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Comment by seanalltogether | Hacker News Reader

I'd be curious to know at this point what amount of bitcoin transactions are actually retail focused. There was a big push a couple years back by users wanting to make actual purchases with bitcoin and helping to build the infrastructure around that. Does this retail side of bitcoin still exist, or is everyone just mining and selling -> buying and holding?

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As far as I know, most Bitcoin transactions take ~10mins to get confirmed, so I'm not sure the current infrastructure would work for retail.

Admittedly I don't know what would need to be changed to speed up transaction confirmations to the point where you could use it in retail situations.

When I say retail I mean things like buying steam games or buying web hosting, not actual brick and morter store purchases.

You can buy games on Steam with Bitcoin.

https://www.theverge.com/2016/4/28/11525482/bitcoin-steam-va...

10-minutes isn't that big of a deal. ACH transactions used to take 3 days for example.

The real big deal is that currently, BTC transaction fees are like $5+ right now. So its cheaper to use Paypal than to use BTC at the current prices.

Casinos & arcades sort of solve this problem. You walk & buy tokens, then use these tokens to spend, which can then be cashed back out when you're done. Also credit card transactions can be reversed up to months later, so in the grand scheme of things 10 minutes is not so bad, if big retail outlets wanted to make it work they could.

Except the majority of customers don't want to pre-purchase gift cards to shop at a retailer, but instead want to spend as soon as they make the decision to purchase.

Likewise, the frequency of chargebacks is so low it doesn't justify waiting up to 10 minutes to buy something for every purchase.

If both the shopper & retail store are using the same BTC exchange, or exchanges that trust each other, the exchange can just move the coins internally, which is instant. Retail outlets could also share information about scammers & create a blacklist of who not to trust, and then just accept the small amount of risk. Like you said, credit cards also have this problem but the frequency of chargebacks is low enough that retail stores do not require you to wait months before leaving the store with your goods. Even accepting cash entails the possibility of fraud. But these are good points you've made. I don't think demand is high enough that we'll see BTC go mainstream for retail, but if demand were to be high enough there are ways to make it work without waiting 10 minutes, but these would rely on exchanges & mutually trusted 3rd party agencies, which you could argue defeats the purpose of using BTC in the first place since its not decentralized but you'd still get the benefits of there being a fixed amount of BTC. People could also budget their monthly spending & transfer it ahead of time into an exchange. People already do this with checking/savings accounts, keeping some funds in checking for when they want to shop.

I read your entire paragraph and this just seems like a hammer looking for a nail. Credit cards automatically handle all of this (blacklisting, risk and fraud management, trustful 3rd party, etc.) so why would anyone want to use BTC for payments unless it's for things that CC companies won't touch (drugs, pirated software, etc.)?

> why would anyone want to use BTC for payments

You're right, that's why I said it probably won't happen, but if demand were high enough it could be made to work. One scenario that would increase demand would be inflation of the US dollar. Look at what happened in Zimbabwe. I'm not saying that's likely to happen, just playing devil's advocate.

Why would I want to make actual purchases when it's rallying like this? You'd almost always be better off holding instead...

So everyone is holding and buying it, and no one is making anything useful with it. Sounds like a great allocation of capital! /s

I am all for bitcoin but you think about it as it is right now. People turn their cash into ether then extract more cash then they put in later only because a bunch of other people are doing it too. This has to pop and when it does i buying a shit ton of it for the next rally.

--edit extra should have been extract.

That's the problem.

If no one is actually using the coin for practical purposes, you've created a glorified Ponzi scheme. The minute that "better off holding" is no longer the most common opinion, the price of BTC will drop.

I dunno how long that will take: it took years for Enron to drop to zero for example. But I do not place much trust in the whims of stranger's opinions.

The largest Bitcoin payment processor for retail is Bitpay, I've used them on a few websites. They enable shops to accept Bitcoin with a locked in exchange rate, shielding them from the volatility and the need to even hold and manage cryptocurrency. They charge a 1% settlement fee, which I believe is competitive compared to traditional payment processors.

Hard to say what proportion of transactions are retail driven, but Bitpay did write about their progress towards a $1B annual payment volume milestone recently[1] which is a drop in the ocean compared to the multi-billion dollar daily trade volumes on exchanges.

[1] https://blog.bitpay.com/bitpay-growth-2017/

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