to other currencies is. They just care that the price doesn't change fast enough that one side or the other gets ripped off during the time it takes to complete transaction. The faster those transactions happen, the less of an issue this is. If either side can quickly buy and sell their coins, something made easier by things like BitInstant's new paycard, they don't have to worry about exchange rate volatility as much. And speaking of, while people in the US don't have this problem, ask someone in, say, Iceland, with its tiny economy and its own currency, how stable the value of the Krona is relative to other currencies...

As for what happens if cash systems collapse... frankly if that's true, chances are something is seriously wrong with society. If the internet is still functioning Bitcoin might still be working well enough as a technological project that your coins are going to be worth something. If the internet isn't work, well, you're coins are going to be worthless because people can't transfer them. Of course, if you're in such bad straits that what you really want is goats and chickens, you might also quickly find out that you can't eat gold...

Re:Wish it was yesterday (1)

Telvin_3d (855514) | about a year and a half ago | (#41105883)

there has been some pretty fierce efforts against bitcoin which might also influence the stagnation of what I consider a great system.

Of course stagnation is setting in. Bitcoins have a fixed supply and thus are a deflationary currency. They were designed that way. It's one of the biggest reasons all the economists snickered when they debuted. Deflationary currencies always result in hording, which is never a desirable feature for a currency system.

So it's been interesting to watch the competing pressures. The natural tendency for a fixed supply currency to rise versus the growing realization that they are backed by nothing but the promises of a bunch of guys with servers.

Re:Wish it was yesterday (2, Insightful)

Anonymous Coward | about a year and a half ago | (#41106401)

Of course stagnation is setting in. Bitcoins have a fixed supply and thus are a deflationary currency. They were designed that way. It's one of the biggest reasons all the economists snickered when they debuted. Deflationary currencies always result in hording, which is never a desirable feature for a currency system.

No, it's not a desirable feature for an economy. If Bitcoin's main use is transferring value from one person to another, the actual value of Bitcoin at any one time is irrelevant, so long as it's stable over however long the whole transaction takes, from fiat, to Bitcoin, back to fiat. The Bitcoin hoarders can have their fun; the people buying drugs on Silkroad aren't going to care. It's getting turned into fiat currency at the other end anyway.

An economy using only Bitcoin as currency would have serious structural problems I'll agree, but that's way off in the future, if ever.

Re:Wish it was yesterday (0)

Anonymous Coward | about a year and a half ago | (#41106393)

NotHaus had two problems: his coins were called dollars, and looked confusingly similar to some previously-issued actual US coinage. This could have lead to people being confused and buying/accepting them thinking they were actual legal tender. There are plenty of private currencies around the world that have not had similar problems (e.g. BerkShares [wikipedia.org]).

Re:Wish it was yesterday (0)

Anonymous Coward | about a year and a half ago | (#41107593)

But labeling him a terrorist? A bit much, I think.

Re:Wish it was yesterday (0)

Anonymous Coward | about a year and a half ago | (#41106685)

They are lucky they just went out of business. Look at the fate of others who have tried to make an alternative to the US dollar. Iraq - bombed to the stone age, Libya - ditto, the EU - taken out by financial terrorists. These BitCoin guys are fortunate to have gotten away with their lives.

Re:Wish it was yesterday (1)

makomk (752139) | about a year and a half ago | (#41106963)

Bernard von NotHaus issued silver coins stamped with face values in dollars that looked really similar to genuine US-issued currency, was encouraging people to pass them off as US dollars in stores, and sold them to his members at a substantial discount to the face value (though still more than the actual value of the silver they contained). He even thought it would be a good idea to pass one off to an unsuspecting store clerk on camera in a TV interview, describing it to her as "the new dollar". It's not exactly surprising that he was done for counterfeiting.

Re:Wish it was yesterday (1)

Penurious Penguin (2687307) | about a year and a half ago | (#41107803)

"....It's not exactly surprising that he was done for counterfeiting."
Counterfeiting might be fair enough. From what I remember though, he was accused of terrorism. I know it's the new pidgin Swiss Army Knife of fascism, but to me, gross usurpation of our language is far more terrifying than dubiously minted coinage. His coins were measurably different from any official currency, and none could be used in any conventional machines. I wonder how the value of Bernard's silver would compare to something like the actual value of derivatives. But that kind of wondering could get a lot folks minted as terrorists.

What I was waiting for! Best of both worlds! (5, Insightful)

Kenja (541830) | about a year and a half ago | (#41105777)

All of the issues with a non-backed currency that no one trusts PLUS the lack of anonymity associated with a major credit card!

Re:What I was waiting for! Best of both worlds! (1)

retep (108840) | about a year and a half ago | (#41106137)

Currencies aren't really backed by anything these days, other than the fact people in certain economic regions generally use a given currency.

All this stuff about governments backing currencies by accepting them as taxes ignores one critical thing: How does the government decide how much to take? Suppose you were in Canada, running a business happened to accept US dollars exclusively from your customers, and at the same time happened to have all your expenses in US dollars. (quite easy to do with an cloud-using internet startup actually) The Canadian government will of course demand you pay your taxes in Canadian dollars, but as for how many Canadian dollars you owe they'll use the exchange rate between CAD and USD.... which is in turn determined by the currency markets, which figure out the price by, guess what, how much people want Canadian dollars vs US dollars.

Now imagine for some reason that every company in Canada becomes such an internet startup overnight. Even though the Canadian government demands that you pay taxes in Canadian dollars, they're going to have to ask how many based on the exchange rate at commercial exchanges. Chances are the value of 1 CAD compared to 1 USD will plummet as soon the only reason you'd want to have Canadian currency is to pay your taxes. Eventually some weird equilibrium will happen where the value is totally determined by how fast the government sells of their Canadian dollars to buy things that the government wants, which means the government might as well just peg the value of the Canadian dollar to the US dollar at some arbitrary multiple.

Of course, this doesn't happen because Canadian companies often want to be paid in Canadian dollars so they can pay their employees and other Canadian expenses. Said Canadian companies often export things to other countries, hence the exchange rate being determined by the supply and demand between Canadian stuff being exported and non-Canadian stuff being imported.

Bitcoin, modulo people holding it due to speculation, acts quite like this sort of thing, except that you can picture Bitcoin as the intermediary between two different currencies. Therefor the exchange rate of Bitcoin is determined by how long it takes to convert from a currency to Bitcoin and back again, times how many people are doing these types of transactions, divided by the total amount of Bitcoin on the market.

Thrifty conversion (1)

SpelledBackwards (587772) | about a year and a half ago | (#41105781)

Like most members of America's elite, I will be using my BitInstant card to buy tulips since it's safer than gold. In the movies, people are always trying to break into Fort Knox. You never see them rob florists.

It's not a credit card, it's a debit card (5, Insightful)

retep (108840) | about a year and a half ago | (#41105819)

Specifically one re-loadable with Bitcoins.

From what BitInstance has said it either works by simply converting your BTC into USD or some other currency when you deposit the BTC to the address on the card, or they've done some clever thing where they convert the appropriate amoun of the BTC balance associated with the card it as you make a transaction. (depositing the currency to the actual account associated with the card just in time for the payment to go through) Credit is never offered.

Of course, this is why they don't really need much help from Mastercard: the technology powering the card is already common for branded payment cards like those ones you can get to give as gifts, just without the crazy fees and with a much more reasonable %1 currency conversion fee and the flat $10 or so fee to buy the card. That conversion fee being pretty similar to what you'd pay at a regular bitcoin exchange anyway.

Ultimately this is like Paypal's debit card: just an easy way to spend your Bitcoin balance. If you happen to have a lot of coins for whatever reason, be it you run a business, mine, or invest in them, this card might be for you. Otherwise don't complain that a niche product doesn't make sense for you.

From a security point of view it's a very easy product to offer. When Bitcoins are sent you can almost guarantee the transaction has gone through, no charge-backs, after one confirmation, or an average of 10 minutes. That rises to essentially guaranteed after six confirmations. (I'm pretty sure no-one has ever managed an actual double-spend with even one confirmation) The rest of the process is subject to the exact same risks as any other pre-paid debit card, hence the transaction limits they've said they'll apply of something like $1000 a day. Basically they just want to limit losses if someone steals/clones your card, or they screw up somewhere.

Re:It's not a credit card, it's a debit card (1)

Animats (122034) | about a year and a half ago | (#41106107)

Specifically one re-loadable with Bitcoins.

No, probably one re-loadable from Bitcoins.

What they're probably going to have is a dollar-denominated debit card. The "Bitcoin" feature will probably just be some way to sell Bitcoins on some exchange and have the dollars credited to the account behind the card. One question is how fast, how reliable, and how non-reverseable the Bitcoin to dollars transactions are. Another question is who stands behind the dollar balances stored in those cards. Is there a separate account in a real bank for each card, or are the funds pooled? If the funds are pooled, the failure of BitInstant will lose you money.

Re:It's not a credit card, it's a debit card (1)

retep (108840) | about a year and a half ago | (#41106195)

As I said, the currency conversion could work either way. It'd be easiest doing it the way you describe, however a big part of BitInstant's other business doing fiat-Bitcoin conversions is that they have good mechanisms to complete the conversions as fast as possible with accurate pricing. This may enable them to do the conversion fast enough that they'd somehow load the dollar balance on the card as you attempt to spend it. Effectively they'd intercept that "over-spent" notification somehow in the computer system, and instantly transfer over dollars as required. They then take the risk that they can't buy the dollars back at a profitable exchange rate.

Re: risk, any balance actually on the cards would be the responsibility of the bank actually issuing the cards. This isn't any different from any other pre-loadable card. BitInstant itself is a registered company in New York, NY with a physical office. The identities of the people running it are well known. On IRC they hinted that they're looking into allowing you to hold the private key associated with the Bitcoin balance on your card, so if BitInstant failed you could recover the Bitcoin balance yourself. (the BTC funds wouldn't be pooled in that case) The issue there is the person holding the card spending the coins before BitInstant can take them to sell on the market. However, the card isn't anonymous, so they know who you are if you try to pull that scam and will just ask you to give them Bitcoins to replace the ones you took. Also in practice even a transaction that's been on the Bitcoin network for only a few seconds is difficult to reverse.

Prepaid debit card? (1)

fufufang (2603203) | about a year and a half ago | (#41106027)

I thought the whole point of Bitcoin is that it is anonymous.

If I want to use money conveniently and have a degree of anonymity, why don't I use prepaid debit card? e.g. those prepaid VISA card?

Re:Prepaid debit card? (0)

Anonymous Coward | about a year and a half ago | (#41106211)

You should read the usage agreement before trying that. Most pretty explicitly state that on top of demanding proof of identity, they will also send it to the feds.

A better mousetrap (0)

Anonymous Coward | about a year and a half ago | (#41106041)

Or, you could keep using your regular USD card and not shop Silk Road.

Reasons I won't get one (0)

Anonymous Coward | about a year and a half ago | (#41106153)

1. I want to store the value as BTC and have only the necessary amount (determined by current market price + fee) converted to the merchant's preferred currency at purchase time. The whole point is that BTC should be a better store of value than the constant inflation of fiat currencies. Feel free to disagree on Bitcoin's merit as a store of value but this point can simply be reduced to preference for different asset classes. Converting my BTCs to USD/local currency upon deposit is useless to me.
2. While this will facilitate trade from BTC out into the greater market preferring other currencies this undoes the technological benefits provided by Bitcoin in adition to simply being another store of value.

Re:Reasons I won't get one (0)

Anonymous Coward | about a year and a half ago | (#41108181)

1 - You can store the balance as BTC and have it converted at time of purchase, meaning that you coins are only converted when you buy something - and that's the whole point, it allows spending BTC with merchants who don't accept BTC

2 - It's an interface to mainstream finance

What is currency? (4, Interesting)

circletimessquare (444983) | about a year and a half ago | (#41106213)

Something like the Dollar, or the Euro, or the Renminbi is backed by a standing army and a society with a functional government and a banking industry. Governments and banking industries that engage in shenanigans and with horrible screw ups that test the patience and faith and trust of all of us. But I still trust in actual social institutions that actually represent the value behind an actual currency, then some protocol for fringe types who don't trust anyone or anything.

Bitcoin is not the dawn of a new stateless economy. Bitcoin is the dawn of a new ghetto for the kind of person with a high level of distrust in society. Distrust not born of actual experience, but the kind of distrust that is a function of that person's personality issues. Such people will always exist. I'm glad the Internet and some dude with a Japanese pseudonym have given them a new toy to exert their prodigious antisocial energies on.

Enjoy, fanboys, but please don't imagine your alternacurrency has more meaning than it actually does. It's a project for you to waste your antisocial frustrations on. Good for you. All hail the small but growing psychosocial ghetto called Bitcoin.

There are just people in this world with a hobbling deficit of trust in any social institution. Considering how the banksters have screwed up over the last decade, some of that distrust is earned. But there never is, and never will be, an alternative to an actual, real, social institution, no matter how badly it is mismanaged. The problem is in not understanding that, not understanding that your currency has to be backed by SOMETHING. Some people are just too antisocial to understand this.

So let the fools exert their energies on Bitcoin if it provides a harmless waste of time for them. This alternacurrency ghetto will bubble and pop and limp along, and eventually peter out into obscurity if and when someone responsible is actually able to take hold of our broken and mismanaged financial system.

Either that, or drug traffickers and other illicit activities will glom onto the idealistic fanboy's new toy, and then the authorities will go after Bitcoin ONLY FOR THAT REASON. But the paranoid crackpots will claim this is proof the state is out to crush anything good in this world, when the simple truth is there is always a lot of ugliness in this world, but there is a heck of a lot more ugliness without a strong government. Sorry fanboys.

Re:What is currency? (0)

Anonymous Coward | about a year and a half ago | (#41106261)

You'll come around, already you are qualifying your hate.

Re:What is currency? (1)

circletimessquare (444983) | about a year and a half ago | (#41106339)

Come around to what exactly that is not as I have described?

Re:What is currency? (0)

Anonymous Coward | about a year and a half ago | (#41108691)

This alternacurrency ghetto will bubble and pop and limp along, and eventually peter out into obscurity if and when someone responsible is actually able to take hold of our broken and mismanaged financial system.

Not gunna happen, they have been trying to introduce SDRs since the 1970s but noone can agree on initial distribution. Bitcoin has solved this problem. Also inflation and "economic growth" are so last century. This upcoming century is going to be about conservation.

Re:What is currency? (0)

Anonymous Coward | about a year and a half ago | (#41108765)

sorry... broken quotes.

Re:What is currency? (0)

Anonymous Coward | about a year and a half ago | (#41106553)

No army is safe from defeat. Bitcoin is defended by math.

Re:What is currency? (1)

circletimessquare (444983) | about a year and a half ago | (#41106719)

An army props up a nation, which cares about the value of its currency.

Math doesn't care what your currency is worth.

Re:What is currency? (0)

Anonymous Coward | about a year and a half ago | (#41106849)

Exactly. Bitcoin isn't a nation's money. Its validity is ensured by something that can't be toppled over, can't be bribed and can't be bent. Math simply is.

Re:What is currency? (1)

circletimessquare (444983) | about a year and a half ago | (#41106889)

Bitcoin's validity isn't ensured. By anything. Backed by nothing = value of nothing.

Null is null. I learned that from math.

Well... this isn't entirely true. The real equation is:

(value of some real society's currency) x (number of true believer asocial cranks using Bitcoin) = Bitcoin's current value.

The enthusiasm of the cranks are a conversion factor that allows this ghetto currency to have some shadow life and shadow value. But this is where the value ends.

If the value of the underlying currency goes up, Bitcoin is also more valuable as it is parasitically propped up by real currencies.

If the number of asocial cranks goes up, such as when a real society screws up it's banking system, Bitcoin is more valuable as a protest expression of distrust and disfaith in the mismanaged banking systems.

But notice that if you remove a real currency from the equation, Bitcoin has no value in and of itself. 0 x (any number of cranks) = 0.

In what world would there be no real currency, or a real currency has zero value? It's a hellish concept, but one certainty is true in such a world: if there is social breakdown, then there is no maintenance of the Internet. And so no trading in parasitical Bitcoins.

Bitcoins are a ghetto, a parasite shadow currency for true believer asocial cranks. It will limp along in this way for awhile. A fascinating toy for the asocial cranks to play with. That is all Bitcoin will ever be.

Re:What is currency? (1)

nschubach (922175) | about a year and a half ago | (#41107581)

You seem to be vehemently opposed to BitCoins for whatever reason, so i have to ask... why not just let people make mistakes if you feel it's such a bad thing? They aren't spending your money on them. If it falters, do you gain some reward? If it succeeds, do you get penalized?

I haven't ever bought BitCoins, nor had the need or desire to... but I find it interesting that so many people are fighting to have it discredited.

Re:What is currency? (1)

circletimessquare (444983) | about a year and a half ago | (#41108577)

I already said in the top level comment above this one "I'm glad the Internet and some dude with a Japanese pseudonym have given them a new toy to exert their prodigious antisocial energies on." By all means, anyone who wants to can and should play with Bitcoin as much as they want.

Furthermore, I'm not discrediting anything, I have no authority. I am merely expressing my opinion about Bitcoin. Am I allowed to do that? Why is the expression of my negative opinion about Bitcoin predicated on an assumption that I have some desire or ability to shut it down? That is a false assumption on your part. I have no desire to shut it down. Calling Bitcoin stupid is just my opinion, there's no force or ability or desire to force anyone on anything with that opinion.

It's like this: I would never ride a motorcycle. There's far more comfortable ways to travel, and if you get in an accident in one, severe injury is likely. Every time I pass a guy on a motorcycle on the highway I thank him for ensuring a supply of organ donations. I think motorcycles are a sad need for some men in midlife crisis to express their manliness, which is never in doubt, expect because they feel such a need to defend it.

Now, having said that, in what way have I implied people can't or shouldn't ride motorcycles? Knock yourself out, ride a motorcycle. I'm going to think you are stupid. And that's just me and my single opinion. Am I allowed to have my opinion? Some other guy, or more importantly, some other chick, might think you are cool on your motorbike. So enjoy getting laid while I sit here typing negative opinions on Slashdot. Enjoy your Bitcoins while I sit here and sneer at Bitcoin enthusiasts.

Welcome to the crazy world called "everyone has a right to their own opinion".

This is why men should marry little girls. (-1)

Anonymous Coward | about a year and a half ago | (#41107431)

Bitches like this.

Re:What is currency? (2)

shurdeek (571257) | about a year and a half ago | (#41107483)

Claiming that national currencies are "backed" by the state is one of the more popular economic fallacies. Currencies work due to the network effect, not due to "backing". If the parameters of the network negatively change (e.g. the critical mass increases or people leave because there is a sufficiently good substitute), the currency will collapse. No amount of "backing" by the state can avert that. The maximum it can do is to attempt to prevent people from leaving, but that might not be enough. All the countries that suffered from currency collapses had armies. North Korea and Russia rank at place 4 and 5 of active military personnel in the world, for example (and Soviet Union was probably even higher).

On the other hand, situations where only the state collapses do not lead to dramatic changes in the use of currency. In Somalia and Iraq, people continued using the local currency even after the collapse of the state. At best they amend their activities with foreign currencies (e.g. neighbouring countries or the currencies with the largest markets, such as the USD and EUR).

Both of these are consistent with the use of network effect as an explanation: currency collapsing does not correlate with the power of the state, but with the empirical features of the currency (e.g. hyperinflation).

This is not specific to currencies. Plenty of other things work like this as well, such as languages, operating systems, the internet or operating systems.

Bitcoin provides a system with lower transaction costs and a predictable inelastic supply, compared to our current system that combines a monetary base and other forms of money, whether they are created by the state or commercially. Transaction costs provide a reason to switch. Of course, there's still the network effect, which hinders migration. The BitInstant Debit Card is a type of a multi-homing solution, i.e. something that provides a way of bridging the two networks. This decreases the critical mass for the Bitcoin network.

Re:What is currency? (1)

ultranova (717540) | about a year and a half ago | (#41108569)

So let the fools exert their energies on Bitcoin if it provides a harmless waste of time for them. This alternacurrency ghetto will bubble and pop and limp along, and eventually peter out into obscurity if and when someone responsible is actually able to take hold of our broken and mismanaged financial system.

Yet here you are, expending your time and effort in an attempt to discredit it, in direct contradiction to your own statements.

This is the strongest evidence for the viability of Bitcoin: that so many people are apparently deathly afraid of it. Nobody bothers fighting something they truly believe is doomed to fail on its own.

Dear Real Financial Institution (2)

Rogerborg (306625) | about a year and a half ago | (#41106663)

Please provide us with debit cards loaded with $USD. In return for that, we will give you some Magic Beans which you can trade anonymously for a wide variety of goods and services, such as drugs and handjobs and... more drugs.

You know, I started typing that sarcastically, but given that it's bankers we're talking about, they might actually go for that.

Re:Dear Real Financial Institution (2)

shaitand (626655) | about a year and a half ago | (#41107157)

Bitcoin can be traded for drugs, hookers, euros, dollars, bribes, and gift cards for most major vendors. The biggest limitation is the technical skills needed to use bitcoin effectively and to access something like Silkroad. A card like this makes it extremely easy to run small amounts of cash through bitcoin. Now you can have an easy way to pay for classified items off craigslist and the like. Not to mention an easy way to pay loaned money or send money to little timmy. You can give your kid his lunch money and allowance on something like this. Even if you won't be able to say funds going through this card are anonymous the source of those funds can still be anonymous in bitcoin land so this is still an effective way to launder money as well.

If you don't think these massive multi-billion dollar markets are enough to support bitcoin you are crazy. Drugs alone are enough to support bitcoin.

It is annoying that nobody offers a way to buy small amounts of coins quickly with a credit/debit card and no waiting but that will change too. At some point people will realize that the risk of reversed transactions vs the permanent bitcoin payout isn't any different than what brick and mortor merchants face. If you reverse payment after ordering books on Amazon they don't get the books back. It can and does happen all the time. This risk is just part of the cost of doing business.

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