Apple Pay and related solutions offer "tamper proof isolation of private keys" while still offering all of the consumer protections of cards, plus broad and growing acceptance via compatibility with standard contactless card terminals and POS systems.
True. On the flip side, most merchants are honest so chargebacks are rarely needed. It's a different tradeoff: credit cards open you to ID theft, which is a lot more prevalent than the need for a chargeback, so personally I prefer Bitcoin.
«accepted approximately nowhere»
Any new technology, such as Bitcoin or Apple Pay, has to start from zero. So it is an irrelevant argument anyway. Today Bitcoin is in fact accepted at about 160,000 merchants.
«very little incentive for merchants to add support»
Not true. The biggest, and arguably most important, incentive for merchants to accept Bitcoin is that it allows them to avoid chargeback fraud (payments are irreversible.)
Apple Pay & similar technologies are a huge step up from plain credit/debit cards. Really, it's important to recognize this. But they still have multiple drawbacks. For example, (1) it has transaction limits, (2) it isn't usable for person-to-person payments (eg. paying back lunch money to a coworker), (3) purchases are still subject to authorization so in a way you don't have 100% control of your own money (eg. the system could accidentally flag the transaction as fraudulent and prevent you from buying something.)
You also lose the convenience factor of that I don't need to care if a merchant is honest. If it's a merchant I haven't heard of it, I can just make the order without worrying too much (providing there are no obvious red flags) as there's very little risk. On the other hand, Bitcoin's irreversibly would mean I'd have to look into the company before ordering, and I'd probably avoid smaller merchants as a result.
> it allows them to avoid chargeback fraud (payments are irreversible.)
How big of an issue is this in practice? My gut reaction is most customers are honest so it's not big enough incentive to add another payment flow, but I've got no idea if that is accurate or not.
You are right. However, examine your pattern of purchases: if you are like the typical consumer, most of your purchases are made at the same merchants that you have been shopping at for years and already trust.
«How big of an issue is this in practice»
It's a huge issue in some markets (eg. online shopping.) I can't remember the stats but CC fraud actually has bankrupted some merchants because it is so prevalent. Dishonest clients are a lot more common than dishonest merchants. It's easy to understand why: by being dishonest, a merchant damages its reputation instantly, however if someone attempts to use a stolen CC and gets flagged, he would simply try another CC number or try another merchant.
And to say that virtually no merchant acceptance[1] is an “irrelevant argument” is laughable. Merchants have little incentive to spend money and effort to add support for an obscure payment method that virtually no one uses and likely never will, due to its reduction in consumer benefits. Apple Pay piggybacked the rollout of contactless terminals which gave it support at millions of locations out of the gate, and fully supports standard consumer protections and reward programs.
Finally, “person-to-person payments” is completely irrelevant to person-to-business transactions. But even in that corner Apple Pay will very soon be superior to any other method for “paying back lunch money to a coworker”. They are rolling out P2P this fall which supports all debit cards, is free, instantaneous, and you can spend the money right away at any Apple Pay merchant or send it to your bank account.
That cuts your argument down to just avoiding transaction limits and authorization at merchants you trust. Extremely narrow use case, so no way there’s going to be enough consumer interest to drive merchant adoption.
[1] https://www.bloomberg.com/news/articles/2017-07-12/bitcoin-a...
Yes there will probably be a minor uptick in merchants being dishonest. But I doubt it will be as bad as you make it to be. Many other factors push merchants to stay honest: legal repercussions, damaged reputation, etc.
«And to say that virtually no merchant acceptance[1] is an “irrelevant argument” is laughable»
Irrelevant was the wrong word. I meant illogical. Your argument is like saying in the early days of Blu-ray that "no one will buy Blu-ray discs because no one has Blu-ray players".
«Merchants have little incentive»
Second time you say it, second time you are wrong. I already pointed out their main (largest!) incentive to accept BTC is to avoid chargeback fraud. This fraud is a major problem for merchants. They can go bankrupt (eg. https://www.youtube.com/watch?v=6Chp12sEnWk&t=45m0s) or be drawn into costly suits with no way to recover the money (https://www.reddit.com/r/legaladvice/comments/5r9nqi/credit_...).
Apple Pay P2P will be riddled with roadblocks. For starters most people will not be able to use it as it requires a $500 device (iPhone). I guarantee you there will be transaction limits, delays in access to funds, etc. All things that Bitcoin solves.
Simply wishful thinking. If that were the case consumer protections never would have been a very interesting feature. But they are. Especially for ecommerce.
> Your argument is like saying in the early days of Blu-ray that "no one will buy Blu-ray discs...
No and I clearly stated otherwise. Apple Pay is more like launching a new disc standard that is compatible with millions of existing players already deployed, compared to one that requires brand new hardware and has fewer features. No contest.
You also ignored -- probably because it is in your interest to ignore it -- that the reason merchants have no incentive to adopt is that nobody uses it. Payments are a two-sided market. Advances need to offer benefits to both sides of the market. You've only cited an advantage to one side, the merchant, which comes directly at the cost of a regression in benefits to the other side, the consumer.
Bitcoin as it stands is a major regression in consumer benefits, and you've only managed to cite one extremely narrow case where it offers any advantage whatsoever (no transaction limits or approval step). This is nowhere near enough to offer a compelling value proposition to consumers.
As for P2P, your own use case was sending lunch money. You've offered nothing to suggest that Apple Pay won't dominate this category. You're also incorrect in your "guarantee" about delays in access to funds; they are debit transactions that process instantly.
People will pay in BTC only merchants that they already trust. Think high-reputation businesses like Amazon, Costco. Do you really think companies like that would start being dishonest if they accepted bitcoins?
«compared to one that requires brand new hardware»
No, accepting Bitcoin doesn't require new hardware. It's a software update to a website or to a point-of-sale.
«You also ignored -- probably because it is in your interest to ignore it -- that the reason merchants have no incentive to adopt is that nobody uses it»
You can continue writing they have "no incentive" but it doesn't make it true. This is the 3rd time you ignore it, and the 3rd time I point it out: their #1 incentive to accept BTC is to avoid chargeback fraud. Will I have to repeat it a 4th time?
As to "nobody uses it", I am not ignoring you, it is simply that you are wrong. Usage is growing: we got from 0 to 160,000 merchants in a few years, the transaction rate is doubling every 18 months (not due to speculation: https://news.ycombinator.com/item?id=15281860)
«Bitcoin as it stands is a major regression in consumer benefits»
It is a (small) regression, yes, no denying that, but it is far outweighed by the advantages: permissionless, near-instant international payments, no inflation, censorship-resistant, gives access to the underbanked/unbanked, etc.
As to Apple P2P, it is pointless to continue discussing it before it is rolled out and before we have a clear idea of its advantages and inconvenients. But I maintain my position that, if not delays, there will be transactions limits, and it also won't ever be used widely (for starters, only 2-3% of the world population has an iPhone.)
When did cash get 2 factor auth?
All of the major wallets/traders use 2FA and all the hardware wallets have it too.
It's like saying... Well there's safes and banks for cash but its something that not everyone "enables" but you and I both know they use it.
Very little cash is stolen by pick-pockets or home burglars. People open their wallets because they fear pain, it doesn't matter how many locks are on the wallet.
relevant xkcd: https://xkcd.com/538/
Also you completely ignored my point about hardware wallets making theft a non-problem.
This has never happened to me, and ive had a CC compromised a few times.
If someone steals your hardware wallet, what do you consider that?
Our discussion thread demonstrates that more education is needed around hardware wallets, as most people have no idea how they work or even that they exist.
Chip + Pin solves it even better by forcing the attacker to learn the pin for the card. We're not there yet in the US but once everyone has modern chip readers, adding pins will be trivial.
Also as a customer I'm not liable for these issues. The vendor is. With cryptocurrency, if there's a hack against me and my coins are gone, well, they're gone forever.
Sure beats giving up on cc's entirely for cryptocurrency, which comes with its own headaches and problems, especially Bitcoin which as a network wouldnt be able to cover 1 hour of credit transactions in the states.
That's not how chip cards work.
Credit cards are built on underlying currencies, offering easy short-term debt and a simpler payment process (compared to check/cash)... I expect that bitcoin credit cards are another prerequisite for consumer adoption.
I need to point out that your comment ("idiots") is against HN guidelines ("be civil"): https://news.ycombinator.com/newsguidelines.html
This also roughly applies to chip-and-pin systems, where the chip holds the private key. They're both like cash in a wallet -- giving someone cash from your wallet doesn't give them the ability to magically disappear more money while your wallet's sitting beside your bed later that night.
Whereas with a (non-chip) credit card, once another party has your information just once, a theft can happen anytime from then until years later when the CC expires.
Bitcoin is very similar to cash in many respects, especially when compared to credit cards.
I doubt anyone would say this:
> Say what you want about cash, but it does solve credit card theft for good. If I could use my cash wallet to pay Sonic, I wouldn't be affected by this security breach
It's obviously true, but it's also trivial and pointless. Saying Bitcoin instead of cash doesn't change any of that.
Say what you want about Bitcoin, but it does solve credit card theft for good. If I could use my Bitcoin hardware wallet¹ to pay Sonic, I wouldn't be affected by this security breach.
¹ No Bitcoin theft has ever occurred on a hardware wallet thanks to their tamper proof isolation of private keys.