
Bitcoin adoption in 2015 - dalton
http://daltoncaldwell.com/bitcoin-adoption-in-2015
======
markkat
If you look at the all-time USD transaction volume, it seems pretty clear that
it is growing:

[https://blockchain.info/charts/estimated-transaction-
volume-...](https://blockchain.info/charts/estimated-transaction-volume-
usd?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=0&address=)

Using the same slope, I'd expect about $110M USD/day this time next year (from
about $70M now). As bitcoin's usefulness is tied to the number of people using
it (like email), it would be strange to see explosive transaction growth so
early on.

Looking at all-time number of transactions, it's difficult to make the case
that adoption is static:

[https://blockchain.info/charts/n-transactions?timespan=all&s...](https://blockchain.info/charts/n-transactions?timespan=all&showDataPoints=false&daysAverageString=7&show_header=true&scale=0&address=)

------
qznc
If Reddit decides to use Bitcoin sidechains for its Reddit Notes, it might
give Bitcoin adoption a push.

------
ps4fanboy
Every new announcement for bitcoin is about how its easier to spend but never
any real announcements about making it easier to buy, the fees are high, the
waits can be lengthy, and limits on amounts are low. Until this changes I dont
see much else changing.

~~~
ssharp
I bought some bitcoins in early 2013 and then tried to buy some a few months
ago. It's more painful to do now and I lost interest in having to tie to a
real bank account, ID verification, etc.

I realize that a lot of crackdowns have been made to make BitCoins less
anonymous and prevent laundering, but it ultimately hurts the UX and the
utility I get from owning BitCoins isn't enough to make me want to jump
through banking hoops.

------
jval
The problem with all of these graphs is that the rise of cloud players like
Coinbase means that a lot (and I'd think probably most) of the Bitcoin
transactions taking place these days are off-chain.

Coinbase can settle most trades internally and push out any 'interbank trades'
onto the chain. Some of the patterns others have noticed could be them
settling internal accounts, not sure though.

~~~
cb18
Did you read the words too? What did you think about this part?

 _Regarding the prospect of growth in value exchange occurring via off-
blockchain services: I still think we would expect to see off-blockchain value
transfer manifest itself on-blockchain, in much the same way that buy and sell
pressure at a single off-blockchain service flows throughout the entire
ecosystem. If an off-blockchain service did somehow manage to become an
“island” and transact increasing amounts of value without any of the growth
showing up on-blockchain… it would be bad for bitcoin on a number of levels._

\--

 _the rise of cloud players like Coinbase means that a lot (and I 'd think
probably most) of the Bitcoin transactions taking place these days are off-
chain._

It's ironic that you so often see these comments forecasting how in the future
most bitcoin activity will occur in these single authority corrals, or 'cloud
players' as you call them. It's really no different from saying "Most people
using bitcoin in the future, won't actually be using bitcoin."

So it raises the question of, if the future of using bitcoin is not actually
using bitcoin, what is the future of bitcoin?

------
ZenoArrow
From the article... "Taking these three charts together, the relatively static
USD transaction value per day metric in 2014 appears to be the result of the
falling market price of bitcoin being offset by increased transaction volume."

...and then...

"Perhaps this is all just a coincidence, but it appears that 2014 was a year
of relatively static demand for transacting value through bitcoin. Static
demand implies that either 1) the number of people using bitcoin to transact
value has been relatively stable, or 2) the number of people in the ecosystem
using bitcoin to transact value is growing but offset by churn/decreased usage
by other participants."

Am I being slow here? The graph showed the number of daily transactions was
increasing over 2014, yet the conclusion being reached is that the demand for
usage of Bitcoin is static. Perhaps I'm reading it wrong, but from where I'm
currently standing it doesn't make sense.

One thing that needs to be understood about Bitcoin usage is that the
transactions are not always for whole Bitcoins, it's increasingly common to
see trades for fractions of a Bitcoin. The protocol explicitly allows this...
[https://en.bitcoin.it/wiki/FAQ#How_divisible_are_bitcoins.3F](https://en.bitcoin.it/wiki/FAQ#How_divisible_are_bitcoins.3F)

If trades of fractions of a Bitcoin are being made frequently, then it does
not mean there is a demand problem, but rather that prices are readjusting.

~~~
debacle
The transaction volume has gone up, but the value of a bitcoin (in USD) has
gone down, so the total volume (not in bitcoin but in USD) is about the same.

~~~
ZenoArrow
Yes, I understand that, my issue is with the term "static demand". To me
static demand implies that there is not growth in usage if Bitcoin as a
currency, yet the opposite is true. Its price compared to USD is immaterial.
Imagine a well used traditional state-led currency, traded with increased
fluidity within that country, despite being devalued on currency exchanges.
The internal demand has gone up, foreign exchange is of secondary concern,
prices will continue to fluctuate as the market matures.

------
minimaxir
_Taking these three charts together, the relatively static USD transaction
value per day metric in 2014 appears to be the result of the falling market
price of bitcoin being offset by increased transaction volume._

This touches dangerously on correlation-implying-causation.

~~~
jrochkind1
Read it again, I think it's just math. If there is a certain amount of
transaction volume, at a certain bitcoin value in USD, that just adds up to a
certain USD transaction value per day, right?

~~~
logicallee
At first I agreed with you, and thought the author only wrote 'appears to be'
to hedge their sentence, because they didn't think it through 100% to be sure
of their reasoning.

But consider: does the sentence read exactly the same if we rewrite it as,

>Taking these three charts together, the relatively static USD transaction
value per day metric in 2014 appears to be the result of the increase in
transaction volume being offset by a falling market price of bitcoin.

Not at all!! So the author really is saying something that implies a causative
effect: the price is falling, so people how need a certain transaction amount
(in real terms) will transfer more.

This makes perfect sense when you consider the authors follow-on sentences.

So absolutely, the author is making a causal relationship. The author even
justifies it (pretty well in my opinion.)

------
ars
Not sure how I'm supposed to take this seriously when the author doesn't use
logarithmic graphs.

If you look at a non-logarithmic graph of money and try to draw conclusions
from it you will draw the _wrong_ conclusions. It's inevitable, it's just how
humans perceive graphs.

If you want to avoid this common error, use a logarithmic graph. The fact that
the author did not points to a lacuna in his knowledge, and such a lack makes
me wonder about the rest of his writing.

It's just such a _basic_ error.

~~~
jasonisalive
I'm not sure I follow. Isn't one supposed to select a scale which allows the
compiled data to be clearly and informatively expressed? And doesn't the data
compiled so far fit comfortably on a linear scale?

Would you recommend using a logarithmic graph because you expect Bitcoin use
to increase exponentially? In that case, wouldn't the use of a logarithmic
scale at this point imply a direct belief in the future of Bitcoin use?

~~~
mpyne
> Would you recommend using a logarithmic graph because you expect Bitcoin use
> to increase exponentially? In that case, wouldn't the use of a logarithmic
> scale at this point imply a direct belief in the future of Bitcoin use?

This is pretty much it exactly, and why the whole "OMG log graphs!!!" thing
pops up in finance only when you're talking about Bitcoin and its alts.

Though even then I can't figure out why, you only would want log graphs for
exponential growth or decay, which isn't something we're seeing out of Bitcoin
except for a brief period of tulipmania.

~~~
ars
No, that's not correct in the slightest.

> pops up in finance only when you're talking about Bitcoin

If you are looking at linear stock value graphs you are being mislead. If you
want to make correct decisions based on graphs they must be logarithmic
(except percent graphs). Any stock trader that uses linear graphs will lose
his shirt. (And I am well aware that the default stock graphs are all linear.)

> you only would want log graphs for exponential growth or decay

No, that's not correct (for the common meaning of exponential meaning "huge").
You want a logarithmic graph anytime the future value of something depends on
the present value (i.e. the mathematical meaning). Which is most of the time.
Most things in the world, the amount you have today influences how much you
will have tomorrow.

It's actually rare to want a linear graph. You only want that when how much
you have tomorrow has nothing to do with today.

So population should be logarithmic (the more people you have the more will be
born), but infant mortality per capita should be linear (future levels of
infant mortality do not depend on how many died in the past).

~~~
logicallee
ars, I think the position you're taking is a bit strong. The author expressed
the relationship between transaction volume and price, to reach a certain
daily transaction amount: this implies he's perfectly aware that the
relationship isn't linear (a move to twice the transactions at half the price
is the same movement, irrespective of the price you're asking at - even though
it looks like a larger swing if the basis is larger). But the fact that the
shape doesn't show this as nicely as the shape you'd like does, doesn't mean
that we can't follow the author's reasoning. Why not drop him a line by email
explaining that his post would benefit from logarithmic graphs, since htey
show the relationships he's discussing better.

~~~
ars
> Why not drop him a line by email

I wanted to, but the site has no place for comments and no info on how to
reach him.

His conclusion at the end is that the total dollar volume is approximately
flat, and he bases this on the graph, but it's not completely flat - it's
bumpy, so you can't actually tell on a linear graph if it's flat or not.

------
sanswork
[https://blockchain.info/address/1ABn5L14hXXJ9RowWEpUcsDc8HXq...](https://blockchain.info/address/1ABn5L14hXXJ9RowWEpUcsDc8HXqHXFre6)

If you look at that and click on the destination, then do the same again
you'll see someone pushing out 10s of thousands of very small transactions per
day across the network. They do the same thing pretty much every day I've
checked(the above is an old link since its the only one I had handy).

The days I've checked though these sorts of things have accounted for 30-50%
of transaction volume.

They are odd not just because of the volume of transactions but the size of
them and the fact that they pay a fee for every one. Ideally for the amounts
and frequency they would be grouping many outputs into a single transaction to
save on fees.

I think its safe you ignore transaction volume for the near future and recent
past while this is going on unless you start accounting for it.

~~~
qnr
A few weeks ago I made a script to look for transaction chains like this in
the blockchain, and it turned out they have been going on every day since
mid-2010. Currently they account for 20-25% of tx volume but the percentage
was much higher in the past (up to 50-60% for some days in 2012). For most of
2014 it was about 15%.

I'm not sure what the sender of these transactions is doing (trying to inflate
tx volume? some badly written software?strange mixing algorithm?) though even
if you discard those transactions from analysis it doesn't change the overall
picture much.

~~~
mike_hearn
They're just a wallet that's making lots of small payments. You're looking at
a change address that gets used once.

I'm not sure why these sorts of transactions would be considered ignorable. If
you have a large bank balance and most of your payments are for groceries,
does that somehow make those payments irrelevant?

~~~
qnr
I'm talking about particularly large chains of transactions (like hundreds or
even thousands of transactions within the same day, often with most of them
included in just a few blocks).

If they actually need to pay to that many different addresses it would be far
superior to make a single tx with multiple outputs.

My first theory was that someone is trying to inflate tx volume and the
simplest idea they came up was scripting the Bitcoin client to make thousands
of small payments in a row.

~~~
martinko
It can be just a popular service (hence the high number of transactions) with
a standard wallet implementation, ie. one transaction per withdrawal. Yes this
is inefficient, but I dont see a reason why to automatically assume that this
is an effort to inflate transaction volumes.

------
cgjaro
Fred Wilson posted better adoption metrics which are a more accurate (and more
impressive) record of how Bitcoin is doing: [http://avc.com/2014/10/bitcoin-
adoption-metrics/](http://avc.com/2014/10/bitcoin-adoption-metrics/) It is
smarter to look at these than at merely the number of transactions.

~~~
sanswork
So many vanity metrics though.

Coinbase and blockchain publish wallet numbers which is used here and is
another useless.

When they start publishing MAU I'll be impressed until then I'll just see
wallets as a vanity number that is always going up.

Number of uniquely used addresses is being inflated by actions like the one I
post about above.

Merchants and Merchants annual revenue are again vanity metrics. Merchants
like wallets above does not accurately reflect current demand(go look up every
story of people trying to travel using coinmap and finding almost all the
merchants listed no longer accept bitcoin). Merchants annual revenue inflates
the importance of companies like Overstock and Dish.

If VC investment was a good metric to follow we'd all be using Flooz and
Beenz.

Hashrate has more to do with the improvements in ASIC miners than growth in
usage/adoption.

And number of bitcoin repos is silly since everyone in the bitcoin space wants
to be a bitcoin developer so the number of vanity repos is astounding.

~~~
cgjaro
Are you denying all these metrics as a whole, and implying that Bitcoin's
usage is either stagnating or declining?? You can't be serious, can you?

~~~
sanswork
>Are you denying all these metrics as a whole

I'm denying the ones I've commented on are important.

>implying that Bitcoin's usage is either stagnating or declining

I think it is but thats not what I'm implying. I'm implying that people
heavily invested in bitcoin tend to use vanity metrics like this.

That said the things I look at that make me believe bitcoin is
stagnating/declining are things like the continued slide of the price over the
year, Bitcoin Black Friday 2014 being a huge failure, Overstock missing their
bitcoin sales expectations by 17 million dollars. Basically every vendor I've
seen comment on sales has said there have been pretty much none this year. The
fact that 2014 was meant to be the year of bitcoin and there has been no
breakout in the general public. Everyone seems vaguely aware of bitcoin but no
one is investing any time in learning anything about it because it solves
problems that most people don't care about(freedom) and creates problems they
do(security).

Now I just see people in the community rallying around remittance and the
killer app that will save bitcoin but the actual transfer of funds isn't the
expensive part of remittance the compliance around the transfer of funds is
and the existing services that do remittance cheaper using bitcoin only work
now because they are ignoring compliance completely. They will either get more
expensive or be shut down in the near future.

~~~
timeal
> Bitcoin Black Friday 2014 being a huge failure

No, BBF 2014 was a huge success: "we saw an 82% increase in the number of
merchants who completed transactions compared to last year’s BBF", "Both Gyft
and NewEgg experienced their best day of bitcoin sales ever" \-
[http://blog.bitpay.com/2014/12/09/bitcoin-black-
friday-2014-...](http://blog.bitpay.com/2014/12/09/bitcoin-black-
friday-2014-recap.html)

> every vendor I've seen comment on sales has said there have been pretty much
> none this year

You are wrong, which is why you quote no source. 2014 was the best year ever
for bitcoin sales. See the BBF numbers above. CheapAir recently passed $1.5
million in bitcoin sales ([http://www.coindesk.com/cheapair-litecoin-dogecoin-
flights/](http://www.coindesk.com/cheapair-litecoin-dogecoin-flights/)).
Newegg, although they quote no numbers, was sufficiently pleased with their
Bitcoin sales that they decided to accept them in Canada in August. Same thing
for Overstock who decided to expand bitcoin acceptance to their international
market.

> Bitcoin solves problems that most people don't care about(freedom) and
> creates problems they do(security).

Bitcoin solves a lot more than that. You must not be very familiar with it. I
will give you 2 basic examples. The most important problem that Bitcoin solves
is fraud: a merchant who receives a payment in bitcoins can be _assured_ it
won't be "charged back" or "cancelled" due to fraud, because Bitcoin payements
are cryptographically irreversible. So once a merchant receives a payment in
Bitcoin, the product or service can be shipped or executed ASAP with no risk
of fraud. And conversely, Bitcoin solves the problem of financial theft for
customers: if Joe Schmo decides to pay a trusted merchant like Dell in
bitcoins (as opposed to using a credit card) he can be assured that if Dell is
hit by hackers who steal CC data, they won't be able to financially steal from
Joe, because the payment he made in bitcoins authorized cryptographically a
certain amount of coins to be transferred, nothing more. Whereas if Joe had
given his credit card information to Dell, hackers would have been able to
initiate any number of other transactions.

Now, I do recognize that Bitcoin is not automatically easy and secure to use.
But there are plenty of smart people working to make this happen:
cryptographic 2-party escrow to deal with untrusted merchants (which is
superior to 3-way escrows used by the traditional financial system: removing
the third-party escrow simplifies the trust model), hardware wallets to deal
with wallet security, etc.

> the actual transfer of funds isn't the expensive part of remittance the
> compliance around the transfer of funds is

That's false. Compliance in the financial industry is mostly automated: it is
just software checks like who sends what to who, and data logging/retaining
records. The most expensive part of the business is the requirement to have
physical presence --offices and employees-- to deal with the need to be able
to handle cash deposits and withdrawals. Bitcoin services make this cheaper
because they don't need physical presence.
[https://www.sendbitcoin.mx](https://www.sendbitcoin.mx) for example accepts
deposit by sending coins to their service, and they rely on the ATM network of
an established bank for withdrawals. They are cheaper than Western Union for
the same reason why simple.com is cheaper than traditional banks: they don't
have physical presence.

~~~
sanswork
>No, BBF 2014 was a huge success

Notice they changed the metric from the number of sales to the number of
merchants? Because it was a huge flop.

>"Both Gyft and NewEgg experienced their best day of bitcoin sales ever"

Congrats to those two companies. That doesn't change the fact that the event
was a flop.

>You are wrong, which is why you quote no source.

I quote no source because I'm too lazy to go search through the /r/bitcoin
posts. Go search for accepting/started/etc then contact the merchants and see
what they say. Better yet search for "no sales" or similar, search for
complaints about coinmap they generally revolve around a store not receiving
any sales, getting rid of bitcoin and having the user be stuck. Or look at
Adafruit.

>CheapAir recently passed $1.5 million in bitcoin sales

It's been over a year since they started taking bitcoin we have no indication
if they are seeing growth or shrinkage in sales with just one figure.

>Newegg, although they quote no numbers

Enough said.

>Same thing for Overstock who decided to expand bitcoin acceptance to their
international market.

This being the same Overstock that recently announced they missed their
bitcoin target by $17 million dollars? Overstock is helpful in that they
release their figures regularly so you can plot the decline in sales on a
chart easily.

>The most important problem that Bitcoin solves is fraud

It solves fraud for merchants by removing consumer protections. Merchants
having no fraud doesn't matter if no one uses it because they don't want to
get screwed over by merchants. (Look at all the complaints related to
Tigerdirect and bitcoin orders).

>And conversely, Bitcoin solves the problem of financial theft for customers:
if Joe Schmo decides to pay a trusted merchant like Dell in bitcoins

Note the trusted part? What about all the millions of other merchants online?
Or do you expect everyone to centralize into a few trusted retailers? Besides
that there are plenty of trusted merchants who make mistakes sometimes that
require charge backs. With bitcoin you're out of luck.

>he can be assured that if Dell is hit by hackers who steal CC data, they
won't be able to financially steal from Joe

If they steal his CC data he can be sure they won't be able to financially
steal from him either since he is insured against loss by his credit card
company.

Unfortunately for Joe he isn't a security expert and his odds of losing money
due to accidentally installing a coin stealing virus are way higher than the
odds of him losing money due to Visa not accepting his fraud claim.

>cryptographic 2-party escrow to deal with untrusted merchants

A new one appears every few months at which point I post the reason they don't
work and the developer moves on.

>The most expensive part of the business is the requirement to have physical
presence --offices and employees-- to deal with the need to be able to handle
cash deposits and withdrawals

That is another very expensive part of it. It's required because you're often
dealing with the unbanked who can't just have an exchange deposit money in
their account. Again bitcoin doesn't solve this problem.

>Bitcoin services make this cheaper because they don't need physical presence.
[https://www.sendbitcoin.mx](https://www.sendbitcoin.mx) for example accepts
deposit by sending coins to their service, and they rely on the ATM network of
an established bank for withdrawals.

They do actually need a physical presence to compete with the services that
have a physical presence. There are a lot of people who can't receive a bank
transfer.

Sendbitcoin.mx will not be around for long once the bank they utilize finds
out they are using their service for remittance because they are avoiding all
regulations which make remittance to MX expensive. If it was so easy to do
remittance using the ATMs surely the bank that owns the network would be doing
it by themselves and raking in the money.

~~~
timeal
> Notice they changed the metric from the number of sales to the number of
> merchants? Because it was a huge flop.

Most likely they quoted this number because 10 or 20 or 30% "increased sales"
sounded less impressive. It doesn't really matter. The reality is that there
are 82% more merchants who completed sales than last year, so no it was not a
huge flop. By the way you still fail at providing any data why it was a "huge
flop". Second time I have called you on this, and second time you ignore me.
Burying your head in the sand saying something does not make that thing a
reality.

> I quote no source because I'm too lazy

You quote no source because you have no source.

I am confident you are able to find some anecdotes on /r/bitcoin from a few
mom-and-pop shops disappointed by their bitcoin sales this year. But anecdotes
are not data. Data is the "+82%" number I reported above.

> This being the same Overstock that recently announced they missed their
> bitcoin target by $17 million dollars? Overstock is helpful in that they
> release their figures regularly so you can plot the decline in sales on a
> chart easily.

Their sales are not declining anymore. They have reached a steady state of
$7000-8000 a day for the last 3 months:
[http://www.coindesk.com/overstocks-2014-bitcoin-sales-
miss-p...](http://www.coindesk.com/overstocks-2014-bitcoin-sales-miss-
projections-3-million/) But I am sure you will ignore this piece of so called
"data" and continue shouting around that "overstock sales are
declining!!!!1!!one"

> Merchants having no fraud doesn't matter if no one uses it

"if no one uses it" -> that's the thing, people actually use Bitcoin, and pay
with it: Newegg, CheapAir, Overstock, etc. So it really does matter to such
merchants that Bitcoin removes the risk of fraud.

> Note the trusted part?

That's precisely my point: most sales are performed with trusted merchants. It
is OK for a payment system to not provide the consumer protections of credit
cards. That's why cash works. You go to a restaurant and pay cash because you
don't care about giving up the ability to contest the charge: you trust the
restaurant. For the same reason, when I go to a local restaurant accepting
bitcoins, I have no qualms paying in bitcoins. There are SOME transactions for
which Bitcoin does not work well out of the box, like paying an untrusted
online merchant without escrow, but that's OK. Bitcoin doesn't have to satisfy
100% of use cases to be successful. You seem to see Bitcoin as binary: it has
to be perfect or it can't work at all. But you are wrong. It is just like cash
or credit cards: they don't work in 100% of use cases either (can't send cash
online, my CC can't be used when I encounter the 3rd merchant of the day who
only takes Visa/Mastercard but not my Amex), yet they are successful payment
systems.

> Besides that there are plenty of trusted merchants who make mistakes
> sometimes that require charge backs. With bitcoin you're out of luck.

I chuckled at this. Obviously you are unfamiliar with how it's done. The
standard way of doing a "charge back" in Bitcoin is to ask the customer to
provide a refund address. Easy peasy :)

> If they steal his CC data he can be sure they won't be able to financially
> steal from him either since he is insured against loss by his credit card
> company.

You completely ignored what I said: despite not losing money, it can be a
tremendous annoyance and hassle to cancel and replace a CC, with the incident
affecting your credit score, etc. These are real problems, real annoyances,
NOT solved by credit cards. Bitcoin fixes that.

> Unfortunately for Joe he isn't a security expert and his odds of losing
> money due to accidentally installing a coin stealing virus are way higher
> than the odds of him losing money due to Visa not accepting his fraud claim.

Second time you completely ignored what I said: yes security is hard, but
hardware wallets are improving security. You can't deny this.

> A new one appears every few months at which point I post the reason they
> don't work and the developer moves on.

They do work (I have used one). Please enlighten us.

> That is another very expensive part of it. It's required because you're
> often dealing with the unbanked who can't just have an exchange deposit
> money in their account. Again bitcoin doesn't solve this problem.

Wrong. My example (sendbitcoin.mx) absolutely does work with the unbanked. The
recipient does not need a bank account.

> They do actually need a physical presence to compete with the services that
> have a physical presence. There are a lot of people who can't receive a bank
> transfer.

Wrong. As I explained, my example (sendbitcoin.mx) does not need physical
presence, as they rely on an existing bank ATM network, even if you don't have
a bank account.

> If it was so easy to do remittance using the ATMs surely the bank that owns
> the network would be doing it by themselves and raking in the money.

Banks don't do it for the same reason large companies often fail to innovate
compared to small agile startups: inertia, redtape, etc.

~~~
sanswork
>By the way you still fail at providing any data why it was a "huge flop"

Fewer transactions and lower volume than last year. Multiple vendors on
/r/bitcoin claiming little to no volume either compared to last year.

>I am confident you are able to find some anecdotes on /r/bitcoin from a few
mom-and-pop shops disappointed by their bitcoin sales this year. But anecdotes
are not data. Data is the "+82%" number I reported above.

Right so reports from multiple vendors about lackluster sales are anecdotes. A
vanity number like 82% increase with no indication of the size of the
transactions, etc is data. How about the fact that bitpay has been claiming
the 1m a day in transactions now for over half a year? How about that for no
growth?

>Their sales are not declining anymore. They have reached a steady state of
$7000-8000 a day for the last 3 months

That is a decline

Here are the figures from their releases so far

Jan 10 - 130K Jan 11-29 - $26K/day average Next 36 days to March 4th they do
$400K - $11K/day average Next 83 days to May 27th they do $600K - $7200/day
average

Now they are claiming $7000 a day. Given that the $7200 * the number of days
left in the year = $3m I'm guessing we'll see that $3m number change again
when they actually release their financials.

>That's why cash works. You go to a restaurant and pay cash because you don't
care about giving up the ability to contest the charge: you trust the
restaurant

Cash works like this because you are physically present with the merchant when
you use it so you can validate immediately if you are getting ripped off or
not.

>Bitcoin doesn't have to satisfy 100% of use cases to be successful.

Right but it has to satisfy enough common ones to convince users to make the
additional effort to acquire it. It's not doing that.

>I chuckled at this. Obviously you are unfamiliar with how it's done. The
standard way of doing a "charge back" in Bitcoin is to ask the customer to
provide a refund address. Easy peasy :)

Yes that explains why there are no scams in bitcoin at all. And there were no
complaints about Tigerdirect fulfillment related to bitcoin orders.

>You completely ignored what I said: despite not losing money, it can be a
tremendous annoyance and hassle to cancel and replace a CC, with the incident
affecting your credit score, etc. These are real problems, real annoyances,
NOT solved by credit cards. Bitcoin fixes that.

But it's not a tremendous hassle. You call the bank tell them the card was
stolen(or they detect it) list any transactions you didn't make and the money
is refunded and a new card is posted. There are a handful of cases where it is
more difficult than that. Do you have examples of it affecting credit scores?

>Second time you completely ignored what I said: yes security is hard, but
hardware wallets are improving security. You can't deny this.

Walk me through the steps to buying and putting bitcoin on your hardware
wallet that wouldn't be compromised by the user having a virus on their
computer that targeted bitcoin.

>They do work (I have used one). Please enlighten us

Which one have you used and I'll tell you how to abuse it.

>Wrong. As I explained, my example (sendbitcoin.mx) does not need physical
presence, as they rely on an existing bank ATM network, even if you don't have
a bank account.

That is a physical presence. The fact that they are using someone elses
physical presence doesn't mean they don't need one. It means they are using
someone elses locations to subsidize their own. Companies tend to not like
that which is why I would put money on sendbitcoin.mx being shut down within
the next 6 months.

>Banks don't do it for the same reason large companies often fail to innovate
compared to small agile startups: inertia, redtape, etc.

Actually there were a lot of banks doing the US->MX remittance up until a few
years ago when regulations and compliance got to be way too expensive for it
to be profitable.

~~~
timeal
> Fewer transactions and lower volume than last year.

Again, for the 4th(!) time, you have no data proving this.

> Multiple vendors on /r/bitcoin claiming little to no volume either compared
> to last year.

A few anecdotes != reliable statistics

> Right so reports from multiple vendors about lackluster sales are anecdotes.

Yes. Your "multiple vendors" probably means "less than a dozen vendors", which
is insignificant given there are tens of thousands of vendors in the world
accepting Bitcoin.

> How about the fact that bitpay has been claiming the 1m a day in
> transactions now for over half a year? How about that for no growth?

Ha! Now you change your claim. You talked earlier about a significant
reduction, a "huge flop". Now you claim stagnation, no growth. That's very
different.

> Here are the figures from their releases so far > Jan 10 - 130K Jan 11-29 -
> $26K/day average Next 36 days to March 4th they do $400K - $11K/day average
> Next 83 days to May 27th they do $600K - $7200/day average > Now they are
> claiming $7000 a day. Given that the $7200 * the number of days left in the
> year = $3m I'm guessing we'll see that $3m number change again when they
> actually release their financials.

Sales were declining, but not anymore, not since September, not since the last
3 months. That is exactly what I claimed, and nothing more. I said: "They have
reached a steady state of $7000-8000 a day FOR THE LAST 3 MONTHS" (emphasis
mine).

> Cash works like this because you are physically present with the merchant
> when you use it so you can validate immediately if you are getting ripped
> off or not.

Exactly, and I am glad to see you acknowledge that Bitcoin's lack of CC-like
consumer protections is a total non-problem in such scenarios. You made it
sound like such protections were absolutely necessary, at all time, or else
Bitcoin can never work!!!!!1!one

> Right but it has to satisfy enough common ones to convince users to make the
> additional effort to acquire it. It's not doing that.

Yes, and I think you will agree that "reducing fraud to zero for merchants" is
a pretty major use case given that fraud is a huge problem for merchants
online. As well as "being able to pay a trusted merchant online while
guaranteeing not having a CC number that can be stolen" since financial theft
is becoming more and more frequent.

> Yes that explains why there are no scams in bitcoin at all. And there were
> no complaints about Tigerdirect fulfillment related to bitcoin orders.

Technological problems from one merchant's deployment of Bitcoin is hardly a
sign that "OMG Bitcoin totally doesn't work and will never be adopted" as you
make it seem to be. For every customer who experiences one issue
paying/getting a refund in Bitcoin, there are many more customers who do so
without any problem.

> But it's not a tremendous hassle. You call the bank tell them the card was
> stolen(or they detect it) list any transactions you didn't make and the
> money is refunded and a new card is posted. There are a handful of cases
> where it is more difficult than that. Do you have examples of it affecting
> credit scores?

Obviously, whether it is a tremendous or a minor hassle is a matter of
personal experience, and a matter of how much of your life depends on credit
cards. But my point is: it can be a tremendous hassle, and credit cards do not
automatically make a theft a non-issue. Some examples of major hassles: having
you card stolen and having to cancel it during a vacation away from home.
After a theft you have to re-configure all automatic periodic payments that
were due to be processed on the CC. You forgot to give the new CC number to
your cloud service provider? Oops they can suddenly shut down your instances
at 3am with little to no notice. Your wife had set up some other random online
service paid through the CC, but you were not aware of it? Oops her online
account will be closed as fraudulent and it will take multiple phone calls and
emails to the support department to get it re-opened. The CC thief's actions
lead to some negative events added to you credit history? Oops good luck
spending multiple WEEKS contacting the credit scoring agencies indepedentently
to get your records cleaned up, and submit the proper documentation to prove
it was all due to a theft.

Bottom line: you know how some Bitcoin fanboys blatantly ignore its kinks?
Well you are guilty of the same thing when you blatantly and childishly ignore
the kinks of credit cards when they are stolen and have to be replaced.

> Walk me through the steps to buying and putting bitcoin on your hardware
> wallet that wouldn't be compromised by the user having a virus on their
> computer that targeted bitcoin.

You mean the same computer where the virus will also steal the CC number that
the user enters on a website when making a payement? Hmm? How does this virus
scenario demonstrates that credit cards are safer? If the user cancels the
first CC, gets a second one, what prevents the virus from stealing the second
CC number at the next purchase? CCs don't solve this virus problem at all.

However I can envision scenarios where Bitcoin hardware wallets actually solve
this virus problem. The simplest one is: you could buy a pre-loaded cheap
disposable wallet (maybe in the form factor of a credit card) hence completely
skipping the virus-ladden PC.

> Which one have you used and I'll tell you how to abuse it.

I used casascius's Bitcoin Address Utility. It has a self-escrow (two-party
escrow) functionality which is not user-friendly, but the it is
cryptographically well implemented and very secure.

> That is a physical presence. The fact that they are using someone elses
> physical presence doesn't mean they don't need one. It means they are using
> someone elses locations to subsidize their own. Companies tend to not like
> that which is why I would put money on sendbitcoin.mx being shut down within
> the next 6 months.

We shall see.

~~~
sanswork
>Again, for the 4th(!) time, you have no data proving this.

Go forth and compare
[https://blockchain.info/charts](https://blockchain.info/charts) ignoring that
the fact that they didn't mention sales at all is a pretty good indication.

>A few anecdotes != reliable statistics

A random statement about a random metric does not indicate growth

>Yes. Your "multiple vendors" probably means "less than a dozen vendors",
which is insignificant given there are tens of thousands of vendors in the
world accepting Bitcoin.

There are 10s of thousands of bitpay/coinbase accounts. That doesn't meant
they are all still accepting bitcoin.

>Ha! Now you change your claim. You talked earlier about a significant
reduction, a "huge flop". Now you claim stagnation, no growth. That's very
different.

No change just another data point.

>Sales were declining, but not anymore, not since September, not since the
last 3 months. That is exactly what I claimed, and nothing more. I said: "They
have reached a steady state of $7000-8000 a day FOR THE LAST 3 MONTHS"
(emphasis mine).

And given they change their numbers reported every few months I don't believe
for a second it has stabilized. I'll wait for their year end.

>Exactly, and I am glad to see you acknowledge that Bitcoin's lack of CC-like
consumer protections is a total non-problem in such scenarios. You made it
sound like such protections were absolutely necessary, at all time, or else
Bitcoin can never work!!!!!1!one

Yes, in face to face transactions bitcoin would be a good solution if cash
wasn't already easier.

>Yes, and I think you will agree that "reducing fraud to zero for merchants"
is a pretty major use case given that fraud is a huge problem for merchants
online. As well as "being able to pay a trusted merchant online while
guaranteeing not having a CC number that can be stolen" since financial theft
is becoming more and more frequent.

The problem is consumers aren't willing to give up their customer protections
to improve the rate of fraud for merchants. All the merchants in the world
could accept bitcoin and that fact won't change. Why would you be willing to
increase your own fraud window just to decrease the merchants?

>Technological problems from one merchant's deployment of Bitcoin is hardly a
sign that "OMG Bitcoin totally doesn't work and will never be adopted" as you
make it seem to be. For every customer who experiences one issue
paying/getting a refund in Bitcoin, there are many more customers who do so
without any problem.

I didn't say that. I said that they were a trusted merchant and they
repeatedly screwed up. And the customers had no easy recourse like they'd have
with credit cards.

>Some examples of major hassles: having you card stolen and having to cancel
it during a vacation away from home.

What happens if you lose your phone/laptop while on vacation with bitcoin?

>After a theft you have to re-configure all automatic periodic payments that
were due to be processed on the CC. You forgot to give the new CC number to
your cloud service provider? Oops they can suddenly shut down your instances
at 3am with little to no notice. Your wife had set up some other random online
service paid through the CC, but you were not aware of it?

Given that bitcoin doesn't allow for automatic pull payments you have to
remember all your accounts and manually pay them every month anyhow. This
isn't an improvement.

>Oops her online account will be closed as fraudulent and it will take
multiple phone calls and emails to the support department to get it re-opened.

Bullshit. No company is going to do this without contacting you and
fraudulent? Seriously what world do you live in. This would never happen.

>The CC thief's actions lead to some negative events added to you credit
history? Oops good luck spending multiple WEEKS contacting the credit scoring
agencies indepedentently to get your records cleaned up, and submit the proper
documentation to prove it was all due to a theft.

Notice you haven't shown a single example of any of this? Because it is
fantasy.

>You mean the same computer where the virus will also steal the CC number that
the user enters on a website when making a payement? Hmm? How does this virus
scenario demonstrates that credit cards are safer? If the user cancels the
first CC, gets a second one, what prevents the virus from stealing the second
CC number at the next purchase? CCs don't solve this virus problem at all.

If a virus steals my CC details and spends on them I get the money back in my
account. Does that happen now with bitcoin that I'm not aware of or do you
lose your money for good?

It is not the same thing so I ask again. Can you walk me through those steps
or do you admit you cannot do it easily?

>I used casascius's Bitcoin Address Utility. It has a self-escrow (two-party
escrow) functionality which is not user-friendly, but the it is
cryptographically well implemented and very secure.

What happens if we set up the transaction and I don't send you anything? Your
funds are now trapped at no cost to me.

~~~
timeal
> Go forth and compare
> [https://blockchain.info/charts](https://blockchain.info/charts) ignoring
> that the fact that they didn't mention sales at all is a pretty good
> indication.

These charts do NOT show Bitcoin Black Friday sales, but all worldwide Bitcoin
transactions. But even assuming they showed BBF sales, they prove you wrong,
as they show a nice increase over time:
[https://blockchain.info/charts/n-transactions-excluding-
popu...](https://blockchain.info/charts/n-transactions-excluding-
popular?showDataPoints=false&timespan=2year&show_header=true&daysAverageString=7&scale=0&address=)

So for the 5th(!!) time: you have no data proving sales went down.

> A random statement about a random metric does not indicate growth

The OP gave not 1 but 10 metrics showing growth:
[http://avc.com/2014/10/bitcoin-adoption-
metrics/](http://avc.com/2014/10/bitcoin-adoption-metrics/) You discarded some
of them as "vanity metrics", but regardless, that's better than the how many
metrics you gave that presumably showed a decrease of Bitcoin's adoption? Oh
yeah, zero.

> There are 10s of thousands of bitpay/coinbase accounts. That doesn't meant
> they are all still accepting bitcoin.

Wrong. There are _millions_ of wallet accounts on bitpay/coinbase (see
[http://avc.com/2014/10/bitcoin-adoption-
metrics/](http://avc.com/2014/10/bitcoin-adoption-metrics/)). Out of them,
there are 10s of thousands of vendors accepting Bitcoin. These are widely
accepted numbers. No one debates them.

So the "multiple vendors" (less than a dozen) you claim who saw fewer sales on
BBF 2014 than on BBF 2013 are a completely insignificant number compared to
10s of thousand, or 10 thousand, or even 1 thousand.

> And given they change their numbers reported every few months I don't
> believe for a second it has stabilized. I'll wait for their year end.

Sales vary from month to month, so the numbers reported vary from month to
month. Shocking!

> Yes, in face to face transactions bitcoin would be a good solution if cash
> wasn't already easier.

Except Bitcoin can be easier/faster/more secure than paying in cash. Ever seen
how annoying it is to split a restaurant bill with multiple people when no one
has the right amount of change? You can always transfer the exact amount with
Bitcoin. Ever been waiting at the cashier's line when a guy in front of you is
wasting time looking for the exact change to pay the cashier? A Bitcoin
hardware wallet could pay in an instant with an NFC tap. Ever had a wallet
full of cash stolen? A Bitcoin hardware wallet could be PIN-protected and
could have a backup at home.

> The problem is consumers aren't willing to give up their customer
> protections to improve the rate of fraud for merchants. All the merchants in
> the world could accept bitcoin and that fact won't change. Why would you be
> willing to increase your own fraud window just to decrease the merchants?

You assume that customers who pay in bitcoins had to "give up" credit cards.
This isn't necessarily true. Bitcoin opens up new markets for customers who
didn't even have the ability to use a credit card before. For example
Overstock couldn't sell in many countries because these countries weren't
supported by their credit card processors. But accepting Bitcoin lets
Overstock sell in any country in the world. So customers in some random
country are now happy to see a new option to shop at that just didn't exist
before.

Also, I think there are quite a few reasons why customers would be willing to
give up the credit card protections. For starters, some merchants offer
Bitcoin discounts, like Air Baltic who removes a 5.99 euro fee when paying in
Bitcoin
([https://pbs.twimg.com/media/BtWPJVvCMAAPgzG.jpg](https://pbs.twimg.com/media/BtWPJVvCMAAPgzG.jpg)).
Other merchants can waive the 2-3% fee that credit card processors usually
charge. Other merchants don't take credit cards when the amount is less than a
certain amount. And in other cases, the customer might want to NOT give his CC
number because he does not want to risk it having stolen (read any of the
numerous stories of restaurant waiters cloning and skimming customer's cards:
[http://www.nbcnewyork.com/news/local/Dave-Busters-
Waitress-A...](http://www.nbcnewyork.com/news/local/Dave-Busters-Waitress-
Arrested-Skimming-Customers-Credit-Card-250705311.html)) You cannot deny that
these are all very good and valid reasons for preferring paying in bitcoins.

> I didn't say that. I said that they were a trusted merchant and they
> repeatedly screwed up. And the customers had no easy recourse like they'd
> have with credit cards.

Everything I read indicates they screwed up by mistake, not by malice.

> What happens if you lose your phone/laptop while on vacation with bitcoin?

Bitcoin hardware wallets can be PIN-protected and backed up.

> Given that bitcoin doesn't allow for automatic pull payments you have to
> remember all your accounts and manually pay them every month anyhow. This
> isn't an improvement.

More and more hosted wallets let you set up recurring payments.

> Bullshit. No company is going to do this without contacting you and
> fraudulent? Seriously what world do you live in. This would never happen.

Yes it does happen.

> Notice you haven't shown a single example of any of this? Because it is
> fantasy.

Yes it can happen. A friend of mine had a credit card that she was not using
anymore that was stolen. The only reason she noticed the theft is because one
day she was looking to get a car loan. The financing company ran a credit
report, and it ended up returning a credit score lower than what my friend
expected. The report showed that one of the factors that lead to a negative
score was listed as "AMOUNT OWED ON DELINQUENT ACCOUNTS". The detailed history
showed that a thief used the stolen credit card for an expensive purchase a
few months back. My friend never received the credit card bill because she had
moved and never updated her billing address on her credit card account (so the
bill presumably went to her old address). So she thought she had a zero
balance on this credit card, but in fact a high balance was due for multiple
months which lead her account to be tagged as delinquent. It took her about 3
months of phone calls and writing letters to get this sorted out, and get her
credit history fixed up.

I have no way to prove it, but I swear this is a true story. I wish people
like you would stop clamoring how amazing the consumer protection feature of
credit cards are, because although they work well in some cases, there are
stills tons of scenarios where financial theft causes majors hassles and
annoyances that credit cards DON'T solve.

You don't even have to look very far for other fraud problems that credit
cards don't solve. Heck, with most credit card issuers, if you happen to catch
a fraudulent payment made more than 60 days ago, you typically don't have any
recourse because it's too late to file a claim...

> If a virus steals my CC details and spends on them I get the money back in
> my account.

But the attacker still has your CC details and if you file a claim for a
fraudulent charge, the attacker can place other ones, as many times as he
wants. So you have to keep cancelling fraudulent charges all the time. After a
point you get sick of it and cancel and replace your CC. But the virus will
steal again the replacement credit card number, hereby making it impossible to
use ANY credit card on this virus-infected computer. The attacker will in
effect have permanent authorization to spend your credit card funds, until you
remove the virus or until you stop using this virus-infected PC for internet
purchases. So for the 2nd time: how will credit cards somehow solve magically
this virus problem? They can't!

> Does that happen now with bitcoin that I'm not aware of or do you lose your
> money for good?

Bitcoin can completely solve this virus problem, with proper processes and
wallets: have the private addresses stored on the hardware wallet
(inaccessible by the virus), and verify the payment address by an out of band
mechanism. For example if you suspect the PC where you were about to complete
the purchase may be infected by a virus, use a smartphone or another PC to
verify the payment address the merchant wants you to send the bitcoins to. If
both show the same address, send the transaction from the hardware wallet. So
the ECDSA-signed transaction exits the wallet, and the virus will have no
chance to steal the bitcoins as it would involve modifying the transaction
bytes and breaking the signature.

> What happens if we set up the transaction and I don't send you anything?
> Your funds are now trapped at no cost to me.

But you have no financial incentive to do this. History shows that malicious
economic actors in the VAST MAJORITY of the cases act maliciously to gain
something from it, not just for the hell of it. Therefore this two-party
escrow system works well enough in almost all cases, except in the 0.001% of
cases where a malicious actor acts maliciously just for the hell of it. And,
as I said earlier, Bitcoin doesn't have to solve everything to be successful,
it just has to satisfy the majority of use cases. Remember that our discussion
about escrow systems started by talking about how to deal with untrusted
merchants. That's exactly a case that would be solved by this two-party crypto
escrow system. A malicous merchant doesn't set up an online shop with fake
items, and go through all this effort just to lock bitcoins up in the ether. A
malicious merchant wants to make financial gains, and this two-party crypto
escrow prevents him from being profitable running such a scam.

PS: Merry christmas!

