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(NYPost)   NYC small business owners now accepting bitcoins, see virtually no risk   (nypost.com) divider line 32
    More: Unlikely, digital currency, payment processor  
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684 clicks; posted to Business » on 29 Dec 2013 at 8:53 AM (15 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-12-29 07:48:53 AM
So who takes the risk? If I am a merchant and do a bitcoin to cash transaction, then the exchange rate changes, is it priced at transaction time or when it clears a day later?
 
2013-12-29 08:09:03 AM
  There is still too much speculation and volatility in bitcoins to make this feasible.  Or at least logical.
 
2013-12-29 08:35:59 AM
Let me know when they start accepting a real currency.

d.ibtimes.co.uk
 
2013-12-29 09:00:10 AM

NickelP: when it clears a day later?


Bitcoin doesn't have to deal with that shiat. Welcome to the future.

It's instant (the broadcast anyway).

You can choose to just take the bitcoins, or instantly have them converted into fiat (or a percentage of either).
 
2013-12-29 09:06:04 AM
In April, EVR "gastro-lounge" in Midtown became the first brick-and-mortar location to accept bitcoin.

Greene Ave. Market owner Lee (who also owns eateries Lean Crust Pizza and Oxford Kitchen, as well as a convenience store and nail salon) has been accepting the digital currency since March.



farking touts don't even pay attention to what they're squawking.
 
2013-12-29 09:09:33 AM

BetaFlame: NickelP: when it clears a day later?

Bitcoin doesn't have to deal with that shiat. Welcome to the future.

It's instant (the broadcast anyway).

You can choose to just take the bitcoins, or instantly have them converted into fiat (or a percentage of either).


article says it takes a day to convert.
 
2013-12-29 09:26:18 AM
They'll find the risks soon enough.  Namely that you can't practically convert back to USD at business levels on the amateur hour exchanges that haven't been shut down yet, and that if you try to convert person to person, you have a decent shot at getting your money seized because the person who sold it to you was using you to launder their stolen money.
 
2013-12-29 11:00:47 AM

NickelP: So who takes the risk? If I am a merchant and do a bitcoin to cash transaction, then the exchange rate changes, is it priced at transaction time or when it clears a day later?


EVERYONE takes the risk.

I get a haircut from you. You charge one bitcoin (Expensive haircut). Bitcoin is valued at $700 when I make the transaction. So you wait 15 minutes for the transfer to confirm, and you now have one of my bitcoins.

By the time you turn that bitcoin into USD, It could be worth $1500, or $15. So both of us are assuming quite a bit of risk by using them.

The truth is that it's very very difficult to get USD out of bitcoins in large amounts. MtGox? 6 month waiting list for cash withdrawls and it's then limited to something like $1500, and you need to provide your personal information.
All the other exchanges have similar problems getting real money out.

Of course, you could meet someone in person to get cash for your bitcoins, but chances are, you won't find someone willing to buy bitcoins A: at market "value". B: in the volumes you need do do anything useful like run a business or pay your rent every month.

It's a pretty good system if you need to say, launder some money though.
 
2013-12-29 11:01:58 AM

frankmanhog: They'll find the risks soon enough.  Namely that you can't practically convert back to USD at business levels on the amateur hour exchanges that haven't been shut down yet, and that if you try to convert person to person, you have a decent shot at getting your money seized because the person who sold it to you was using you to launder their stolen money.


Or having a week / months worth of coins 'stolen' - knowing exactly where they are, but watching the new wallet slowly siphon down helplessly. You know like this:

https://blockchain.info/address/1CbR8da9YPZqXJJKm9ze1GYf67eKAUfXwP
 
2013-12-29 11:04:33 AM

frankmanhog: They'll find the risks soon enough.  Namely that you can't practically convert back to USD at business levels on the amateur hour exchanges that haven't been shut down yet, and that if you try to convert person to person, you have a decent shot at getting your money seized because the person who sold it to you was using you to launder their stolen money.


I'm pretty sure it's possible to have a no-risk transaction. That being said, 'no-risk' in the financial world is not a synonym for 'good'. It just means that it is deterministic rather than stochastic. You could throw a hundred dollars out the window and that would be a no-risk transaction.
 
2013-12-29 11:06:24 AM

fluffy2097: NickelP: So who takes the risk? If I am a merchant and do a bitcoin to cash transaction, then the exchange rate changes, is it priced at transaction time or when it clears a day later?

EVERYONE takes the risk.

I get a haircut from you. You charge one bitcoin (Expensive haircut). Bitcoin is valued at $700 when I make the transaction. So you wait 15 minutes for the transfer to confirm, and you now have one of my bitcoins.

By the time you turn that bitcoin into USD, It could be worth $1500, or $15. So both of us are assuming quite a bit of risk by using them.

The truth is that it's very very difficult to get USD out of bitcoins in large amounts. MtGox? 6 month waiting list for cash withdrawls and it's then limited to something like $1500, and you need to provide your personal information.
All the other exchanges have similar problems getting real money out.

Of course, you could meet someone in person to get cash for your bitcoins, but chances are, you won't find someone willing to buy bitcoins A: at market "value". B: in the volumes you need do do anything useful like run a business or pay your rent every month.

It's a pretty good system if you need to say, launder some money though.


oh screw that. I didn't know it was that hard to go back to usd and thought volatility was the major problem.
 
2013-12-29 11:09:08 AM

fluffy2097: It's a pretty good system if you need to say, launder some money though.


You'd be surprised what people do to launder money.  Hell, there's people who buy/sell items in video games to launder money.
 
2013-12-29 11:10:12 AM
is there even an arguement not involving doing something illegal for why a business would want to deal with them? 1% vs 3% transactionalcost seems point less as hell if you wind up with your money tied up for six months
 
2013-12-29 11:14:43 AM

NickelP: is there even an arguement not involving doing something illegal for why a business would want to deal with them?


Because the Fed is corrupt!

</libertarian>
 
2013-12-29 11:24:35 AM

Slaxl: Let me know when they start accepting a real currency.


Not until the sites promoting that real currency do something about security. 30 million Dogecoins were stolen on Christmas Day.
 
2013-12-29 12:01:36 PM

inglixthemad: frankmanhog: They'll find the risks soon enough.  Namely that you can't practically convert back to USD at business levels on the amateur hour exchanges that haven't been shut down yet, and that if you try to convert person to person, you have a decent shot at getting your money seized because the person who sold it to you was using you to launder their stolen money.

Or having a week / months worth of coins 'stolen' - knowing exactly where they are, but watching the new wallet slowly siphon down helplessly. You know like this:

https://blockchain.info/address/1CbR8da9YPZqXJJKm9ze1GYf67eKAUfXwP


It's actually kind of encouraging that the solid-object scarcity paradigm still holds up even during theft. I don't know about the future of bitcoin itself, but this concept will be important when everything is software. You'll need to know that the object you're holding is genuine instance Y of type X, and the blockchain algorithm seems to do a good job of that. I would've thought someone would have found a flaw in the algorithm by now and flooded the market with counterfeits, rendering the whole concept useless.
 
2013-12-29 01:54:22 PM
Guy asked me in my store if I planned to take bitcoins as payment.

I run a very small beer specialty shop about 30 miles from downtown St. Louis.  I just switched to squareup.com; it works great.  I guess he thought I was on the cutting edge.

I like trading currency for bottles of beer.  Just seems real to me.  The square is great, but even that's pushing it.  I wouldn't switch to it from the old school until I'd tried it for a few weeks.  I guess I'm a Luddite.   No plans for bitcoins at this time.

Love those little dollar coins, though.
 
2013-12-29 02:39:37 PM

Yankees Team Gynecologist: I would've thought someone would have found a flaw in the algorithm by now and flooded the market with counterfeits, rendering the whole concept useless.


That is the fundamental flaw with bitcoins. Sure they are secure now, but that's only because the market is so small that it wouldn't be worth it to spend the time/ computing power to break the algorithm. If Bitcoin ever went truly mainstream, you can bet there would be well funded organizations trying to do exactly that.
 
2013-12-29 02:43:10 PM

Dinki: That is the fundamental flaw with bitcoins. Sure they are secure now, but that's only because the market is so small that it wouldn't be worth it to spend the time/ computing power to break the algorithm. If Bitcoin ever went truly mainstream, you can bet there would be well funded organizations trying to do exactly that.


Well, supposedly it's mathematically impossible.  They can be stolen or regulated out of usefulness, but the population can't be diluted like paper currency.

Given that millions of dollars have been invested in mining hardware, I'm pretty sure it's already mainstream enough to invite what you're talking about.  Bitcoin has flaws, but probably not in this sense.
 
2013-12-29 02:49:25 PM

Yankees Team Gynecologist: supposedly it's mathematically impossible


And the Titanic was unsinkable. I would always be wary whenever anyone talks in absolutes.
 
2013-12-29 03:13:56 PM

Dinki: Yankees Team Gynecologist: supposedly it's mathematically impossible

And the Titanic was unsinkable. I would always be wary whenever anyone talks in absolutes.


Agreed, although bitcoin can turn out to be "unsinkable" in this respect, which you call "the fundamental flaw," and still be fundamentally flawed.
 
2013-12-29 03:47:05 PM

NickelP: So who takes the risk? If I am a merchant and do a bitcoin to cash transaction, then the exchange rate changes, is it priced at transaction time or when it clears a day later?


There's exchanges where you can deposit them on the spot. That exchange takes the risk.

I wouldn't pay 2 bitcoins for a haircut though.
 
2013-12-29 03:47:33 PM
Bitcoins scare the hell out of me, as for one there is nothing at all backing them , meaning they are at the mercy of people keeping confidence in it, if they loose confidence it crashes and burns.

also as they only exist on the interests/electronically sooner or later someone is going to figure out how to fake them and when that happens the bitcoin will die as a viable form of currency.

Someone will figure out how to fake them it is a matter of time.
 
2013-12-29 04:09:17 PM

grimlock1972: Bitcoins scare the hell out of me, as for one there is nothing at all backing them , meaning they are at the mercy of people keeping confidence in it, if they loose confidence it crashes and burns.

also as they only exist on the interests/electronically sooner or later someone is going to figure out how to fake them and when that happens the bitcoin will die as a viable form of currency.

Someone will figure out how to fake them it is a matter of time.


Which is funny because most Libertarians scream about fiat currency (backed by nothing) and harp about 'gold standard' nonstop. Show many of them Bitcoin, backed by nothing at all so even less than a nation state's currency, and they prattle endlessly about how great it is.

All it takes is someone coming up with a sieve for the algorithm. That's not easy, but I'd guess that a nation state could dedicate a bit of time to destroy Bitcoin relatively when they want.
 
2013-12-29 04:43:08 PM

grimlock1972: Bitcoins scare the hell out of me, as for one there is nothing at all backing them , meaning they are at the mercy of people keeping confidence in it, if they loose confidence it crashes and burns.


They should. That article is nothing but lies. No really, there is hardly a word of truth in it. Anyone who thinks bitcoins are low risk simply fails to understand them.
 
2013-12-29 05:06:32 PM

Yankees Team Gynecologist: inglixthemad: frankmanhog: They'll find the risks soon enough.  Namely that you can't practically convert back to USD at business levels on the amateur hour exchanges that haven't been shut down yet, and that if you try to convert person to person, you have a decent shot at getting your money seized because the person who sold it to you was using you to launder their stolen money.

Or having a week / months worth of coins 'stolen' - knowing exactly where they are, but watching the new wallet slowly siphon down helplessly. You know like this:

https://blockchain.info/address/1CbR8da9YPZqXJJKm9ze1GYf67eKAUfXwP

It's actually kind of encouraging that the solid-object scarcity paradigm still holds up even during theft. I don't know about the future of bitcoin itself, but this concept will be important when everything is software. You'll need to know that the object you're holding is genuine instance Y of type X, and the blockchain algorithm seems to do a good job of that. I would've thought someone would have found a flaw in the algorithm by now and flooded the market with counterfeits, rendering the whole concept useless.


The primary reason I see the algorithm holding up is the lack of nation state care. I doubt the proverbial 'pros from Dover' or foggy bottom have really tried to crush it. While cheating is nice (and easier) for them, they still have some of the smartest people in the world with a couple metric tons of specialized hardware that is dedicated to creating sieves for algorithms. They don't even have to crush it completely, just enough to institute instability (or distrust) by the general public in the chain. Remember, the public is the same people that hear about a CIA web server being hacked and think crackers actually got into classified material.

Let's assume the algorithm is 100% secure though. Even without that block chain threat, the outrage from people (or businesses) watching the money slowly dissipate would palpably register as rage leading to abandonment of Bitcoin.

Without a retrieval mechanism, it's pretty much doomed IMHO. You can see the money that was stolen from you sitting in a public square. You can give the cops the serial numbers, they can read them, but as long as they don't see the perp walk up and touch it in person, they leave it sit there as the pile gets smaller everyday.

Imagine the a Target heist, during the holidays, with no FDIC or other nation state regulatory mechanism about consumer losses. One heist could easily outstrip a company's ability to repay, and consumers would be left holding whatever is left. You want to talk rage, talk about a robbery where people 'know' who has their money but can't touch it, around Christmas. The company can't afford to repay losses.

A company like Walmart losing 100 million in a second, that's 119 days of PROFIT (using Snopes $35,000 of profit per minute) gone in that second. Nearly 1/3 of a years profit lost in a single second by the largest retailer in the world, likely unrecoverable. Walmart may not be a company you can empathize with, but imagine if a mom and pop lost a 1/3 year's profit in one second. Would they be able to recover? Unlikely.

Where is your blockchain god now?
 
2013-12-29 06:28:49 PM
my friend just bought me a plane ticket to san fran for .03 bitcoins and i got the ticket in the mail already.
 
2013-12-29 07:19:10 PM

gittlebass: my friend just bought me a plane ticket to san fran for .03 bitcoins and i got the ticket in the mail already.


At current rates (assuming you can get USD for them) .03 BTC is $22.32.

I had no idea it was possible to get plane tickets, to anywhere, for that price.
 
2013-12-29 08:27:24 PM
Sorry; you keep using this phrase: "Libertarians scream about fiat currency (backed by nothing)..."

You can be like Al Capon and go to the slammer for Tax Evasion... or like Gangster  Dutch Schultz, Walter Anderson, Wesley Snipes, Willie Nelson, Pete Rose, Nick Cage, Sophia Loren, Leona Helmsley... all spent time in the big house (or paid out big time after losing court cases).

Backed by the full faith and credit of the US Government means something; to include, the PRC buys more fiat paper than any other entity on the Globe, and we keep paying them back with interest, and even borrowing more to keep the US Govt's till open 24/7.

Beats the hell out of Mnt. Gox not giving you your dollars back for 6 months... I love being 100% liquid/ with full acceptance in all 50 states ( and Mexico, most of Canada and even Iraq! oh, add Belize too for all you John McAfee fans). Thanks, I'll stick to my Benjamins... my favorite dead President!
 
2013-12-29 09:14:54 PM

Swampmaster: Sorry; you keep using this phrase: "Libertarians scream about fiat currency (backed by nothing)..."

You can be like Al Capon and go to the slammer for Tax Evasion... or like Gangster  Dutch Schultz, Walter Anderson, Wesley Snipes, Willie Nelson, Pete Rose, Nick Cage, Sophia Loren, Leona Helmsley... all spent time in the big house (or paid out big time after losing court cases).

Backed by the full faith and credit of the US Government means something; to include, the PRC buys more fiat paper than any other entity on the Globe, and we keep paying them back with interest, and even borrowing more to keep the US Govt's till open 24/7.

Beats the hell out of Mnt. Gox not giving you your dollars back for 6 months... I love being 100% liquid/ with full acceptance in all 50 states ( and Mexico, most of Canada and even Iraq! oh, add Belize too for all you John McAfee fans). Thanks, I'll stick to my Benjamins... my favorite dead President!


Actually, I did say 'most Libertarians' because not all are completely against fiat currency, for the gold standard, or are in love with Bitcoin.
 
2013-12-29 10:19:40 PM

inglixthemad: Yankees Team Gynecologist: inglixthemad: frankmanhog: They'll find the risks soon enough.  Namely that you can't practically convert back to USD at business levels on the amateur hour exchanges that haven't been shut down yet, and that if you try to convert person to person, you have a decent shot at getting your money seized because the person who sold it to you was using you to launder their stolen money.

Or having a week / months worth of coins 'stolen' - knowing exactly where they are, but watching the new wallet slowly siphon down helplessly. You know like this:

https://blockchain.info/address/1CbR8da9YPZqXJJKm9ze1GYf67eKAUfXwP

It's actually kind of encouraging that the solid-object scarcity paradigm still holds up even during theft. I don't know about the future of bitcoin itself, but this concept will be important when everything is software. You'll need to know that the object you're holding is genuine instance Y of type X, and the blockchain algorithm seems to do a good job of that. I would've thought someone would have found a flaw in the algorithm by now and flooded the market with counterfeits, rendering the whole concept useless.

The primary reason I see the algorithm holding up is the lack of nation state care. I doubt the proverbial 'pros from Dover' or foggy bottom have really tried to crush it. While cheating is nice (and easier) for them, they still have some of the smartest people in the world with a couple metric tons of specialized hardware that is dedicated to creating sieves for algorithms. They don't even have to crush it completely, just enough to institute instability (or distrust) by the general public in the chain. Remember, the public is the same people that hear about a CIA web server being hacked and think crackers actually got into classified material.

Let's assume the algorithm is 100% secure though. Even without that block chain threat, the outrage from people (or businesses) watching the money slowly dissipate would palpably register as rage leading to abandonment of Bitcoin.

Without a retrieval mechanism, it's pretty much doomed IMHO. You can see the money that was stolen from you sitting in a public square. You can give the cops the serial numbers, they can read them, but as long as they don't see the perp walk up and touch it in person, they leave it sit there as the pile gets smaller everyday.

Imagine the a Target heist, during the holidays, with no FDIC or other nation state regulatory mechanism about consumer losses. One heist could easily outstrip a company's ability to repay, and consumers would be left holding whatever is left. You want to talk rage, talk about a robbery where people 'know' who has their money but can't touch it, around Christmas. The company can't afford to repay losses.

A company like Walmart losing 100 million in a second, that's 119 days of PROFIT (using Snopes $35,000 of profit per minute) gone in that second. Nearly 1/3 of a years profit lost in a single second by the largest retailer in the world, likely unrecoverable. Walmart may not be a company you can empathize with, but imagine if a mom and pop lost a 1/3 year's profit in one second. Would they be able to recover? Unlikely.

Where is your blockchain god now?


I just read that in Matt Smith's voice.
 
2013-12-30 10:51:39 AM
Oof, now is not the time to accept bitcoins.  They will collapse at some point, and if we're lucky they'll stabilize (relatively speaking) based on their value as a no-fee transaction tool and stick around after the crash.  But their current value does not reflect the value of their intrinsic utility.
 
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