Reddit Considering Accepting Bitcoin | Hacker News Reader

Reddit Considering Accepting Bitcoin

betabeat.com

194 pointsmet3139 comments

Just the fact that someone at Reddit is publicly discussing the possibility of accepting Bitcoin is compelling anecdotal evidence that Bitcoin is on the usual path to wider adoption of all innovative products. It now appears to be expanding from a tiny number of innovators to a still-small but considerably larger number of early adopters.[1] I'm persuaded Bitcoin is likely to gain much wider adoption over the long haul.[2]

Kudos to Reddit!

[1] http://upload.wikimedia.org/wikipedia/en/4/45/DiffusionOfInn...

[2] I've written down my reasoning at http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...

Edits: added context; made my point clearer.

If a lay person were to ask how they get back their Bitcoins if they are stolen from their account, say due to a person gaining access to their computer, what do you tell them?

You tell them it's the same as cash.

So I can deposit it in my checking account?

Yes, using a 3rd party service such as Coinbase.com.

I think the correct response is asking how they would get back their money if cash was stolen from their house.

BitCoin is like cash, not like a credit card. You wouldn't want to leave a significant amount of cash laying around your house and you shouldn't keep a significant amount of BitCoin on your computer.

I'd trust it more on my own computer than on any of the bitcoin exchanges. There have been a number of pretty giant security and backup lapses, and they haven't been around long enough for me to trust any of their reputations.

My own computer on the other hand, is pretty definitely secure. And I can encrypt the wallet if I'm extra paranoid.

This doesn't really extend to your average computer user, and I don't think BTC will take off in any meaningful sense until we have a user friendly and secure architecture for it. But the current state of being a currency for the tech-savvy isn't necessarily a bad thing.

>I think the correct response is asking how they would get back their money if cash was stolen from their house.

But stealing Bitcoins doesn't require physical access to your property. That seems like a pretty big distinction to me.

Edit: And if Bitcoins are like cash, why should I bother using them? I already have cash (that I don't use very often) available to me readily. And since I get paid in dollars, what advantage do I have to use a separate currency solely for rare and unimportant transactions?

You can't send cash over the Internet.

I've used Paypal in the past.

Bitcoin is like cash (pseudo-anonymous, nobody can technically interfere with your transactions...) except it is digital while preserving these advantages. This is why it cannot be compared to Paypal.

So, Bitcoin is like cash, except in the important ways in which it is different. And along with also gaining some more disadvantages as well.

But you're right, Paypal isn't cash. But then again, neither is Bitcoin.

Being digital and decentralized are 2 significant advantages. Unless you are a luddite preferring to send cash in the mail!

Goronmon: a Paypal account is in no way similar to cash. It can be frozen by authorities. It is centralized. It is not anonymous.

Bitcoin is like cash (pseudo-anonymous, nobody can technically interfere with your transactions...) except it is digital while preserving these advantages. This is why it cannot be compared to Paypal.

Actually, yes, stealing bitcoins will increasingly require physical access as technologies for storing them offline evolve: brainwallet, paper wallet, credit-card sized electronic bitcoin wallets (at least 2 in development).

I personally think the latter is what will propulse mainstream adoption of Bitcoin, as it will make it impossible for inexperienced users to leave unsecure bitcoins on their computers.

Same thing you tell them if someone accessed their computer and transferred money out of their bank account. "Secure your [stuff]."

That's actually not what a bank typically tells you in that situation, so you've sort of proved the point.

Banks are happy to tell people that "chip and pin" credit cards are secure, and thus any transactions on them cannot be fraudulent.

In England there's a voluntary code to protect consumers; that code says that the burden is on the bank to prove that transactions are not fraud. Banks were using chip and pin as "proof" that the transactions were fraud.

(http://www.cl.cam.ac.uk/~sjm217/papers/oakland10chipbroken.p...)

This is all a tangent to the security of Bitcoin. Bitcoin is horrifically insecure, and there are no trustworthy banks for Bitcoin.

The bank would try to work with you to investigate and possibly reverse the transaction and refer your case to law enforcement. (Wire transfers cannot be reversed, but EFT payments often can.) A bank would most certainly not say, "secure your stuff" and leave it at that.

If a lay person were to ask how they get back their dollars if they are stolen from their wallet, say due to a person mugging them, what do you tell them?

To put their money in a bank. But there are no secure Bitcoin banks.

I'm willing to bet that I have more protection securing the contents of my Bitcoin Wallet than Wells Fargo has protecting my account at any level.

>I'm willing to bet that I have more protection securing the contents of my Bitcoin Wallet than Wells Fargo has protecting my account at any level.

Would you say this is true for most users?

Currently? Of course not. But when the idea of storing money on your computer (e.g. in a file) becomes more widespread, then the answer would be yes. Or at the very least it would be equally secure.

It's not that hard to provide people with a secure environment, as long as that environment is designed with with security in mind. A non-jailbroken smartphone is probably good enough, though a dedicated device might be better. And you can use live boots.

I can see a future where we use such (or similar) things to do money transfers.

Wells Fargo is a bigger target, but they also have many more layers of protections and an interest in providing customer service. My hunch would be that it would be easier for a criminal to profit off of attacking WF than attacking a personal bitcoin user, but that it would be easier to actually cause financial harm to a personal bitcoin user (even without profiting themselves). But to clarify that, I have a couple of questions about how storing your own bitcoins works, since I've never used it:

* How does bitcoin storage work with offsite backups? If someone compromised the backup, would that give them access to your money?

* If you lose the file (hard drive crash, home burns down, backup system fails, whatever), does neither you nor anyone else have that money anymore? I.e., someone wouldn't have to gain access to the money themselves to deprive you of it?

keep your wallet file encrypted and back it up to multiple locations on a regular basis (to update the backups with new private keys that are created by your client software).

there are also ways of generating bitcoin keys completely offline as well as producing signed valid bitcoin transactions completely offline. This way you can forward funds to keys that are not on a machine connected to the internet, or keys that are backed up only on paper (in multiple safety deposit boxes if you like). And also you can then put signed transactions from the offline machine onto a usb stick or whatever and then use a networked machine to forward those valid transactions to the bitcoin network.

Coinbase is doing something like this for their storage of customer funds. Coinbase seeks to be a bitcoin bank that wont get hacked or that if it somehow does get hacked (cough inside job, cough) that only very small losses could occur.

For what it's worth, Coinbase has no reported cases of fraud. We are tracking these kinds of things here:

http://howdoyoubuybitcoins.com/

For example, Bitfloor (which had 250K USD stolen): http://howdoyoubuybitcoins.com/from/bitfloor/

Verses Coinbase, which has no such history: http://howdoyoubuybitcoins.com/from/coinbase/

Absolutely not. But then again, I used Android at version 1.6, I run a 12 hour old nightly rom and my desktop is my server running 3.7-rc5 and running a 12TB BTRFS RAID. "Stable" or "mainstream" isn't really in my vocabulary.

To be sure, I'm not advocating that my parents start using BitCoins. I just tire of this implication that somehow USD is, by virtue of being USD, automagically more secure than Bitcoins.

Armchair loud mouths (I have one in mind who went into hiding after trolling HN repeatedly) stop by for months following an online wallet incursion to tell us how stupid Bitcoin and Bitcoin users are.

Yes, but somebody can have illusion that he can sue Wells Fargo in case of broken security.

Sure, but if you use a "real" Bitcoin bank, theoretically there is someone you can go sue as well. They won't have the bank roll that WF has, you're right, but there is still grounds for a civil case I'd imagine.

The endgame security isn't provided by Wells Fargo, it's provided by the federal government.

Not security, insurance.

Same result.

People in the thread were talking about computer security mostly, though. In the end, the best "protection" is that insurance will reverse your losses in case security fails. Something a lay person "securing" their bitcoins on their own computer won't have.

I'm not sure why he was downvoted. FDIC isn't the only insurance. Banks have other insurance to protect against theft.

Also, banks are protected in a way since they don't really hoard cash or valuables. They invest it which spreads out the risk.

Furthermore, the federal government will go after criminals to recover money. Good luck getting them to help you with BTC theft.

Items not covered by FDIC: "Losses due to theft or fraud at the institution."

http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corpo...

FDIC Regulation-E.

Consumer liability for unauthorized transfers. The consumer has limited liability if reported expediently.

You should read up more closely on the FDIC regulation -- they don't just provide insurance.

http://www.fdic.gov/regulations/laws/rules/6500-3100.html#fd...

Also, a clever little loophole: if the bank goes insolvent paying their accounts back, you are then covered under FDIC insurance.

Are those protected contents stored in a computer that can be carried away?

If they're protected by a strong password and backed up, a stolen computer isn't a problem.

For long-term storage of large amounts of value, use redundant flash drives in a safety deposit box.

:) I'd be happy to send you a copy of the image of my flash drive if that's your concern. I also do not only have one copy of my wallet, if that was your concern as well.

Would their be a market for a Bitcoin bank?

Coinbase is giving it a go. Seems like they've convinced some investors to help them along with that plan too.

Yes, they were funded by both YCominator (YC S12) and FundersClub (>$600k)

But it is too late to use a bank. He was mugged and his money stolen. What do you tell him?

You avoid answering because you know that cash theft is a big hassle.

Bitcoin shares some of the properties of cash. This includes its advantages (direct people-to-people transactions, no account can be "frozen", pseudo-anonymity, etc) but also its inconvenients (thefts are hard to recover). And smanek's point is that if cash is good enough despite its weaknesses, then surely Bitcoin is good enough too.

Furthermore, unlike cash, Bitcoin has numerous ways to palliate these inconvenients. Two examples:

0. You cannot "back up" cash (if you put it in a bank, you lose all its aforementioned advantages), but you can back up bitcoins by making copies of a wallet file. Very useful especially when using deterministic wallets.

1. Cash can only be secured in primitive ways (physical security), but Bitcoins can also be secured by using wallet encryption, storing them offline, remembering them (brainwallet!). Soon you will be able to store them on tamper-proof credit-card-sized hardware Bitcoin wallets protected with PINs or similar.

I will be the first one to admit that Bitcoin is not yet easy enough to be used securely by inexperienced users. But these problems are solvable, and are being solved.

You can buy and sell bitcoins on Coinbase, which is also a wallet (bank). They keep 87% of their funds offline to prevent customers from loosing their funds in the case of hacking.

http://howdoyoubuybitcoins.com/from/coinbase/

There's no such thing as 'offline' Bitcoins. It's not like your client has to be connected to the Internet in order for someone to steal your shit.

You print the bitcoin hash. That's offline to me.

I would suggest researching a little bit next time before making a post like this.

There are in fact some very clever ways to make completely offline and non-physical Bitcoin wallets.

Yeah, and I know what they are, although I wouldn't describe generating a wallet on an offline PC and keeping it offline as 'very clever'. At any rate, after reading it again I think I confused what the parent was insinuating, so nevermind.

Right, and while you could store cash or bitcoins physically in a bank, there's no point in doing so for the average consumer. Cash is comparable to bitcoins in this regard: it's a riskier form of money because it's anonymous and can be stolen relatively easily, but it's also really convenient for financial transactions.

Nothing preventing there from being one, aside from the good 'ol risk of 51% attack.

all that would do is to enable the attacker to double-spend their own btc. Not much else.

That sounds pretty catastrophic to me.

Similar frauds occur every day with "normal" currencies, though.

"That wasn't your fault - at least your wallet wasn't somehow accessible from the Internet, heh heh..."

Nothing mandates that you keep your bitcoin wallet networked.

That mugging is a terrible analogy, considering these Bitcoin owners are giving their money willingly to their muggers.

But this is in fact the reason people don't pay for goods and services by mailing cash.

The current answer is, you can not.

In the long term, I suspect you'll see insurance companies arise that would handle that. In the end they'd probably build a better system than the one that currently exists, which sort of uses rollbacks as a crutch to avoid needing really solid security. (There are many reasons for that. Not all of them are bad.) But there's many a theft betwixt here and there.

This is an important question to raise. One of the only reasons that credit cards were able to take off was because the credit card companies promised to limit your liability if your credit cards were stolen.

Similarly, there are countless examples of people's bank and investment accounts getting hacked, with the banks and brokerages reimbursing their customers to prevent bad PR.

Given this, I imagine that it would be a long time before the average person would be comfortable maintaining any store of money as Bitcoins (versus quick conversion and payment for things, but then what's the point?).

Agreed this is a main reason BTC is struggling.

But also, Bitcoins can increase greatly in value especially since at a certain point it's guaranteed there's no inflation. I just don't see people willing to spend something that can increase so much in value. It's like paying for Reddit with fractions of Facebook stock.

"since at a certain point it's guaranteed there's no inflation."

I'm sorry, but this is a statement you cannot make.

To make this claim, it would need to be true that the cost, in Bitcoins, of goods and services in the real world, would never rise.

There is no basis to believe this is true.

"The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy." -L. Von Mises

In that statement, L. Von Mises is presuming some things that are not true of BitCoin. In particular, the BitCoin creator has essentially made it impossible for anybody to change the number of BitCoins in circulation. Thus while it may be true that no governmental entity or currency controller will choose to inflate the currency through some activity, it is not true that the currency will therefore not vary in value over time when compared to some other things, and it isn't unfair to say that if I need more BitCoins to buy something now than I did last year, the currency has inflated, and vice versa. It may not be precisely the same as fiat currency inflation in every detail, but it's broadly the same, but it won't be the result of changing policy. (Arguably one could call it the result of an unchanging policy set at the beginning.)

In the sense that the quantity is not controlled by a government, BitCoin can be compared to gold. And the value of gold is highly unstable.

It is worth noting that in (the crazy cult of) Austrian economics, inflation is defined as increasing the money supply. This sometimes makes discussions with them difficult, since for rest of the world (all serious economists) inflation means increasing prices

This!

The Austrians are 'crazy' when they inexorably link inflation to the supply of money growing faster than the demand for money, but when someone quotes Friedman on inflation, to wit: "Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output," heads nod, and no one calls anyone crazy.

The difference between the two views is little more than semantics.

You don't understand how Austrians define inflation. If they had said it's "the supply of money growing faster than the demand for money" we wouldn't have an argument (oh, we would, but not over the definition of inflation) They claim it is the increase in money supply that is inflation. They don't care about prices. Also - Friedman (with his famous VM = PY ) obviously acknowledged the importance of demand for money affecting prices)

Both the Austrians and Friedman overestimated the role monetary policy can play. We've had a huge increase in the monetary base, but no price inflation since 2008. Austrians and to some extent Chicago-economists have predicted runaway inflation, and ended up with egg on their faces. But self criticism is of course nowhere to be seen as usual.

He meant the inflation of the _money supply_, not the inflation of the price of goods.

He is actually suggesting the opposite about the price of goods -- that they will deflate.

You absolutely can make the statement that the money supply of Bitcoin will not inflate in the long run, by the nature of their design.

Well, if you have enough bitcoins, you are probably pretty happy to spend small amount of them. It is usually pretty rational to spend some of your collected wealth before you die.

No need to conflate spending with savings/investment. Just keep some USD in an exchange and convert it to spend it.

Regarding your second sentence:

Are you suggesting that bitcoins are struggling because people will not want to spend something that increases in value?

So bitcoins aren't purchased because they will increase in value too much?

That is the same circular logic that is used to explain "deflationary spiral", and it doesn't make sense.

Consider high tech equipment like a computer. You know that the price of a computer (or TV, or hard drive, or graphics card) will fall rapidly but you buy it anyway because you want to purchase it. It doesn't actually matter much that the price of the item is deflating. And these are for luxury items. Price deflation of goods matters even less when it is for something essential, like basic food items.

In other words, what you are saying is that the price of items priced in bitcoins will fall (because your bitcoins will become worth more and more), and therefore people will not spend their coins. However, we already see real world examples of deflating prices, where people still buy these items.

I'm really surprised nobody has mentioned Coinbase, which is YC funded, as an answer to this question.

Coinbase is a hosted bitcoin wallet.

In terms of security, I'd certainly be happy trusting them with several hundred dollars worth of bitcoins at a time, which more than enables e-commerce using bitcoins.

The same thing I'd tell someone if they left their wallet on a coffee table in public and it were stolen.

Why is this being downvoted? What am I supposed to say? I'd say the same thing as if they were hacked and malware stole their credit card. Computers aren't magic; there is an expectation that you know what you're doing with them. If you don't know how to secure a wallet, don't use Bitcoins. If you don't know how to keep malware from stealing your credit card, don't download virus-infested porn or go buy an iDevice.

I'm assuming I was being seen as cynical but as with "the command line" and "Git", I'm not sure what people want. A magic, easy, secure solution? Sure, we'll just ignore the fact that identity management, authentication and security aren't complex issues that are still evolving today.

If we're just rehashing "Centralized currency is easier to use" then by all means, whatever, yes, Bitcoins are currently harder to use than cash both because they're more complicated and because there is almost no infrastructure to support their use. But frankly, that's really a completely separate issue from whether or not they can be used securely. I can give you tens of security and usability problems that cash has day-to-day that Bitcoins are unaffected by.

At this point in time, I'd say lay persons aren't using bitcoin to begin with.

Get some physical BitCoins

https://www.casascius.com/

Can you help me understand how this works? How is there both physical and bitcoin value?

They're made out of gold/silver, and have an associated BTC value.

The normal[1] physical Bitcoins have no physical value; they're just a paper wallet[2] with a certain balance, glued to a brass coin. The tamper-evident holograms are pretty cool.

[1] The silver/gold ones are so confusing that I won't address them.

[2] https://en.bitcoin.it/wiki/Paper_wallet

Use a wallet like Coinbase, which stores 87% of funds offline.

http://howdoyoubuybitcoins.com/from/coinbase/

Well, nothing yet, but multi-signature Bitcoin accounts are the current top priority of upstream Bitcoin developers, so I suspect we'll soon see hardware tokens and/or 3rd-party services acting helping to prevent Bitcoin theft.

Actually, this could be a boon for computer security: We might actually get some real security, rather than the ex post facto "security" that antivirus products supposedly provide.

The same way you would go about getting back cash that was stolen from your wallet when you left it lying around in an unsecure area.

to be honest, if someone is handling BTC then as long as they password protect their wallet then the only way the BTC can be stolen is if someone gains access to their password. as with any online banking facility, or debit card facility, if your password or PIN becomes compromised and money stolen from your account you have no automatic right to restitution.

There are plenty of things that were popular at some point and on the brink of exploding, but have faded over time.

(just because yesterday I saw some hReview microformat now obsoleted by latest and grandest schema.org stuff)

It is not a random "someone" at Reddit. It is their CEO! :)

Bitcoins will only be valuable insofar as they can be converted to tax-driven or commodity currencies.

This really sounded more like Yishan was just acknowledging that he personally knew what bitcoin was. Notice that he didn't "distinguish" his comment as an Admin?

Generally when an admin is speaking "as an admin" they turn their username red, and get a letter A next to it.

Like this: http://www.reddit.com/r/blog/comments/12v8y3/now_is_the_time...

I've seen admins/mods respond from authority without distinguishing their comment. I wouldn't read into that too much (though I also wouldn't read into the original comment that much either).

I usually distinguish my comments when speaking as a mod, but it's just so it catches the eye and looks official more. I sometimes forget, not distinguishing doesn't mean much.

The statement itself seemed pretty innocuous. It feels like more hype than anything else.

Yes, this is the same issue we had at Kiva when I and another engineer said we were going to explore accepting Bitcoin. I provided a lot of caveats but there were already two blog posts about it out on the interwebs the next day.

As I noted in the thread where Yishan mentions looking into Bitcoin, there are a lot of barriers to entry, barriers that we were not able to overcome at Kiva (at least for now). Maybe as a for-profit entity they will have better luck though as they have more options open to them, I'd just caution people about getting their hopes up.

The Bitcoin "community" really is it's own worst enemy.

This is an odd coincidence, one of the Dead Man's Switch subscribers asked me if I supported Bitcoin, and I ended up adding a MtGox button on the site (it's pretty nifty, it even autoconverts to whatever currency you want and supports IPN):

http://www.deadmansswitch.net/pricing/

I've been warming up to Bitcoin, the same subscriber clued me into https://blockchain.info/ and it looks pretty good. The only thing I'm worried about is that Bitcoin isn't very stable, but I don't really care since MtGox autoconverts all payments. There's no downside in accepting it, as far as I can see.

Plus, I can just keep them as Bitcoins and pay right away with very low fees.

EDIT: I also decided to dabble in a bit of MtGox trading with my newly-acquired 4 BTC, so I sold high and bought higher. It... didn't go very well.

"Autosell" is the term Mt. Gox uses as the name for the parameter in the shopping button API to sell immediately once the transaction has confirmed.

But that's the thing. Merchants are worried about the downside risk, and basically ignore that there is an upside gain possible as well. Sure, the merchant shouldn't be speculating with revenues that go to employee's salaries and inventory purchases, but if there's 10% profit, keeping 10% of revenues without converting that to USDs might be beneficial.

BitPay is a merchant processor that lets the merchant specify what percent of revenue to convert and remainder of bitcoins are paid out without conversion.

Eh, if I want to gamble, I'll go to a casino. I pay my employees in Euros, that's what I want revenue in. I even want it exchanged from dollars, so I get X Euros every time.

The autosell feature means I can add Bitcoin as a payment method with no hassle, I'm enjoying it greatly.

Wow, an entire article based on a vague non-promising comment. Internet journalism at its best.

These promises are incredibly vague, the most specific thing I saw was in another thread: "Alternative payment features are in the works" (http://www.reddit.com/r/blog/comments/12v8y3/now_is_the_time...).

Does reddit have the manpower to deal with a non-mainstrem payment system like bitcoin?

I'm pretty sure the manpower to deal with this would be like... a (reasonably small) fraction of one man.

The manpower to support bitcoin payments is minimal. A single engineer could integrate with a bitcoin payment provider such as Bitpay (or Walletbit or Mt. Gox Merchant) in less than a day. These bitcoin payment providers have APIs that are very similar to Paypal and Google Checkout. After the initial setup, ongoing support would likely be minimal. These payment providers also offer to convert BTC to USD (or many other currencies) at the current market price. So, your company doesn't even have to deal in bitcoins.

Bottom line: if you're already accepting Paypal, accepting Bitcoin as well is easy.

For users who have never used Bitcoin, the cost and time involved in acquiring something as small as $3.99-$29.99 is quite high. It would likely cost as much as 10-50% of that cost in fees.

So I'm not sure if this will create new bitcoin users. But more vendors always helps.

> the cost and time involved in acquiring something as small as $3.99-$29.99 is quite high. It would likely cost as much as 10-50% of that cost in fees.

Where are you getting these figures? I can pay 0.5% in fees or less to purchase bitcoins on MtGox. Other solutions are nowhere near 10%.

I use a bank deposit site that charges me $3 to deposit funds regardless of the amount (cavirtex).

Then coinbase takes 1% to transfer money somewhere.

So for $3.99 = $3 deposit fee + 0.039c for 1% coinbase

= $3.04 or equivalent to 76% of the cost

For $29.99 = $3 deposit + 0.2999c for coinbase

= $3.30 which is equivalent to 11% of the cost

Okay, but that 11% figure is mostly because of your traditional bank, which charges for deposits (wtf?)

Lets say I want to $100 to a friend in Mexico:

* My bank doesn't charge me for deposits. (still $100 USD) * Coinbase charges 1% to convert my USD to BTC (converted 8.947 BTC at 11.05usd per btc) * Sending that to someone else costs almost nothing (8.947 BTC). * The person receiving is not charged anything, unless they want to convert to another currency (e.g. pesos)

In this scenario, there is certainly slippage / costs, but it still beats MoneyGram, WesternUnion, Xoom, etc in terms of cost to send money from country to country.

You've misread my comment again. Never said anything about an 11% bank fee. I said $3.

Coinbase.com will allow you to buy up to $100 with a 1% fee. It's pretty much what I'm recommending these days to Americans.

http://howdoyouusebitcoins.com/

See my post below. I factor the deposit fee not just the wallet transfer fee.

I replied to your post, although if your bank takes 10% off the top to begin with, the issue isn't with bitcoins, it's your bank's deposit fee.

Cavirtex takes a flat rate of $3 when depositing money directly into their bank aact regardless of the amount, as I mentioned above. Not 10%...

Oh please, and then they charge you 3.0% when you do a trade on your first 100 bitcoins.

So if you buy $5 worth of bitcoins, it costs you 61.2% in fees.

If you buy $50 worth of bitcoins, it costs you 9% in fees.

If you buy $100 worth of bitcoins, it costs you 6% in fees.

Ouch yeah, another example of Canada lacking proper competition in an industry.

Well, it's an alternative payment method, i.e. one people should use if they don't want to pay via PayPal/Google Checkout. E.g. it's for people from outside of USA.

I'll give you an example. I live in Ukraine.

When my father wanted to buy something via PayPal, he had to:

* get a debit card, which requires going to bank, signing some papers, etc. (Ukrainians often have debit cards for receiving salaries, but those usually have internet payments completely blocked. Ukrainians rarely have credit cards.)

* fill it with USD, again going to bank.

* register on PayPal site

* call bank to unblock internet payments (this requires ~10 minutes)

* try paying

* call bank again, apparently they haven't unblocked it

* try again

* Success!

Now let's compare that with what I did to get bitcoins in btc-e account:

* register on btc-e

* select deposit via interkassa

* go to cash terminal nearby, deposit UAH

* so I got USD on btc-e account and can buy BTC with it

So it actually takes less time than dealing with bank cards/PayPal, and isn't expensive (there is, maybe, 2% fee for deposits).

I'll buy a Reddit gold subscription if I can pay in Bitcoin. Who uses Paypal anymore??

Many people use Paypal and I think it works fine. But yes, I'd be more likely to buy Reddit Gold in Bitcoin too!

coinbase.com (YC company) is like Paypal for Bitcoin.

Sure, it works. Until they decide to suspend your account.

Most people don't know paypal's history and many of the rest simply assume disaster will never happen to them.

Reddit is not profitable? It feels like the difference between profitability and non-profitability is an extra ad on each page.

And who's going to buy those ads? Reddit is far from prime real estate, and the demographics seem to be shifting towards younger and younger teens.

Who on earth would want to advertise on reddit, given the site’s thoroughly unpleasant audience, the notoriety of which has been growing by the month?

Reddit might be able to court the same sponsors (porn sites and such) that sustain the likes of 4chan, as long as said sponsors are willing to associate themselves with a far more misogynist, racist, child porn-defending audience. But this would likely inspire a revolt among redditors, who hold themselves in laughably high self-regard.

I find Reddit having a fine audience. Not as good as Hackernews or Stackexchange or so (where good content is a little more valued than on the average forum), but certainly better than the real stinkholes of the internet. Even 9gag has ads.

The reddit audience has changed over the past 5 years due to large growth and the introduction of subreddits. Old users from digg eventually took over reddit. Comments on the sites went from was what intelligent and humorous to stupid and blatant.

Submissions continue to degrade and more cats continue to appear.

I think the contributors to racist, misogynist, and child porn-defending subreddits are only a tiny minority of Reddit's users. Most of the popular subreddits are fairly benign (AskReddit, IAMA, etc.)

Interestingly, all your recent comments seem to be about how you dislike Reddit. Consumption of a chill pill may be in order.

Subreddits like AskReddit do have a lot of racist and misogynist shit posted all the time, esp. those leading questions people post to AskReddit. The Reddit moderating system doesn't make Reddit a safe space for people, so I can see what the OP is getting at in terms of Reddit being an unsafe space.

As long as you can limit which subreddits your ads are shown on, which I'm 99% sure is already possible, this wouldn't be a real issue for the vast majority of advertisers.

It's possible but a pain, you either get all subreddits at once, or you need to make a separate campaign for each subreddit.

Reddit demographic is extremely anti-advertising, and poor. Not exactly an extremely easy group to monetize.

As a recruiter I've advertised my open jobs a few times on Reddit. The results were surprisingly good and cost effective.

Agreed, I think the big issue is that not enough people know about the self-serve (and subreddit targeting) options available.

Also worth noting, Duck Duck Go had a very positive experience with Reddit Ads:

http://www.gabrielweinberg.com/blog/2010/03/my-duck-duck-go-...

How about an optional bitcoin miner running in the background while using reddit using webgl (so it can make use of the GPU) that accumulates bitcoin. As the user browses around reddit it will be active, slowly generating bitcoins as part of a pool. When the user has accumulated enough for reddit gold, it automatically buys it for them. Maybe it would take two years or so to accumulate a bitcoin to buy reddit gold but that's at least turning users into money.

Am I an idiot or did I just discover an alternative to the ad supported model for free content sites?

If ASICs are shipped in the next couple of months, then very soon GPU mining will do as little as CPU mining does today.

This already exists, but it uses the CPU: http://www.bitcoinplus.com/miner/embeddable

I tried it for one of my websites and it made the user experience intolerable, and didn't even make a dime.

I'd love to be a fly on the wall with the upcoming Reddit / Conde Nast accountant meeting.

The legal meeting's going to be even better.

Condé Nast isn't their parent company anymore, they moved up to Advance Publications (the parent company of CN).

http://blog.reddit.com/2011/09/independence.html

I would also buy a reddit gold subscription with Bitcoin.

I don't see much of a downside as long as Reddit gives a price quote in bit coins and convert it the main currency Reddit uses, probably USD. The main problem for main-stream business using Bitcoin I think is the volatility. Losing money because the currency fluctuates around 10% every 30 days is horrible.

There are services (e.g. Bitpay) which remove the currency risk for the seller. The seller can set their price in US $ or whatever and receive the payment in that currency while the purchaser has the option to pay in bitcoins at the going rate at the time.

Are there any privacy concerns with bitcoin? For instance, suppose I know the day someone got reddit gold. Could I then check the bitcoin transaction database (eg: bitcoin block explorer) to extract the ip of the users that created the account that day, and link this account to other transactions and try to pin down the individual?

This is just a far-fetched scenario, but I'm wondering what would change when money stopped being so anonimous as it is now..

You would be able to find their wallet address, but good practice is to use a different wallet address for each person you send payments to. The blockchain doesn't keep track of IP addresses to preserve anonymity.

Original source: http://www.reddit.com/r/Bitcoin/comments/12vg6t/the_admins_a...

OP, "Please submit the original source. If a blog post reports on something they found on another site, submit the latter." - http://ycombinator.com/newsguidelines.html

-1. The Reddit comment has almost no context. The BetaBeat article explains Reddit, Reddit Gold, Reddit Gold pricing, Bitcoin, contains a full quote of the comment, and a number of other things that random Hacker News readers might lack complete context on.

Whatever helps you sleep at night.

Reply on news.ycombinator.com