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Here's Why People Don't Buy Things With Bitcoin (vice.com) 376

An anonymous reader shares a report: One reason for this, if you live in Toronto like me (or anywhere else for that matter), is that there's basically nowhere to spend digital coins in the real world. Coinmap, a service that maps bitcoin-accepting locations all over the world, shows a few places that accept bitcoin in Toronto, but it's clearly out of date -- I called several businesses listed on the site and they had no idea what bitcoin even is. A bigger problem is perfectly illustrated in a Reddit post from Wednesday morning complaining that a bitcoin transaction worth just $9 still hasn't gone through the network after two days of waiting. Two. Days. The likely reason is that the fee attached to the transaction in order to incentivize faster confirmation -- 50 cents, which is about as much of a premium as I'd pay for a $9 transaction -- simply wasn't enough. "Should I have paid $3 on a $9 transfer to get it processed?" the person wrote.
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Here's Why People Don't Buy Things With Bitcoin

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  • Transaction fees (Score:4, Interesting)

    by green1 ( 322787 ) on Wednesday August 23, 2017 @04:57PM (#55071873)

    The author has a good point, and I've always felt that the transaction fees were a big problem for bitcoin. Many of the people who are looking for an alternative form of payment are trying to get away from all the fees banks put on their money, but if you have to spend more than 5% in transaction fees to get your payment processed, have you really gained anything?

    I like the concept behind crypto-currencies, but it's just not going to work if it's more expensive to use it than to use existing payment methods.

    • Blame the miners. Miners receive the transaction fees whenever they receive the block award. So, the miner have been trying their best to keep the fees as high as possible. They do this by creating several small transactions they basically send the coins to themselves creating a backlog. Part of this whole forking bitcoin is related to this.

      Personally, I support Dash because they have very low fees 0.0001 Dash (=$0.03) for normal transactions and you can have ultra fast transactions with several confirmatio

    • I don't think the idea of block chain is inherently slow. Design choices that BTC have made and stuck to have kept it so. I had a very little bit of bit coin, and trying to spend it was not easy. You are also right that BTC is no longer being marketed as a currency, but as an investment. The currency side of things has been sidelined and forgotten.
      • Re: Transaction fees (Score:5, Interesting)

        by argumentsockpuppet ( 4374943 ) on Wednesday August 23, 2017 @10:10PM (#55073163)

        It all depends on the systems you use. I have a debit card with a Visa logo. Anywhere they take Visa, I can use it to spend money. In this particular card's case, it withdraws bitcoin from my coinbase account when I use it. I pay the price in whatever currency the merchant is using. McDonalds gets USD from Visa. Visa gets USD from coinbase. Coinbase gets bitcoin from my wallet.

        Basically, I can spend my bitcoin anywhere that takes Visa. Or, I can sell bitcoin and get USD deposited to my credit union account. As a bonus, I can send bitcoin to people or organizations. If I ever need to pay someone who doesn't have a bank account, or need to pay a (cheap, cause I don't have much) crypto malware ransom, I can do that with bitcoins or ethereum. In theory, I could buy things on a black market with my crypto-currency holdings, but honestly I haven't looked into it because I don't want to connect myself to that world.

    • Credit card fees float around 2-3%. Debit's even lower. Why bother with bitcoin when everybody has cash? There's no upside and lots of downsides.
  • Seems like the inevitable is about to happen. Nobody want's to mine Bit Coin for what they pay anymore. Silly me, I thought that this wouldn't happen until all the coin was gone and they stopped issuing new ones, I was wrong by a long shot.

  • There are people paying actual money for it. I wish I would have come up with that idea.
  • by Anonymous Coward

    You can use Bitcoin person to person.
    Yes, Bitcoin (BTC) has been taken over by companies and individuals who hate the original anarchist idea of unstoppable decentralized cryptocurrencies.
    This takeover will centralize and have high fees and controls and you will lose.

    That's why there's now Bitcoin Cash to replace it...
    https://www.bitcoincash.org/

    Only stupid people believe that in the new world of cryprocurrencies that any particular crypto will be *THE COIN* for all eternity.
    That's not what this is all abou

  • I didn't really think or look into it too much, but I'm not sure I understand this whole bitcoin thing.
    I understand the technology behind it is very valuable to banking institutions; but what makes the bitcoin itself be worth (more?) than an ounce of gold for example?

    It's even worse if, according to this, it's hard to use your bitcoins. Is it the same dilemma as using gold? I imagine if walk into a store with a tiny nugget of gold, they won't go out of their way to bring a scale to weigh it/an expert to ens

    • by ledow ( 319597 )

      Gold's physical value is... well... mostly decorative. It does have uses but in such small quantities that they hardly figure compared to the jewellery market.

      Why do people want shiny crystals and yellow metal? Same kind of questions. Same kind of answer: scarcity but demand. You can't find them lying around in the back garden, but equally other people want them (because THEY can't find them lying around in their back garden either).

      Bitcoins aren't generated by raw processing power as such - it's a spe

    • Re:I don't get it (Score:4, Insightful)

      by DaMattster ( 977781 ) on Wednesday August 23, 2017 @05:35PM (#55072065)
      Even gold only has value because people believe it does. Its only real value is as a conductor, but beyond that, it's pretty worthless. Gold is too malleable and cannot be used in building.
    • Re:I don't get it (Score:5, Interesting)

      by burtosis ( 1124179 ) on Wednesday August 23, 2017 @06:44PM (#55072387)
      Value is what people believe it to be. The US dollar is just as imaginary as bitcoin, the difference is there is an infrastructure in place to process it, whereas bitcoin is non-central. There are plenty of places you can exchange bitcoin, like gold, but issues like the one in the article do happen mostly because it's still in its infancy. Playing a mmorpg someone went off on how it's insane that in game gold has real value when it's imaginary, I pointed out that the in game economy of world of Warcraft alone exceeds that of Venezuela [foxnews.com]
  • by viperidaenz ( 2515578 ) on Wednesday August 23, 2017 @05:15PM (#55071979)

    If a 5.5% fee can't get a transaction complete in 2 days, how much does it cost?

    I've never paid more than 3% extra for credit card transactions, 1.5 or 2% is more common. My bank gives me back 1% of that anyway. If the merchant absorbs that cost and distributes it across its credit card and cash customers, I effectively get a discount.

    • Yes. This is the fundamental problem. The only way crypto-currency gains traction is if the transaction fees and other "friction" drops below other convenient methods. This is probably why a lot of companies are developing private block chain systems and consortiums for special purposes so they can make the transaction fees essentially at cost (of operating their computing hardware)

      Its still just a ton of speculation until some killer apps arrive. IMHO the real blockchain value is in the distributed cryptog

    • by Kjella ( 173770 )

      If a 5.5% fee can't get a transaction complete in 2 days, how much does it cost?

      It's not related to the amount, but to getting your transaction included in a transaction block. Since they all take up the same space those who verify take the transactions with the biggest fee regardless of size. The idea was simply that you'd pay for faster processing though, not that it'd become a blocker to getting processed. But since Bitcoin has gone up more in value and is used for more transactions than designed, if you don't pay a big fee your turn never comes at all. I hear it's around $3 now, bu

    • by Bert64 ( 520050 )

      The problem is that each block can only hold a finite number of transactions, so the miners will only carry those transactions that have the highest fees... Hence the scalability problem that's being talked about.

  • Like any other currency, it's worth what you can buy with it. Given the relatively illiquid level of commerce done in bitcoin, it's no wonder there is so much maniacal speculation over its value.

    I once heard a currency expert on NPR remark that bitcoin is a collective hallucination we all share, that ascribes a value to an abstract entity. But he was quick to add that every currency is like that.

  • by timholman ( 71886 ) on Wednesday August 23, 2017 @05:23PM (#55072009)

    The idea of any blockchain-verified cryptocurrency being widely used as money never made sense, and never will. What, if I buy lunch for $10, I have to wait several hours or days for a bunch of server farms in China to verify my transaction while burning enough energy to light every house in my neighborhood? Either that, or pay $2 or $3 to get it "expedited" in 15 minutes?

    It's insane. The world economy is far too large and complex to be funneled through 1 MB or 2 MB or 4 MB chunks of data verified one at a time, and even the people pushing BTC realize that now. When was the last time you heard BitPay brag about how many new merchants were using their service? The idea of BTC as money has all kind of faded away. It simply won't scale, regardless of the supposed "solution" of SegWit.

    Now it's all about the speculative frenzy, and the different factions within the Bitcoin ecosystem fighting for control of the blockchain with hard forks. BTC is useful for moving large sums of currency across borders without government control (many wealthy Chinese like that), but as far as being used as "money", that ship has long sailed.

    • Re: (Score:2, Insightful)

      by tlhIngan ( 30335 )

      The idea of any blockchain-verified cryptocurrency being widely used as money never made sense, and never will. What, if I buy lunch for $10, I have to wait several hours or days for a bunch of server farms in China to verify my transaction while burning enough energy to light every house in my neighborhood? Either that, or pay $2 or $3 to get it "expedited" in 15 minutes?

      It's insane. The world economy is far too large and complex to be funneled through 1 MB or 2 MB or 4 MB chunks of data verified one at a

  • We need to have a bank account with bitcoin that is not necessarily tied to a bitcoin wallet, that would just be bitcoin credit, similarly to what a fiat coin account would be. And then bitcoin credit card where a payment wouldn't require any movement of bitcoin from a wallet to the next and the financial institution could approve that purchase in bitcoin immediately. And then, financial institutions would only need to do a bitcoin transaction once in a while in large batches and they wouldn't mind paying
  • Bitcoin suffers from it's own design. It's decentralized, and unregulated. Criminals have flocked to the 'currency' for these very reasons.

    It just goes to show, regulation does have a place. I personally can't get behind something that facilitates criminality to the degree bitcoin does.

    It's very design is the problem. It can't be regulated. Oversight is impossible. In the age of scams, fraud and identity theft, we simply cannot have a deregulated decentralized, pseudo-anonymous 'currency.' It just ca

  • by jediborg ( 4808835 ) on Wednesday August 23, 2017 @05:49PM (#55072129)
    Because scaling the transactions was becoming a problem. SegWit is supposed to allow for future development of the 'lighting network' which is supposed to allow thousands of transactions a second instead of just hundreds. Its a technological problem, for which there are multiple solutions. We'll just have to let the market work itself out.

    Interesting times if you are an amateur economist.
    • by James Carnley ( 789899 ) on Wednesday August 23, 2017 @06:58PM (#55072447) Homepage

      I don't think transaction speeds are a technological problem. Bitcoin can do nothing to make transactions happen quickly at scale with any technological model with the way cryptocurrency is currently set up. It's a political problem that currently has no solution and worst yet as far as I know nobody has even come up with a pie in the sky solution that might work either.

      Visa has to process millions of transactions every second. Visa spends a TON of money on data centers and ways to process all of that load. There is currently no good incentive for miners to create the massive infrastructure needed to make a real time transaction system work in the real world. It's either wait more than 5 minutes (unacceptable) or charge multi dollar fees on top of the price of what's being bought (also unacceptable). The only way Bitcoin will be viable is to work fast and cheap. It's neither.

  • by Flu ( 16236 )
    I find Ripple (XRP) quite interesting, since it is designed specifically for fast money transfers. I personally believe it will gain traction, and essentially take over Bitcoin as transaction media.

    Disclaimer: I have invested in Ripple and Ether (ETH).

  • FOMO Hate (Score:3, Insightful)

    by Anonymous Coward on Wednesday August 23, 2017 @06:37PM (#55072339)
    There's a lot of bitcoin hate on Slashdot from people who are mad they don't own any bitcoin, and didn't get in when it was affordable.
    • Even worse having sold it some time ago :(
    • by sl3xd ( 111641 )

      You realize a lot of us just don't care about Bitcoin, right? It's just another commodity <yawn> There are millions of them in the market. What makes Bitcoin special? That it requires a energy expenditure that makes alt.pavers [wired.com] look like a model of efficiency?

      There's little else interesting about Bitcoin.

      There's certainly no envy: I put my money into the "traditional" stock and commodity market, and they have made more money for me than if I had used it for Bitcoin.

    • Re: (Score:3, Informative)

      Then there's those of us who saw it the first time and thought "..gee, that's a great too for criminals to hide their illegal transactions, I'd be nuts to get involved in something like that!" and passed on the whole thing.
    • Re: (Score:2, Insightful)

      by sysrammer ( 446839 )

      There's a lot of bitcoin hate on Slashdot from people who are mad they don't own any bitcoin, and didn't get in when it was affordable.

      Yeah. Pretty much like all pyramid schemes.

  • Businesses are reluctant to deal with Bitcoin because it's nothing but stable, transactions (confirmation times) are nothing but certain, there's this whiff of something which is used for illegal purposes to launder money and it's still largely unknown aside from those who read tech news. Over 95% of general population have no idea what Bitcoin is and how it can be used.

    Second, "the fee is not evaluated relative to the transaction value. The fee is evaluated relative to the transaction size in bytes. In o

  • Look, you BC guys want to have your little fantasies about "alt-currencies"? Go right ahead. Do NOT, however, think that BC will ever be any kind of true money (legal tender). It's 100% pure, organic, dolphin-free gambling. Sure, today, I can agree with a barber, say, to cut my hair in exchange for non-currency. It's known as barter. Barter, however, is even better in that there is something of value being exchanged. What's BC? Some algorithm generated on a Chinese server-farm. Woo-hoo! Suckers, apparently,
  • by JohnFen ( 1641097 ) on Wednesday August 23, 2017 @07:48PM (#55072697)

    I don't use bitcoin in part because it is of very limited utility -- you can't buy much with it directly. I also don't use it because it's inconvenient.

    But mainly, it's far too volatile for my tastes.

  • No one but distributors actually buys the products. The products exist to keep the pyramid just barely legal.

    Bitcoins are only held by "distributors". They buy and sell them amongst themselves, driving the price ever higher. They have no more value than tulip bulbs did in the 1600s, and will end the same way, when people come to their senses.

  • by Neo-Rio-101 ( 700494 ) on Wednesday August 23, 2017 @09:51PM (#55073113)

    The strength of Bitcoin comes from the health of the computers maintaining the Bitcoin network, and those computers are only on the network is because they're getting paid in bitcoin to maintain it.

    Once it becomes hard to impossible to mine bitcoin, to the point where it is not financially feasible to do so, Bitcoin's network will weaken and fold as miners move onto the next crypto-currency with a better ROI.

    This will have the net effect of weakening the number of systems maintaining bitcoin - and potentially weakening the strength of the bitcoin network. This *might* possibly cause bitcoin's price to suddenly drop as people pull out.

    It's either that or bitcoin has to continue to inflate for eternity I guess.

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