
Accepting Bitcoin as a Small Business – 4 Years In, No Customers - tim333
https://seymour-locksmiths.co.uk/bitcoin-locksmith/
======
spectramax
Bitcoin has the same sort of issues that plague Linux Desktop and why Linux
never took off as the defacto standard for PC OS.

It’s the lack of user focus. Setting up a bitcoin account, understanding the
security implications, hardware wallet, secret keys, the whole enchilada is
too big for an average consumer to digest.

Somewhere in Jobs’ biography by Walter Isaacson, there is a snippet about how
products often fail when they’re designed by geeks, engineers and technology
people - they make products to sell to customers that are like themselves. I’m
an engineer myself and I also think the contrary is also true - products and
services developed by “MBA” kinds often fail because the people in charge of
the company roadmap have no fucking clue about the technical details and
trade-offs of the product.

Bitcoin transaction process is designed for the most part for the nerds, not
for the average Joe. I know there exists Coinbase and other “easy” setups for
Bitcoin. But I’m talking about what happens when an average joe Googles “How
to setup a bitcoin account”. Instant “nope” - I don’t have time for this shit
and my personal money is at stake if I mess this up.

~~~
cal5k
I have a better analogy: Bitcoin has the same sort of issues as TCP/IP. It's
weird that people are expected to interact with it on the protocol level.

I think the term "cryptocurrency" is the "Big Data" of 2018. The term itself
has been somewhat tarnished, but the underlying technology is super useful and
will find its way into a lot of applications.

And no, I don't mean "blockchain". I mean Bitcoin... it's rather nice as a
business or individual to be able to send large amounts of money around the
world without snaking through the nightmare that is international banking.
Inherent in that idea is the notion that the coin itself has value independent
of a particular application.

~~~
fyfy18
Most of the issues with "international banking" are infact just issues with
North American banks.

I can transfer large sums of money around Europe and it will arrive in few
days at the very latest. Within the same country transfers mostly arrive the
same day (often it's under 1 hour), and sometimes that happens internationally
too. Oh and I don't need to pay anything for that.

A few years ago I was working in the Middle East, and before I moved back I
transferred my savings from there (~€50k) back to Europe without any questions
from either bank. I just did the transfer online, and it arrived in a few
days.

Now I'm working for a US company, and it took them a few weeks to setup paying
me with their bank. It usually takes at least a week from when they tell the
bank to pay me, until I receive the money in my account - to a USD account
also in the US.

~~~
short_sells_poo
> Most of the issues with "international banking" are infact just issues with
> North American banks.

This. Whenever someone says that Cryptocurrencies solve money transfer
problems, I look where they are based and 99% of the cases it is the US. In
Europe, transferring money is the same internationally as it is nationally.
Type in the IBAN and the name of the recipient and they get it the same day,
or latest the next day. I made seven figure international payments that went
through in 24 hours.

This is not a technical problem that Cryptocurrencies are somehow uniquely
placed to solve. Technically, a money transfer could take miliseconds -
updating a couple of database rows. National payments in Europe at least are
actually pretty much instant since they are now fully automated. International
payments can take up to a day due to an actual human checking the correctness
(and perhaps doing due diligence for money laundering).

~~~
cal5k
So? There's a huge amount of currency flowing to and from North America to
Europe, Asia, etc. Just because the euro zone has standardized their banking
system doesn't mean a) that America will ever do the same ( _cough_ the metric
system _cough_ ), or b) that all movement of money across borders should be
strictly the purview of banks.

In Canada alone people send $23.3B/year back to their country of origin in the
form of remittances (China, India, the Philippines, etc.). Historically
they've been massively overcharged for the privilege of doing so because
they're held captive to our oligopolistic banking system - sometimes upwards
of 20% because they regularly send smaller amounts to minimize risk.

~~~
notamerican
Nobody mentioned the Euro Zone before you did; they're talking about Europe
"as a continent", for the most part.

Living in the UK, national payments are _instant_ , with very few exceptions.
And having lived in both Switzerland (where they use CHF), and Germany
(Euros), I can say it's much the same across Europe.

International payments within Europe are fast too; a couple of days if you're
changing currencies, and faster if both sides are in the Euro Zone.

Banks don't have to be slow. The only real issue I have is that the bank's
exchange rates are criminal!

~~~
tim333
>bank's exchange rates are criminal!

Transferwise is easy and are about 0.3% off interbank.

Interactive Brokers are a pain to set up but some tiny amount off like 0.02%

~~~
frosted-flakes
I love TransferWise. I live in Canada, and had 2k USD sitting in a Canadian
bank account. I was going to convert it to CAD, but the bank's exchange rate
is atrocious. So I opened a free US-based account with my bank's US division,
transferred all my USDs there 1:1, then sent it through TransferWise to my
Canadian account. A bit convoluted, but I saved close to $100 and it didn't
take long to set up.

------
acabal
At Scribophile, I set up an option to pay for a membership upgrade directly
with Bitcoin, i.e., without an intermediary to USD like Coinbase. Customers
would be given a Bitcoin address to send a certain amount of Bitcoin to for a
1-year upgrade purchase, and once the transaction was verified, their account
would be upgraded.

In the ~5 years we had the option, I think we had about 3 purchases with
Bitcoin.

I kept it as an option for a long time because I was mildly interested in the
_philosophy_ of Bitcoin. That is, its use as an alternate currency for
everyday transactions, not its use as an intermediary for USD transactions or
its use as a Ponzi scheme to separate the stupid from their savings.

But with such a poor sales rate I finally removed it some time last year. It
was interesting while it lasted but Bitcoin is clearly nowhere near being
useful for e.g. buying a bag of flour.

After some thought I decided that the entire cryptocurrency space, in its
current pump-and-dump/outright scam incarnation, is mostly stupid, and
unethical at best and criminal at worst. I could have kept Bitcoin payment as
an option indefinitely--it's not hard to keep a static page up--but I felt
that doing so would be in some small way promoting an unethical industry.
(Unethical not because of what people are buying with crypto, but because
today crypto is being used as a thinly-veiled scam to trick gullible people
out of their investment money.)

------
joshstrange
It's about time we admit the emperor has no clothes. BTC/ETH/XYY/123 can store
value (I don't care to get into the fluctuations right now) and moving it
around can be a lot easier than outdated systems like ACH but they are
terrible for paying for things. Maybe something like the lightning network or
similar will be able to solve part of that but accepting BTC has always been
more of a fad/PR-move than an actual business decision.

Unless you are running in the gray/dark web (Silk Road-type, Torrent/nzb
trackers, seedboxes, etc) your customers are not going to jump through the
hoops required to spend BTC.

~~~
Ruphin
Users that already have a Bitcoin wallet don't have to jump through any hoops
to spend BTC. It's just as easy as any kind of digital money transfer.

Obviously using BTC to pay for anything is a huge hassle if you don't already
have a wallet with some BTC in it. But that's like saying Apple Pay is
inconvenient because your customers have to go to and buy an iPhone first.

~~~
scrumbledober
except i don't need to wait for blockchain confirmations on apple pay, it's
instant.

~~~
sparkie
It's also reversible.

With bitcoin, it might take a bit longer, but transaction are non-reversible
after a few confirmations.

 _Any_ other system can reverse payments even 6 months down the line. Sucks
for businesses.

~~~
bluejellybean
I've heard this argument a few times now and while yes this is true for
Bitcoin, there is nothing stopping another project from implementing this
feature. Smart contracts, for example, make this type of feature open to any
developer who wishes to code it.

In my view, Bitcoin is like MySQL and cryptocurrency/blockchain is SQL. Sure
bitcoin has specific limitations but any other generic cryptocurrency doesn't
have to implement features in the same way.

~~~
sparkie
"Blockchain" is a database, but bitcoin is much more than its storage backend.
The reason you can't simply replicate it is due to the monetary policy. In a
world where anyone can make their own cryptocurrency, and we have
"bluejellybeanBucks" and "sparkieSterling", how much value are these silly
currencies going to have?

Their value will converge towards zero as more of them are printed and less of
them are actually useful for representing value. The whole point of Bitcoin
was to solve this inflation problem. If you don't care about inflation, you
don't need a "blockchain" to begin with.

Bitcoin has the network effects, and it also required the creation (inflation)
of some initial set of distributed digital asset because it was the first of
its kind, and could not piggyback off of some other scarce, verifiable asset.
Every other "cryptocurrency" that came afterwards, _could_ piggyback of a
scarce digital asset and avoid the inflation problem. They had Bitcoin to
piggyback off.

In future, all "blockchain" projects will be implemented as sidechains to
bitcoin, or as payment networks which transact in Bitcoin and therefore don't
create inflation by design. Things like the Liquid sidechain, Sidechain One
(drivechains), Rootstock, Lightning network, etc. These are the
"implementations" which will be competing for users, but they'll all be
functioning on the same currency, because any currency other than Bitcoin is
destined to lose value with time, due to the inflation they designed into
their system.

~~~
bluejellybean
>"Blockchain" is a database, but bitcoin is much more than its storage
backend.

Blockchain in this context is referring to a specific set of implementation
details to create a database. They are similar but not the same, a blockchain
is a database but a database is not a blockchain.

>The reason you can't simply replicate it is due to the monetary policy.

I’m not fully grasping what you are implying here, mind explaining further?

> In a world where anyone can make their own cryptocurrency, and we have
> "bluejellybeanBucks" and "sparkieSterling", how much value are these silly
> currencies going to have?

This world already exists and the value of each should be somewhat
independent, “bluejellybeanBucks” may have a feature that creates far more
value than “sparkieSterling” for example. I would postulate that the majority
of the currencies created will be low value but I don’t really see this as an
issue with cryptocurrency in general.

> Their value will converge towards zero as more of them are printed and less
> of them are actually useful for representing value.

I don’t actually see an issue with this as market forces can handle this. If I
have a street with a single Starbucks (bitcoin) serving the population
adequately I can still open 20 more shops. The value will converge towards
zero as more stores open, thus the closure of failed stores should occur.

>The whole point of Bitcoin was to solve this inflation problem. If you don't
care about inflation, you don't need a "blockchain" to begin with.

Do you have a source for this claim? Although a touted difference between fiat
and bitcoin, the idea of deflation isn’t limited to bitcoin. I could create
bluejellybeanBucks to include the same mechanism that bitcoin does. I could
also decide to print the currency at specific times or even give control to a
central authority that will print money when deemed fit.

> Bitcoin has the network effects, and it also required the creation
> (inflation) of some initial set of distributed digital asset because it was
> the first of its kind, and could not piggyback off of some other scarce,
> verifiable asset.

While true Bitcoin does had the network effects, this does not mean another
contender will be unable to rise to the top. Any cryptocurrency that one
chooses to create can implement it in a way that mirrors bitcoin or piggyback
off of some asset.

> Every other "cryptocurrency" that came afterwards, could piggyback of a
> scarce digital asset and avoid the inflation problem. They had Bitcoin to
> piggyback off. Well, they didn’t have to and again, this is a choice in the
> development of each specific asset.

> In future, all "blockchain" projects will be implemented as sidechains to
> bitcoin, or as payment networks which transact in Bitcoin and therefore
> don't create inflation by design.

This is a little absurd to me and I don’t really see this future happening. In
anycase, any predictions of the future here is mainly speculation.

> Things like the Liquid sidechain, Sidechain One (drivechains), Rootstock,
> Lightning network, etc. These are the "implementations" which will be
> competing for users, but they'll all be functioning on the same currency,
> because any currency other than Bitcoin is destined to lose value with time,
> due to the inflation they designed into their system.

Sure, the implementations you described are on bitcoin, but again, solutions
of this sort can be applied generally to other cryptocurrencies. Any currency
other than Bitcoin is NOT destined to lose value with time. If you are
specifically talking about a currency that has inflation built in, sure I
would agree, but when discussing a currency this isn’t necessarily the case.

~~~
sparkie
> I’m not fully grasping what you are implying here, mind explaining further?

Bitcoin catches the interest of low time preference people who want to be able
to store assets (accumulate capital) in a way that a government could not come
and steal their money. Inflation is one form of theft, it's a hidden tax on
savers, continually picking small amounts of their stored value. The
"blockchain" is interesting technology to achieve this, but if there were an
alternative which provided the same security guarantees then it too would be
just as good. It's not the "blockchain" which is the interesting development,
but the innovation of censorship resistant, permissionless, non-inflationary
money. A blockchain is really just an application of a Merkle-Tree, something
which has been around for decades and is used in many systems already.

> This world already exists and the value of each should be somewhat
> independent, “bluejellybeanBucks” may have a feature that creates far more
> value than “sparkieSterling” for example. I would postulate that the
> majority of the currencies created will be low value but I don’t really see
> this as an issue with cryptocurrency in general.

I think it's a mistake to look at a cryptocurrency as "creating value". They
do nothing of the kind. Money does not create value. Lending money can create
value by allowing enterprises to expand in exchange for some of the profits,
but in order to lend money, it needs to be worth something to begin with.

Imagine if I went around lending "Hasbro Monopoly Money" to people and
expecting them to "create value" from it. It's absurd. Cryptocurrencies in
general are no different from Monopoly money. Printing your own money does not
create any value at all, because anyone can do it. Cryptocurrencies have
precisely the same problem, that anyone can create one. Nobody has a leading
edge, because the ideas can be copied too. Cryptocurrencies are trying to
forcibly grab some network effect to make them appear to be more than Monopoly
money, but they only attract speculators and gamblers who want to make a few
bucks. Nobody is interested in the "technology" behind Dogecoin. It's hype +
marketing + memes.

As the hype dies down and reality gets a hold, these cryptocurrencies will all
be competing for a share of the declining "dumb money" which comes into the
crypto space. Lets say we had some objective measure of value of this value,
call it V. If we have one cryptocurrency, then the value of each of its tokens
will be a function of V over the total supply of its currency. When you
introduce a second cryptocurrency, it doesn't increase "V". It merely
increases the number of tokens which V is split among. Each token will
therefore hold less of a portion of V than before. Keep adding
cryptocurrencies and splitting V further, the only outcome is that they become
worth effectively 0.

The mistake cryptocurrency proponents believe is that V will increase due to
their "innovation," and not just because they're collecting easy (gambled)
money. Far from _creating_ value, they do nothing but _extract_ value from
laymen and enrich their creators. There is nothing in economic history which
suggests that new value will be created _merely_ by the creation of a new
money. Even Bitcoin didn't "create" value in itself, it relied on people
exchanging it for other value initially. Bitcoin has created value in
industries surrounding it, but this doesn't increase the value of bitcoin
itself unless people are willing to exchange some other value for it.

> I don’t actually see an issue with this as market forces can handle this. If
> I have a street with a single Starbucks (bitcoin) serving the population
> adequately I can still open 20 more shops. The value will converge towards
> zero as more stores open, thus the closure of failed stores should occur.

I'm not contesting that the market will deal with it. I'm just telling you the
market's outcome in advance, because it is inevitable. Either Bitcoin will
come out as the winner, or all decentralized cryptocurrencies will become
worthless and we'll end up with digital fiat.

> Do you have a source for this claim? Although a touted difference between
> fiat and bitcoin, the idea of deflation isn’t limited to bitcoin. I could
> create bluejellybeanBucks to include the same mechanism that bitcoin does.

It was hinted in the Bitcoin whitepaper (the removal of inflation altogether),
and other texts written by Satoshi Nakamoto. However, it was _implied_ to the
cypherpunks who were already interested in digital money, because it was a
fundamentally unsolved problem. Various digital monies had come and gone
before it, but it wasn't until Bitcoin that both the removal of trusted
entities _and_ the removal of inflation had been achieved together. This is
what made Bitcoin successful, and it's a success that cannot possibly be
repeated, because it already happened. You can't invent the wheel a second
time, it was already done.

Because their value is measured _in terms of Bitcoin_ (due to bitcoin being
the ramp by which alts are obtained), new cryptocurrencies which print their
own money (ie, Litecoin) are simply adding inflation to the (overall) digital
currency system. There are 21M bitcoins and 84M litecoins. If one Litecoin is
worth (via speculation) 0.013BTC, then 84M of them is ~1M BTC of value. In
effect, there are now "22M worth of BTC" in tokens, because people who don't
understand economics think that LTC has some tangible advantage that Bitcoin
doesn't provide.

As above, there is still a finite amount of value being put into
cryptocurrency, V. The value of a bitcoin is now V/22M. If we now create
XCoin, YCoin and ZCoin, each printing many millions, then you're just
increasing the denominator but you're not actually increasing the numerator,
V. People are going to stop putting money into bitcoin (or cryptocurrency in
general) because it will become a terrible store of value, worse than fiat,
because no cryptocurrency can hold value whilst there is no cap on inflation.
This means V will acttually _decrease_ rather than increase, and the value of
each coin will decrease in response.

The failure of people to understand economics and look at Bitcoin as merely a
technical system means that no decentralized currency is going to have any
value at all, unless only one of them does (to fix the inflation problem).
People would have more faith in centralized shitcoins pushed out by Facebook
et al than they'd have with an ecosystem of coins which cannot hold value.

> While true Bitcoin does had the network effects, this does not mean another
> contender will be unable to rise to the top. Any cryptocurrency that one
> chooses to create can implement it in a way that mirrors bitcoin or
> piggyback off of some asset.

If anyone can create a cryptocurrency, then there is nothing that can set one
cryptocurrency ahead of the others. If there is some interesting technology,
that same technology can be reused by somebody else as a bitcoin sidechain,
and then you'd have the same technology, plus the "inflation fix" of Bitoin.
It would be superior to the coin which printed its own token. This is why it
is extremely unlikely that any "flippening" will occur. Bitcoin has the
network effects and the developers who are most focused on the principles
behind it (financial autonomy etc). The thousands of others have a few
developers who are trying to strike it rich by selling to people like
yourself, or themselves, because most of the developers themselves have no
grasp of economics.

That isn't to say that there isn't some use in other currencies. Monero is an
example of one which has a real tangible use-case, for anonymous payments
which Bitcoin doesn't provide yet. It's very likely that Bitcoin will get this
functionality at some point, and since Monero is inflationary by design, it
will probably not retain value. It's use case will eventually be assimilated
by something pegged to Bitcoin. The same is true for other coins, although I'm
not aware of any other currency besides Bitcoin or Monero which does offer a
real tangible use case.

> Sure, the implementations you described are on bitcoin, but again, solutions
> of this sort can be applied generally to other cryptocurrencies.

Put this into reverse perspective. If any solutions can be applied generally,
then they can be applied to Bitcoin too, and take advantage of Bitcoin's
larger network effect. Who is going to win then? The die has already been cast
and Bitcoin is leading the charge by a very large margin. Loss of faith in
Bitcoin would imply a loss of faith in cryptocurrency as a concept, meaning
that if people decide to drop Bitcoin, it's unlikely they'll be replacing it
with some snakeoil competitor of it.

------
Ruphin
Many posts here about how Bitcoin is not user friendly, and how it can't
compete with existing (digital) payment solutions in terms of UX. My
experience with it is quite the opposite, and I prefer paying with
Bitcoin/cryptocurrencies in most (but not all) situations.

My phone has a wallet app with some small amount of Bitcoin on it. If I have
to pay for something, all it takes is opening the app, scanning a QR code, and
clicking ok. For paying beers at a bar (which I have done) the setup is
slightly less convenient than NFC touch-to-pay solutions but not significantly
worse. But for things like purchasing digital goods or other items online, the
process is sometimes significantly better than alternatives. If I purchase
something from an online vendor it's the same process; QR code shows up, I
scan it with my app, and press ok. For this scenario it is almost always more
convenient than having to enter some payment information, or logging in to
some payment processor like PayPal or whatever solution my bank has
implemented.

The downsides are that my phone effectively has a bundle of cash strapped to
it, and when I lose the phone my cash is gone too. Getting the money onto my
phone is also not the most convenient process as I need some external service
like an exchange to acquire the coins first.

Not all the problems have been solved, but things are slowly getting better.
Just like Linux on the Desktop, people will keep repeating the same story that
it's never going to happen, but the reality is that modern Linux distributions
have nearly the same install-and-go ergonomics as Windows, with many happy
users.

~~~
exit
_> The downsides are that my phone effectively has a bundle of cash strapped
to it, and when I lose the phone my cash is gone too._

you should have the root mnemonic of the wallet stored separately, in which
case you would be able to regenerate the private keys and access your funds
again.

i can recommend the eclair wallet, by acinq, for android. as well as
traditional on-chain transactions, it also supports spend-only lightning
channels. receive functionality is being tested on testnet and should arrive
on mainnet soon.

~~~
Ruphin
It's exactly narratives like that, "you have to store this passphrase
somewhere secure or you risk losing all your money", that makes anything in
this space so much less accessible to normal people.

You can choose to ignore those complexities and just treat a wallet like a
simple app that just sends and recieves money without understanding anything
about how it works, and the UX is way better. You just have to live with the
consequence that your money is gone if you lose the phone (which is the same
as losing the cash in your physical wallet when you lose that). In my
experience that narrative works much better for onboarding people, because it
doesn't place any burden on them to do anything. They just have to choose
their level of acceptable risk, which is something they are familiar with
(carrying cash in their physical wallet).

------
mattferderer
I find accepting it & having to pay US taxes to be a pain unless I convert it
into USD immediately. Otherwise I have to use special software to figure out
the USD price at the time of receipt & then the USD price at the time of
conversion into anything else.

I would imagine for large businesses this probably isn't to big of a concern.
I also wonder if they could get away with making significant amounts of money
by picking the price highs & lows of the day of receipt and day of conversion
to USD when reporting taxes.

On the consumer side, I can't imagine keeping track of BTC prices to pay for
stuff if I used it as an every day form of currency. I would need special
software to help me file taxes. It would need to keep track of every purchase
of BTC and then the price of BTC/USD whenever I purchased something. To me
this is a huge issue & would create a giant spreadsheet to turn in with my
taxes. On the bright side, if more people did this maybe we would have
different tax laws regarding cryptocurrencies in the US.

~~~
oarsinsync
> I would imagine for large businesses this probably isn't to big of a
> concern. I also wonder if they could get away with making significant
> amounts of money by picking the price highs & lows of the day of receipt and
> day of conversion to USD when reporting taxes.

Nope. The daily spot price is determined and that's the value you need to use
in your accounting with currency conversion for tax purposes. It's set by
taking the value at a particular time of the day, and that's the value set for
the day. That also happens to be the busiest time of day in the Fx markets,
unsurprisingly, as minor fluctuations in the price can have massive positive
(or negative) impacts on banks businesses.

~~~
mattferderer
Good to know. I was under the assumption you were to use the price at the time
of the transaction.

The daily spot price seems like a huge risk for businesses.

~~~
tim333
I'm more up on the UK system than the US but how it kind of works here is
technically the liability is the price at the time of the transaction but they
don't mind you estimating or using approximate prices if it doesn't have a
large effect on the tax liability.

------
turkeytotal
This should come as no surprise, but not for the reasons the author thinks.

>I could list 50 different reasons why but for us it boils down to two main
facts. A very small percentage of our customers posses Bitcoin in a hot wallet
ready to transfer and secondly, Bitcoin can be slow and expensive for small
payments.

The main reason is that no one _needs_ to use Bitcoin to pay for their
locksmithing. Bitcoin is not your neighborhood Visa competitor. Bitcoin is
your last resort payment method/store of value--for when you don't have access
to traditional financial infrastructure (for whatever reason). This article is
a signal only that people are not ideologically using Bitcoin as a payment
(which is a good thing, I don't care to store payments on my node that would
be better served by Visa).

~~~
amanaplanacanal
> Bitcoin is your last resort payment method/store of value

This is what people have traditionally held gold for. It feels to me like
there are very few use cases that aren't already served by physical gold.

~~~
turkeytotal
You can't use gold online in an trust-minimized way. One counterexample are
industries with high chargeback/fraud rates. Bitcoin is perfect for merchants
exposed to friendly fraud, it completely removes the leverage customers have
over them.

~~~
leereeves
But accepting _only_ Bitcoin is hardly an option even for those merchants.

------
jrumbut
Regardless of what it was, it is really cool to see someone do a follow up on
their experience being an early adopter of a technology in their business.

You see so many "why we're choosing this" and not so many "how it went a few
years down the line" posts.

~~~
ykevinator
Agreed. I love retros too. Amazing that some people in this thread don't want
to hear it.

------
Kaotique
Bitcoin is more like gold or diamonds. Expensive to mine. Interesting as an
investment and to store wealth outside normal currencies.

But nobody pays in the store with diamonds or gold. It's not practical.

~~~
vortico
Great analogy, I'll remember that one. BTC is only really useful to me when
other payment methods surpass ~$100 of effort. For example, when paying
contractors tens of thousands of $ internationally, it's impossible to avoid
$50-300 fees from bank wires, TransferWise, or Xoom. So if both parties are
fine with sitting down and figuring out how to send/receive BTC on their
computer, only then it is worth my time.

~~~
pjc50
I'm reminded of the guy who lost $400k by trying to do an international
transfer of his own money through Quadriga at the point they collapsed.

~~~
sparkie
If only he was using a trustless cryptocurrency rather than a "trusted"
custodial entity, he would never have had that problem.

~~~
tim333
My friend lost trustless cryptocurrency that would be worth well over $400k
today by forgetting about it and formatting his hard drive.

~~~
sparkie
He clearly didn't value it highly enough at the time.

You're implying that if he didn't accidentally lose his private keys, he
would've had the nerve to hodl it till now and wouldn't have cashed out when
it was valued less on the USD markets.

Some banks will shut your account after a long enough period of activity.
There are statutes of limitations which may prevent you from claiming any
assets you had lodged in the bank if you suddenly remembered you had the bank
account N years later.

There are pros and cons to both Bitcoin and the traditional banking system.
With Bitcoin, you can at least chose for yourself, whereas the decisions are
made for you when you use custodians.

~~~
tim333
He minded it on his mac back in 2010 or so when it wasn't really worth
anything much and then forgot it was there when the machine malfunctioned.
Easy come easy go I guess and it wasn't worth much at the time but would be
now.

------
kbody
> Otherwise please use the original title, unless it is misleading or
> linkbait; don't editorialize.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

Actual title is "Accepting Bitcoin as a Small Business – 4 Years In"

~~~
gvb
_Since that day over four years ago and the time of writing, we have not had
one customer ask to pay in Bitcoin, Dash or any other cryptocurrency._

I viewed it as a useful summary of the article, quoting from the article, not
editorializing.

~~~
amenod
> Should my small business accept Bitcoin?

> We think accepting Bitcoin is a positive move for your small business. While
> you may not get anyone paying in it now, it does come with other added
> benefits

The change of title clearly misrepresents author's message by picking a single
fact without context. It doesn't matter if you agree with the author, the
message conveyed in modified title is _very_ different from what the article
talks about. Don't like the message? Write your own blog post. But don't
misrepresent others' intentions.

------
dr_win
IMO, UX is a minor issue. Why would anyone spend hard money before fiat money?
(Gresham's law) Also each spending could trigger a separate taxable event
(depending on your jurisdiction) and that would be a serious accounting
nightmare if done willy-nilly for casual payments.

Bitcoin is a store of value and a payment rail for significant sums. Currently
it is not suitable for casual/small retail payments.

In near/mid-term future I expect new banking services to allow people to stay
in bitcoin for "savings accounts" and offering traditional fiat credit in
"current account" for daily spending (backed by bitcoin in savings account as
a collateral). Settlement and transfers between savings and current account to
be less frequent and easily trackable for tax purposes. This would allow a
person to completely stay out of fiat while still having access to fiat
payment infrastructure - this would cost some interest on borrowed fiat which
I expect to go pretty low thanks to collateral (bitcoin) liquidity. See
companies like BlockFi which are getting close to this model.

~~~
zcopley
I think Gresham's Law explains it. I _could_ pay a locksmith in bitcoin, but I
would rather keep my bitcoin and pay with USD. Bitcoin is harder to get and
can be used for purposes that USD cannot (e.g.: donating to financially
censored people and organizations).

------
stakhanov
The biggest argument against bitcoin, in my mind is this:

Regulators really only get involved in allowing/prohibiting innovations very
late in the game. I'm thinking of how Air BNB and Uber were allowed to grow
really huge despite being blatantly in violation of a lot of laws in a lot of
places (for example restrictions around subletting in contracts between
tenants and landlords, regulations around running businesses that are hotels
or taxis, etc). Only after they had gotten really big did regulators start to
think about whether or not they like what's going on, and then they shut down
large parts of the sharing economy.

For bitcoin there are only two scenarios in my mind: Either it dies right now
for the problems it is facing right now (network externalities around lack of
merchants/customers outside darknet/illegal stuff, volatility etc), or it
overcomes those problems, gets really big, and is then killed by regulators.

For the most part the trend in regulation of financial services and financial
reporting has been: erosion of banking secrecy (even Switzerland and tax
havens in the Carribean are now sharing data with law enforcement), anti-money
laundering regulation tightened (FATCA/CRS), increased requirements around
creating transparency about ownership of legal entities in cross-border
corporate structures (e.g. "persons of significant control" register
introduced in the U.K. and many European countries), increased reporting
obligations around cash transactions even for small businesses (parts of
Europe are now mandating the introduction of electronic cash-registers capable
of reporting on a transaction-by-transaction basis even for small businesses
like a self-employed taxi driver), etc. etc.

Allowing bitcoin to happen would not fit into that regulatory trend AT ALL.

It's just that bitcoin isn't big enough yet for regulators to even be thinking
about it. But it'll happen.

~~~
Ruphin
Bitcoin and cryptocurrencies are an active issue for regulators right now.
Statements have come out from several parties that confirm networks like
Bitcoin and Ethereum are not securities. The SEC is actively shutting down ICO
schemes that are deemed securities. Things are moving slowly because it's a
complicated topic, but we are seeing more and more guidance from regulators
like the SEC and others.

AirBnB and Uber are doing pretty fine for companies that got killed by
regulators.

~~~
stakhanov
I did not say AirBnB and Uber "got killed" by regulators. I said that it had,
at one point, reached a level that was clearly beyond what was within legal
limits, and that afterwards "large parts" of that got shut down. BTW: This is
a trend that is still ongoing and we have by no means reached the end of it,
especially in Europe where there is a lot more regulation around who gets to
be a taxi or a hotel (see Madrid taxi strike raising awareness about Uber's
illegal role in the market there)

The SEC ruling that bitcoin is not a security is not really saying anything
much as there are many facets to it (should the law treat it as being somehow
equivalent to cash? equivalent to transactions carried out by banks?). It's
also not saying anything about this pesky little thing that Americans keep
forgetting about called "the rest of the world" and even if bitcoin is not in
voilation of any laws that exist now, that doesn't mean that new laws won't be
brought in to outlaw bitcoin etc. etc.

------
hrdwdmrbl
I also run a small clothing business. We have received about bitcoin 6 sales
over 5 years. Only 1 was offline though.

Bitcoin is too valuable to spent. Hopefully something like Grin or Dai will
make more sense for spending day-to-day.

~~~
andirk
How many sales were purchased through gold bars? Probably only like 1 or 2 per
year.

------
jakobegger
A handful of people have requested that I add Bitcoin as a payment option to
my store. But when I offered these people to purchase my app with Bitcoin,
none of them actually bought a license.

As much as I like the idea of Bitcoin, it just doesn't seem like people really
use it for buying legal things.

------
IAmEveryone
We got a regular trickle of three to ten orders per month for about three
years, until the rally to 5-digits broke the system because transaction costs
started to surpass our order values.

...which was excellent, because we had forgotten the entire system even
existed. We had accrued a few hundred orders in the $80 range, many paid at
exchange rates < $100.

------
thefounder
Bitcoin is the most expensive method of payment when you factor the difference
between exchangers and merchant gateways(i.e try using bitpay). It is more
expensive than gift cards. Not to mention that the volatitlity puts the
clients in a pretty bad situation.

------
minikites
Are the drawbacks of Bitcoin (massive global electricity usage, makes
email/malware extortion scamming much easier) worth the advantages (the
ability to anonymously buy things online at a small number of places) overall?

I'm of the opinion that Bitcoin is a net negative (Bitcoin mining has wiped
out all of the gains we've made from the recent renewable energy boom), but
perhaps there a useful purpose that I'm unaware of.

~~~
sparkie
Bitcoin is going to drive research into renewable (cheaper) energies faster
than all of the G20 combined. The reason is simple: Mining profitability is
measured in Hashes per Joule. Increasing hashes means bringing down the price
of mining equipment, which is happening already, and it is reaching the limit
of Moore's Law, meaning that the mining equipment will have a much longer
lifetime, and the amount of energy it will burn in that lifetime will dwarf
the cost of the chip. In effect, the "Hashes" in the above equation will
become negligible - mining profit will be measured solely in Joules.

If miners want to remain competitive, their profit will be the difference
between the bitcoin reward and the cost of their electricity. The mining
reward is unpredictable, but the subsidy is going to decline over time. The
clear path to increasing profitability then, is to reduce expenditure on
energy!

Miners have an absolute requirement to invest in cheaper energies, because if
they don't their competition will, and they will go out of business.
Industrial mining is a race to see who can develop the cheapest, most
abundant, lowest maintenance energy solutions.

------
xd
_It shows your customers that you are a forward thinking company._

Bit of a loaded assumption that; accepting bitcoin has nothing to do with
being forward thinking.

Bitcoin appeals to human greed, that's it. The comments comparing this to
Linux and TCP/IP is apples and oranges.

Why would I as a hard working member of _my_ society with a house and kids
invest money into a system completely unregulated. I'm all ears.

~~~
tim333
>Bitcoin appeals to human greed, that's it

Much of the motivation of the founders and enthusiasts was that governments
and existing financial systems are flawed so it may be valuable to have a peer
to peer financial system outside of that.

~~~
xd
Flawed how? This is a problem solving furum keep in mind.

~~~
tim333
Dunno - Szabo tweets a bit about Venezuela and the old communist famines. That
kind of stuff I guess.

------
pjkundert
"Why does no one want to pay their local locksmith with Bitcoin?"

The reasons given (few customers have it in a hot wallet ready to use, slow
and expensive for small payments) are _not_ the reasons! Even if many people
had it, and the expense was lower -- few people would use it.

The real reason? Gresham's law: a monetary principle stating that "bad money
drives out good".

Given 2 forms of commodity money in circulation, the more valuable commodity
will eventually disappear from circulation.

A fixed-issuance token is _designed_ to Deflate (go up in value), if its
uptake and utilization increases. Hence, Bitcoin will "disappear from
circulation" as money, vs. almost _any_ alternative form of money!

Who's going to spend something that the believe is likely (barring
catastrophic failure) to go up in value?

It is astonishing to me that this topic is even a question that people
actually have...

~~~
paulgb
You're mixing up two things. Gresham's law applies when the conversation rate
is fixed, not when it is set by the market. It's not the same as a currency
being deflationary.

Hayek wrote about the confusion: [https://fee.org/resources/denationalization-
of-money/#VI.%20...](https://fee.org/resources/denationalization-of-
money/#VI.%20THE%20CONFUSION%20ABOUT%20GRESHAM%E2%80%99S%20LAW)

~~~
pjkundert
Its original application was to coinage with a fixed face value and a
fluctuating inherent (market) value, of course.

The "spirit" of Gresham's law applies to any money that is (or is likely) to
become more valuable in the future than it currently it. The same mental
process applies in the holder of the money: "why would I spend this
potentially more valuable money, when I have this other less valuable money to
spend?"

edit: the article mentions the German Weimar inflation as a counterexample; in
fact, it is a prime example of this concept: _if_ a vendor accepts _either_
the Weimar Papiermark _or_ the US Dollar as payment, who in their right mind
would pay that vendor with US Dollars? That vendor would probably never see a
single US Dollar in payment! Bad money would have totally chased out good,
from their perspective.

The real issue is not fixed exchange; in a free market, where vendors accept
multiple forms of payment: unless forced, payors will always pay with "bad"
money, and will keep the "good" money for themselves.

~~~
paulgb
If the vendor is free to set the conversation rate, and it is generally
acknowledged that the value of the Papiermark is falling, they will require
more of it for the equivalent of a dollar. The aggregate effect of everyone
doing this may inflate the Papiermark out of existence, but it has nothing to
do with Gresham's law. In fact, it's the opposite effect, since the dollar
would remain in circulation.

If the vendor _had_ to accept the Papiermark at a 1:1 rate, _then_ nobody
would pay with the dollar and _then_ it would drive out the dollar. That would
be Gresham's law.

------
stevenjohns
The only time I ever paid with bitcoin was for likely-illegal pharmaceuticals.
And that’s only because that’s all the online pharmacy accepted.

I can’t imagine it’s much useful as a payment system for much other than that.

------
larry_mulgrave
Because Bitcoin is optimized for speculative investment, not as an actual
currency.

------
mnort9
A shift in consumer habits require orders of magnitude in improvement over
previous solutions to achieve mass adoption and become the new true "normal".

The reality is bitcoin and crypto are not much of an improvement (if any) for
the avg consumer compared to cash/debit/credit card.

------
classicsnoot
Back in early 2016 I told myself that if BTC dropped below $200 I would buy
one. The lowest I saw was $203. When it went meteor a few years later, I felt
Fold remorse. Perhaps it is sour grapes, but every time I walk by the BTC
machine at my corner store, I relish in seeing how low it has gone, though
still well higher than $200. :/

More on topic, the only action the corner store BTC machine gets, apart from
drug addicts, is scams. That I can attest to, twice some tech ignorant soul
has walked in, dumped their savings, then asked the cashier for a receipt.

Unless crypto currency can be inoculated from speculation (impossible IMO) it
will be some time, if ever, before it becomes a viable mechanism for general
economic exchange.

~~~
skinnymuch
What’s a BTC machine? What happened to the money the poor souls dumped into
it?

~~~
nybble41
It's a vending machine for exchanging BTC and local currency. Depending on the
type it may be linked to an account at an exchange or else rely on scanning QR
codes for the receiving address (either the users or the machine's). Some only
sell BTC, while others support both buying and selling.

I imagine that this was one of the models that was linked to an exchange
account, since the QR-based versions make it fairly obvious where the funds
are going and won't work unless you first set up a receiving account and
present the QR code for the machine to scan.

~~~
skinnymuch
I see.So the people didn’t just lose their money then, or get scammed out of a
portion of it.

------
jelling
Of possible interest, Moon, a company in our our accelerator cohort, lets
people pay with crypto on any website that accepts credit cards:
[https://paywithmoon.com/](https://paywithmoon.com/)

~~~
jstanley
Why does it require a Coinbase account?

~~~
oarsinsync
Most likely because intra-coinbase payments are instant, as they don't occur
on the blockchain, but in the coinbase local database only

------
ausbah
until cryptocurrencies are able to be as accessible, easy to use, and fast as
everyday debit or credit cards, i fail to see any significant future for their
usage beyond people well versed in tech

~~~
ecwilson
They never will be. I think people misunderstand cryptocurrencies because of
the mania that surrounds them. Bitcoin, for example, is a protocol, and should
be judged as such. The most important thing for the protocol is trust,
reliability, and scalability. Not UX and convenience. That could/should come
from the layers/products that get built on top of the protocol.

~~~
criddell
Satoshi Nakamoto did say this:

> The existing Visa credit card network processes about 15 million Internet
> purchases per day worldwide. Bitcoin can already scale much larger than that
> with existing hardware for a fraction of the cost.

He clearly expected Bitcoin to cheaper and faster than credit cards and I've
often wondered how he could have been so wrong about that.

~~~
magnamerc
That's likely because he expected the block size to increase in addition to
second layer scaling solutions.

------
boznz
The only advantage and attraction of bitcoin to date to the lay person has
been capital gains, not so much lately but at least its semi-stabilised to
most holders relief.

I suspect that was the secret attraction of most businesses who set up to
accept it.

However in real life it is too awkward for the average joe or joan and if you
want to "go dark" cash or gold much easier to use and understand.

Cryptocurrencies day will come but not until it is as easy to use as a credit
card or cash

------
krzkaczor
ITT: Bitcoin as a store of value not a medium of exchange.

They should look into decentralized stablecoins like DAI (1 DAI = 1$).
Particularly xDAI and BurnerWallet [https://medium.com/gitcoin/burner-wallet-
at-ethdenver-was-fa...](https://medium.com/gitcoin/burner-wallet-at-ethdenver-
was-faa3851ea833) are interesting.

~~~
miguelrochefort
I've been given some xDAI at an event, and spent hours trying to get them out
of the burner wallet, to no avail. This left a very bad impression to many
people there.

They're still stuck there.

~~~
magnamerc
xDAI is no more than a few months old, and DAI itself is a little over a year
old. Give it some time... Come back in a decade or two if you're looking for
super smooth user experiences.

------
mateuszf
There is still a pretty good chance that with Lightning it will change,
because of minimal transaction costs, speed and scalability.

~~~
futureastronaut
I've been hearing about Lightning for a couple years now, is this the new Duke
Nukem 3d/Perl 6 or what?

~~~
hrdwdmrbl
No, Lightning has been released. It works. There are multiple implementations.
It isn't perfect. Version 1.1 should fix a lot of the shortcomings.

~~~
Nursie
It has routing problems that are unsolvable.

~~~
kbody
Unsolvable like internet/BGP routing? I guess internet doesn't work either.

Tech evolves, most teams working on LN are working on getting the basic cases
to a rock-solid state before doing more R&D on different routing strategies
although there are already proposed alternatives on the mailing list.

Layered-strategies are the way to go.

~~~
Nursie
No, unsolvable like routing payments from A to B requires finding routes from
A to B that are well enough funded to allow the payment to go through, but
with no knowledge of the funding states of the channels (as this would be a
privacy leak)

~~~
sparkie
The Byzantine Generals problem was "unsolvable" until Satoshi Nakamoto
sidestepped it to make Bitcoin work. You don't need perfect solutions to have
practical applications.

It's such a stupid argument against LN. I can make the same argument that you
connecting to Hacker News is unsolveable (there is no mathematical proof that
you will be able to connect to HN, because various gateways could drop
offline). What does this matter in practice? You can still get here most of
the time.

In LN, if the first route from A to B does not have the capacity to make the
payment, an alternative route is tried. Many routes can be attempted, because
they're usually sub-second negotiations between peers. If it happens that
there is _no_ route between A and B with sufficient htlc capacity that can be
found in a timely manner, then you might be out of luck. Can always fall-back
to an on-chain transaction. A LN invoice already supports a fallback bitcoin
address. As the network grows this will become less and less likely because
there will be an enormous number of routes to attempt for any payment. Chances
of not making a payment will usually indicate your own or the payment
destination nodes are the ones lacking capacity to make the payment.

~~~
Nursie
Proof that I will be able to connect to HN is a lot different and less
important than payments. It's also far from the only problem LN has.

If the network grows much, people creating and closing channels (two on-chain
transactions) will start to gum up the system. If they don't close channels
then they need to keep a node online or face various forms of attack. If they
delegate that task to someone else, we've got yet another party to trust in a
system that's already a failure when it comes to trustlessness. Even before
all this, to make it work properly, vast quantities of BTC will need to be
committed to the effort. The LN seems to me to be a joke.

And beyond that, well, what's this story about? Nobody really transacting in
bitcoin anyway.

------
DiseasedBadger
I personally never got into, because it's not private. No regular person can
verify their transactions without joining a public vehicle that _requires a
credit card_. Even bitcoin atms require a photograph of your face. Mining is a
huge loss of value.

Bitcoin itself was simply never a good idea for most people.

~~~
throwaway77384
Bisq sort of solves that problem.

~~~
hanniabu
Bisq uses centralized intermediaries

------
tamaharbor
Solar panels and electric cars are not as prevalent as the media would have us
believe either.

~~~
endless1234
Did you comment to the right article?

------
argo_
Bitcoin on-chain transactions are almost on its historical peak again:

[https://www.blockchain.com/charts/n-transactions?timespan=al...](https://www.blockchain.com/charts/n-transactions?timespan=all)

This forum has been denying bitcoin since the first time someone posted about
it:

first time:
[https://news.ycombinator.com/item?id=463793](https://news.ycombinator.com/item?id=463793)

second time:
[https://news.ycombinator.com/item?id=599852](https://news.ycombinator.com/item?id=599852)

~~~
dmitriid
Less than 10 transactions per second while spending more electricity than
several medium-sized countries.

Yup. Technology of the future that we are fools to dismiss.

~~~
argo_
The technology still evolving. 10 transactions is not and will not be the
limit. The Lightning Network already proved that a much higher volume of
bitcoin transactions can be made without slowing down the bitcoin network.

I like to think the energy consumption of the bitcoin network is an "idle
energy":

10 transations/s = mid-size country

100 transations/s = mid-size country

10.000 transations/s = mid-size country

An increase in transations do not directly increase energy consumption.

~~~
dmitriid
> An increase in transations do not directly increase energy consumption.

So far this has always been the case

> The Lightning Network already proved that a much higher volume of bitcoin
> transactions

It hasn’t proven anything yet, and as already pointed somewhere in this
discussion there’s already a new version trying to fix shortcomings and
limitations.

------
moonbug
Bitcoin needs to die in a fire.

------
Cypher
Well bitcoin is better for store of value, just use a CC for spending - more
protection.

~~~
acdha
The only value Bitcoin has is group consensus. If nobody has a need to use it,
the values of otherwise-meaningless numbers will trend to zero.

~~~
dnautics
Literally true for every currency at some level. I suppose you could use a
greenback as very poor toilet paper.

~~~
acdha
The part you're leaving out is that most currencies are backed by governments
with significant economies and that backing creates a substantial market
because you use those currencies to pay your taxes and government workers and
contracts are paid using that currency.

In contrast, a pure fiat currency like Bitcoin has no inherent value and no
built-in demand. If something else becomes popular, there's zero anchor for
anyone who doesn't have a substantial holding and the pitch of “you should use
this so I get rich” is not generally compelling.

~~~
dnautics
Why I said "at some level": what are governments backed by?

