This is great news. I've always thought teenagers are the biggest market for bitcoin, they're less likely to have a bank/credit card. Knowing you can now exchange bitcoin for Xbox points makes accepting bitcoin a lot more attractive.
Which makes it rather difficult to obtain bitcoin in the first place.
> Knowing you can now exchange bitcoin for Xbox points makes accepting bitcoin a lot more attractive.
One major reason for the popularity of the cards you can buy in various grocery/department stores providing points/credit for the various stories (Google Play, iTunes, Nintendo, Xbox, etc) is precisely because you can buy them with cash, redeem them at the online stores, and use the resulting credit to make purchases, all without using a credit card. This really doesn't solve that problem, it just shifts that problem to "how do you obtain bitcoin?"
Idea for a business model: make Bitcoin gift cards, and get them into the various grocery/department stores.
True, but now with Bitcoin a teen can do work for pay over the internet (I assume minors cannot easily get a paypal account). I've seen teens draw incredible art, make avatars, do minecraft related tasks, light programming, etc. So while it's not easy, there is a way for them to obtain it.
I remember scheming for ways to make money online when I was a teen, but my only options were to get someone to send me cash in the mail, or have my parents cash a check (after asking me a bunch of questions as to why someone was sending their 14yr old a $100 check).
Hop over to btc-e and watch thousands of teens daytrade altcoins while chatting, it's eye opening.
They are notoriously difficult to work with as a vendor. I had someone pay for the last milestone of a project, then after the goods were delivered, filed a chargeback with their credit card company. The CC company ruled in his favor, and Paypal offered no way to dispute. I was left with the -$1,500 balance
They can, very easily. I've had one of my accounts banned after applying for their debit card, but I was able to open another one with the same SSN and still haven't been caught.
These are a stop gap measure. Say I have $500 and I put $400 into Xbox points and $100 into Steam points. Then some new game comes out on PC but I'm out of cash because its all tied into Xbox points. This transfer is one-way, so my money is now stuck.
With bitcoin, or some other non-vendor middle-man, I have value sitting in my wallet ready for any transaction that accepts this currency. For someone without easy access to credit, buying a couple bitcoins (or some other cryptocurrency) seems like the better move.
Once you can purchase content directly using XBT, instead of merely using it as a funding source, you might have a use case.
Otherwise, most people would just buy a prepaid Debit card. It solves actually the same problem you're saying XBT solves, but it's accepted at vastly mere merchants.
There's still a big problem out there with foreign transactions and the credit card system. Paypal kinda handles this in some scenarios, but it still is unsolved, especially when you're discussing non-trivial amounts of money.
That said we also have pre-paid debit cards in some stores now, so it's even easier to have one of those.
(Also it is not uncommon at all for teenagers to have a debit card)
Not true. They just need to sell something illegal online and they got bitcoin. :trollface:
On a global scale the issue is even worse, there are billions of people without access to proper banking services. I can't even begin to imagine how much time/energy/value/productivity is wasted globally due to that. Bitcoin, or another similar solution, may be the key to helping to bring those billions out of their economic exclusion and into a more prosperous reality [3][4].
[1] https://www.economicinclusion.gov/surveys/2013household/ (2013 National Survey of Unbanked and Underbanked)
[2] https://www.youtube.com/watch?v=YAxL4TB6pmQ (Spent: Looking For Change (Documentary))
[3] https://www.youtube.com/watch?v=6NfNwjJfrOg (What Bitcoin Means For Unbanked Economies)
[4] https://www.cryptocoinsnews.com/cell-phone-connected-unbanke... (The Cell Phone Connected the Unbanked, Bitcoin Will Bank Them)
The losses from this would easily be in the tens of millions and possibly in the hundreds of millions. We are lucky (Our company account has a credit card) but this is the biggest roadblock facing every young hacker/freeelancer/startup founder, especially those starting at the college level- You can't even open a Google play developer account. On the other side, there are millions of Indians who are blocked at the last mile while trying to purchase apps, ebooks, music on the Play store or iTunes (Microsoft Store seems to work but i cannot confirm this) with no explanation given other than a cryptic "Transaction rejected by bank" . If you are an app developer wondering why so few purchases come from India - this is the biggest reason why.
It is quite baffling why the likes of Google or Apple can't get off their butts and implement 3d secure (which is becoming widespread everywhere but the U.S.). People are begging Google and Apple to take their money and being rudely turned away.
Credit/debit cards work in a fundamentally flawed way from a security perspective, you essentially give everyone your "money password" each time you pay for something and have to trust them to not abuse it. Because of that a large number of expensive middlemen, checks and barriers are needed inside the system to ensure that the trust is not abused.
One of the easiest and most obvious ways to prevent abuse of a system is to limit access to that system to only trusted actors. And one of the quickest ways of identifying trusted actors is unfortunately discrimination based on things like prosperity and nationality. That's one of the reasons why so many people are prevented from using bank cards, letting them access the system is considered too high of a risk. I guess that's why the Reserve Bank of India require 3-D Secure for debit cards - as a way to mitigate some risk of abuse.
The reason why so many stores don't implement 3-D Secure is actually pretty logical. The extra step in the order process 3-D Secure adds results in a decrease of completed transactions of up to 30%. The only reason why 3D Secure was created in the first place is because the system it was built on top of is so damn insecure.
Bitcoin will help solve this issue, since it removes the need for trust completely. When paying for something with Bitcoin you don't have that fear that the person/company you send money to will grab more money from your card than you allowed, and he/she/they doesn't have to fear that you won't pay.
Because of this Bitcoin may end up creating a much freer financial world open to anyone, no matter their nationality or prosperity.
>>results in a substantial increase in transaction abandonment and lost revenue.
Right now 100% of all debit card transactions in India are abandoned due to lack of 3-D Secure. Almost all Indians who have a bank account have a debit card. A very small minority have acccess to Credit cards.
I think the biggest reason for merchants like Google and Apple to avoid 3-D secure is that they cannot pull money from your account without your permission. Each individual transaction has to be authenticated.
The issue is not the currency, the issue is the bank. Who will start the bank and accept the risky customers? Just because the currency changes does not change the causes of being underbanked.
A user in the Phillipines can create a wallet for nothing. Their relative in the US can send them bitcoin, then they exchange it for cash in the phillipines. they dont need a bank just a local trader who will trade bitcoin for cash, this will become more widespread as adoption grows so finding someone to trade with will be easier.
What services does a bank provide? it holds your money, it sends your money, it allows people to send you money. all of these can be achieved by bitcoin.
Outside of these functions everything else is a finacial service; loans, overdrafts, mortgages etc. all of which attract fees and charges, these are products you are being sold, this is not banking.
hnnewguy says that banks accept risk, well the risk they accept is not you, not if you are the one depositing money with them. you are taking the risk by letting them hold your money. they do assume risk but that is when you are taking out a loan or an overdraft, bitcoin does not replace these fucntions. bitcoin replaces, holding, sending and receving money, it does this far cheaper than a bank does, especially for the poor who are hit unfairly with charges that are very high in comparison to their income.
It also provides an audit trail for where money comes from and where it's going, and assumes some of the responsibility as an intermediary during those transactions. Believe it or not, that's vitally important to businesses.
Banking isn't about making payments. It's financial intermediation, and will not be usurped by Bitcoin. If anything, it will merely adopt Bitcoin into its practices.
>especially for the poor
Maybe I'm dense, but how exactly are the poor paying for things with Bitcoin?
I agree, bitcoin is not out to replace banking but it can offer banking facilities to those who cannot get them and banks will adopt bitcoin for the benefit it provides them, in all likelihood bitcoin will underpin financial transactions without the end user knowing particularly with regard to international transfers.
It is not about paying for things with botcoin, for the poor most banks won't touch then because they are not financilly viable, ie their income is to low for the bank to safely lend them money (loans, overdrafts, credit cards) as a result they don't even get to access the basic hold, send, receive money services.
Think of international remittance, a worker wants to send money home, he wants to send $50, Western union charge 10% of that, a bank would probably charge 20% to send it to Philippines. This second option requires the person in the Philippines to have a bank account, which is not always the case. The first option cones at significant expense for the sender.
If I send money to someone unintentionally or undeservedly, how does the block-chain rectify that charge?
My bank simply reverses it. That's powerful.
>This second option requires the person in the Philippines to have a bank account
True, but Bitcoin requires a cell phone or consistent internet access, doesn't it? And there's no recourse to having your money stolen or lost? I'm not sure those are appealing scenarios to the poor, either.
Transaction fees aren't high "just because". Otherwise anyone could open a lending facility of some sort and kill it. I mean, it's not like Western Union is making excessive profits. There's a matrix of risk involved with the movement of money. Bitcoin solves some, and creates others.
You don't need constant Internet access to use bitcoin. If you have an address for payment you can receive payment to it without being online. Next time you check the address the funds are there.
There is recourse to theft, the same ones available to people now, law enforcement. Yes you cannot guarantee the return of funds at present however insurance and insured wallets will be available and in some cases already are. Also security in the area is improving significantly all the time.
Western union make about $200 million a year in profits. So it is making a good profit. But transaction fees are high because the infrastructure needed to send payments internationally is extremely entice to build. Or it was before bitcoin came along. People forget that bitcoin is as much about the Blockchain technology as it is the currency. It is the Blockchain that makes transaction fees low and it is one of the primary reasons that bitcoin will "kill it" in the end.
The poor pay more for banking services than the better off do. This means they pay a higher percentage of their income for bank fees. I did not say they were buying things with bitcoin. Just that bitcoin allows them to transact far more cheaply than traditional banks do.
A bank isn't a vault to store money, it's a service provider. They provide services for money, including the assumption of risk. Whether those services justify the fees charged is another story. But you certainly aren't "banking" with bitcoin any more than putting cash in your wallet is "banking".
I'd start playing Magic: The Gathering again if the digital cards I bought were colored coins or counterparty-style tokens that I controlled, and could trade outside of the game.
If the game itself was open source and p2p, even better - there would be no worry of the company shutting down the servers/abandoning the game. The community could take over and make improvements to the client if needed. The initial creation of the game would be funded by selling the digital cards.
I think every card they print will eventually be represented as a member of a blockchain.
But what could we call such a site?
We're (I'm the founder) doing what you've outlined. Though the Deckbound-specific games are proprietary, the APIs and services are open -- and you can use the Deckbound card identities to make your own games. Ultimately we plan on p2p game clients as well -- and are building on top of other projects to deliver that.
G.
The initial concept is focused on Trading Card Games and built on the Bitcoin blockchain, but there are very interesting medium-to-long term plans that are very much in the spirit of what you suggested.
The medias will love it.