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Why We Should All Hope Bitcoins Go Mainstream
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Lorna Garey
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Lorna Garey,
User Rank: Author
2/26/2014 | 10:01:07 AM
Big, big money
Establishing a competing payment system to challenge MC/Visa seems akin to taking on the Comcast/AT&T duopoly - prohibitively expensive and with such a regulatory obstacle course than only an entity on the scale of Google or Amazon could really make a go (Google Fiber).

Even PayPal and Square can be pricey for small businesses. On the downside for cybercurrency, however, are the sometimes wild fluctuations. An SMB accepting payment for your sandwich in bitcoin can't be sure that next day, it really gets the full amount. Do you see any cybercurrency addressing that issue?
famin
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famin,
User Rank: Apprentice
2/26/2014 | 10:46:25 AM
Re: Big, big money
You will still have to pay the fee similar to what CC is charging.

Instead of at the time of transaction, the fee will be charge at the time of exchange back to $.

 

Basically,  $100 = X Bitcons ≠ $100

Or due to the fluctiaiton it can evan be, $100 = X Bitcons ≠ $70


Will you take $100 worth of bitcoins that MAY reduce to $70 when you exchange it back to $?

 
Lorna Garey
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Lorna Garey,
User Rank: Author
2/26/2014 | 11:10:24 AM
Re: Big, big money
Right, that's my point about fluctuation. However, if Bitcoins were more mainstream, why would you NEED to exchange them back to dollars? You as the deli owner would simply pay your bread supplier with the bitcoins you earned selling sandwiches.
Lorna Garey
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Lorna Garey,
User Rank: Author
2/26/2014 | 11:10:24 AM
Re: Big, big money
Right, that's my point about fluctuation. However, if Bitcoins were more mainstream, why would you NEED to exchange them back to dollars? You as the deli owner would simply pay your bread supplier with the bitcoins you earned selling sandwiches.
micoin
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micoin,
User Rank: Apprentice
2/26/2014 | 11:39:23 AM
Excellent
Excellent article, I would like to see more of your thoughts on the Bitcoin protocol and further uses of it, such as smart contracts.
JasmineMcTigue
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JasmineMcTigue,
User Rank: Strategist
2/26/2014 | 12:14:45 PM
Re: Big, big money
The exchange fee, even with larger brokerages is still a fraction of what card processors charge small businesses, and like Lorna says, if the currency is more widely adopted exchanges may become a moot point. The real issue is stability, which ought to come naturally with maturity. 
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/26/2014 | 1:14:14 PM
Nothing backs Bitcoin
"Think bonds, stocks, and business and national agreements: They all use large sums of extant reserve currency to secure relations and stabilize trade."  If you believe a Bitcoin is in this category you are very mistaken.  There is much more than just "extant reserve currency" behind these to secure them.  For example, bonds support public works project backed by governments.   Stocks support business endeavors backed by assets and captial.  What backs Bitcoin in a similar manor?  Nothing. 
JasmineMcTigue
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JasmineMcTigue,
User Rank: Strategist
2/26/2014 | 1:56:56 PM
Re: Nothing backs Bitcoin
DDURBIN1, 

You've made an excellent point, and one of the important things that credit card companies and processors provide in exchange for their fees is also transactional security. If someone hacks your bitcoin wallet and spends lavishly, no one will step in and soak those charges for you. 

This leaves an interesting niche to fill in cryptocurrency: who will provide financial services that indemnify consumers against fraud and protect assets? 
Lorna Garey
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Lorna Garey,
User Rank: Author
2/26/2014 | 3:03:22 PM
Re: Nothing backs Bitcoin
Governments certainly seem to see cybercurrency as a threat, above and beyond the possibilities for illegal activity. The US and Japan are investigating Mt. Gox and will, I imagine, do what they can to maintain the status quo.
JS88
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JS88,
User Rank: Apprentice
2/26/2014 | 3:10:05 PM
Re: Big, big money
Coinbase and other payment companies take on that risk. When the business accepts bitcoin, it instantly transfers it to USD, eliminating all of the risk. The business gets the USD and coinbase/etc gets the bitcoin. There is, as far as I can see, absolutely no risk for a small business to accept business under these circumstances and they get free publicity plus tap into a new market. I would much rather visit an establishment that is accepting bitcoin.
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