Mt.Gox Meltdown

lukep said:
If CC value theft was the only thing at stake, I'd say no contest. However, it's one of many problems with modern purchases.

The consumer is already used to cash. Bitcoin behaves exactly like cash that must be teleported. (The value transfers with it, instead of a IOU being fulfilled later by bankers out of your control) Consumers understand how to use cash and what the risks are with cash, but what we haven't gotten them to understand Yet is that it IS in fact like cash, instead of frequent flyer miles or rewards points.

Meanwhile, there are benefits specifically to the consumer:

1. Anti-ID-theft - No need to send your personal info with it, ever, and therefore, no ID theft nor account fraud! (This alone stops hundreds of millions of dollars being stolen from consumers every single month.) On official polling, consumers always say they are more afraid of having their ID stolen than merely having the value of the stolen money stolen.

2. Privacy. - No more porn charges showing up on the ol credit card bill for the wifey to find! (And of course black markets are easier.)

3. Personal safety from all kinds of bad shit. - With a brain or paper wallet, or some Deniable app on your smartphone, you can take your entire life savings out with you and hang out in the worst part of town, and never have to worry that they'll even KNOW you have money on your being. This goes double for governments trying to confiscate your savings, like they did in Cyprus and do to thousands of border-crossers on a daily basis. Deniability is a word you're going to be hearing a lot of, and you can't do deniability with anything physical.

4. Freedom. - Yep, down with central banks & inflation and all that. What, you think there are only like 7 libertarians in the world?​


Does that make more sense? It's just an education matter. Every consumer is going to prefer bitcoin to (Debit) cards once they are educated enough to feel comfortable with bitcoin and not be afraid they'll lose it... I know this because they all have cash on their persons now, and cash absolutely sucks dogshit when compared to bitcoin.



This admittedly isn't his best video on the subject, but it's true, we haven't built up the Computing safety that we truly need yet to protect well enough.

There's going to be all kinds of insurance services and hardware solutions popping up this year that will make bitcoin a whole lot safer against hacks. I personally use paper and an offline unix PC whenever I touch my main stash, and I know they'll make it easier to do so soon, with so many Thousands of talented coders (Yes, that's just bitcoin projects on Github!) being funded by so many millions of $s from Venture Capitalists.

Basically, the innovation engine for the entire rest of the planet has been put on hold to develop the bitcoin infrastructure. Expect to see new solutions to every last little problem you can dream up premier on a daily basis.
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Fistly I want to mention that you do mention some good points. There is no denying that anonymity and prevention of ID theft are major selling points but still not enough.

Again I belive very strongly that there is no way that Bitcoin can have an edge over Paypal etc when buying online (for legitimate purchases). You mention cash a whole lot but cash is mainly used in face to face transactions. When it comes to online transactions (credit) card and Paypal etc is going to be chosen every time.

You cannot argue security using the likes of cash and debit cards, most online transactions are carried out on credit card via the likes of Paypal and popular merchant accounts, provided by the banks that you hate so much. When you can come back with a genuine and valid argument as to why it would be better to buy for example a phone charger from Griffin using Bitcoin over Paypal, then I will believe that you're onto something.

The fact that you chose to mention cash and highlight "debit" card, whilst purposely avoiding the credit card, proves to me that you must agree that the Bitcoin is no match for conventional credit card transactions when it comes to legitimate online purchases.

If you do come back with an argument please do not use any political agenda because you will still be talking minority, when we're talking mainstream adoption, goverments and banks overthrown.
 


Gox is now under 500 - 494 and going down more.

The other exchanges can hold atm 600
 
swiftmoney said:
I belive very strongly that there is no way that Bitcoin can have an edge over Paypal etc when buying online (for legitimate purchases).
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This sounds absurd to me, especially in light of all the rampant ID theft lately, but perhaps I haven't even mentioned the economic argument yet... Maybe that's what's missing...

When paypal or credit card companies charge processing fees, who really pays that fee? You may argue the merchant does until you're blue in the face but in the end, the customer always winds up paying it in the price of the product. Most merchant's margins aren't large enough to do it any other way.

Bitcoin's savings really are so great over those dinosaurs that merchants are going to be forced to give it bitcoin it's own pricing teir one day. $7buckTees will be sold for $5.00 worth of bitcoin, right there beside the $7 fiat price... You can count on this to happen; it's just how free markets work. In fact, there are sites doing this now for high-dollar items, even condos.

So really there are no advantages to using the 50+ year-old credit card system at all; only a couple of perceived advantages that will be educated right the hell out of the masses in the coming years.


swiftmoney said:
You mention cash a whole lot but cash is mainly used in face to face transactions. When it comes to online transactions (credit) card and Paypal etc is going to be chosen every time.
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I mention cash because like gold, fiat cash is the actual container of the wealth. You have control over the flow of that wealth with cash; not so much with credit and debit systems... With the these patchwork systems, banks actually do not move the wealth (which is just an Internal IOU) until a batch processing period many hours if not days after you swipe your card.

Bitcoin is a transfer of the wealth, not of an IOU. YOU control it, and nobody else, not obomba nor FinCEN, can stop you from sending it to the person you want it to go to.

To argue that it's not a desirable alternative to paper cash is silly; that would be like arguing that driving a car is better than using the teleporter.


swiftmoney said:
When you can come back with a genuine and valid argument as to why it would be better to buy for example a phone charger from Griffin using Bitcoin over Paypal, then I will believe that you're onto something.
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Ok, altogether we have:

  1. Lower prices from the merchant.
  2. Zero chance of ID theft.
  3. General privacy, hiding your transaction from people with access to your computer, including advertisers.
  4. Ease at checkout. No more carrying the credit card & typing in 16+3 digits plus an expiry date. I already make purchases in my browser doing nothing more than typing a password clicking "send."
  5. Increased product availability. There are now lots of products and services that cannot be bought with anything but bitcoin. In fact there are now industries that can't exist without bitcoin. Microtransactions have opened up entire new payment methods, like "pay a penny to read this page" website monetization. These lists will grow quickly.

There are probably more, that's off the top of my head. #1 & #2 are what is going to move public opinion of course, especially as credit card hacks like the target one last week become more widespread.

You keep underestimating ID theft... Have you ever had your credit card stolen? It's an extreme PITA. You feel violated. My wife literally cried like a baby when it happened to us. You have to call in and wait for a rep, cancel your card, cut it up, worry about other cards & IDs being stolen too, wait for a new card to arrive a week or so later, making no purchases with it during that time, etc... And they NEVER catch the thieves, nor even try to, so it just feels dirty from start to finish.

Honestly, I'd much rather the thief just steal $100 out of my wallet than go through all that to get $100 credit theft transaction reversed... Getting the charge reversed is SO not enough... Unless you just don't value your own time.


swiftmoney said:
The fact that you chose to mention cash and highlight "debit" card, whilst purposely avoiding the credit card, proves to me that you must agree that the Bitcoin is no match for conventional credit card transactions when it comes to legitimate online purchases.
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Not at all; you misunderstood entirely.

The reason I highlighted "debit" card is to make a fair comparison. Debit cards are really the type of online fiat that bitcoin is destroying; because that is wealth that you are not Borrowing in order to move.

Again, bitcoin is like cash... Credit cards are taking out LOANS. -So it's not a fair comparison at all.

One day bitcoin lenders will offer bitcoin wallet loans too... In the meantime we can't compare HELD coins credit cards yet, as that needs to be compared to LOANED coins.


Thorn said:
Gox is now under 500 - 494 and going down more.
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It can't fall fast enough; the entire bitcoin community has written Gox off and is waiting to throw a massive party when the domain goes down for good.
 
lukep said:
To argue that it's not a desirable alternative to paper cash is silly; that would be like arguing that driving a car is better than using the teleporter.
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Please do not misunderstand, I am not arguing that fact. When making online transactions Bitcoin does offer many advantages over cash and debit cards. What it has very little advantage over is the credit card.
You say it is unfair to compare the two as you know that Bitcoin can never compare and there is no argument as to how Bitcoin can take over market share of all online transactions, including credit card transactions, which would have to happen if Bitcoin was to overthrow the banks.

A miniscule saving to the consumer in regards to processing fees (if you are naive enough to think all merchants will pass this on) is in no way enough to outway the insecurity of the transaction as they would be at risk of a total loss. The merchant processing fee is a small price to pay for the extra fraud security that a credit card transaction does provide, providing they actually feel the incurred processing fee in the first place, in which case there is no actual decision to be made at all.
 
swiftmoney said:
Please do not misunderstand, I am not arguing that fact. When making online transactions Bitcoin does offer many advantages over cash and debit cards. What it has very little advantage over is the credit card.
You say it is unfair to compare the two as you know that Bitcoin can never compare and there is no argument as to how Bitcoin can take over market share of all online transactions, including credit card transactions, which would have to happen if Bitcoin was to overthrow the banks.

A miniscule saving to the consumer in regards to processing fees (if you are naive enough to think all merchants will pass this on) is in no way enough to outway the insecurity of the transaction as they would be at risk of a total loss. The merchant processing fee is a small price to pay for the extra fraud security that a credit card transaction does provide, providing they actually feel the incurred processing fee in the first place, in which case there is no actual decision to be made at all.
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The transaction savings will eventually be a net savings to the economy as a whole when bitcoin or any other digital currency works its way into the mainstream. Economies lean towards efficiency and savings and the technological savings of bitcoin will be passed on to everyone in due time. Even if merchants don't pass it on directly it will be passed on indirectly.

The security is also not an issue. Anybody is free to create their own level of security on top of bitcoin and as this works its way through the market it will also be cheaper and better than the security currently offered by credit cards. If you, as a consumer, want to pay another company to insure your transactions you can. I, on the other hand, can continue to have the option to do my transactions without fraud insurance. The market will easily handle all this.

We have a better horse, it's called the car. When new technologies come in people as a whole become wealthier because it costs less to do the things they do. If there is even a hint of money to be made (which there is in bitcoin) entrepreneurs will do anything they can to make people adopt bitcoin and to sell the hell out of them on the benefits. Let the entrepreneurs and salesmen do their thing and soon enough digital currency will unseat the credit cards. The cat's out of the bag now.
 
slayerment said:
The transaction savings will eventually be a net savings to the economy as a whole when bitcoin or any other digital currency works its way into the mainstream. Economies lean towards efficiency and savings and the technological savings of bitcoin will be passed on to everyone in due time. Even if merchants don't pass it on directly it will be passed on indirectly.

The security is also not an issue. Anybody is free to create their own level of security on top of bitcoin and as this works its way through the market it will also be cheaper and better than the security currently offered by credit cards. If you, as a consumer, want to pay another company to insure your transactions you can. I, on the other hand, can continue to have the option to do my transactions without fraud insurance. The market will easily handle all this.

We have a better horse, it's called the car. When new technologies come in people as a whole become wealthier because it costs less to do the things they do. If there is even a hint of money to be made (which there is in bitcoin) entrepreneurs will do anything they can to make people adopt bitcoin and to sell the hell out of them on the benefits. Let the entrepreneurs and salesmen do their thing and soon enough digital currency will unseat the credit cards. The cat's out of the bag now.
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If the merchant does not pass on the saving, where exactly will this indirect saving come from?

Anyone is free to create their own level of security is a cop out. People do not want to be taking care of their own fraud security, the average person believes that they are dumb when it comes to technology (which most are, and I dont mean that as a put down, it is generally the case), and are likely to feel quite vulnerable if this was the case, and yet you are using this as a selling point?

If I buy a pair of shoes via Paypal or Bitcoin there is no saving for me as a consumer what so ever, just the headache regarding the fact that I may not recieve the damn things and potentially loose my Bitcoin, so again why would I bother?

Just hoping that someone smarter in the near future is going to somehow convince everyone that they shoud, regardless of the negatives, is a pretty ridiculous argument.
 
Yes, the consumer protection side is being worked on right now. I am working on a project...but it's a big fucking problem. 1 solution on the consumer side that some are working on is multi wallet transactions. What this does it basically hold the coins in a wallet that can't be touched by the buyer or sell unless both parties agree to disburse the funds. This can be automated (in the future) or it can be held by an arbitrator who may get a small fee to make sure both sides are happy. This is similar to how merchant services and credit cards/paypal, etc. do it now.
But it still is not quite there yet, but really close.

I do agree it is a big problem though.

Personally, I feel bitcoin is not going to be the alt. currency of the future.
There will be someone who comes along and does it better and offers a more "fair" process of how the coins are mined...and it won't just be based on who can spend more money on computing power. There has to more of an upside...think Tom's shoes merged with bitcoin, or some sort of program with those who are most involved with the alt. currency actually getting coins out of the deal and not the N$A coming into the game and winning because they have the biggest computer.
 
Just a quick note. Bitcoin security is absolutely atrocious, so when you guys say it's more secure than credit cards or cash, you have no clue what you're talking about. Go ahead and start a site or 10 that require live wallets, then wait a week or two, and I bet you change your tune. You even have Andreas, one of the biggest proponents of bitcoin, saying "we suck at security".

And please don't refute with guys like Overstock. That's different, because they have $500k to drop on security. Jane Doe who wants to sell some scented candles via her Wordpress site that's hosted on a $10/month shared Hostgator account does not have $500k to drop on security, nor is she even the least bit interested in doing that.

Do you know what a professional security audit costs? They start at $20,000, and go up from there depending on your requirements. And like it or not, if you have a live wallet, you need this level of security. Bitcoin is a hackers paradise -- you can't do much with a stolen credit card these days, but a quick 30 BTC is quite valuable. These are the guys that get headlined on CNN news -- they absolutely love to hack for the sake of hacking, and have spent years / decades teaching themselves everything they know.

So when I see shit like, "well, you just need to use 2FA", I just drop my shoulders in disgust. And this is the biggest hurdle to bitcoin becoming mainstream. Then even worse, bitcoin was "apparently" (yes UG, I know -- NSA), started within the black market by hackers, so any efforts to implement the required protocols that will allow bitcoin to go mainstream are going to be met with MASSIVE push back. So I'm not sure how this is going to work.
 
Whether Bitcoin becomes more ubiquitous than paypal and credit cards or not, the biggest thing I hope for is that it wipes Western Union off the map with their ass-raping fees. If just that happens, then I will celebrate and high-five all my Filipino friends.

Bitcoin needs to become easier to buy and sell for that to happen. Hopefully licensed exchanges and ATMs will keep their fees low. The Vancouver ATM charged me 5% which I can`t say I was thrilled with.
 
lukep said:
It's just an education matter. Every consumer is going to prefer bitcoin to (Debit) cards once they are educated enough to feel comfortable with bitcoin and not be afraid they'll lose it...
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Consumers will only consider Bitcoin as a viable option once they're able to:

  1. pay their mortgage/rent with it
  2. pay for groceries with it
  3. buy gas/petrol with it
  4. pay utility bills with it
  5. pay medical bills with it
Problem is, i can't see that happening, ever! There may be a small number of adopters but it can't envision industry wide adoption with all those services that are essential for living.

lukep said:
I know this because they all have cash on their persons now, and cash absolutely sucks dogshit when compared to bitcoin.
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NO... cash is still King!

[ame="http://www.youtube.com/watch?v=ODPJOQX5We4"]Donnie Brasco - Wise guy don't carry his money in a wallet - YouTube[/ame]
 
And now we add THIS news:
Silk Road 2 got hacked and all bitcoin stolen like SR 1.

SR has been HACKED! : DarkNetMarkets

lol...

The danger is, that there is something beyond a crash. Thats a collapse.
And thats possible and it happend in the past to other markets too.
 
Satoshi spam hitting the blockchain.shit is hitting the fan and no solution in sight. Is this the ignominious end of bitcoin? Probably not the currency itself but the exchanges, yes. People are asking themselves why the fuck a virtual coin worth $600 each?
 
Thorn said:
And now we add THIS news:
Silk Road 2 got hacked and all bitcoin stolen like SR 1.

SR has been HACKED! : DarkNetMarkets

lol...

The danger is, that there is something beyond a crash. Thats a collapse.
And thats possible and it happend in the past to other markets too.
Click to expand...

Didn't this also happen a couple of months ago?

After silkroad was shut down, another popped up, and all the coins were stolen. Now this is the second time?
 
r3p1v said:
Didn't this also happen a couple of months ago?

After silkroad was shut down, another popped up, and all the coins were stolen. Now this is the second time?
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Yeah...
You know - underground, against the evil authorities. Hackers and be cool and such.

Its so fucking simple... a bunch of useful idiots and some real criminals...

I have no idea what people expect what will happens. Except what happend.
 
all major exchanges now in the 5xx, going fast down.
Gox heading to 400, going to 3xx.

Come on lukep, i had earned a like from you now ;)
 
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