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Comment by hartpuff | Hacker News Reader

> It doesn't matter. I can pay with bitcoin on Steam.

I can pay with Dogecoin with one additional step.

>It makes bitcoin more fungible and thus viable as a currency.

Isn't using Bitpay just a way of exchanging bitcoin for dollars, while kidding yourself that's not what you're doing?

> And for what it's worth, I find the bitcoin payment process immensely superior to credit cards: Just pull out the phone and scan the QR code on the screen. Screen updates to show payment was made.

All that's left is to wait countless tedious hours for the funds to appear in the, for example, Namesilo account. It is easy (so is using a credit card), but it's almost uselessly slow (unlike credit cards).

Edit: maybe this explains anti-Bitcoin sentiment. The fundamentalists can't handle any factual comments that aren't entirely about how game changing it is.

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> Isn't using Bitpay just a way of exchanging bitcoin for dollars, while kidding yourself that's not what you're doing?

That's fungibility. That's liquidity. A big marker of stability and legitimacy for a normal currency is that it's freely convertible.

A parallel example: you can pay for stuff "in euros" on Paypal, but Steam likely only gets dollars. That's still good for the viability of the euro as a currency, because it can be easily exchanged for goods and services, even with a middleman.

The point is, unlike with Bitcoin, people with Euros do not have any significant ideological opposition towards dollars, or acquire Euros because they believe it is superior to or will one day replace dollars.

> That's still good for the viability of the euro as a currency, because it can be easily exchanged for goods and services, even with a middleman.

So it's good for Bitcoin in exactly the same way that it's good for Dogecoin, and other popular alts.

> The point is, unlike with Bitcoin, people with Euros do not have any significant ideological opposition towards dollars, or acquire Euros because they believe it is superior to or will one day replace dollars.

And that's why it's a bit silly to have ideological positions about currencies :-P I'm just arguing that it is actually good for Bitcoin the currency, not that it's good for the bitcoiner ideology.

> So it's good for Bitcoin in exactly the same way that it's good for Dogecoin, and other popular alts.

Oh yeah, totally. It's good for the viability of blockchain currencies in general.

> And that's why it's a bit silly to have ideological positions about currencies

Indeed. I think Bitcoin would be given the time of day by a lot more people if there was a lot less political whackjobbery surrounding it, and more sane, informed discussion from people such as yourself.

>All that's left is to wait countless tedious hours for the funds to appear in the, for example, Namesilo account. It is easy (so is using a credit card), but it's almost uselessly slow (unlike credit cards).

This is not a bitcoin problem.

Then why does it only happen using bitcoin?

Actually, scratch that, because it doesn't even matter. Wherever you want to lay the blame (anywhere but bitcoin) it's a problem for anyone using bitcoin, making it more useless than (not "immensely superior" to, as claimed) using a credit card or Paypal, which makes it a problem for bitcoin.

>Then why does it only happen using bitcoin?

Because some people insist on waiting for the payment to settle before actually providing the services, although it's not nearly as common as it used to be.

This is just completely unrealistic with credit cards where settlement times are far longer than with bitcoin, days or months.

>Wherever you want to lay the blame (anywhere but bitcoin) it's a problem for anyone using bitcoin, making it more useless than (not "immensely superior" to, as claimed) using a credit card or Paypal, which makes it a problem for bitcoin.

I don't know, I use bitcoins to pay for things regularly and pretty much everyone accepts zero-confirmation transactions nowadays (which is pretty much the same as accepting credit card payments, except the settlement will most likely take less than an hour).

Credit card payment is a '2 phase' process. The second phase you are referring to as settlement - moving funds from the issuing bank to merchant's bank does take days.

The first phase of the process - authorization, when successful not only makes sure the customer has enough credit on their account, it also reduces their buying power by the grand total of the auth thus guaranteeing the funds to the merchant. And it takes 2-4 seconds.

Bitcoin works exactly the same, except settlement times are significantly shorter.

You authorize (sign) a transaction, broadcast it and the network confirms it.

Signing a transaction takes only a fractions of a second, and to the merchant it's a significantly stronger guarantee of settlement than a credit card authorization.

Credit Card authorization guarantees the funds to the merchant. Signing a bitcoin transaction and broadcasting it to the blockchain does not. Successful confirmation of the tx on the blockchain does, and to be on the safe side the rule of thumb is to wait for 6 confs on the bitcoin blockchain before considering the funds to be guaranteed.

Tx confirmation times are a known problem with BTC in terms of the payment acceptance flow, this is one of the hurdles preventing wider merchant adoption of BTC acceptance.

Credit card chargeback fraud isn't that rare, and the merchants usually take the hit.

Yup, and that is one of the selling points of bitcoin from the merchant's perspective. I was specifically talking about funding confirmation times, to claim that CC processing is slower than bitcoin because it takes longer to settle is misleading.

>Credit Card authorization guarantees the funds to the merchant.

It absolutely does not. Even if the customer isn't actively trying to screw you it's still possible for the hold to expire before settlement.

>Signing a bitcoin transaction and broadcasting it to the blockchain does not.

With a reasonable fee it's a far stronger guarantee of settlement than a cc authorization as it's way harder for the customer to reliably cheat you.

>Successful confirmation of the tx on the blockchain does, and to be on the safe side the rule of thumb is to wait for 6 confs on the bitcoin blockchain before considering the funds to be guaranteed.

6 confirmations makes sense if you're selling a house, surely you wouldn't just rely on a cc auth if you were doing that.

Successful auth is the issuing bank telling the merchant - 'yes, the customer has the funds and the money is yours for the taking via the capture request against this auth.' Which is a GUARANTEE. Yes, as a means of customer protection it expires if the merchant did not request the capture within a certain timeframe which is at least 2 weeks, 4 weeks in most cases.

For digital goods (and POS) this is a non-issue since the capture request is combined with the auth request. For physical goods - well if I'm a customer and the merchant hasn't shipped in 2+ weeks it's fair to me to get the hold removed from the funds my bank GUARANTEED to the merchant.

6 conf is a rule of thumb bitpay (and other bitcoin payment processors that I'm aware of) are following before GUARANTEEING the funds to the merchant. sure, if this is a P2P transaction and I was personally selling you $10 worth of merchandise I'd be ok with 1 conf, when talking 'industrial' scale payment acceptance things work just a little bit different.

So now in this particular case - steam can revoke the license if the payment eventually fails which is precisely why I think this sort of market is perfect for BTC (I commented on this in this thread).

And finally since you're claiming high tx fees are 'a far stronger guarantee of settlement than a cc authorization as it's way harder for the customer to reliably cheat you' - how would you cheat the merchant after the auth (let alone auth/capture) went through?

>Successful auth is the issuing bank telling the merchant - 'yes, the customer has the funds and the money is yours for the taking via the capture request against this auth.' Which is a GUARANTEE. Yes, as a means of customer protection it expires if the merchant did not request the capture within a certain timeframe which is at least 2 weeks, 4 weeks in most cases.

That's a pretty shitty guarantee when the bank can deny settlement anyways, and FWIW mine seem to expire in 5 days.

>6 conf is a rule of thumb bitpay (and other bitcoin payment processors that I'm aware of) are following before GUARANTEEING the funds to the merchant. sure, if this is a P2P transaction and I was personally selling you $10 worth of merchandise I'd be ok with 1 conf, when talking 'industrial' scale payment acceptance things work just a little bit different.

Unless you're talking about transactions worth tens of thousands of dollars it's simply not worth it for an attacker to even attempt such an attack (not that it'd be very likely work anyway).

And last I checked bitpay is just fine with 1 conf transactions and will happily tank the risk for you. I'd assume the risk is quite small since I haven't ever heard of such an attack actually happening.

>And finally since you're claiming high tx fees are 'a far stronger guarantee of settlement than a cc authorization as it's way harder for the customer to reliably cheat you' - how would you cheat the merchant after the auth (let alone auth/capture) went through?

I could just claim that the transaction was fraudulent. I could contact my bank and forward them a fake email from you claiming that the auth was an accident (done this before, although not with a fake email).

Oh, and most shockingly... I could just use a stolen card!

Even if the auth expires (5 days is probably the limit imposed by your payment processor although it's probably sufficient in most cases) - when you are ready to ship and do a capture against it, it'll fail so you know the guarantee provided to you when the original auth went through is no longer there.

bitpay - even if they were happy with 1 conf it would still mean 10 or so minutes before you are guaranteed your funds as a merchant. They are not, however - "When an invoice is complete, it means that BitPay.com has credited the merchant’s account for the invoice. Currently, 6 confirmation blocks on the bitcoin network are required for an invoice to be complete." (https://bitpay.com/docs/invoice-states) Although the merchants can take the risk of course, and if they are controlling the product after the sale (which is the case with Steam) - they are free to dispatch the goods when they please.

Fraud - sure, you're talking good ol' chargebacks and yes not having to deal with chargebacks is a good selling point for btc payment acceptance. These happen AFTER the settlement however. If the customer convinced their bank to remove the auth hold, then the capture the merchant performs before shipping would fail so you know that the guarantee the issuing bank provided is no longer there.

Again, bitcoin does have it's strengths in terms of being attractive to both the merchant and the buyer, transaction confirmation times is probably the single biggest weakness here especially compared to the way CC processing works.

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