That first time you had to explain to your mom or aunt what Bitcoin is becsuse they saw it on TV news or radio - that’s the time it became too risky for retailers to trust it.
Today we’ve linked instant payment methods to our credit cards, if the card isn’t rfid enabled on its own. So you just swipe your payment method and you’re done.
We even have a banking app that lets you instantly transfer funds between you, between banks as well, for free. Called mobile pay. So smaller stores that can’t afford to have a credit card system, use that.
So that’s on the payment side. It’s also extremely tedious, and expensive, to turn the bitcoin into actual cash + taxation makes selling a coffee with crypto a bad business case.
Honestly though, I think it’s mostly down to a complete lack of demand.
Technically, this has always been the case, but there was a false belief that 0conf transactions were secure, because Bitcoin clients rejected double-spend attempts by default (as a DoS protection). This prevention of double-spending unconfirmed transactions was never part of the protocol though, and it was made clear when Replace-by-fee was added, which shows how clients can easily replace existing transactions with new ones, without changing the Bitcoin protocol.
There's still a crowd who believe that 0conf transactions are fine, and RBF should be removed (eg, the Bitcoin Cash developers), but it's really just ignoring the reality that RBF is not an enforcible protocol rule, but a client-side policy in the software. It's probably fine to use 0conf for small transactions because it is manageable risk, similar to accepting credit cards where payments can be reversed.
Another possible solution to faster payments is with payment channels, where the risk of double-spending is mitigated by hashed time-locked contracts which are transmitted between parties and not broadcast over the Bitcoin network until one of the parties wants to reclaim their funds onto the Bitcoin network. Since the parties are just exchanging HTLCs over a TCP connection, they're practically instant, the fees are low or nil, and there is a potential privacy improvement by not revealing every transaction into the Bitcoin ledger. This is in development (minimally working on Lightning Network now), but proceeding quite slowly.
If Bitcoin is going to have widespread global usage, these problems need to be overcome so that it is as simple, or simpler to use than credit cards for the average user. It possibly is simpler to set up for merchants already, if they're technical enough, because they don't have to involve 3rd party payment processors.
The other side to it is that we take credit cards for granted in the developed world, and often miss that there are a billion or more people without banks in the developing world. These are the people who have the real use-case for Bitcoin. A single user can set up a Bitcoin node on a smartphone in some remote village, and suddenly bring banking capability to their entire village. I think that's a very strong use case. People are also using it to hedge against their national currencies which are being hyper-inflated by their own governments - as is happening in Venezuela right now.
I simply don't know what problem BTC was supposed to solve.
Creditcards are robbery, they are not very populair and cost retailers money. Why does everyone want to make money from transactions? We are talking about a basic service that costs less than a cent.
The reason Bitcoin hasn’t seen much usage is that it’s worse on every one of those metrics. There just isn’t a non-ideological market for a slow, expensive system with no fraud protection.
Citation needed.
Well on the popular claim. Yes they cost retailers money, so do debit cards, so does cash.
In the UK debit cards are the most popular means to do a retail transaction - in terms of numbers of transactions (it's been plastic in terms of value for years). Credit card transactions from 9% in 2013 to 11.5% in 2016. Debit card from 32% to 43%. Cash decreased from 52% to 42%. 'Plastic' has never been more popular.
Average cost of taking sash has remained fairly stable, but the cost of taking debit and credit cards has plummeted in recent years, in line with their increased popularity.
In 2016, credit cards cost 0.5%, Debit 0.25%, Cash 0.15%.
Non card costs (including things like paypal) is at 1.7%.
Figures from https://brc.org.uk/media/179489/payment-survey-2016_final.pd...
Fair enough. Government bonds let countries deficit spend. They are also a stable store of value. These attributes make them useful.
Bitcoin is neither of these. Like government bonds, it does not behave like money.
Bitcoin is however similar to a government bond in that it a) has value, b) is not directly useful for consumer transactions. Also, I dunno that behaving like money can be put in such stark binary terms.
Nothing is eternal. That doesn’t make everything ephemeral equally risky. Bitcoin is a speculative asset. Speculative assets are volatile by design (you want them to go up).
More critically, government bonds’ role as a store of value is ancillary to their core purpose: to enable public deficit spending.
> Bitcoin is however similar to a government bond in that it a) has value, b) is not directly useful for consumer transactions
My cat has value and is useless for consumer transactions. That doesn’t make him a government bond.
For which there (a) is zero evidence and yet (b) are lots of unsophisticated investors throwing money at. This combination is well known in financial engineering circles, which has had a habit of dreaming up assets with inobservable specialness since the days of John Law.
Bitcoin is very early, it's core infrastructure, it's going to take time to get established, and once it does get established it's going to change society as much as electricity did.
We’ve yet to make it work though. Decentralized voting is too vulnerable and mining is too anti-climate, so it’s really all turning out to a big pile of nothing.
My colleagues in banking are running into the same issues.
The only place I’ve seen blockchain put to good use is at Maersk, who runs their claims of ownership on the tech. Because of port corruption, the claim of ownership linked to a container is more expensive to ship than the container itself, even though it’s a single a4 document. Their blockchain isn’t really decentralized though.
By comparison the arpanet had an instant use case, so did electricity. They took time to spread, like everything new does, but they are very different from the blockchain in the way they weren’t searching for a reason to exist.
Other types of digital international payments have also been made a lot easier. You don't need to sign an agreement with a credit card company or a bank to start accepting money from a blockchain, you just run a node an you are good to go. Especially for use cases where payments are typically high risk or denied altogether (shipping expensive hardware, adult entertainment, or any business with a generally high fraud rate and chargeback rate).
Blockchains also allow for completely transparent, auditable, provably fair gambling, something you simply can't achieve in the physical world.
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A lot of the blockchain projects that have kicked off do not understand the limitations and uses of blockchain technology. For example, decentralized land ownership and decentralized voting are both things that you fundamentally can't get fully secure using a blockchain. Land is a physical asset, and it will always be a government or police force that ultimately decides who owns a property. The blockchain may say one thing, but that result has to be defended in the physical world by someone who agrees with the blockchain results.
Voting is the same way. Identity is inherently centralized, there is no way to connect a physical human being to a single identity in the digital world unless there's some centralized entity like a government managing the ID system.
One big use case that's around the corner but needs more foundational technology work is point of sale payments. It seems like the adoption curve has been going backwards on those for blockchain, however this is because layer 1 fees have been getting more expensive, and attackers have finally started exploiting weaknesses like zero confirmation payments, something that originally a lot of blockchain proponents asserted was secure (core developers never endorsed this notion, however core developers rarely had control of the blockchain narrative). As more user friendly, more secure, and more scalable solutions like the lightning network come online, we will see point of sale payments using blockchain technology pick up again.
We're still probably 1-2 years out from the lightning network being production ready, so merchants are still generally discouraged from using it for daily business. But it's going to get there and when it's ready the scalability will be on the order of tens of millions of daily users.
We have the cryptography and technology to get from tens of millions to hundreds of millions, but again that's technology and research which is just now coming out, won't be in production for another 5-8 years by my estimations.
Whether or not you choose to believe it, there are tens of thousands of businesses out there today tackling markets and buyers that would be completely unavailable to them without the use of blockchains. And that's because blockchains make payment rails viable that simply aren't viable when you are stuck with traditional systems like credit cards, paypal, stripe, and bank transfers.
Obviously useful things have obvious uses.