Producers and payment options using cryptocurrencies

[awdc]

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!

Because of this, there are producers here on this forum that I don't do business with. If there's something I really, really, really can't live without, I'll grudgingly dig around in the drawer until I find my checkbook, but usually the "humbug" factor of that stops the process. Again, credit card or PayPal, or not at all. Not that I have any particular allegiance to those institutions, they're just the ones we had when we decided "enough is enough."

So the idea of reaching out to embrace yet another vehicle of electronic currency exchange is, to me, disagreeable. Another account to manage, another point of attack for thieves, another opportunity to lose track of value due to growing pains in an unproven system, another bureaucracy to support.

I can understand that to a certain degree. If a vendor/producers offers you another currency option it doesn't mean you have to use it. I'm not suggesting any of the producers switch solely to these. What's interesting in your viewpoint is that you said you don't want any more entry to your personal financial information. Well, a Cryptocurrency like bitcoin would simplify this for you. Think of it as you taking your physical wallet with a $20 bill (if you're in the US) and paying for a product or service. You hand the $20 to the merchant and you then get your product/service. Using a bitcoin would be the same way. Open your bitcoin wallet, plug in the merchant's payment address and send coins. There was no point of entry added to put you at risk. The merchant cant "suck" any additional currency from you making a payment. No third party (visa/mastercard/paypal/etc) has to be involved and no financial institution even knows you bought something. You in fact made a transaction with less points of entry containing no personal information. The situation with Adobe wouldn't even be possible if you solely used bitcoin (or another crypto). There's no "charging" your wallet. Someone would have to physically steal your computer and break your passphrase to get your money. You wouldn't need adobe to pay for protection because even if someone hacked Adobe and got your payment address there's nothing they could do with it. If you feel too vulnerable with your current credit/financial setup, this is a way to make you less vulnerable when paying for goods and services. There's no longer a central bank monopolizing your money.

I can understand your reluctance and disagreement with what seems like another vehicle of electronic currency, but this one is a different paradigm than what you're familiar with. There is no online bank account to manage. Your wallet stays on your computer or in paper form and not in the hands of some financial institution. These types of currency are a divergence from the norm you understand and accept today. It's at least worth reading more about. I'd never suggest someone dive into this without being informed first.

[awdc]

See news stories about Silk Road

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

Not sure which events you are referring to. Whether bitcoins are anonymous or not depends on how they are used. You could compare Wallet IDs to IP addresses - they don't have a name tag on them, but there may be ways to associate them to a person based on other information. Unlike IP addresses however, you can get a new Wallet ID anytime you like.

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.

You cannot eat dollars either. Well, I suppose you could, but it's not a healthy diet. In the long term currencies suffer from inflation because there is constantly more of them being issued. I see inflation as an obscured tax (http://www.youtube.com/watch?v=D4yBrxmEOkY). Bitcoin does not have that particular problem. I agree that this is not relevant RIGHT NOW, because the currency is unstable. However when/if Bitcoin becomes more wide-spread and stable, this will become relevant.

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

At about 0.000029 BTC right now.

Any form of currency has been used for illegal activities. Bitcoin or any of the alternative coins are no different. Silkroad stories get highlighted because silkroad was highly illegal and Bitcoin is trendy to talk about. Had silkroad used USD, Euro, etc there'd be no one batting an eyelash at the mention of the currency type.

[awdc]

While Bitcoin likely has a future it hasn't arrived just yet. The amount of effort and risk required of producers to accept it doesn't balance with the tiny amount of business that might be gained. Don't expect them to take it before Amazon.com and others have caught on. Especially when each producer already has multiple payment options that work very well.

I understand it's not convenient or easy. You're right that Bitcoin (and other coins) likely have a future but I believe they have arrived. My original question was also a suggestion to see if any of the producers are open to the idea of being on the forefront of this new future of money exchanges. It doesn't hurt to ask or discuss this and if anything my thread at least raises awareness to this so that if one day these coins are prevalent enough that any or all of you could be prepared to get involved sooner than later. Maybe you're right that now is not the time. You likely have larger tasks to be concerned with rather than futzing with a bitcoin exchange. I do know that if one or more of the producers offered this as a payment option, I'd be buying more or your content or subscriptions with bitcoin payments. I may only be one person, but it's something. I would put my bitcoins where my mouth is...or something like that.

[awdc]

If they remain in existence at all, I suspect there are two ways in which things like digital currency might be used. One I see as legitimate and the other I am highly skeptical of. I am highly skeptical of any form of private currency. As pointed out by Mynock's link, private curency of highly questionable legality. And, even if legal, there is no more, and almost certainly less, basis for a stable value in such things. If someone were to send me a bitcoin I would insist on converting it to US dollars before providing anything in exchange. The other way, suggested my my previous statement, is as a method of transfer of value. It may well be that digital currency could be legitimately used to transfer value internationally while minimizing the costs of currency exchange. within the United States, and also within some other countries, it is already possible to transfer funds from one person (or entity) to another a no cost whatsoever. QuickPay (Chasae Bank) and PopMoney (through many banks, but not through their direct website) are examples of this. Anyone with a checking account in ANY US bank can send funds to anyone elsewith a cheecking account in ANY US bank, at no cost at all, provided at least one of the checking acocunts is with Chase. With PopMoney, both parties must have accounts with a bank that uses the service, but there are a LOT of those. The situation internationally is more difficult, I think as the result of a complex of legal issues from country to country, and these, along with the issue of currency exchange, mean it will likely never be completely free. If digital currencies are set up such that the exchange (and there would be two exchanges) costs less than what is no the case, then they may have a future for that purpose.

There's a word for creating your own currency. I believe it's pronounced "illegal".
http://en.wikipedia.org/wiki/Liberty_Dollar
If you want an alternative to fiat there are options.....mail Fred one of these.

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Interestingly enough is that even though a bitcoin is private in the sense that no centralized bank or financial institution controls it, the coins' ledger is publically visible and traceable all the way back to the very first bitcoin transaction. it's an interesting dichotomy of private and public currency management. At this current point in time most people would do exactly as you proposed in converting/exchanging a given number of botcoins back into USD currency because any and all other bills, products, etc you need to pay for are in that currency....for now. Hopefully in time there may be the change in people paying for something and then holding on to these coins just like you would hold on to your dollar bills. The problem I see with a QuickPay or PopMoney is that someone else (a bank) manages this and would likely have my name and personal information stored in order for me to transfer a payment to you. If you need 0.03 bitcoins for a video...I open my wallet and send them to you. No bank had to see me do that. There was an incredibly small transaction fee $0.06 for transferring the money (which the buyer could pay for). Any of the checking account transfer also involves a bank. All these banks I'd like to avoid knowing where the money went when sending a payment for a video on a quicksand fetish website. The issue is even simplified greatly for over-seas transactions with a bitcoin for you. In the case of bitcoin I only see one exchange in this process unless if I'm not fully understanding your point. The exchange of bitcoin from my wallet to yours costs next to nothing. The cost of exchanging it to USD may be 1-2% which can't be far off from whatever visa, mastercard, discover, paypal charges.

[awdc]

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

I appreciate you at least considering it some day. Hearing your feedback is valuable to also help me understand each producers feedback in accepting alternate forms of currency. As I mentioned in my other posts I'm just testing the waters to see how people feel about this. Thanks for thinking about it and giving feedback.

[awdc]

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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What will be revolutionary is that even if the US government doesn't approve this doesn't mean these currencies go away. The US doesn't own bitcoins so good luck to congress regulating the coins themselves. Even if congress says they're illegal the only way they can stop me from getting and receiving coins is to somehow block all internet access. Even if that happens the coins will continue on in other countries and computers. The coin ledger is decentralized and self-managed. The system is designed to keep a single influence from controlling it without significant computing power. What the US/Congress can make much more difficult is exchanging the coins for USD. They'll try to put their paws into the exchanges because they'll have no grip anywhere else. I am a coin miner so my wallet grows only through finding these coins and not through spending my local fiat currency for them. My profits from said coins will be reported to the government as taxable income making me in compliance to my federal tax code.

[awdc]

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).

Sure...all valid points but my point of this thread isn't to discuss long-term investments. What I'm trying to address is a more-anonymous method for consumers like myself to purchase products from producers using a form of currency that is making grounds. There are ways to establish a transfer and exchange to lock in a stable price that fits the cost of the product or service being offered. It just means on my end the cost of these may fluctuate every time I refresh my browser. That's my issue not the producers.

[awdc]

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.

This route that you and your partner may choose would be very similar to sending bitcoin payments from one wallet to another. You're not giving a credit card number when you make a bitcon payment. You're sending money to an address that gets verified/confirmed. I'd recon it's even safer than the giftcards you proposed.

[awdc]

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.

It has not proven to be a pain in the ass to me. Perhaps the service you chose was poor.

[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? ......

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....

That's an unfortunate and pessimistic viewpoint only provided by your admitted lack of knowledge of these coins/currencies. Given your reluctance to think outside the box and to stay with what is the norm might not lend your willingness to be open to learning more from this Youtube video. If you want to understand a bit more, it's an excellent presentation on how this all works. Bitcoin is actually very well engineered both in code and conceptually. The systems we have in place today can be an enormous discussion all by itself with respect to governments keeping large banks from failing and how those people are getting rich off of yours and my money. The interesting part about you negatively suggesting cryptocurrencies as a "scheme" means that it would be very beneficial for you to read some more on them before blindly throwing them under your own pessimistic bus. If anything I feel the technology that was created could help us in the future to stop all the shenanigans that happen with banks and governments scratching each other's backs when you and I take the hit in other ways. It may not be bitcoin that survives but it is certainly paving the path for what's next to come. I agree that these coins have an angle but the way they are designed isn't catering to the view you think it is. Don't get me wrong...people are trying to get rich off these things but the source code is there for the public to scrutinize the underlying meaning, architecture, and implementation. Try finding the source code and methodology from your personal bank and see if it's published in the wild for all to scrutinize. That's more of an abstract rhetorical statement than anything else.