It's back up.

The point of the article is that Average Joe consumer will choose to use a credit card, BS fees and all, knowing that he is protected from a dishonest merchant.  I am a huge BTC fan, but I would not use them for a big ticket purchase right now. 

The author is simply shortsighted (as are most critics) because consumer protection can be built on top of the BTC protocol.  Plus, as you point out, BTC gives people the choice to send money without the BS when trust isn't a concern.  Plus there are many other uses of BTC besides purchasing products online.

As is often the case with critics, the author fails to acknowledge that the technology is still in its infancy. 

Some sort of escrow system I think would be fine, but that would be a system built on top of the bitcoin system.  And I can definitely see it as an improvement on the current ridiculously stupid and unfair chargeback system.

There are a few things to keep in mind, however.  First, most consumers will not go back in and confirm delivery after they get the goods.  That takes work.  Second, if it is easy for consumers to rip off merchants by claiming no delivery, then many will, which brings us right back to the current problem that the "irreversible" part of BTC is supposed to solve.

Thus, we are back to the same problem.  Honest consumers are wary of buying with BTC without the ability to reverse things, and merchants don't like a system that will let dishonest consumers rip them off. an escrow system won't solve that basic dilemma.  It may just make things better.

This is already how the chargeback system works.  When the buyer initiates a chargeback, the credit card company asks the merchant to produce a "proof of delivery" signature.  If the buyer signed for the product then the merchant doesn't have to eat the loss.  If the buyer did not sign for it, then the merchant does.  That's the idea, anyway.

Of course most products purchased online are delivered without requiring a signature and I don't see this changing, bitcoin or not.  Smaller ticket items are generally considered not wiorth the hassle. 

Also, however, customers can seek a chargeback for other reasons, such as the product not being as described, or being damaged. 

I am not saying that I agree with the article, but I think his point is that consumers inherently trust all types of electronic transactions because there is a belief that these are reverseable.  I, the consumer, am protected from fraud.  

Examples:

If my credit card number is stolen I am only responsible for $50.

If I order something online and get ripped off I can initiate a chargeback.

We bitcoiners love to brag about the irreversibility of BTC, but it is this very attribute that scares the buyer.  Now I fully understand that consumers are not protected nearly as much as they think, but they believe that they are. "buyer protection" protocols must be implemented before Average Joe will start using them.

I closed one out about 10 days ago.  I got it within a few hours, no problem.

Absolutely. China has the world's highest personal savings rate (50%).  Let's all just process what that could mean for BTC. Wow.

I think a number of states will definitely go after BTC through legislation, and it is likely the more volatile states. The Robert Mugabe's of the World definitely don't want their citizens to have other options.  Developed nations will likely look more toward regulation.  Hasn't Thailand already declared it illegal? 

Let's be honest.  I think this is a bit more accurate:

http://quenpompo.com/wp-content/uploads/2012/04/demotivational-posters-sir-cheeto-of-mountain-dew.jpg

I know that if you try to send from Blockchain.info without a miner's fee you get a warning that if there are zero confirmations after 24 hours it will no longer be sent.  Danny, try for yourself if you don't believe me.

As for acceptable risk, tell the average Wal-Mart shopper that not sending a miner's fee may lead to them getting to keep their money and see how many choose to pay the fee.  Yes, there is an acceptable level of risk, and then there is mass exodus from miner's fees.

Danny, if there is a way for the fee to be added, via the technology, so that when I send the BTC I cannot choose to not add the fee, then I will be happy to stand corrected.  I know that with blockchain.info I can choose not to add it.  It is entirely up to me, and if I say no, then it doesn't happen.  The person receiving the BTC has no say in it.  Maybe I am wrong, but I don't think that I am.  They can choose to not give me what I paid for until confirmation, but that is all.

Also, with Blockchain.info unconfirmed transactions get cancelled after 24 hours.

Thus, if I were to use that wallet to buy something at a store I could not pay the fee and I *might* get a free lunch. 

Zero confirmations is definitely not instant under these circumstances.  Zero confirmations simply means that the transaction may go through, and with no miner's fee paid there is a good chance it won't.

The problem, as I understand it, is that the purchaser can choose to pay or not pay the fee.  It is done on the "senders" end.  Thus, there is no way that I can see for a seller to "add the fee" automatically to the purchase.  True, he can add the fee to the total cost, but the person receiving the BTC cannot "force" the fee to be paid via the technology. Thus, the sender could simply not pay it.  

Verification that the fee was paid seems difficult in busy environments with lots of sales ringing up.  Remember, the transaction gets returned to the wallet if confirmation doesn't take place in 24 hours.  

Any type of instant gratification purchase (grocery store, coffee shop, fast food) would be very vulnerable under these circumstances.  

I don't really see Bitcoin transactions as "instant" and impossible to "charge back" as described.  Confirmation is necessary, and sometimes it won't happen.  You don't have your BTC until the transaction is confirmed.  You can forget most businesses taking BTC under these circumstances.

Is there a way for the merchant to "force" the fee to be paid?  

As for the psychology of "paying the fee," it doesn't matter that we already pay fees to use credit and debit cards.  They are currently hidden.  It is all in the mind, I admit, but Americans wholeheartedly hate the idea of adding a few cents.  Debit/Credit "feels free" and that is what matters.

I understand that the miner's fee is just a few cents, but am I the only one that sees it as a potential problem?

Situation 1: I buy something and refuse to pay the fee.  I know that blockchain.info will put it back in my account after 24 hours if it isn't confirmed.  Thus, merchants may refuse to take BTC fearing these types of "charge backs."

"so merchants just insist on a miner's fee!" is the simple answer, but imagine a busy restaurant or store ringing up lots of transactions an hour, usually by the typical teenage or marginally trained employees.  A lot of no fee transactions may slip through the cracks.

Situation 2: People making small purchases (under $10) for fast food or coffee are not going to want to tack on a few cents every time.

 "People shouldn't be so cheap!" is the easy answer to that, but they definitely are. Go ask people if they are willing to pay a few pennies every time they use their debit cards and see what the reactions are. Consumers hate that.

Ideas? Solutions?

That's a great idea, Koko, except that in a couple of years the person needing to transfer the money will be able to easily buy the bitcoins himself and send them home.  Bitcoin ATMs and the like will cut out the need for other people to get involved. The person on the receiving end will be able to convert them back to fiat just as easily, or, for that matter just spend them as BTC.

btcsportsmatch.com?

Remitting money doesn't require any transfer service, per say. Both people just need access to the same wallet.  Pedro goes to work abroad, uploads his BTC to blockchain.info, his wife at home can access it. 

The only trick is converting it to local fiat, but it won't be long at all before the wife can just buy local stuff with BTC because local sellers will figure out that she has BTC to spend.

This post shows the real barrier to mass bitcoin adoption. Average Joe will never read or process something long and detailed like this.  People have had PCs for 20 years and 99% don't know (or care) what an Ethernet cable is. We need to stop trying to get the general public to "understand" how BTC works. It will never happen.
Start talking about the blockchain and you get glazed eyes really fast.  People don't care. They want to push a few buttons and see it work without having to think.

Develop apps and ways for people to use them that are, in their daily lives, better than dollars.  That's how it will happen.

So I suppose that you think people buying things will be the first mass adoption rather than people remitting money?

For something to really have mass appeal it has to be better than something that already exists.  The Model T was a hit not because it was a good car, but because it was better than owning a horse.  In other words, it has to be disruptive.  This is also why electric cars have yet to disrupt internal combustion cars.  The mass of people don't see electric as better than gas.  Electric vehicles are toys of the rich, and "novelty" vehicles. 

Why did VCRs take off?  Because watching porn at home was better than going to a theater.  Just ask Pee Wee Herman.

Thus, we need to think of what industry bitcoin will disrupt.  What would a critical mass of people see bitcoin as "better" than?  We bitcoiners understand the technology, and certainly see how BTC is better in lots of ways.  Now, go try and talk your co-workers into moving all their investments into BTC.  Try and explain to Average Joe why paying for something in BTC is better than buying the exact same thing with dollars.  The current system works fine for them, from their perspective. How is BTC better?

Give Jose the field worker a cheaper, easier way to send his money home, and all of the sudden we have huge numbers using BTC.  He doesn't understand the tech, but that doesn't matter.  It works for him.  Bear in mind that many, many more South Asians (mostly from India) send money home than Latin Americans.  Also, 80% of Africa is "unbanked."

I am curious to see what people think will be the "break out" use for BTC that will lead to its mass adoption. Despite all the publicity BTC is still an abstract novelty to the general public much like amazon.com and eBay were in 1995.  So, what will be the first true use on a popular scale?

I, for one, think it will be for money transfer.  BTC is a big improvement over the current system of sending money, especially for migrant workers and the working class "unbanked."  Buying things and preserving wealth seems like a much tougher sell to the average Joe who is perfectly comfortable with good old fashioned dollars.