
Reddit Starts Accepting Bitcoin for Reddit Gold Purchases via Coinbase - jerguismi
http://techcrunch.com/2013/02/14/reddit-starts-accepting-bitcoin-for-reddit-gold-purchases-thanks-to-partnership-with-coinbase/
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SCdF
So I have read a bit about Bitcoin, including actively trying to read primers
and so on, but I think my utter lack of education around economics^ is really
hindering my understanding.

Plainly: _Why do I care about bitcoin? What does it have that other currencies
(US, EU, my own NZD) doesn't have? Why should I put my money into it, and how
do we know it will not collapse and make your fake wealth even more fake?_

^To help calibrate your measurements, the part of The Economist that actually
talked about the economy utterly confounds me. _Edit_ : As another
calibration, I had to google 'fiat currency' when someone brought it up below
;-)

~~~
javert
As a merchant, it could hypothetically be easier or cheaper to deal with
Bitcoin than other currencies online. (For example, note how aggravating/risky
PayPal is.)

As a person who wants to hedge against inflation or hyperinflation, it has a
fixed total supply and can't be directly manipulated by the government (nor
does its value depend on the government's credibility).

As a speculator, there is the _possibility_ of making huge profits if you go
ahead and get in early.

As a person who is afraid of government power, it _could_ take away a lot of
the government's power if widely adopted. (If everything is "cash," they can't
really tax you accurately; and with Bitcoin, they can't just print more
money.) It would be really nice if the US government had to choose between,
say, multiple decade+ occupations in the Middle East vs. spending on other
things.

As a regular spender, there is the _possibility_ of easy digital transactions
with less overhead expense (e.g. swipe your smartphone to pay for something,
_without_, say, VISA taking off the top... though probably it would be some
bitcoin processor taking (less) off the top).

A different way of looking at it is: it's basically analogous to gold, except
easy to transmit, but not impervious to apocalypse or regulatory action that
would take down the Internet. Basically everything I said above is an
implication of this way to look at it. People who are slightly bullish on gold
ought to be extremely bullish about Bitcoin, IMO, if they have the technical
understanding to believe that it works (I do, and it does).

~~~
MichaelApproved
_"As a merchant, it could hypothetically be easier or cheaper to deal with
Bitcoin than other currencies online. (For example, note how aggravating/risky
PayPal is.)"_

As a customer, I don't care about how aggravating/risky PayPal is to you. I
also don't care that you have trouble with any other merchant account. I'm
going to use the payment option that gives me the most protection and is most
convenient to me. Credit card companies and PayPal allow me to dispute charges
for unsatisfactory service. Even though I've rarely used that in my life, it's
a huge reassurance!

As I understand it, Bitcoin is like a cash transaction with very little
recourse for the customer. Once the transaction is complete, you can't reverse
it (I'm still learning about it so please correct me if I'm wrong).

There could come a day when a middle man comes between the merchant and
customer to give customer protection but then you're pretty much in the same
boat as we are now.

Note: I'm also a merchant, so I know the pains of PayPal and merchant
accounts. Just reminding you to look at it from the customer perspective.

~~~
SilasX
Bitcoin, like cash, does not prevent you from layering an escrow-like protocol
on top of it; it's just that:

a) it's not built-in by default; and

b) it's a lot easier to get into business offering such a service (you just
just need to have the trust of typical pairs of parties, rather than that PLUS
all the stuff you'd have to put up with when setting up a whole new payment
network).

Using Bitcoin does not condemn you to being at the mercy of every merchant you
may ever buy from.

(FWIW, the above is why I don't understand the excessive promotion of "OMG LOL
no chargebacks FTW!")

~~~
javert
> (FWIW, the above is why I don't understand the excessive promotion of "OMG
> LOL no chargebacks FTW!")

That flexibility is great. I'd be perfectly happy to buy from a lot of
merchants that I trust (say, Amazon.com) without the ability to chargeback.
That will lower costs for them, which will be passed on to the consumer (if
the overall market is competitive).

OTOH, merchants that aren't widely trusted may "have" to allow customers to
purchase using an escrow-like service that allows chargebacks.

In fact, maybe the same merchant could offer both options; you pay a tiny bit
more for escrow.

~~~
MichaelApproved
Good point. I trust Amazon enough to complete a purchase with Bitcoin. I think
the term escrow would be too confusing for most customers but that'll probably
work out as the platform develops.

~~~
SilasX
I meant "escrow-like" in the sense that PayPal and credit cards (with their
evil _chargebacks_!) are escrow-like: you don't use the term, you just know
that you have recourse if you're stiffed and that the payments are reversible.

The difference is that you don't have to be as big (or as versed in financial
regulation) to provide such a service: if you're trusted among the gambling
community, you can provide "PayPal with Bitcoins" for them, because they trust
you. If you're trusted among arts and crafts dealers and their customers, you
can be the trusted party that enables chargebacks on Bitcoin in that area.
Etc.

~~~
MichaelApproved
It's going to be exciting to see how these escrow-like services develop over
the next few years. Specifically because, as you mentioned, you don't have to
deal with a lot of regulation that comes a traditional product.

I wonder if companies like Strip/PayPal/Visa will try and lead the way or if
they'll wait and be the acquirers.

~~~
javert
> I wonder if companies like Strip/PayPal/Visa will try and lead the way or if
> they'll wait and be the acquirers.

By the looks of things, they'll sit on the sidelines and do nothing.

Their continuing relevance will be inversely proportional to the success of
Bitcoin.

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powertower
If you are going to buy bitcoins, don't use BitInstant (at least not until
they get their operation together).

Read the nightmare thread here were some people are filing police reports to
get their money back, while others just give up -

<https://bitcointalk.org/index.php?topic=128314.980>

It's the same story over and over every day without any change and the same
effects.

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lcc_tn
I will now get Reddit gold.

Protip for hopeful startups: there's a really, really good chance I'll pay you
money (whatever your thing is), if you accept bitcoin payments. I personally
want to see bitcoin be successful, and I'll go quite a ways to realize that
wish in whatever small ways I can.

~~~
nblaisdell
Out of curiosity, what makes you want to see bitcoins be successful so much? A
backend programmer I'm working with wants to include bitcoin payments in a
site but I'm not convinced.

~~~
celticninja
why wouldn't you accept payment for soemthing? Taking payments in BTC is very
easy there are a multitude of copy and paste code snippets that will do it for
you. Unlike taking paypal or visa there are no hoops to jump through.

~~~
nblaisdell
I guess my real question is how many people actually use it. I know for a lot
of people it has a tendency to sound a bit scamy when you first hear about it.
I feel like for those people it might be a turn off. Feel free to prove me
wrong though.

~~~
celticninja
plenty, have a look at bitmit.net, an ebay clone that uses bitcoins for
payment, then look at bitpay - a bitcoin payment processor, they provide
services to 2500 companies, reddit just adopted it so that will increase the
nuber of users, it is still in early adopter stage but that is still a large
volume of users.

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jere
Virtual goods like Reddit gold seem like an obvious opportunity to accept
bitcoin. There's no marginal cost, so you don't have to worry so much about
the price of BTC plummeting one day.

~~~
nwh
The price is converted from USD and updated automatically. There's no risk
from moving exchange rates.

~~~
jere
You're saying Reddit gets USD instantly? I guess coin base is the one taking
the risk? Maybe I am misunderstanding.

~~~
mahyarm
I'm guessing it's being used as an exchanged medium to do in within seconds.

(Currency->Bitcoin)->(Bitcoin->USD)->(Reddit Bank Account).

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Expez
I bought some Bitcoins using MtGox about 4 months ago. The experience was
pretty smooth. I had to send money to their bank in Japan and they credited my
account. This increased the cost of aquiring bitcoins, because the bank also
took a cut.

In general, I don't trust my wallet in the hands of strangers so I don't keep
my bitcoins with MtGox. Instead I encrypted my wallet.dat with GnuPG and put
copies of it in several locations.

Bitcoin Qt seems to be able to attach a passphrase to your wallet.dat as well,
but I opted to go the manual route. I bought some bitcoins as an alternative
to gold to balance my portfolio and hedge against inflation. In other words I
plan to hold on to them for the forseeable future, so the inconvenience of
dealing with the encryption manually is negligible.

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SlipperySlope
Like WordPress, this is great for the Bitcoin economy.

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TBCM
Bitcoin adoption is increasing and reaching new businesses every day. The more
people who get into this virtual currency, the better! For those who haven't
joined the revolution yet, check out <http://thebitcoinmaster.blogspot.com>
and get started!

