Quote from: JayJuanGee on July 20, 2014, 09:22:59 AM

Quote from: JorgeStolfi on July 20, 2014, 02:59:08 AM

Yes you called the question stupid, and no you did not understand it. If "you pay USD go USD to BTC to buy", as the poster suggested, how do you send USD to Coinbase/exchange/Bitpay/whatever?

I go to Dell's website, and I choose to pay with bitcoins from my blockchain wallet, no?

See why I would rather not buy bitcoin? Exposure to the stuff ruins one's vision so that even the simplest stupid question becomes utterly incomprehensible, even if repeated in boldface -- if the answer turns out to be inconvenient. Wink

Quote from: nby on July 20, 2014, 09:55:33 AM

I send the USD to the exchange in any way it's available to me, preferably with the cheapest one.
It could be one of these: ACH for Coinbase; Plain wire transfer (most of the exchanges)
Or even these: Astropay (Bitstamp); SEPA (Bitstamp, Kraken, and so on); ...

Thank you! The answer did not have to be that detailed; the important point is that turning USD into bitcoin requires a bank transfer (BT) of some sort. (Out of curiosity, are there exchanges that accept credit card?).

So, for a domestic internet purchase, the best payment method is as follows:

(1) If you have USD, and the merchant accepts USD, you just send USD to the merchant:
USD in your bank >--[BT]--> USD in merchant's bank

(2) If you have BTC, and the store really accepts BTC, you send them the coins with a blockchain transaction (TX):
BTC in your wallet >--[TX]--> BTC in merchant's wallet

(3) If you have BTC, and the store accepts only USD, but has a Coinbase (or Bitpay) account, you send the coins through Coinbase:
BTC in your wallet >--[TX]--> BTC in Coinbase wallet >--[**]--> USD in Coinbase's bank >--[BT]--> USD in merchant's bank

(4) If you have BTC, and the store accepts only USD, and the store does not have a Coinbase/Bitpay account, you must sell the BTC yourself:
BTC in your wallet >--[TX]--> BTC in Bitstamp's wallet >--[**]--> USD in Bitstamp's bank >--[BT]--> USD in your bank >--[BT]--> USD in merchant's bank

(5) Finally, if you have USD, and the store accepts only BTC, you should look for another store. There is a good chance that the merchant is either a fanatical bitcoiner who believes that ideological purity is more important than profit and client satisfaction, and threfore may go bankrupt before filling your order; or is a scammer who thinks (naively, perhaps) that he has better chances of evading justice by taking your bitcoins instead of your dollars. (Examples abound of both.)

The ">--[**]-->" in (3) and (4) above stands for "sell the BTC for USD on some exchange". That is the point when the day traders who buy bitcoins today get to pay the bills of the old bitcoiners who are spending the coins that they bought before November.

By the way, it is not quite correct to say that "Dell gets the bitcoins, and may decide to sell them". Rather, Dell may opt to receive the entire payment in USD from Coinbase, or to keep some fraction in BTC in their Coinbase account, which they may latter sell or withdraw. In either case, it is Coinbase, not Dell, that sells the bitcoins that are not kept.

And there is no indication in Dell's website that they intend to keep any of the bitcoins. On the contrary, there are indications that they leave the handling of bitcoin entirely to Coinbase. For one thing, if you pay the wrong bitcoin amount, Coinbase will reject the payment and refund you by returning the bitcoins to your Coinbase account; but if you return defective merchandise, Dell will send you the refund in USD, no matter how you paid for it.

For purchasing goods overseas, going through BTC could be an interesting alternative even if you have USD rather than BTC, since it would replace one international bank transfer by two domestic ones plus exchange fees. However, it seems that Dell and many other merchants do not accept "bitcoin payment" (that is, national money via Coinbase or Bitpay) for overseas purchases; and the higher risk of loss in transport makes credit cards more interesting in that case. As for paying hotel bills and such whlie traveling overseas, prepaid debit cards still seem to be the cheapest and more convenient option.

So, that would explain why the price does not rise on such "good news": not because of "damn sheep" and "stupid weak hands", but because those news are irrelevant to most people -- except for Coinbase and BitPay, and for the bitcoiners who wish to unload some old cheap coins.