PayPal president David Marcus: Bitcoin is good, NFC is bad
news.cnet.com
news.cnet.com
He adds: "People are confused. They think because it's called cryptocurrency it's a currency. I don't think it is a currency. It's a store of value, a distributed ledger. It's a great place to put assets, especially in places like Argentina with 40 percent inflation, where $1 today is worth 60 cents in a year, and a government's currency does not hold value. It's also a good investment vehicle if you have an appetite for risk. But it won't be a currency until volatility slows down. Whenever the regulatory framework is clearer, and the volatility comes down, then we'll consider it."
I agree with him that Bitcoin is a ready-made solution for people living in less stable economies who want to diversify away from their (risky) local currency, particularly if they find it difficult or impossible to buy US dollars or euros through their local financial system.
Would you rather own (a) savings in a bank account denominated in a "soft" currency (whether Argentine pesos, Bolivian bolivianos, Libyan dinars, North Korean wons, Syrian pounds, Venezuelan bolivares, or some other one), or (b) bitcoins, which, despite their recent volatility, are used globally[1] and do not require trusting a third party?
--
For reference: http://bitcoincharts.com/charts/bitstampUSD#rg1460ztgSzm1g40...
Been working on a pure-BTC retirement portfolio fund that I'd luuuv to sell you. Step right up...
If for some reason, I had no confidence in any currency/bonds I could get my hands on, I would prefer gold to Bitcoins, because I expect that, while it is more volatile than a properly run currency, it is far less volatile than Bitcoin and I expect that to remain so in the future.
Was kinda hoping Bitcoin would finally be the micropayment system that kneecaps them.
1. Foreign countries, where credit cards aren't common (but banks are) 2. People in the US who hate entering CC info for every payment 3. Merchants without alternatives
People have felt for a while that there's nothing that can solve all 3 of those things, but I think there is.
What is stopping something like this? If Ebay uses a service to convert directly from BTC to dollars, there's no volatility risk. Is it fear of bad press? Fear of angering existing players like Paypal? Is it logistics? I'm biased, but why wouldn't Ebay accept an additional form of payment for free?
Introducing non-paypal payment methods would cut directly into their profits.
See: https://bitpay.com/
[1]: https://en.wikipedia.org/wiki/Contactless_smart_card [2]: http://www.bbc.co.uk/news/business-18265388
I think he may be on to something - there is the current development of presenting cards by an NFC enabled device, like a phone. This is a huge process to get the virtual card to the customer securely - one of the abstract approaches, which I don't think is really being taken seriously, is virtualizing the card communication in a cloud, so the card is never downloaded or emulated on the device, like an Android phone. This is kind of leaning towards an "invisible" transaction he speaks of, where a secure payment could be done as an after thought without an actual device or interaction?
I was just using a phone as an example for virtualized cards, which kind of feeds his thoughts on an "invisible" transaction because the interaction between terminal and card is becoming emulated and not two physical devices communicating between each other.
I think this is right. The amazing future doesn't change what I get out of my pocket. The amazing future lets me walk into a store and just walk out with things without stopping, while some computers in the background just make sure all accounts are settled.
There's a limit ($200 max on phone self-checkout), but they don't seem concerned with shrink.
What merchants don't want, typically, is added customer convenience to payment methods IF it adds additional risk for fraud. EMV Chip has been a huge success, and NFC is kind of a step backward because anyone can steal a NFC chip card and make small purchases, which means merchants still need to dispute fraud charges.
Consider that most merchants don't have much of any cash. I know it's hard to believe because your world revolves around Starbucks and Apple, but put the iDevice down for a second and join the rest of reality. Merchants don't want risk. I know of merchants that do reasonably well, and a single chargeback is a real piss off. They (chargebacks) don't just cost money (you are out the money and the product), they also cost time if you try to dispute it.
I had to read that section about three times because I interpreted that as "amazon app, box arrives on doorstep in two days, cheaper than in store (store aka showroom)"
That's pretty much how I shop now. Going out and paying more is already an inconvenience, waving something around, or not, is already a rounding error of the total sum of inconvenience.
While with nfc the phone manufacturers have full control and they will be dead in the water while Apple/Google process all the transactions.
Did he have to play the two-step bank account shuffle like the rest of us?
Instead, a Bitcoin wallet could send the transaction (a few hundred bytes) over NFC. This gives an extra advantage: the point-of-sale would broadcast the transaction to hundreds of Bitcoin p2p nodes itself, hence reducing the risk of accepting a zero-confirmation transaction!
No handing cards, picking up terminals, signing receipts, checking signatures or any other nonsense.
It's also secure--tapping is chip compliant.
You can also have more than one card on your phone.
versus
I wait for the onscreen prompt, I tap my card, hear a satisfying beep and am done.
It's pretty obvious the difference.
Whoops finger slipped and that went on the corporate card; well, there's a $25 charge to transfer an accidental charge.
Or
Whoops finger slipped and that spouse christmas gift went on the shared expenses card. Well, if you don't want her to find out early, there's a simple $25 convenience fee to transfer to a different account.
Or
Whoops paid for the new snowblower in "cash" using direct debit from the checking account instead of the credit card. Woo hoo thats ten bounced checks at $50 pure profit, err, I mean, "fee", each!
I've not been charged any extra charges for using NFC.
The goal of NFC seems to be to make it easier to spend small amounts of money.
Even if these fees were assessed, it strikes me as an incredibly inefficient way to generate revenue.
Plus NFC is only for small amounts (usually) so the snow-blower thing is pure nonsense.
f*k em, paypal are driving themselves to irrelevancy
On bright side 2 years ago when paypal screwed me and my company it pushed me to look at alternatives and i bought a pile of bitcoins when testing how it works, this turned out to be the best decision ever, thanks paypal for making me $$$