You're doing well with your credit card because your bank allows you to do so.
Just a few days ago my debit card was blocked because I was traveling internationally and the bank suspected that it was stolen. That's great, they're trying to protect me. But then, the only way to get it unblocked was to visit the bank in person.. but I was 10,000 miles away! I tried to reason with them over the phone but they wouldn't listen. So here I was, far away from home, without access to my money because my bank was trying to protect me but had a retarded system in place for that. Eventually, I spent a few hours on the phone, got someone to pull some local stunts in my city (went to speak to the manager in person, etc.) and then got my card unblocked. You see the problem ? I don't own my money. I can't pay for my coffee with my debit card unless my bank lets me. I couldn't pay for anything, I had to apologize to my hotel and ask them to wait until this got sorted out.
I run a website that is sustained by online advertising. I usually have two options to get paid by advertisers. Paypal or Bank Wire. Paypal charges huge fees, so I opt for wire. Bank Wires take 5 days to clear (2 if I'm lucky..) and due to multiple different advertisers I end up paying over $200 in wire fees each month. I think of that as the 'cost of doing business' but really, it shouldn't be.
I used to live in Dubai two years ago and send money back home. Every time I transferred money, I would get hit with huge fees. This is a reality for immigrant workers all over the world. Western Union caters to this audience right now.
Yes, banks are good at what they do - to a certain extent. We all know them and use them. But that doesn't mean that I want to be at their mercy all the time. Things are always fine, until they are not. That's what happens to me with banks all the time.
Volatility isn't a feature of bitcoin, it's a market reality - for now. You don't have to pay for your coffee using bitcoin right now, you are right, bitcoin isn't ready for that yet.
But when it is, you'll be able to pay for your coffee, and no single 3rd party in the world (bank, western union, visa, mastercard, federal reserve, etc.) will have a say in it. Not a single entity in the world will stand between you and that delicious brew.
If this is all there is to it, I'm not sure I see the utility. I travel internationally somewhat often, not only has my credit card never been blocked, I also usually carry some amount of cash in the local currency so I wouldn't be screwed even if it were.
Transferring money internationally is a bit of pain, you're right about this. But it's also a regulatory minefield. I simply don't want to risk - (a) the IRS coming after me and (b) all the problems associated with bitcoin purchase and sale - just because I'm trying to save a few bucks in transfer charges.
This is the most interesting part of your comment.
> I usually have two options to get paid by advertisers. Paypal or Bank Wire. Paypal charges huge fees, so I opt for wire.
Now, paypal are enormously profitable and they don't give a shit about small businesses which is probably why you end up getting screwed. Maybe bitcoin can help you there, but it's probably better if you could get dollars instead of bitcoin through a bitcoin like protocol. I think it's important to distinguish between the bitcoin protocol and the currency itself. I think the former has some good ideas which will almost surely make in to many many other protocols and applications. The latter, I suspect, is best avoided by "normal" people.
>Not a single entity in the world will stand between you and that delicious brew.
Except the exchange rate. Your 1/300th of a coin might buy you coffee if it is a good day, but the next day it might cost 1/100th of a coin.
I just bought in because I'm hoping that what I can buy with 1/100th of a coin will only cost 1/300th by Christmas.
Bitcoin is having a bad day and I hope to capitalize on it. Having bought at $650 I will be sad if it turns out that the new price is $500, and happy if BAML was right and we are off to $1300.
But All of your arguments fall down in that you are either using an exchange to get from currency to BTC. Or you are keeping coins in a wallet and they could swing 50% in value in a day.
No, my arguments do not fall down. You are making the terribly flawed assumption that bitcoin will always be this volatile. Bitcoin is less volatile than it used to be, and with greater adoption will continue to decrease in volatility.
The volatility in bitcoin today is nothing compared to 2011. Is it still bad ? Yes. Will it continue being bad ? Probably not. The long term trend supports the assumption that volatility will decrease with greater adoption.
Furthermore volatility has little effect on the 'money transmission' element of bitcoin as long as transfers and conversions take place immediately. It's still a viable way to legally move USD from the USA to Singapore with very low fees.
Another example, I'd like to add is that I had a large part of my savings in Indian Rupees. They depreciated by 30% over the past 2 years. That's definitely pretty bad but it didn't prevent me from buying coffee. Euros have also swung around by 15-20% over the past 2-3 years. The Brazilian Real lost 25% of it's value last year. Does that make them as bad as bitcoin ?
Your motivation for getting into bitcoin is your personal choice and I certainly hope that you profit from it. However, don't forget that bitcoin is an emerging technology going through fairly rapid adoption, as such, volatility, crashing exchanges, bubbles, bubble pops, etc. will be a part of it. And of course, I have to convert money from USD to BTC. Or from Marks to Euros. Or from escudos to Euros. That's just how it works.
> Euros have also swung around by 15-20% over the past 2-3 years.
In relation to the dollar. Which is totally irrelevant for day to day transactions inside the Euro zone. I still pay the same price for a coffee I did 2-3 years ago.
But at the moment Bitcoin volatility is still huge: It's currently not reasonable to offer coffee for a fixed number of Bitcoins, that, say, stay stable over a year.
Your analogy between debit cards and Bitcoins seems a bit flawed too: For the purposes of international transfers it might be apt, but for small day to day business like buying coffee, it may be better to compare it to cash. And then there's no bank stopping you from transacting in cash.
You pay the same price for coffee but you will certainly pay more for coffee beans, the market will only absorb the difference for a while.
I wasn't drawing an analogy between bitcoins and debit cards. I was taking about how a bank lets me access my money vs me having direct access to it. I cannot get cash in a foreign country without my bank cooperating unless I carry a world recognized currency (USD, Euro) in cash and try to exchange it somewhere.
The problem is that you read a comparison as an analogy. It's a comparison of our current dependency on the banking system vs bitcoins relative independence from the same.
Just a few days ago my debit card was blocked because I was traveling internationally and the bank suspected that it was stolen. That's great, they're trying to protect me. But then, the only way to get it unblocked was to visit the bank in person.. but I was 10,000 miles away! I tried to reason with them over the phone but they wouldn't listen. So here I was, far away from home, without access to my money because my bank was trying to protect me but had a retarded system in place for that. Eventually, I spent a few hours on the phone, got someone to pull some local stunts in my city (went to speak to the manager in person, etc.) and then got my card unblocked. You see the problem ? I don't own my money. I can't pay for my coffee with my debit card unless my bank lets me. I couldn't pay for anything, I had to apologize to my hotel and ask them to wait until this got sorted out.
I run a website that is sustained by online advertising. I usually have two options to get paid by advertisers. Paypal or Bank Wire. Paypal charges huge fees, so I opt for wire. Bank Wires take 5 days to clear (2 if I'm lucky..) and due to multiple different advertisers I end up paying over $200 in wire fees each month. I think of that as the 'cost of doing business' but really, it shouldn't be.
I used to live in Dubai two years ago and send money back home. Every time I transferred money, I would get hit with huge fees. This is a reality for immigrant workers all over the world. Western Union caters to this audience right now.
Yes, banks are good at what they do - to a certain extent. We all know them and use them. But that doesn't mean that I want to be at their mercy all the time. Things are always fine, until they are not. That's what happens to me with banks all the time.
Volatility isn't a feature of bitcoin, it's a market reality - for now. You don't have to pay for your coffee using bitcoin right now, you are right, bitcoin isn't ready for that yet.
But when it is, you'll be able to pay for your coffee, and no single 3rd party in the world (bank, western union, visa, mastercard, federal reserve, etc.) will have a say in it. Not a single entity in the world will stand between you and that delicious brew.