Producers and payment options using cryptocurrencies

[wysvp]

I do not have plans to use BitCoin or other "currencies" in the immediate future, but I am keeping an eye on that technology and may use it one day. Right now, pretty much all my customers are happy with using credit cards, Paypal or even checks, all of which I accept.

Mike
DIDVP.com

[Green Heart]

Bit coins are not illegal. Please check your facts.

[Fred588]

I am no lawyer and its clear that what is legal and not sometimes requires the interpretation of the courts. However, here are some observations and thoughts:

Article 1, Section 8 of the U.S. Constitution delineates the powers of Congress. The fifth paragraph, or power, listed reads:

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

The first item, to coin money, certainly enables the Federal government to do just that, although it could be argued that this does not prevent some other entity from also coining money. The second item, however, "to regulate the value thereof," may be more sweeping. It says Congress can regulate the value of money. It does not say "money created b y the government." Thus, it can regulate the value of any currency, at least any domestic currency, and this would include digital currency. It would likely be an highly specious argument to try to claim it only applies to coins and not other other forms such as paper currency or something digital.

If the above interpretation is correct, then Congress can regulate bitcoins, and that would include disallowing them. Provided, of course, that the bitcoin is actually money. The case described in Mynock's link appears to hinge on how the "currency" in that case was actually used. If there is a claim that the currency is legal tender then it is clearly not legal and, in that case, if I read it correctly, the fact that is was being used that way was the same as making the claim, even though no such claim was actually published.

On the other hand, if a bitcoin is simply a representation of dollars held in a legal account somewhere, and is used as a way to transfer those dollars from one account to another, then it is, in my amateur opinion, indistinguishable from a gift card, debit card, a chec, or a money order.

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[Mynock]

At the end of the day you're trading stable, reasonably well regulated dollars for extremely unstable and nearly unregulated bit coins. Both are a form of fiat, in that they have no intrinsic value. If you want to protect yourself from inflation and sticky government fingers buy physical silver and/or gold and convert it back to dollars or whatever when you want to buy something with it (or buy from someone who will accept physical gold/silver as payment).

[Sydney]

As things stand today, there are already too many options for purchasing. I long ago drew a line in the sand and decided that if my credit card or PayPal account wouldn't buy it, I'd do without. I don't want any more points of entry to my personal financial information than I already have. Adobe insisted on having my information for billing purposes, now they are paying for my credit protection because they got hacked. In the last calendar year, we've had three instances of a credit card company cancelling our card and replacing it with a new one because of "security concerns." Each of those instances caused disruption in our daily lives as automatic bill pays failed, cards weren't available to make plane reservations, or put gas in the car, or buy groceries, etc. I'm already too damned vulnerable, and I'm not doing anything risky!

Given the recent Target thing, I'm wondering if going my partner's route with such things is a good idea. She pays cash for a lot of things. For some online services (Xbox Live, iTunes, etc), she'll go to the store, and pay cash for a card of value for the service, then redeem it on the service for what she's looking for. The only times I see her break out the plastic is when she's buying bigger ticket items.

Yes, it can be slightly inconvenient (first that one has to maintain a ready reserve of cash on one's person, the second that a few places like gas stations it takes a lot longer to transact), but I do wonder if companies are being entirely too lax with the way they handle credit card transactions to be trusted.

[Sekani]

Bitcoin is a commodity, not a currency. Nothing that fluctuates in value by hundreds of US dollars a day can be taken seriously as a currency.

It's also a pain in the ass to convert Bitcoins back to cash.

[dlodoski]

With the increased popularity of cryptocurrencies such as the ever-growing Bitcoin (BTC), Litecoin (LTC), etc, has there been any thought or consideration from any of the producers here to accept payment for their media using these forms of payment? ......

Personally, I don't know what these things are, but I will learn about them if it becomes pertinent. For me, that will be when a significant number of the retailers, providers, utilities, government entities, etc. that I regularly make payments to accept it as currency.

As far as monetary systems go, I don't believe there is any incentive to think outside the box. This particular box has been honed over thousands of years. It's a strong box, and familiarity and predictability (currency markets notwithstanding) are important.

And just realize folks, nobody would be cooking up schemes like this if there wasn't an angle to make even more people rich off of other people just trying to do business....

[Aiko]

Use of Bitcoins is not illegal per se unless you live in Thailand (see http://en.wikipedia.org/wiki/Bitcoin#United_States). However, under many jurisdictions there is still room for interpretation regarding what Bitcoins actually are and which laws and regulations are applicable to them.

Merchants who want to enable their customers to pay with Bitcoins without having to deal with cryptocurrencies themselves, can do so through services like Bitpay (https://bitpay.com/bitcoin-direct-deposit). This eliminates the risk of losing money due to fluctuating exchange rate, but of course they do require a fee.

As far as monetary systems go, I don't believe there is any incentive to think outside the box. This particular box has been honed over thousands of years. It's a strong box, and familiarity and predictability (currency markets notwithstanding) are important.

The monetary systems have evolved several times over the course of history, and IMO cryptocurrencies might just be the next step forward. Different people see different incentives (or as in your case: none) to give Bitcoin a chance. The most important one to me personally is that no government or bank has control over Bitcoin. Such control is power, and with cryptocurrencies that power (and the accompanying responsibility) is returned to the people who use the currency.

[awdc]

With the increased popularity of cryptocurrencies such as the ever-growing Bitcoin (BTC), Litecoin (LTC), etc, has there been any thought or consideration from any of the producers here to accept payment for their media using these forms of payment? I know that this community may be small in relation to other industries but this could be an interesting and inviting way to branch out with their sales for some of us who have interest in both supporting this kind of payment type and also using it to purchase the offerings from our producers here where we wouldn't normally feel comfortable using a traditional credit card or other name-brand electronic transfer. I'm interested in the communities thoughts and feedback from members and even producers.

For myself the answwer is negative. The use of these currencies would significantly slow down a transaction because, for the foreseeable future an order would not be fillable until the bitcoin (or whatever) was converted to dollars. Iam aware that some claim that these currencies are some sort of "hedge" against inflation but the very fact that they themselves fluctuate in valau means, by definition, that they are not stable. And the fact that they fluctuate more than traditional currencies means, also by definition, that they are less stable than the traditional currencies.

I appreciate the feedback and respect your opinion on this. Cryptocurrencies have been something that has intrigued me for some time now and they are gaining popularity and acceptance in various places and merchants. I know they come with certain risks and challenges but can offer some nice benefits on both sides (consumer and merchant) once those benefits are understood. I would have no objection of an order being delayed until payment was received and exchanged and confirmed through the block chain infrastructure of a cryptocurrency. I'm fully aware that the value of these coins does fluctuate quite a bit and that's due to a lot of reasons. I wasn't suggesting that only one coin be accepted (ala Bitcoin) but as a consideration towards any of these coins as they mature.

[awdc]

I am not an economist but I will attempt to make a few points:

1. While it may be true that fees are minimal, for now at least, fees are not the only cost of using any form of currency to make a transaction. There are costs involved in convenience, safety, and likely other factors.

2. Anonymity with bitcoin appears to be a myth based on recent events.

3. I believe inflation simply means that what a unit of currency will purchase declines. Deflation means it increases. Since there is no inherent value in a bitcoin (you cannot eat one) its value at any point in time is what it will purchase. Having a fixed number of them in circulation is irrelevent. It would be relevent if they were increased arbitrarily but the fact of their being fixed in number does not make the difference.

4. The nature of what I will accept in trade, and I expect most people will accept in trade, is determined by the utility of what is traded to me. I will, and have, accepted services, second-hand clothing, props and decorations, and gift cards as well as money, checks, money orders, and simple cash. I accept these things because, and when I perceive value in what is offered. But note that, with the gift card for example, I will accept cards drawn n business I regularly do business with, and NOT on places I never or rarely do business with. It would be the same with bitcoins.

My two cents worth. How much is that in bitcoins?

I think Bitcoin and other cryptocurrencies have several properties that would make them preferable over other payment methods for this community:
- Minimal (in most cases optional) fees
- Anonymity
- No regulation (Nobody to lock you out if they do not like what you are selling.)

Iam aware that some claim that these currencies are some sort of "hedge" against inflation but the very fact that they themselves fluctuate in valau means, by definition, that they are not stable. And the fact that they fluctuate more than traditional currencies means, also by definition, that they are less stable than the traditional currencies.

It's true that their exchange rates are not stable. They would need to enter much more widespread use to become stable and not be affected by speculation to the degree that they are today. However it's also true that Bitcoins do not suffer from inflation, simply because there is a fixed amount to ever come into circulation.

1.) What are the costs you see with safety when using a cryptocurrency? They are fairly easy to keep safe and make safe transactions.
2.) Anonymity means more than you being able to trace back the transaction from your wallet to mine. If I use paypal, a check, or my credit card there's far less anonymity than if I send you some coins from my wallet to yours. I don't regard any of the transactions from me to you as questionable or illegal so I'm not concerned there but it makes me feel better than seeing a charge show up in my paypal or visa/mastercard with your business name in it.
3.) There is no more or less inherent value in a paper dollar bill unless if you feel there is some way of selling it for the dried ink and paper content. I get your point though that there is no hard and established fixed value because these coins are still too closely tied to fiat currency like $USD, etc. I know at the end of the day you would want to take your 0.0003 BTC and exchange it for USD.
4.) I don't dismiss that it's a difficult mindset change to accept these new cryptocurrencies because of their mysteriousness, volatility, and controversy. Why I asked my question was to get producers to at least think about them because they may become more of an accepted thing sooner than later. It takes the large giant corps like Target, walmart, Amazon, etc to make radical changes like these but I think it's an opportunity to be on the forefront of something interesting and useful.