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BitInstant Continues Bitcoin Paycard Plan
judgecorp writes "Virtual currency exchange BitInstant says its BitCoin credit card is still on track. even though Mastercard denied any involvement with the plans yesterday. BitInstant says it is applying through a third party bank which will broker a Mastercard application. BitInstant is still taking signups for the card. Oh, one clarification: the card will not be anonymous."
And the advantage using it is what then? If this catches on, I'll be watching intently how the revenuers treat this.
“He’s not deformed, he’s just drunk!”
I hadn't seen a BitInstant story since Tuesday so I assumed that it was no more. Thanks for reminding me that I care.
Well, actually, there was the story on Wednesday that was able to keep my hopes up. If you can subtly work a few more BitInstant stories into the next few days, I'll be compelled to get a card and those advertising dollars will have been well spent.
If someone makes a product and nobody uses it, does its failure make a sound?
Some very talented folks I once had the pleasure of meeting just went out of business. They had formed Bitcoin Harbor, an exchange for buying and selling items strictly in bitcoins. I suspect the undue lack of popularity for bitcoin is to blame, but there has been some pretty fierce efforts against bitcoin which might also influence the stagnation of what I consider a great system. One example of government hostility against alternative currencies I think is no better illustrated than in the case of Bernard von NotHaus.
Some fear the forced introduction to a "cashless society", and maybe I do as well. However, If such is the unavoidable future, I'd rather it be in bitcoin. It's peculiar the vehement government defense of what might reasonably be considered amongst the most unstable and fantastical currencies in the world, in contrast to their hostility toward arguably less deformed competitors. When speculation suggests bitcoin may be more worthy of confidence than the euro, I pay at least one ear of heed. But when Alan Grayson asks Lord Ben where $500,000,000,000 went and he can't reply, I reach for my Adult Depend Undergarment.
Forward! -- Emperor Norton, 2012
All of the issues with a non-backed currency that no one trusts PLUS the lack of anonymity associated with a major credit card!
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
...as to how many actually use Bitcoin, and how not being either a government-supported fiat currency and also not being specie with some inherent material value it can have value not intensely tied to being a trend. After all, we've seen a lot of other essentially worthless things become very valuable, and then crash, and we've even seen valuable things like real estate also crash. In the end, bullion and real estate have tangible value. A string of characters does not, and without the backing of a government I don't see how it'll work.
It's identical to any other economic system. Basically, it's Tinkerbell. So long as you believe, everything will be okay...
Gold is quite useful stuff, so you can't really say bullion has NO tangible value.
Specifically one re-loadable with Bitcoins.
From what BitInstance has said it either works by simply converting your BTC into USD or some other currency when you deposit the BTC to the address on the card, or they've done some clever thing where they convert the appropriate amoun of the BTC balance associated with the card it as you make a transaction. (depositing the currency to the actual account associated with the card just in time for the payment to go through) Credit is never offered.
Of course, this is why they don't really need much help from Mastercard: the technology powering the card is already common for branded payment cards like those ones you can get to give as gifts, just without the crazy fees and with a much more reasonable %1 currency conversion fee and the flat $10 or so fee to buy the card. That conversion fee being pretty similar to what you'd pay at a regular bitcoin exchange anyway.
Ultimately this is like Paypal's debit card: just an easy way to spend your Bitcoin balance. If you happen to have a lot of coins for whatever reason, be it you run a business, mine, or invest in them, this card might be for you. Otherwise don't complain that a niche product doesn't make sense for you.
From a security point of view it's a very easy product to offer. When Bitcoins are sent you can almost guarantee the transaction has gone through, no charge-backs, after one confirmation, or an average of 10 minutes. That rises to essentially guaranteed after six confirmations. (I'm pretty sure no-one has ever managed an actual double-spend with even one confirmation) The rest of the process is subject to the exact same risks as any other pre-paid debit card, hence the transaction limits they've said they'll apply of something like $1000 a day. Basically they just want to limit losses if someone steals/clones your card, or they screw up somewhere.
Who bought the first fax machine?
I mean, the very first fax machines were expensive (around $2000), and the first person to get one had no one to send things to, and no one to receive from. Were fax machines ever really that unlikely to succeed?
There's lots of things that have value in proportion to the number of people who use it - it's called the network effect. In a few instances (fax machines, telephones, the internet) the value is zero if no (or very few) people are actually using it. That doesn't mean that telephones or fax machines or the internet didn't come into common, everyday usage.
Is this a valid concern? Should I, as an intelligent adult, claim that something will never be of value simply because no one uses it right now?
It 'kinda seems like there's a flaw in that reasoning. Wouldn't you be better off with a different argument?
Like any other tradeable thing: on an exchange. If you don't think the exchange rate BitInstant gave you is fair, it's easy to go to a site like BitcoinCharts and look at the spot prices at the time on any of the exchanges in existence for the currency you were converting too. After all, the back-end of BitInstant is just a computer program that automatically submits sell orders as required to meet their float requirements. Buyers then buy the Bitcoins, giving BitInstant fiat currency in return, which they then send to the bank handling the debit card backend via wire transfer.
The key thing from BitInstant's point of view is to have solid reliable backend software that submits orders fast enough, and statistically understands the volatility well enough, to figure out what instantaneous exchange rate they can make a profit on while still giving a good enough rate that their users don't feel ripped off. This is easy if the price of Bitcoins is rising, but if it's dropping they could easily be in a situation where they give you too much fiat currency for too little Bitcoins. Part of the issue too is that spreads between buy's and asks on Bitcoin exchanges tend to be much larger than you'd find in government-issues currency exchanges, simply because the market is smaller. They're looking at spreads in the region of one percent, rather than hundredths of a percent.
Ultimately though the process is no different from what your bank does if you use a USD denominated debit card in Europe.
Clap, clap, clap.
I don't think the ability to fiddle with the exchange rates is really something unique to this situation: a common way to get shafted when you travel abroad is that companies allow you to pay in your "home currency" on your credit card, thereby saving you the currency exchange surcharge from your card provider... and instead putting you on the hook for a price calculated with an incorrect exchange rate, giving the vendor or atm a direct profit.
Also I wouldn't speculate too much about how this would look because it isn't here yet, but there are bitcoin exchanges where you exchange your money for bitcoin or vice versa - if the card had bad exchange rates that would be an avenue to simply sidestep or even profit from that.
Something like the Dollar, or the Euro, or the Renminbi is backed by a standing army and a society with a functional government and a banking industry. Governments and banking industries that engage in shenanigans and with horrible screw ups that test the patience and faith and trust of all of us. But I still trust in actual social institutions that actually represent the value behind an actual currency, then some protocol for fringe types who don't trust anyone or anything.
Bitcoin is not the dawn of a new stateless economy. Bitcoin is the dawn of a new ghetto for the kind of person with a high level of distrust in society. Distrust not born of actual experience, but the kind of distrust that is a function of that person's personality issues. Such people will always exist. I'm glad the Internet and some dude with a Japanese pseudonym have given them a new toy to exert their prodigious antisocial energies on.
Enjoy, fanboys, but please don't imagine your alternacurrency has more meaning than it actually does. It's a project for you to waste your antisocial frustrations on. Good for you. All hail the small but growing psychosocial ghetto called Bitcoin.
There are just people in this world with a hobbling deficit of trust in any social institution. Considering how the banksters have screwed up over the last decade, some of that distrust is earned. But there never is, and never will be, an alternative to an actual, real, social institution, no matter how badly it is mismanaged. The problem is in not understanding that, not understanding that your currency has to be backed by SOMETHING. Some people are just too antisocial to understand this.
So let the fools exert their energies on Bitcoin if it provides a harmless waste of time for them. This alternacurrency ghetto will bubble and pop and limp along, and eventually peter out into obscurity if and when someone responsible is actually able to take hold of our broken and mismanaged financial system.
Either that, or drug traffickers and other illicit activities will glom onto the idealistic fanboy's new toy, and then the authorities will go after Bitcoin ONLY FOR THAT REASON. But the paranoid crackpots will claim this is proof the state is out to crush anything good in this world, when the simple truth is there is always a lot of ugliness in this world, but there is a heck of a lot more ugliness without a strong government. Sorry fanboys.
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
Not really. It's too soft for engineering with. Copper is more conductive. No really special useful properties. In terms of what you can do with it, anything you can use gold for you could do with lead as well. The only use for gold is in very small quantities for some niche things like semiconductor hookup wires (Is it even still used for that) and reflector foil, and decorative. It's valuable because it's so rare, and thus decorative use became a status symbol millenia ago. It's like a brand-name clothing line: If it wasn't expensive, no-one would want it.
...and if you are using it for an actual application, it's frustrating how expensive the damn stuff is. As an electronics designer I'd much rather just gold plate everything for durability, rather than having to fight the cost-engineering department every time.
Gold bugs are a very real part of the reason why consumer electronics are unreliable. Remember that every time a crappy tin-plated connector fails. Heck, silver bugs too: for high-current connectors and RFI shielding silver is usually the best option, but again it's unaffordable for a lot of applications.
AFAIK it's used for connectors a lot because it doesn't corrode.
Please provide us with debit cards loaded with $USD. In return for that, we will give you some Magic Beans which you can trade anonymously for a wide variety of goods and services, such as drugs and handjobs and... more drugs.
You know, I started typing that sarcastically, but given that it's bankers we're talking about, they might actually go for that.
If you were blocking sigs, you wouldn't have to read this.
Well duh.
As long as enough people believe in their society, society will still function.
So why believe in society?
Because the alternative is far worse.
Currency is just a subset of this truth.
Meanwhile, Bitcoin isn't backed by any society. Therefore, it is simply a playground for that perennial sort, the cranks who have a hobbling deficit of trust or faith in anything. Bitcoin is a simply a new ghetto for such age-old types of fringe characters.
Well power to you crackpots. Have fun with your new toy. Just understand why Bitcoin will always just be a ghetto for the fringe and is not poised to take over the world. No sovereign society backs it.
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it