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Shopify accepts Bitcoin (shopify.com)
218 points by rasengan on Nov 9, 2013 | hide | past | web | favorite | 121 comments

For those who had a hard time finding the official information, I will repost it here:

  Brian Alkerton
  Shopify Employee
  Hey Everyone,
  Just a quick update on this: our Bitpay integration is feature-complete and can be added to your store now.
  Due to the fact that it's a very new feature and not something we're ready to roll out to all stores just yet,
  you will need to contact me to have it enabled, and I may want to follow up with you for your feedback once
  you've been using it for a while, but it works. When active, Bitpay will appear as a credit card processor
  in the Checkout page of your shop admin - enter your access key and you'll be all set to go.

  One caveat: at this time, Bitpay functions in the same way as the other credit card processors on Shopify,
  meaning that you can't use Bitpay in conjunction with Authorize.net, Stripe, or other credit card processors.
  PayPal Express Checkout can be used as a secondary option with Bitpay in the same way it can be used with all
  other gateways.

  To activate, email me your shop URL at brian@shopify.com and I'll do my best to get everyone up and running promptly!

  One caveat: at this time, Bitpay functions in the same way 
  as the other credit card processors on Shopify,
  meaning that you can't use Bitpay in conjunction with 
  Authorize.net, Stripe, or other credit card processors.
This is so half-assed, and frankly sort of typical in terms of the strange limitations that Shopify saddles you with (similar to how it took them 5 years to fix their database so you could modify a shipping address as a merchant). Sure, it would be fun to have a button that allows a customer to pay with bitcoin if they want to or are able to, but how many merchants would forgo credit card processing in favor of bitcoin? This "feature" is link-bait, and nothing more at this time.

It's obvious to me that many of the Bitcoin critics in this thread have never actually used it. I prefer Bitcoin for online purchases, if a vendor accepts it, I'll use it. Purchases aren't tracked, or being sucked up by some SIGINT program, no fees (even in exchanging, if you do it right) and I don't have to give my CC # to the vendor.

>It's obvious to me that many of the Bitcoin critics in this thread have never actually used it.

I've used it, not much though - maybe $100 worth of bitcoins.

>Purchases aren't tracked

List of transactions from your wallet is visible to anyone.

>being sucked up by some SIGINT program

As far as you know, but I wouldn't be surprised if your transactions are "sucked up" by some SIGINT program. Or maybe they aren't because there are websites that enable anyone to easily view transactions.

>no fees (even in exchanging, if you do it right)

I'd love to hear more about this. How can you buy bitcoin online without fees? Meeting with someone and buying them in person kinda defeats the purpose, you could go out and buy the items you want with cash - there are no fees for that either. And is the effort really worth the small transaction fees? Not to mention that by the time you get back home from cash-purchase the price may have gone down and you can't even buy the item you wanted now.

>I don't have to give my CC # to the vendor.

That one is true.

Also, when paying with bitcoin you (in most cases) don't have absolutely any customer protection.

> List of transactions from your wallet is visible to anyone.

With the important side note, that nobody needs to know it is your wallet. You can create as many wallets as you want if you care about privacy.

I'm not suggesting this would put you completely in the clear from NSA/professional hacker level audits, but it is miles away from doing a query in a database "Where CC=..."

While this is true, one only needs to be a vendor who ships products to begin to associate metadata with purchaser's wallet address and start breaking down that privacy. Multiple addresses works in theory, but we don't know how often it's practiced. I'm not sure it's really as far away from that kind of direct correlation as you think.

I've also had good experiences using Bitcoin for online transactions. Fast, cross-border, nearly free. But I assume the transactions are getting analyzed by any number of government and corporate entities.

There's a lot to be learned from the public blockchain, especially if any transaction in the chain can be linked to your identity (such as sending/receiving with exchanges or online wallets).

I assume that authorities have access to your identity at exchanges and online wallets, can link your identity to addresses used for deposits and withdrawals, to IP addresses you use, and from there to historical and future transactions.

Pseudo-anonymity is still loads better than a CC transaction from my point of view, but your point is taken.

Of course, you can always buy Bitcoin with cash (:

Many purchases requires that you reveal your whereabouts or otherwise identify yourself (physcial address, mail, phone number, google/service-account). And bam, you and all your transactions with the bitcoins you bought with cash are once again public.

I think most people are familiar with what pseudo-anonymous means, no need to keep restating it in different ways.

I'd argue that, in a shopping context, using your credit card and real name is more anonymous than using bitcoin.

And I'd never even consider calling either pseudo-anonymous.

Well, except for the fact that all bitcoin purchases are very publicly tracked for everyone to view.

hopefully not for much longer[1]

[1] http://www.indiegogo.com/projects/bitcoin-dark-wallet

dark wallet doesn't change a thing in that

Every story I Hear from Shopify seems good. Thanks Tobias and the rest of you guys. And thanks for open sourcing so much. Especially Liquid templates and Batman.js.

BitCoin can be better viewed as gold. If you would use gold to buy something then you will use BTC (illegal markets apart of course).

But peercoin could stand a chance to become a sort of online trading currency because of it's inflationary[1] policy. Something BitCoin should also have in order to become a widely accepted currency instead of a hoarding mechanism that gives the early adopters huge advantage over anyone else.

[1]: http://en.wikipedia.org/wiki/PPCoin#Steady_inflation

[1]: http://ppcoin.org/

Gold is inflationary. There's infinite amount of that on asteroids and other planets. Bitcoin is totally an asset. It will probably have far wider usage than currency.

I wrote a 30+ words comment, but to make it shorter:

* The nature of BitCoin could make it from an asset worth 350 USD to 0 USD overnight.

* Gold has been there for centuries.

I won't even comment on the asteroid thing.

> * The nature of BitCoin could make it from an asset worth 350 USD to 0 USD overnight

No. Not unless it stops being traded for anything. Read this:


It makes sense if you think about it. As long as 2 parties will accept Bitcoin as a trade medium, it literally MUST have a value in order to carry that exchange value. Whether it's 10,000 coins for 1 pizza or 1 coin for a gold bar.

So no, it will never go to zero anymore unless something as useful and unique comes out which is at least twice as good (due to network effects).

That doesn't mean a portion of the current value isn't speculative. But the speculative value is NOT "all" the value.

Grandparent: Bitcoin could fall to 0 USD overnight.

You: Not true, it would only fall arbitrarily close to 0 USD.

Me: Not reassured.

If you actually read the article, at the time it was written (months ago, when BTC volume was lower), it calculated a "bottom, minimum" value of about $45 USD.

So if it ever goes back to there, it will most certainly be a buy... which will of course drive the price higher, into the speculative space.

Basically, since the cat is out of the bag, it won't be possible to get completely rid of the speculative portion of the value, but the fundamental portion of the value WILL keep rising (at this rate).

I was replying to your comment[1], not the numerous, separate arguments that could have been made in defense of a related point.

I'm optimistic myself about BTC, but don't think your comment as written is a good reason to think so in the context of the GP's point.

[1] specifically, "As long as 2 parties will accept Bitcoin ... it literally MUST have a value ... Whether it's 10,000 coins for 1 pizza ...". That last bit is the "arbitrarily close to zero" lower bound I was attributing to you.

Seems a bit like: "You're a startup, I won't use your product."

But like startup customers, bitcoin users exist and eventually the new product takes over.

> I won't even comment on the asteroid thing.

Because you can't refute it?

Nobody will be mining asteroids and shipping the resources back to Earth within our lifetimes. Certainly not profitably.

It's a complete irrelevance unless you're specifically talking about 100+ years in the future.

this company (backed by high-profile investors) is setting out to do just that: http://www.planetaryresources.com/

No I can't. Neither I can refute that you're... Batman!

I am sorry - this is something I do not understand. Where is the problem in deflation? You can always pay in fractions of a bitcoins, e.g. nanobitcoins, picobitcoins, etc.

There is not really an agreement in the ivory towers that a limited amount of currency is a bad thing per se.

Could someone explain this to me?

I don't know which ivory towers you frequent and what you mean by "limited", but the idea that the money supply should be flexible has been pretty well established after some failed experiments in the 1970s and 80s.

As for the inflation / deflation thing: I'm pretty sure we all agree that the faster the relative prices of things can change to reflect changes in the underlying reality, the better.

A priori, it seems that these relative adjustments should be independent from the average adjustment and hence the overall price level.

However, economic actors tend to resist a nominal decrease of income much more than a real decrease of income. You may not think that this is rational, but you have to work with the reality that you have.

This means that inflation is beneficial, because it allows real decreases of income without nominal decreases of income, and this means that real income can decrease more easily, which is what you need for relative prices to adjust reasonably quickly.

Inflationary currency makes sense from economics point of view, if you can force it onto people, as governments do. No one will hold inflationary currency voluntarily, if they can choose a deflationary one, all else being equal.

Sure, but no one will spend a non-inflationary currency when he can spend an inflationary one.

It is really a sad state of things that people misunderstand deflation. They have this idea that no one will spend, but it doesn't stand any scrutiny, really. Please read these articles, we made a real effort here to explain why deflation wouldn't be a bad thing:

http://blog.oleganza.com/post/66215430631/deflationary-spira... http://snitko.ru/blog/the-beauty-of-deflation.html

There are many examples from history that Bad money drives out the Good[1].

This is why people think a little moderate inflation is good for an economy, and deflation is bad. A currency needs to be spent to be of use, but if it is going to always increase in value, the sensible thing to do is to spend something else and keep the increasing currency as a nest egg. Unless you can mandate everyone only transact in Bitcoin, people will tend to spend other things and hoard bitcoin if it keeps increasing in value.

[1] https://en.wikipedia.org/wiki/Gresham%27s_law

A little moderate deflation is not bad. There was continuous economic growth with deflation in the USA after the American Civil War for ~2 decades.

Macroeconomists really have no idea what they are doing - except, I believe them that a sudden drastic drop in the money supply is bad

And did you convince anyone?

It is up to you to decide whether you are convinced or not. If you have any logical counter-arguments, then great, I would be willing to listen to them, discuss them and change my mind about deflation. However, simply saying "it doesn't work this way" and "it's more complicated than that" is not a way to argue and seek truth.

My argument is about currencies not inflation or deflation.

The primary service provided by a currency is facilitating the exchange of goods. Being inflationary is imperative for the population to use it. It is true that currencies are forced upon population by governments (or any form of governance) and it's true that anyone would rather be holding an asset that will not lose value over time compared to one that will.

Inflation is an indirect motive to spend money today and not hoard.

Now the above is the generally accepted truth in micro-economics and social theory, so I'm not feeling any heat proving the dominant view on this. It's how our world uses currencies actually.

All in all, to me makes sense: a currency SHOULD lose a small (1% or 0.5%) amount of purchasing power over time, to boost commerce/spending and so on. It's an indirect way but works. Until we find another way, I think we are stuck with it.

Bitcoin in my view, will never be a largely used currency because it does not have this imperative characteristic any currency should have. So people would rather spend dollars (as a user already said about PPCoin for example..) or any other inflationary currency instead of spending an asset.

>Inflation is an indirect motive to spend money today and not hoard.

Why is spending good? If I spend money on the things I don't really need because I'm afraid I'm gonna lose otherwise, why do you think it's good for the economy? Some spending is good, some spending is bad. If everyone spends money on cars while they don't really need that many cars, why is it good? Inflation might create some jobs, but those jobs wouldn't be secure for long, because workers would be producing things people really don't want. I don't understand how scaring people into spending is a good idea.

>Bitcoin in my view, will never be a largely used currency because it does not have this imperative characteristic any currency should have. So people would rather spend dollars

Since you argue that people would rather spend dollars, here's a thought experiment. Let's say Bitcoin is accepted in most places. Say you store your wealth in Bitcoin. Now you want to buy something. Why would you want to exchange it into USD, pay commission to the exchange and then make a purchase instead of paying it in Bitcoin in the first place?

In your hypothetic world, would I be able to pay taxes in BTC?

Why do you want to pay taxes?

You want people to eat each other in a complete anarchy? We need some minor group of accountable well-educated lawyers and bankers to decide the laws and issues of life and death. That'd be more civilised. And this requires people to fork off a part of their income. It's a social contract, man.

I shouldn't?

Maybe you need to provide a complete frame, because I'm not sure I follow.

ps. I have a deep respect for Anarchism, as I have for Communism (Marx/Engels), although I don't endorse their views about society. That said, believing that bitcoin is in any way close to anarchy because you don't pay taxes is wrong. As Prof. Shamir (the 'S' in RSA) showed some time back, 98% of BTC is controlled by 2% of portfolios. If you have a financial background you can see how this is deeply flawed and extremely centralized.

No one says you shouldn't pay taxes, of course. But just think about what taxes really are. A group of people calling themselves "a government" claims it has the right to collect part of the created value to provide some products and services that they claim nobody else is able to provide at the same or better quality and price. And because the government not just offers those services, but simply orders people to give money (or go to jail), almost nobody is able to compete with government - if a consumer wanted an alternative, he still would have to buy this service from government and then put extra money for the alternative. Needless to say, people are reluctant to do that. That's why private schools are mostly for rich parents who can afford paying taxes and paying for a private school. That's why in Europe private hospitals are for rich people. That's why protection services are for rich people, but the poor get abused by government police force.

What Bitcoin is able to do is to break this vicious cycle. Of course, governments are not going to give up easily, but fighting a war against mathematics is arguably a bad idea.

As for 98% of BTC being controller by 2% of portfolios - same can be argued for almost any currency, that's the state of the world. The difference with Bitcoin is that although those players can shift the market, they have a lot less power than any government. They can't force me to buy from them. And they arguably didn't get their money by stealing it from others.

I think that the BTC 2% has the same power as a government inside their ecosystem, no responsibility (ethical or other) given the complete anonymity and thus can not be held directly or indirectly accountable in any way, while a gov can.

The fact is that you know who runs the FED. You don't know who owns 95% of BTC in circulation.

They didn't stole directly, but it's a perfect Ponzi scheme if they choose to liquidate their BTC overnight :-) ... They are in a position to create "money" out of thin air. Money issued by people trusting BTC. So there is no difference from a trading Wall Street crook who sells garbage stocks for gold to naive investors (calling Goldman Sachs)...

Pretty much the whole of modern economics is built around justifying the existing cultural regime

Do you realise that for something to be money or currency (e.g. medium of exchange), it must have value? How do people know what is the value of 1 BTC or 1 dollar or 1 ounce of gold? They look at how much other people are willing to pay to hold it. Why would people hold gold, dollars or bitcoins? Not only in speculation that they will be worth more tomorrow. But also because they are more marketable than groceries and no one know exactly what you want to buy tomorrow. So we want to hold some cash for the short-term and long-term future - we never know what exactly we'd want to buy.

For transactions the exact value does not matter, only matters how liquid this value is. And liquidity is measured by number of people willing to buy that assets at that price. In case of Bitcoin, the more people want to hold it, the higher the price will be (because they need to buy them from someone and outbid others).

Now, imagine Bitcoin and Freicoin. Freicoin loses value ("demurrage") over time. So people would be motivated to hold bitcoin instead. So Bitcoin will gain bigger liquidity and higher value. People will see that Bitcoin is more sellable on the market and thus is wider accepted. So they can rely on Bitcoin's price when doing transactions. While Freicoin remains less liquid and thus less suitable for exchanges.

The currency is the most marketable, most valuable asset. And to make it so it must be the cheapest to store and transport, hardest to produce and impossible to counterfeit.

Currencies are not chosen by the population. They are forced upon them via specific organizations.

The USD Gov allows to you to pay taxes in USD, not in BTC. Even if BTC get taxed you still will have to pay your taxes in USD.

If and when the US gov will start accepting taxes in BTC all this reasoning might have a solid ground. Until then, it's a utopia.

ps. The above, will never going to happen though. It's insane/stupid/unthinkable for a state to give such power to unknown people (%98 of BTC are located in 2% of portfolios) instead of controlling it's own currency by a central authority (FED, ECB, ...).

Shamir's paper is bullshit (RSA and SSSS are cool, though). 98% of bitcoins belong to exchanges or web wallets that manage money for their users. This distribution says nothing about actual users and there is no way to find this out. Yes, technically there are big "owners" of a lot of coins, but that's temporary delegates, not primary investors. Also, by scanning HTML printout of blockchain from block explorer they only demonstrated their incompetence in this matter - blockchain is always readily available for analysis in bitcoind.

Unfortunately, the state is cutting the tree they are sitting on. Their massively inflated money supply is going to hit them hard when China and other foreign nations will refuse to accept USD as a reserve currency and all that printed nonsense will hit US economy and destroy it by hyperinflation. Or, USG will put up massive capital controls to avoid that thus closing the country in an iron curtain. Considering that externalised inflation destroyed a lot of production inside the country, isolating people from global market will also destroy what remains of the economy. In no theory it is sustainable in the long run to print shitload of money and not have its value massively dropped at some point of time. Each day it doesn't happen only makes the inevitable hit harder.

Once people all over the world start tasting Bitcoin and moving savings off fiat currencies, they will naturally hyper inflate - people will be trying to get rid of them quickly. This has nothing to do with orders of the state: it'll happen legally or illegally. And policemen will be among those people who try to save what's left of their savings.

Also: did you notice what Obama said when he asked Congress to raise debt ceiling? He said he wouldn't be able to mail the social security cheques. In other words, he admitted that there's absolutely no money that was extracted from people is available in form of cash or real investments. That he must have to issue new debt to pay that debt. Isn't it a good enough proof that the whole monetary system is going to collapse any time Link: http://www.dailymotion.com/video/x14y4cx_obama-tells-america...

I don't think Shamir's paper is BS. I think it shows how early adopters have a huge advantage over other players, exactly like a Ponzi scheme.

As for the fact that they can't force you to buy from them it's totally irrelevant. They (or he) can drive the market back to 0.5USD : 1BTC in less than 24 hours should they choose to do so, and there's nothing stopping them. The fact the you don't know who this player is, makes things a lot worst compared to FIAT controlled by the state.

The monetary system is a total mess, but that's because of abuse from those in power, than by design. BitCoin is a good thing to have, but it will never replace the USD and it wasn't suppose to IMHO. It's properties attracted only the illegal market and various low level speculators so far.

The fact that BTC went up instead of down after SK bust shoes clearly that the general consent has little to do with its price. BTC became famous because of SK. Now will be used even less as a currency. Instead it became even more expensive.

Boosting commerce and spending is a fine goal, but a larger value of mild inflation is that it boosts investment. Deflation of course has an opposite effect, you get risk free gains by making your capital idle rather than investing in productive assets.

Yes, and that's why I agree that bitcoin is "digital gold", rather than the Holy Grail of ecommerce. But that doesn't make peercoin a good idea. If I want to spend I have credit card and a paypal account, I don't need whatevercoin to help me with that.

I totally get that and I agree with you.

My initial point stands though: As a currency BTC is/has failed. As an asset might work, but I don't know for how long.

"Failed" is a strong word and it's still too early to tell. Sure, I don't think it will ever be used predominantly as an exchange medium but that could be a nice "bonus" functionality. A lot of it depends on how bitcoin-friendly governments are. For example, if a global network of bitcoin ATMs can be built, this could practically put Western Union out of business.

Imagine if you spent $1000 for bitcoins a year ago and now they are worth $40000. Wouldn't you enjoy spending a little bit of it here and there, spread the word etc? If you are a hard believer, then you'd probably wait till it's worth $100000 and maybe then, you'd spend a little here and there?

Last year 3.5x the US money supply was spent by consumers (not even counting b2b transactions, which I suspect are at least as high). So in your hypothetical example, holding $40k in bitcoins, you would need to spend _$150k_ in bitcoins yearly to match that level of liquidity.

US cash is a depreciating asset fuelled by cheap artificial credit. This level of spending is not a genuine liquidity, but a economy on heroine. It will not end well because while people are buying all these plasma panels, printed money is being spread in to actually productive economies where it will cause inflation and massive losses. So either, say, China goes into depression and production halts and everyone loses, or China throws their USD back into U.S. causing massive inflation there. Short-term liquidity figures do not tell this story and they are not to be matched. Everyone needs to invest in hard assets and save instead of spending: invest in education, profitable businesses, friendly neighbours, bitcoin.

Silk road did what, 10 million btc over two years?

Peercoin lets those who have the ability to leaves funds untouched for 30 days accrue this interest. Peercoin was designed to enable the early adopters that can simply sit on their coins.

In the real world most poor people cannot let any amount of coin remain unmoved for 30 days, so Peercoin in a privilege based coin and SunnyKing the creator intended this.

A simple change = Allow all coins no matter age accrue interest. Sunny is a rich millionaire and does not care about the wealth divide his coin will cause if it took off.

The last time I looked at Peercoin, it also appeared to be designed so that people with more coins in effect accrued a higher rate of interest on them due to a subtle quirk of the inflation algorithm. That may have been fixed since then though.

I like the mining design of Peer Coin much better. I worry that bitcoin mining will become too centralized/unprofitable due to declining block rewards. I'd feel more comfortable using a coin with a continuous small inflation tax paid to miners (say, 1% a year), than a coin that depends on fees becoming higher/more popular in the future.

Besides, I hate fees in my coin, it hurts microtransaction applications.

This is really forward thinking Shopify! Great news.

It's an interesting company... (HR vid 'Draw the Owl') https://www.youtube.com/watch?v=dwSe2imUyvg

The CEO looks high as a kite.

Well, there's little risk to Shopify in allowing bitcoins to be used. Any risk is still on the seller.

Risk in what way?

Given the volatility, probably price fluctuations is the main risk. That could have an upside or a downside for a seller.

The seller would also have to trust bitpay (who it seems shopify are using) to store the coins securely, but that's really just like trusting any other payment provider, and hopefully bitpay have insurance and proper financial controls, unlike many exchanges.

Great to see this happening though - I wonder what the comparison on fees is between accepting bitcoin and credit cards, have the fees just moved from one provider (mastercard say) to another (bitpay), or are they significantly lower?

Is there anyone here accepting bitcoin who can enlighten us on the pros and cons?

I am not accepting bitcoin or using BitPay but the fees seem to be much lower than any credit card: https://bitpay.com/pricing

Also, I'm not sure what you mean by price fluctuations. BitPay accepts bitcoin from the customer and automatically converts it to the seller's local currency at market price. So the price is always fair and the seller never deals with bitcoin.

I am not accepting bitcoin or using BitPay but the fees seem to be much lower than any credit card

Sounds good at $30 a month or 1% per transaction, $30 per month almost too good to be true, but I guess they can make it up in volume if they have enough customers sending payments through. The only drawback would be persuading customers to pay in bitcoin, but that could come in time.

Also, I'm not sure what you mean by price fluctuations. BitPay accepts bitcoin from the customer and automatically converts it to the seller's local currency at market price. So the price is always fair and the seller never deals with bitcoin.

Ah I see, thanks for the correction - I'd assumed the seller set a price in bitcoin. Can't see much risk for sellers then if the prices are not set in bitcoin and it goes through a payment processor who moves it immediately to their local currency, and pays out (immediately?). I guess bitpay then has the risk as they have to hold bitcoins till they can sell them and deal with fluctuations in the meantime.

I think the risk for the sellers is that the price fluctuations may exceed Bitpay's ability to smooth them out causing them to go bankrupt.

They use Bitpay, all the incoming transactions are converted to USD automatically.

Bitcoins are better not spent these days as they seem to increase in value almost 10%-20% daily.

To me that means that it's time to start selling. There is no fundamental reason why Bitcoin is rising so fast, it seems like speculation to me. I'm not one of the Bitcoin haters either, I've been heavily involved the last 6 months, I just don't see any major reason for this spike other than the usual speculative arguments.

If Bitcoin shouldn't be spent then what use are they?

Yes, it's speculative.

Yes, there's no intrinsic value.

Yes, the exchange rate could fall by 90%, or expand by 10,000%.

It's also true that Bitcoin has survived and thrived far longer than experts predicted. Acceptance is increasing rapidly, and globally.

Pretty cool how all of these things can be true at the same time.

> Yes, there's no intrinsic value.

I always find this argument silly, as I see intrinsic value in finance as a logical fallacy, but I'll entertain the idea anyway. From Wikipedia:

>In commodity money, intrinsic value can be partially or entirely due to the desirable features of the object as a medium of exchange and a store of value. Examples of such features include divisibility; easily and securely storable and transportable; scarcity; and difficulty to counterfeit.

I see Bitcoin as three things: a commodity, a 'trust-less' payment network and a distributed ledger. Now, those are all value-worthy features in my book, especially the latter two.

If you live in a bankless country without a stable currency, Bitcoin is a very powerful tool that has 'intrinsic' value in its capacity to serve your financial needs where other instruments have failed or are entirely absent. Same goes for folk stuck in countries with severe capital controls or vicious austerity measures.

If gold has "intrinsic value", so does Bitcoin. In fact, Bitcoin has more value from that perspective; since when you could you divide gold infinitely? It's also counterfeitable; Bitcoin, not so much. That's what all these clowns like Joe Weisenthal don't seem to understand because they are so caught up in their own ideas of sound money that they can't see the value that Bitcoin brings to the table. Their loss.

> There is no fundamental reason why Bitcoin is rising so fast

Sure there is. The goal of BitCoin is to be as popular as USD and EUR. There are maximum of 21,000,000 bitcoin. Imagine owning 1/21,000,000th of all the USD!

Imagine owning 1/21,000,000th of all the USD!

Based on M0, you'd have about $148,090.

It probably makes more sense to compare it to the broader M2 and M3 money supply.

Why do you say that? If and when bitcoins become borrowed and deposited at banks, there can potentially be a lot more supply of bitcoins.

A genuine 'why?' I'm reasonably naive on these issues, but there's no fractional reserve banking of Bitcoin yet, is there? M2 and M3 include savings, all of which couldn't be converted directly into underlying currency, whereas every Bitcoin is clearly traceable and exists as a unit of currency. Disclaimer: I am no economist or financier.

But you can buy 1 bitcoin for ~ $300 today. That means in a few years, it'll be worth $148,090!!! No wonder the price is going up!

(presume bitcoin takes off this way)

There are maximum of 21,000,000 bitcoin.

I find this limit a really interesting part of the bitcoin experiment.

What sets the limit though? Is it technically possible for the developers to revise this limit at a later date, thus causing a drop in value for existing holders?

This limit is set by miners and the reference client (and the various clients that copy the reference client's limit).

I'm not sure of the exact minimums necessary to change the limit, but roughly speaking if you could convince more than half of active bitcoin users and enough miners to control more than half of the network hash rate, you could change the limit.

However even this wouldn't necessarily change the limit in the way you expect. It would create a hard fork where you would have two versions of bitcoin. All coins made before the fork would exist in both versions, but coins made after would only exist in their respective version. So you'd have A-bitcoins with a limit of say, 1 billion, and B-bitcoins with the old limit of 21 million. Whether anyone would still use B-bitcoins depends on how many clients/miners decide to stay on the B-bitcoin branch.

Thanks, that's fascinating - this idea of a currency by consensus is one of the most interesting features.

The limit was set as part of the bitcoin protocol. You can change it by basically making a replacement to bitcoin. It won't exactly be easy to convince people to use your new replacement (because massive social change is hard).

There are many bitcoin fans who think the hard limit is a very good thing.

One way to start selling a bit of your stash is to actually spend some part of it. No hassle with exchanges, no fees and no tax implications.

Historically, people were more willing to "cash out" by spending coins during boom periods: https://blockchain.info/charts/n-transactions-excluding-popu...

> One way to start selling a bit is to actually spend them.

That is what I was getting at, in order for Bitcoin to have a reason to exist people must spend them on goods and services. Bitcoin most likely would not exist for long if it became purely a store of wealth. Not that that will happens but many people are treating that way.

> no tax implications

Wouldn't that be tax evasion?

If bitcoin becomes a universal "store of wealth" it automatically becomes the only currency: most marketable, most liquid, cheapest to transport and store currency. See my big comment on how this happens elsewhere in the comments in this post.

Gold is not currency because it's too damn expensive to store and move.

Capital gains tax evasion - maybe, I'm not a lawyer and I'm not advocating it. But it's clearly a motivation for some people to spend bitcoins directly without going through an exchange.

UK point of view: No, it's tax avoidance. Tax will still be paid in the form of VAT/Sales Tax and Corporation Tax.

You avoid paying Capital Gains tax.

Is this a bigger thing for Bitcoin or for Shopify. One the one hand, another sign of bitcoin being integrated into mainstream sites. On the other hand, quite possibly Shopify might be looking for ways to obtain discounted bitcoins (assuming they have a profit margin). imho and everything :)

> Shopify might be looking for ways to obtain discounted bitcoins

They're using BitPay's service to instantly convert to fiat, so they're not getting any bitcoins.

Interesting. Thank you very much for your comment.

No problem!

I am starting to see services like this http://www.freesafeip.com/bitcoin

which is a more generic version of another similar service http://pizzaforcoins.com/

It may be a matter of time before any site can accept bitcoins indirectly if people started using these services.

If any shopify folks still reading this, have you had any issues with your bank refusing to do business with merchants that accept bitcoin? Been hearing that new bitcoin companies are having problems along these lines, due to increasing FDIC scrutiny.

Will be interesting to see if Shopify (or anyone in general ecommerce) ever reports on the popularity of Bitcoin as a payment method considering there is no sense at all to use Bitcoins to purchase legal items in the vast majority of countries.

No reason to use Bitcoin to purpose legal items? How about not having to divulge your credit card or bank account details to sellers? This exact same problem is apparently important enough that even the established players are trying to solve it, with things like one-time use credit card numbers and third-party authentication pages.

A bit off topic but is anyone trying to work subscription payments with bitcoin? Is that even possible without something like a prefunded account?

The only way you could do it without a "pre funded" account (online like Coinbase) was if you had a RPC-Client for your transactional wallet, say on your local machine. This client would schedule payments.

> considering there is no sense at all to use Bitcoins to purchase legal items in the vast majority of countries.

This is quite asinine. I assume you've never tried to purchase an item in country A from merchant A' accepting currency A'', while you are in country B using bank B' with an account denominated in B''. The hurdles, generally, are numerous and diverse. Any lack of hurdles is quite exceptional, and completely dependent upon international agreements between nations, banks, and any number of permutations thereof.

Instead, you could simply transact in BTC.

Right, because rather than copping the automatic forex charge that most cards do for you, it is easier to open an account on coinbase, make a bank transfer that converts your USD into bitcoin (at a frozen rate mind you, that could either double or halve in value in a matter of weeks), and then transact in bitcoin?

Not sure I'm following.

All of the rampant downvoting on this thread and blinkered discussion regarding Bitcoin really bothers me.. it sounds like /r/bitcoin has taken over HN.

Don't get me wrong, I believe bitcoin is the future of payments. I have absolutely no doubt that in the coming years it will become a global payments infrastructure that will destroy the idea of an international money transfer and change global e-commerce and payments forever. But the idea that it is already there is totally misguided. OP is right. There is no sense at all to use BTC to purchase legal items in the vast majority of countries.

Just a point - my bank asks 2.5% commission for automatic currency conversion when buying with credit card.

You don't need to do any of that if you already are a Bitcoin user. You are speaking nonsense.

Another example: currently there is about 30% arbitrage opportunity between BTCChina and bitstamp. That is, there has been more than $100 difference in the price of Bitcoin between those markets.

If you know how to move money quickly between those locations, you can make lots of money. It isn't easy problem, because otherwise the arbitrage opportunity wouldn't exist.

I've encountered hurdles like that, but most of the time, they aren't strictly due to billing issues, and more likely due to intentional restrictions coming from the seller. As soon as you have a credit card, pretty much all payment processors will happily accept to process your payment, wherever you are in the world.

I've had quite a few bad experiences trying to purchase internationally (if your billing address and your shipping address are in different countries, you're in for trouble), but I don't think BTC solves any of those. BTC doesn't solve the shipping part, and BTC doesn't solve the fact that some stuff isn't internationally available (for example, music/movies/TV shows).

While I agree that it shouldn't be automatically assumed that someone who has bitcoins to spend will use them for illegal purposes, I'm curious as to what specific hurdles you encountered as mentioned in your post?

In my country at least, if you want to purchase something online and in a different currency than your account and CC's denomination, the conversion is done automatically for you at checkout, at whatever the bank has set for the rate, usually a fair one. Works like this regardless of what store you buy from, could be in the U.S, Europe or somewhere else on the globe.

Most US Companies charge a strangely large "currency conversion" fee for this privilege.

Considering that many of the coins are simply generated with electrify calculating hashes (proof for work done) out of nowhere, and a portion of it being generated by hijacking computers and many wallets getting stolen and became unrecoverable, there are still rooms for improvement (which Bitcoin itself couldn't solve unfortunately.) And there is no near instant payment which makes it quite hard for micropayments (sorry haven't followed much lately, does that getting improved?)

Credit cards work well in the situation you describe (if I understand it correctly).

Credit cards & banking are much less distributed outside the developed world. While in the US, 63% of the 15+ population has a credit card, in Mexico it's barely 13% (in Latin America in general it's only 18%). This is a HUGE obstacle for e-commerce and bitcoin's cash-like, informality (no requisites, no need to register or be approved by a central entity) might allow it to spread where banks have so far been unable to. (Source World Bank Financial Inclusion Data http://datatopics.worldbank.org/financialinclusion/)

Yes, you can see bitcoin is getting much better distributed in less developed countries:



People in less developed countries don't buy online not because they don't have credit cards, they don't buy because they don't have money. If you make $5/day, bitcoin doesn't suddenly give you the ability to buy brand new iPhone.

I would have thought zero fees would be reason enough, 2-3% extra on every transaction from a merchant point of view is very appealing

> ...no sense at all to use Bitcoins to purchase legal items in the vast majority of countries

I'm speechless.

If someone holding an opposing view to you leaves you speechless, it generally means you are indoctrinated in your belief and should reevaluate it.

Bitcoins can't be used to extinguish the tax obligations that arise from legal sales.

Should merchants stop exporting too, because foreign currencies can't be used for everything?

You made the BTC-zealots angry. Be careful; most of them have nothing to lose.

Get it?

It's a pure international currency. That's useful for customers without USD access.

To the moon!

Stores want bitcoin as a secondary method of payment, not a first...

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