Quote from: franky1 on August 04, 2014, 08:19:50 PM

Quote from: Honeybooboo on August 04, 2014, 07:31:39 PM

Quote from: user528KD9 on August 03, 2014, 09:17:00 PM

What do you think is the biggest problem when you use crypto currencies for paying?

I think the biggest problem with spending it is getting merchants involved, which shouldn't be a problem if the benefits are clearly explained to them, but I think they're scared off by the volatility and the technology which can seem a bit daunting at first.

thats where bitpay should come in to not even talk about encryption. not talk about blockchains, not talk about satoshi. but to simply say

"if a customer asks for bitcoins show them one of our special barcodes (QR Codes) and we will guarantee the conversion price for 15 minutes, and send the funds straight to you by the next business day"

When merchants are using these services, here is what happens in 90% of cases:

User buys Bitcoin from an exchange using his bank account
User places order with merchant.
User sends BTC to Coinbase.
Coinbase temporarily hold BTC and send it back to the exchange.
Coinbase sell the BTC and exchange sends money to their bank account.
Coinbase sends USD from their bank account to merchants bank account.
Merchant sends goods to user.

If you're going to tell all merchants to use services like bitpay/Coinbase, then why use Bitcoin at all?

Why not just send direct to the merchants bank account and avoid bitcoin altogether?

All this seems to do is expose the buyer to more fees and expose the merchant to unnecessary risk, as they have to trust Coinbase to send them the USD. They could be hacked, they could be goxxed (poor management leading to bankruptcy) or they could one day pull a massive scam, one of which is bound to happen one day to at least one of these services.

In addition Coinbase has recently implemented stringent AML requirements. They now require users of their wallet service to specify if a transaction is to a Bitcoin business and to give the businesses URL, information which can be used to do blockchain analysis and hinder the anonymity of everyone using bitcoin. And this is only going to get worse as these kind of services are put under more pressure to try and stamp out "money laundering". No doubt one day in the near future we will see Coinbase freezing accounts for AML issues.

Why should a merchant do all of that when it can accept BTC directly with no risk at all. Sure they have to trust an exchange if they wish to change some of it to fiat, but in this way they are encouraged to keep the money circulating inside the Bitcoin economy by spending their BTC - for example by switching to suppliers who accept BTC and paying employees in BTC (which is perfect for those outsourcing to emerging economies). This in turn is what will lower the price volatility.

We really shouldn't be encouraging merchants to use these services, these services should be a "fallback" for merchants whereby it isn't viable for them to accept bitcoin directly.