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Comment by pmorici | Hacker News Reader

"Using a credit card online or 1-click checkout isn't painful."

I've heard this from a number of people as an argument for why Bitcoin isn't needed. It only holds true for a very limited world view though. That being people who are well off and have a credit card.

Consider that something like 30% of _Americans_ don't have a credit card. How do you suppose they buy things on Amazon in 1-click? What happens if you live in a area known for high rates of credit card fraud so merchant's refuse to send credit card orders to your address? There are an infinite number of scenarios where credit cards don't work for people Bitcoin solves a lot of them. Bitcoin is like the long tail of financial products.

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> How do you suppose they buy things on Amazon in 1-click?

Have you tried going to a gas station, Wal-Mart, or convenience store in poor America? They sell pre-paid credit cards that are usable (with a few extra hoops) for online banking.

Of course, pre-paid cards are, like all things used predominantly by the poor, susceptible to poor regulation of fees and penalties, but then the 30% of Americans without credit cards are also not the ones able to keep a wallet.dat secured...

How do you suppose they are buying Bitcoin? I expect the ones doing transactions with Amazon are mostly using debit cards or buying prepaid cards somewhere.

It's a nice hypothetical use of a distributed transaction system, but it's not how the people you are talking about are accessing the financial system, they are much more likely to either not buy things from Amazon or to get a prepaid card at Walmart.

That's the point. Accepting bitcoin opens up new markets an online business that weren't accessible before because of deficiencies in the available payment systems. If you have a history of financial difficulty then you probably can't get a credit card or debit card let alone a bank account. Have you ever looked at the fees on a pre-paid card? Many if not most are highly exploitative.

Yes I agree that bitcoin could be useful to the unbanked or in high inflation countries. I don't have enough knowledge of those markets to elaborate.

I was answering the author who was advocating bitcoin's ease of use as compared to credit cards.

Credit card use is not a limited world view though. Credit card networks are pervasive all over the world. And in the areas they aren't, I don't think a volatile digital asset is at the forefront of people's minds when it comes to payments. A lot of innovation is being put in place to eliminate card use and opt instead for the mobile phone/wallet, connected directly to a bank account in fiat, government-regulated currency.

It would be useful to know why those 30% of Americans don't have a debit/credit card. Is it an infrastructure problem? Is going online and buying things part of their day-to-day activities?

And for those areas of high credit card fraud, what do merchants do now? Accept checks, cash, ACH? And what do consumers do if they receive subpar merchandise? Etc.

"And for those areas of high credit card fraud, what do merchants do now?"

Nothing, they lose out on the sale.

"It would be useful to know why those 30% of Americans don't have a debit/credit card."

Typically because of past financial difficulties. If you've got a bad credit record, or have a history of over drafting your bank account banks will refuse to work with you.

As an aside if you subscribe to the idea that Bitcoins transaction mechanism is the valuable aspect of it then the value of a Bitcoin is going to have to rise enough to handle the value of the transactions that pass through it. It can't be worth zero and still work.

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