BitPay, Toshiba Partnership Brings Bitcoin To 6,000 New Merchants

Raystonn (1463901) writes "Toshiba has announced the integration of Bitcoin support in their touch-screen point-of-sale platform, VisualTouch, used by over 6,000 merchants. The merchants will now be able to accept Bitcoin payments at the register from anyone with a smartphone or any other QR code reader. Acceptance of Bitcoin as a payment method frees merchants from worries of fraudulent chargebacks, as Bitcoin payments are non-reversible just like cash, while allowing settlement deposits in any of 9 currencies, including USD and Bitcoin."

Comments

What about taxation?

[CRCulver]

Many countries are slowly transitioning away from cash to electronic payments in order to ensure that there is a paper trail and people can be forced to pay taxes on all their income. Terminals that accept anonymous Bitcoin seem to undo much of that progress. Will we see legislation to require terminals to also take a form of ID (or another document linked to one's ID) when paying with Bitcoin?

Re:What about taxation?

[goombah99]

Not until they do that for cash.

I hadn't really thought about that aspect of bitcoin before: no chargebacks. IN fact as a consume not a seller it seemed like the very reason I would not use it. It sounds too much like Western Union frauds. But in point of sale transactions where I know I have my goods, as opposed to remote transactions where I don't I can now suddenly see this as a killer advantage. On the other hand chargebacks are not that prolific for honest sellers. I've used two in my life and both for cheats.

On the other hand doesn't this actually put the merchant at more risk? I get my goods, hop in the car, and ten minutes later he finds out I gave him bad bit coins.

Re:What about taxation?

[UnknownSoldier]

> Not until they do that for cash.

Exactly. Cash is anonymous. Why isn't BitCoin allowed to be as well?

Re:What about taxation?

[Anonymous Coward]

Bitcoin has a built-in functionality, called CHECKMULTISIG, where you can require two or more private keys in order to spend a transaction.

There are ways you can get coin back so buyer and seller can do business without worry.

http://www.opine.me/future-of-bitcoin-escrow/

Re:What about taxation?

[Charliemopps]

Because the government wants to control all financial transactions down to the penny. They don't like cash either. And no, it's not just about taxes. It's about controlling the populace.

Re:What about taxation?

[compro01]

Bitcoin comes standard with a fairly indelible trail of electrons.

Re:What about taxation?

[CRCulver]

Not until they do that for cash.

The problem is that as a physical, government-issued object, it is easier for a state to limit the availability and appeal of cash. Strategies that have long been used include circulating fewer coins and banknotes, restricting cross-border movements of cash, forbidding certain businesses from taking cash, and placing restrictions on how many ATMs can be located in a community so that getting cash just becomes a hassle.

Bitcoin, on the other hand, is an electronic concept floating around in the ether, and will be treated just like any other electronic form of payment. So, there definitely seems to be a need for a different kind of legislation to target this anonymous payment method.

Re:What about taxation?

[Anonymous Coward]

If the governments insist on treating BitCoin transactions as a capital gains taxable conversion of non-currency to goods/services/currency, this could get complicated. Either they trust the BitBuyers to report every BitPurchase on their taxes, or they demand that the vendors get IDs for every BitPurchase, which destroys the pseudonymous aspect of BitCoin.

The tax regulations on the vendor side don't need to be examined, it's still a payment, and some preset percentage of that payment must be paid to the government as a sales tax.

Re:What about taxation?

[ShanghaiBill]

Terminals that accept anonymous Bitcoin seem to undo much of that progress.

A government paper trail of every detail of your life is "progress"?

Re:What about taxation?

[CRCulver]

A government paper trail of every detail of your life is "progress"?

One's cash flow is not "every detail of one's life". To suggest it is makes you sound unintentionally Marxist. There are all kinds of activities that one goes about and wishes to keep private that do not involve the exchange of money.

But as far as a government paper trail of every detail of cash flow being progress, yes, yes it is. I happen to pay taxes in a state that uses those funds for all kinds of nice things in a policy supported by the majority of the population (even our cantankerous far-right party supports the welfare state). Legislation designed to ensure that everyone's income is declared to the last penny so that it can be taxed is a big part of this.

I can understand Bitcoin's anonymity being sacred in the US, where suspicion of the government is rampant (just as the strongest point of 3D printing for some American Slashdotters is that you can print the Liberator handgun), but elsewhere Bitcoin will have to compromise on anonymity to fit with the society people say they want.

Re:What about taxation?

[Anonymous Coward]

Its progress because its no paper trail but stored in a Bluffdale data center. Bitcoin is a stepback because payment is now public and the credit card companies can't sell payment data to criminals any more.

Re:What about taxation?

[rotaryexpress]

On the other hand chargebacks are not that prolific for honest sellers. I've used two in my life and both for cheats.

I used to work for a small retail chain (75 stores) working specifically on the POS system (including CC processing). Chargebacks are a huge issue.

Our staff had to deal with 30-40 chargebacks a month during our busy times. Each of those required at least an hour of research on the transaction, filling out forms and then getting the information back to the credit card processing company. All of which typically resulted in money coming out of our account, even though the customer was in the wrong (Along with other things, we sold monthly subscriptions to our service. A customer would dispute charges because they went to a store that started with the same first 4 letters of our name and didn't recognize the charge.).

Chargebacks cost us 1 employees time for an entire week every single month, and we where an honest retailer (refunds for anything even have way reasonable).

Re:What about taxation?

[Anonymous Coward]

elsewhere

"Elsewhere" being some part of Europe, and maybe some of their colonies. I don't know any other place on Earth where suspicion of the government isn't rampant.

Re:What about taxation?

[DerekLyons]

I can't speak to other countries, but in the US the seller is responsible for collecting and paying the taxes - and paying (pseudo) anonymously via BTC doesn't undo any of that as the seller still has an electronic record of the amount of the sale.

Re:What about taxation?

[LF11]

Bitcoin spent for daily purchases are not considered taxable as capital gains.

I'm not a tax lawyer (but I have one).

Re:What about taxation?

[Anonymous Coward]

Terminals that accept anonymous Bitcoin seem to undo much of that progress.

Most people don't think that's progress. They're not against taxes, but seriously, the things the government does to try to guarantee that it's able to tax, are totally incompatible with why we bother having government and taxes in the first place. You would be better off in a lawless anarchy with no justice, security, and other services, than you would be in the type of dystopian society our governments are trying to create.

Bitcoin isn't at odds with taxes. It's merely at odds with ridiculous over-the-top silly attitudes about taxes. And undermining all that silliness is the progress.

Maybe nobody ever votes this way, ever, and indeed we usually all try to vote for regression and dystopia. But most of us feel, and say we feel, differently. We just haven't taken that last step toward voting yet. Democracy can wait, I guess.

Re:What about taxation?

[ShanghaiBill]

One's cash flow is not "every detail of one's life".

A record of your transactions reveals a lot more than how much you spent. It contains what you spent it on, where you were, when you were there, and, with cross referencing, it can reveal who you were with. I would rather the NSA monitor my phone calls than have access to my financial transactions.

I happen to pay taxes in a state that uses those funds for all kinds of nice things ...

There are plenty of taxes that do not require the government to collect details of citizens' lives. My local government is funded primarily by property taxes. The deed to my house is already a public record, so no private information is needed to access that tax.

Re:What about taxation?

[TheCarp]

Actually it has a built in ability to allow for fairly arbitrary spend conditions, including multiple keys, no keys at all( not recomended but if you did want to just toss some bitcoins out for grabs....you could), static passwords for keys.

Re:What about taxation?

[TheCarp]

> So, there definitely seems to be a need for a different kind of legislation to target this anonymous payment method.

Well you have only shown that it has been done for cash, not really that there is need for that kind of control or even that such controls actually accomplish anything as they exist today.

The only real change I have seen that has decreased the use of cash is the convinence and ubiquity of cards as an alternative; which is far more carrot than stick.

Re:What about taxation?

[CRCulver]

While the seller may collect sales tax, the state needs some kind of paper trail of the buyer's finances as well to catch tax cheats. It may be that a person has declared their income at one figure and pays taxes on that, but is out there making purchases that suggest his income is actually much higher. With electronic payment systems like a bank or credit card, you can ensure that all of a person's money is accounted for and penalize him/her if it is not declared it as income, but anonymous payment methods like Bitcoin or cash allow people to hide undeclared income.

Re:What about taxation?

[sgbett]

On the other hand doesn't this actually put the merchant at more risk? I get my goods, hop in the car, and ten minutes later he finds out I gave him bad bit coins.

Confirmations aren't as important as may have been originally thought...

http://www.cryptocoinsnews.com...

It at least brings it into the realms of tolerable/insurable. Double spend is really hard, probably not worth the effort unless its a big (high value) purchase.

I'm sure there are exceptions, but high value purchases are probably worth hanging around a bit longer for, and probably involve some kind of warranty which in turn depends on some kind of identification.

Probably works just fine for the majority of cases, at least right now...

Re:What about taxation?

[Anonymous Coward]

Don't live under the illusion that cash is annonymous. I work on envelope free/deposit automation hardware for Financial Institutions(ie ATM, cash recyclers). Let me tell you that there are versions of those deposit device in ATMs that performs serial number tracking for each bank note inserted. In Europe serial number tracking is used to match the card holder with the counterfeit that was deposited. Once you keep track of bank note serial number and card holders you can start painting a pretty good picture of where the money has been.

Re:What about taxation?

[sgbett]

Sure the government can look at it, but then so can everyone else.

I know its a difficult proposition but transparency appears to have its benefits.

I can imagine a future where 'dark ages' refers to those centuries before the internet, when it was possible of brad people to terrible things in secret.

I think the fact that few humans can't be trusted, spoils 'privacy' for the many that can be. When privacy is used as a tool to further nefarious goals I think you have to look at what benefits it provides. Perhaps privacy only provides benefits because transparency has to date been largely unachievable (on any sort of equal footing). Does privacy benefit all equally? Am I some crazy socialist? or whacko libertarian? who knows! :)

This is a good experiment, and another notch in the bedpost of 'openness'.

Re:What about taxation?

[Anonymous Coward]

There are lots of situations where the customer is ultimately trusted and while a few do cheat it largely seems to work just fine. As an example when you sit down at a restaurant how often have you been asked to pay before your given the food (except for fast food restaurants at least)? This is the same thing. There is some risk on the merchant part, but it's no more than with traditional payment cards-or cash. And unlike cash there is nothing that is going to be stolen if somebody comes in and tries to stick the place up.

If a merchant is so worried there is a simple solution. Set a maxium threshold for what the person can pay in bitcoins. As long as it is a few hundred dollars equivlent it's highly unlikely to be worth someones time in scamming. They could potentially allow thousand dollar equivlent transactions too, safely, provided they make the customer wait 10 minutes or so. From my experience as a merchant the transactions are usually confirmed very quickly with a high degree of confidence. If you lower that to just a moderate people wouldn't even be waiting that terribly long for a large transaction (probably just a few minutes, and how often do most merchants have $1000 dollar transactions? not that often, and if your buying a car, a computer, etc is waiting 10 minutes that much of a problem? chances are the consumer will be waiting for other reasons on the merchant).

Re:What about taxation?

[Anonymous Coward]

While the seller may collect sales tax, the state needs some kind of paper trail of the buyer's finances as well to catch tax cheats.

No it doesn't. Why would you think it does?

It may be that a person has declared their income at one figure

Employers with hold US income tax (and state tax in the states that have it). The US tax return is filed with an attacked W2 form from the employer with the amount earned.
If someone is self employed or owns their own business, they report income monthly. They are far more likely to be audited.
Can people do "under the table" work? Sure. but that can be paid for in barter, cash, and be just as anonymous and untraceable as bit coin.

With electronic payment systems like a bank or credit card, you can ensure that all of a person's money is accounted for and penalize him/her if it is not declared it as income

Or you could see that they signed up for some porn site, or other aspect of their life they'd like to keep private, and extort money from them to keep it quite... Or use it against them to make them look like a villain if they become a "political agitators" (which no government has ever done before, certainly not the US during the Red Scare, the Civil Rights Movement or a political campaign).

... if it is not declared it as income ...allow people to hide undeclared income.

So, you're saying.. "If you ain't done nuthin' wrong, you ain't got nuthin' to hide." Where have I heard that before? Oh wait, I know... I'm just one of those 'Muricans who is suspicious of governments.
Yes, people can abuse the system, but that is sacrifice I'm willing to pay to keep my right to privacy. Besides, most taxes that are unpaid that should have benn are because of legal loopholes people with a lot of money lobbied to put in the tax code. I suppose there is also drug money, but that wouldn't be a problem is the US revoked it prohibition on illegal substances and treated addiction as a medical problem rather than a criminal problem.

Re:What about taxation?

[PRMan]

Actually, they are. You are supposed to track them, especially for large (over $600 or something) purchases.

Re: What about taxation?

[LF11]

$600 is not grocery money.

Re:What about taxation?

[LF11]

BitPay protects merchants against double spends.

Wait 10 minutes?

[NotInHere]

Do you have to wait 10 minutes until you get your stuff? Do you have to stay 10 minutes in the restaurant after you've paid before you can go?

Re:Wait 10 minutes?

[QuasiSteve]

Do you have to stay 15-90 days in the restaurant after you've paid with a credit card before you can go?

After all, nothing's stopping you from later calling up your bank/credit card company and getting the charge taken off for reasons ranging between fraud and "I didn't like the way that waiter looked at me, but I paid anyway, but after some more thinking I believe he was staring at my ass".

Bitpay is a bit like the credit card companies in this - they actually deal very little 'in' Bitcoin, they just exchange it, and they give vendors some guarantee that they in fact get paid, even in the unlikely event of a customer trying to perform a double spend.

Similarly, it's in merchants' best interest to take the money and run the small risk of fraud - same with credit cards. Of course, if you're selling a car, house, yacht, private jet.. you may want to wait those 10 minutes.. or maybe a day, just in case.

Re:Wait 10 minutes?

[NotInHere]

Do you have to stay 15-90 days in the restaurant after you've paid with a credit card before you can go?

With credit cards you still can track down the person who owned the credit card. This is not (always) possible with bitcoin. Of course, as less bitcoins get mined, more and more bitcoins will be trackable, as people get them from exchanges, which have anti-money-laundering rules.

Re:Wait 10 minutes?

[Anonymous Coward]

So does that mean I now have to keep my coin in bitpay?

Re:Wait 10 minutes?

[Anonymous Coward]

You may have to give signature...

Re:Wait 10 minutes?

[Anonymous Coward]

No. Actually BitPay doesn't have such a feature; you can't keep your coins there. They just take precautions against double-spending on behalf of the merchant, and I believe there hasn't been any such incidents yet.

Re:Wait 10 minutes?

[LF11]

Not at all. BitPay is entirely merchant-side.

Re:Wait 10 minutes?

[LF11]

Not if the card is stolen, or the person reports the card as stolen. These are both significant problems for merchants, which cannot happen with bitcoin transactions.

Something a lot of people don't understand about payment networks is that credit card transactions are not "confirmed" for several months. The merchant is on the hook for the full amount of the charge for this entire time period. The customer can call and dispute a charge several months after the fact, resulting in a chargeback to the merchant.

Bitcoin, once the transaction has been confirmed, is permanent. What does this take, 10 minutes max if you include a reasonable fee? (a fee which is still vastly less than that charged by credit card companies...) Imagine being able to account for EVERY POSSIBLE "CHARGEBACK" by 10 minutes after closing that day? That's what bitcoin is.

Re:Wait 10 minutes?

[Anonymous Coward]

Don't worry, at the car dealership, between the talks to the manager, the time the car gets 'cleaned' and 'driven down from the lot', you have the time to clear a pair of Bitcoin transactions ;-)

Re:Wait 10 minutes?

[bspus]

As soon as you release the transaction from your client, it is visible within seconds. It will take 10 minutes or longer to get into a block, sure (and buried under a couple of blocks at least to be really "confirmed"), but if you initiate the transaction you can't really take it back and it proves that you at least had the coin at the time to carry it out in the first place For payments the scale of a meal, that would be enough for me if I were the owner of the restaurant

Re:Wait 10 minutes?

[bondsbw]

This also highlights one of the problems of Bitcoin. When receiving goods instantly (such as going to the grocery store or through the drive-thru), Bitcoin is somewhat easier to counterfeit and to get away with.

Either the buyer will be gone before any reasonable suspicion comes about, or the seller will need to force the buyer to wait until some number of confirmations succeed (what that number is depends on the seller who may require a higher number of confirmations for more valuable transactions).

That said, you could play smarter with Bitcoin. A good camera could be setup recording all transactions that occur as well as the exterior of the building (parking lot), and any denied transactions could instantly trigger video to be sent to the manager and the police with full video recordings at the exact times that matter.

Re: Wait 10 minutes?

[LF11]

No different than counterfeit cash, except with bitcoin the discovery happens quickly and automatically. Also, the bitcoin problem takes considerable technical ability and infrastructure.

You definitely haven't bought anything with bitcoin in person. It happens FAST, often faster than a CC auth.

Re: Wait 10 minutes?

[Anonymous Coward]

Point of sale stuff can be trained to recognise counterfeit cash and can have a very high accuracy rate. No amount of training is going to allow them to detect a double-spent bitcoin, because that can only be done by the network, and cannot happen with reliability until after the next block is processed (typically takes about 8 minutes, but has been known to take over an hour on rare occasions).

And suggesting that this is going to be a rare occurrence isn't going to cut it. It's pretty easy to double-spend BTC, and doesn't require you to provide any information about who you are, which means if any significant number of retailers start accepting BTC at point of sale without waiting for validation of their transactions you will see large scale abuse of this. Credit card chargeback fraud is *much* harder, because you need to provide proof of ID to get the card, then you need to provide a description of the circumstances that lead to you wanting to charge a transaction back to your card issuer. It's more work, and if you do it too many times on the same card your issuer will get suspicious. With BTC, there's nobody to get suspicious, because (1) the process is entirely automatic and (2) there's no easy way to spot that it's the same person making the transactions.

Face it, BTC is *not* suitable for point of sale use.

Re:Wait 10 minutes?

[Anonymous Coward]

As soon as you release the transaction from your client, it is visible within seconds.

It will take 10 minutes or longer to get into a block, sure (and buried under a couple of blocks at least to be really "confirmed"), but if you initiate the transaction you can't really take it back and it proves that you at least had the coin at the time to carry it out in the first place

For payments the scale of a meal, that would be enough for me if I were the owner of the restaurant

If I pay for my meal with bitcoin, and simultaneously issue a transfer request to send my bitcoin to another wallet that I also control, there are three important things to note:

(1) the chances of you detecting that I've done this before I leave the premises are very small
(2) the chances that the money will be transferred back to me rather than to you are approximately 50%.
(3) it would be very difficult for anybody to do anything about this after the fact; it is practically consequence-free for me to do this (except at a restaurant I intend to use again).

Why therefore would anybody with the slightest degree of dishonesty ever not do this? If BTC at point-of-sale becomes common, BTC double spending will become rampant. It is much easier to perform than credit card chargeback fraud, and much harder to prevent.

Re: Wait 10 minutes?

[bondsbw]

No different than counterfeit cash

True if you assume the counterfeit cash is always difficult to detect before the buyer leaves. Counterfeit Bitcoin would be impossible to detect within such time if the buyer is allowed to leave immediately after attempting the transaction.

You definitely haven't bought anything with bitcoin in person. It happens FAST, often faster than a CC auth.

No I haven't, so please enlighten me. I'm basing my assumption on quite a few articles stating that a single confirmation takes minutes (typically under 10). But I doubt many merchants would consider a single confirmation to be adequate. So multiply that time by the number of confirmations the merchant chooses, right?

Re: Wait 10 minutes?

[LF11]

Yes. But a merchant can choose zero confirmations. So for example, I recently renewed some domains at register4less with bitcoin. They displayed QR code and I took a picture of it with my phone's bitcoin app. Confirm the amount, and about 5 seconds later the QR code went away and the purchase was done. No name, no billing address, no entering long number strings, just take a picture and confirm. It was simpler and faster than a CC, and there was absolutely no way for someone to intercept or steal the payment parameters and take more money from me.

Once you do this a few times, credit cards start to feel very archaic.

Now of course I could have attempted to defraud r4l, but the infrastructure required is not even remotely worthwhile for this scale of purchase. For those purchases where that infrastructure is worthwhile (thousands of dollars) then it seems appropriate to wait ten minutes. Notably, merchants in this range -- such as car dealers -- often have access to all kinds of identifying information which can be used to track you down in the event that the payment fails or is revoked. Nevertheless, they still occasionally fall victim to counterfeit cashier's checks and the like. With bitcoin, once those confirmations start layering up, there is no possibility of revokation or counterfeiting.

Re: Wait 10 minutes?

[LF11]

Have you ever tried to actually accomplish a double spend? It is not as easy as you might think.

Furthermore, BitPay protects merchants from double-spend risk. Even if you are successful, the merchant is not necessarily defrauded.

Contrast this with any form of fiat exchange -- credit card, check, cashiers' check, or cash -- where the merchant assumes all such risk.

Re: Wait 10 minutes?

[LF11]

To clarify, it doesn't cost a lot of money to attempt a double-spend. Got confused with 51-percent attack (perhaps plausible with a big enough botnet?). Regardless, BitPay offers protection against double-spending to all of their merchants, so the point is moot in the case of this article.

Re:Wait 10 minutes?

[LF11]

BitPay protects its merchants against double spends.

As for credit card chargeback fraud, all it takes is a phone call.

"how-will-refunds-be-calculated dept."

[Anonymous Coward]

how-will-refunds-be-calculated.................

Probably the same way as they are already.

Re:"how-will-refunds-be-calculated dept."

[SydShamino]

By refunding the purchase in the non-standard currency used for payment? Because even when I pay by credit card now, I am always paying using the same currency as the item is priced.

With Bitcoin, there is a conversion involved in the payment. If the item is returned but bitcoins have halved in value, will I get twice as many bitcoins back as I paid (i.e. new conversion at latest rate - most likely outcome, but I still got to launder my bitcoins into more bitcoins)? If Bitcoins have doubled in value, will I get back the same number I paid and make money on the return (i.e. reuse old rate; ripe for abuse as a way to hedge on the exchange rate for 30 days)? Or will the return be processed as cash (i.e. easy way to launder bitcoins into cash)?

Re:"how-will-refunds-be-calculated dept."

[tlhIngan]

By refunding the purchase in the non-standard currency used for payment? Because even when I pay by credit card now, I am always paying using the same currency as the item is priced.

With Bitcoin, there is a conversion involved in the payment. If the item is returned but bitcoins have halved in value, will I get twice as many bitcoins back as I paid (i.e. new conversion at latest rate - most likely outcome, but I still got to launder my bitcoins into more bitcoins)? If Bitcoins have doubled in value, will I get back the same number I paid and make money on the return (i.e. reuse old rate; ripe for abuse as a way to hedge on the exchange rate for 30 days)? Or will the return be processed as cash (i.e. easy way to launder bitcoins into cash)?

Generally speaking, that's generally the case - there's a "buy" and "sell" price and they can differ.

E.g., let's say the last BTC to USD conversion was 1 BTC to USD$500. A currency converter might "buy" BTC at $450, and sell at $550. So if you buy a $450 item and pay 1 BTC, then return it, you'll get back $450/550 or approximately 0.81818182 BTC back.

Sometimes the company may cheat and limit you to refunding what it got from you - e.g., let's say it's now $250 USD for 1 BTC, and you return the item. The company may cheat and give you back your 1 BTC (and pocket the $450 the merchant returned back).

Currency conversions are horrendously messy , and generally payment processors are geared towards screwing you over. The merchant doesn't see any of this since as far as they're concerned, they refunded you in full.

Re:"how-will-refunds-be-calculated dept."

[PRMan]

My wife accidentally double-paid on an Overstock transaction in bitcoin. They refunded the same amount of dollars. We ended up with MORE bitcoins because the price had dropped a little.

not really

[fermion]

merchants from worries of fraudulent chargebacks,

What keeps merchants from excessive fraudulent chargebacks is providing a clearly defined product or service, with a clearly defined return policy, and good customer service.

Bitpay is a US company and as such is under US laws. You can bet that at some point someone will spoof a payment through bitpay at a clueless retailer, sue Bitpay, and Bitpay will sue the retailer. It could even be a fraudulent suit, but if the security measures are not there to insure that bitcoins are secure, and accounts are not accidentally wiped out, lawsuits will happen. And we have seen with Mt Gox that even though bitcoins are supposed to be decentralized, it is still subject to a single point of failure.

Remember when Paypal promised the same thing. A secure way to pay an untrusted party for goods and services, better than a credit card? Remember how Paypal prevented access to seller accounts if the buyer complained? Did not seem so good of a deal then, did it?

Re:not really

[PRMan]

How do they spoof someone's private key? And if they do, then why do they need bitcoin?

Re:not really

[Anonymous Coward]

What keeps merchants from excessive fraudulent chargebacks is providing a clearly defined product or service, with a clearly defined return policy, and good customer service.

Not really. This is what keeps them from excessive legitimate chargebacks. Fraudulent chargebacks are people trying to get something-for-nothing, and no amount of customer service or returns policy is going to prevent these people from trying it on. The only way to prevent fraudulent chargebacks are to require photo id & proof of address from your customers. That way if they try it, you can sue them to get your money back. But it's too much hassle for most retailers, and offputting for many customers.

volatility

[Joe_Dragon]

is the exchange rate set each day / each hour / live?

and what happens if it's price drops fast and you end up under paying them will they try to hunt you down to pay for the shout fall?

Re: volatility

[Anonymous Coward]

Iirc it's live, based on a 1-hour average of several exchanges, some secret sauce and about a 3% markup.

Nothing, exchange rate risk is already priced in... what on earth is a shout fall?

Re: volatility

[Anonymous Coward]

I think he meant "short fall" where you fall short of a full payment because the market crashed in the middle of the transaction.

That said, I think a "shout fall" is when you push him off a cliff and he screams bloody murder all the way down. Darn annoying, that.

Re:

[Anonymous Coward]

I dunno, see how the credit card companies like Visa and Mastercard do it and just do it the same way.

What about taxation?

[LF11]

Businesses are required to report bitcoin transactions as income like any other. In this regard, there is no difference between accepting bitcoin and accepting cash...except that there is considerably more tracking related to bitcoin. In particular, every transaction is public and permanently visible, and there is significant tracking and monitoring of the bitcoin/fiat exchange points.

I am here for the pain

[LF11]

Every time there's a bitcoin story, I come here to relish in the flood of angry, embittered nerds. Too old to have picked up on the "next greatest thing," now they just rage, trolling a technology they don't know and missed out on.

Bitcoin was supposed to die years ago. Right? But it didn't. And now big names are getting on board. Shouldn't you start learning a little bit about how this works? eBay is looking at it, after all, and the founder of PayPal is watching.

If only you had bought in early, you could be taking a trip to space on Virgin Galactic, like that flight attendant from Hawaii who was Branson's first public bitcoin customer. Ouch.

Re:I am here for the pain

[JaredOfEuropa]

Bought in? In the early days, the coins for that trip to space would have come at the cost of the electricity required to run a miner on your laptop for a few weeks.

Re:I am here for the pain

[LF11]

It sucks to be so close to the lottery and miss.

And let's not even talk about Dogecoin.... :)

Re:I am here for the pain

[Anonymous Coward]

Preach It!! i was very close myself to buying in early but missed. I try not live with regret, and have tried to actively learn about the ongoing story that is Bitcoin. But as you said, many seem to be full of troll rage for those reasons.

Re:I am here for the pain

[Anonymous Coward]

Every time there's a bitcoin story, I come here to relish in the flood of angry, embittered nerds. Too old to have picked up on the "next greatest thing," now they just rage, trolling a technology they don't know and missed out on.

I wouldn't call people who rejected/rejects BitCoins nerds.

Most of the trolling I remember was about it being a "scam", "ponzi scheme", etc. rarely do they talk about the technological aspects.

Also, I wouldn't call people who bought in bitcoins for the sake of cashing out later nerds either. Almost anybody can speculate and invest into emerging markets.

Re:I am here for the pain

[Anonymous Coward]

Every time there's a bitcoin story, I come here to relish in the flood of angry, embittered nerds

I think the word is "gloat", but go ahead if it makes you happy.

Re:I am here for the pain

[ADRA]

Nah, I always see it the other way, every article released about bitcoin is like "xxxx is the year of the linux Desktop" and every single article pumps up reasons why bitcoin will suddenly take the world by storm, but nothing else changes. Bitcoin is a commodity that a few bit players will continue to play withg it and the general public won't know or give a fuck about until someone gets defrauded for their entire life savings for some reason (most likely due to their own ignorance). Then politicians will knee jerk and do something drastic (like banning online gambling in the US a few years back) and it'll continue to suck the life out of a concept that is frankly destined to fail.

Re:I am here for the pain

[Powercntrl]

If only you had bought in early, you could be taking a trip to space on Virgin Galactic, like that flight attendant from Hawaii who was Branson's first public bitcoin customer. Ouch.

This is exactly what will prevent Bitcoin's wide acceptance as a currency. Why would you spend your zero-point-something-something Bitcoin on a coffee at Starbucks today, when two years from now that amount may buy you a car from Tesla?

A little bit of inflation is needed in a currency to encourage it to be spent and exchanged, not hoarded in the hope that tomorrow it will be worth more. The cryptocoin that started as a joke, Dogecoin, gets this. Don't get me wrong, cryptocurrency is here to stay - it just may not be Bitcoin that we'll all ultimately be using.

Re:I am here for the pain

[LF11]

Linux never did have its "year of the desktop." Instead, it just made the desktop (and the laptop) obsolete. Game over.

Great model for bitcoin to follow, if you ask me.

Re:I am here for the pain

[LF11]

The thing you (and many others who claim this is a problem with bitcoin) simply do not understand is that bitcoin does not work in an inflationary model. If the inflationary model were correct, bitcoin would have died years ago. Bitcoin was designed around a different economic model. It makes no sense unless you look at it with the correct model in mind.

It's five years old and growing. Maybe the inflationary model works for other currencies, but the inflationary model clearly is not accurately representing the bitcoin economy.

As for dogecoin, yes, I expect we will be using dogecoin in the future. Dogecoin is the only thing more ridiculous than a deflationary crypto-anarchy to have come along, and humanity loves a good joke.

Re:I am here for the pain

[TeknoHog]

Why would you spend your zero-point-something-something Bitcoin on a coffee at Starbucks today, when two years from now that amount may buy you a car from Tesla?

The question makes sense with or without Bitcoin. If you care about your money in the long term, you don't go to Starbucks, you make your own coffee for much less money, and invest your savings. OTOH, if you're really short of cash, and you're hungry, a good meal right now is worth a lot more than a prospect of earning some more in a few years. The idea of spending vs. saving is a lot older, it's just that Bitcoin has seen some rapid growth in the past couple of years that has made it more in-your-face.

Re:I am here for the pain

[PRMan]

You haven't missed it. $450 is still really cheap for a technology that will likely revolutionize world finance.

Re:I am here for the pain

[PRMan]

Well, here's to hoping it fails as spectacularly as Linux. That will put the price per bitcoin at what? $50,000?

Re:I am here for the pain

[PRMan]

Because we just bought the coffee at Starbucks for a fraction of a cent. And we can buy coffee for the rest of our life for $8.

Re:I am here for the pain

[Anonymous Coward]

The thing you (and many others who claim this is a problem with bitcoin) simply do not understand is that bitcoin does not work in an inflationary model. If the inflationary model were correct, bitcoin would have died years ago. Bitcoin was designed around a different economic model. It makes no sense unless you look at it with the correct model in mind.

It's five years old and growing. Maybe the inflationary model works for other currencies, but the inflationary model clearly is not accurately representing the bitcoin economy.

I hate to break it to you, chum, but you're fucking dumb.

There isn't anything magic about bitcoin which makes deflation a good idea for it even though it's a horrible idea for real currencies. The thing you fail to realize is that there isn't a real bitcoin economy, so you can't reason about bitcoin as if it has already succeeded in any real sense. Yes, yes, you can "buy" things with bitcoins, but that's because there's a couple of venture capital funded companies willing to throw millions of real-money VC at trying to bootstrap a bitconomy in hopes of striking it rich. These are not the first time that VC has been burned on something dumb, and they won't be the last either.

There will be a real bitconomy the day that real people can meaningfully run their real lives living on bitcoin. As in, can a McDonald's worker ask to be paid in bitcoin, and spend bitcoin directly on everything they need to live, from rent to transportation to food to clothing? The reason we as a society value currencies isn't just because we (or the mythical "men with guns") arbitrarily decide they have value -- that's the seductive lie bitcoiners tell each other. The value of currencies derives from the fact that real people, particularly people at the bottom of the economic pyramid, are paid in a currency and have a very reasonable expectation that they can pay for things in that same currency. The "men with guns" are in one sense a necessary component of this system, in that they enforce rules which say things like "all U.S. debts public and private may be resolved by paying dollars". Such rules bootstrap national currencies past the chicken-or-egg dilemma, but the actual day-to-day value derives from people actually using them.

And use is where the case for Bitcoin falls flat on its face. Bitcoin has never really grown in any sense other than having a ludicrously high and obviously speculative market cap. The exchanges have never had enough depth to back the market cap up -- the U.S. Government could instantly tank the "value" of one Bitcoin to nearly $0 by choosing to sell all the coins they've seized from Silk Road, for example. There simply aren't enough buy orders on the markets to sustain Bitcoin's price in the face of such an event. Another looming potential crash is the 200K Mt. Gox coins which are likely to be liquidated by Japanese bankruptcy courts.

In recent months, bitcoin transaction volume has tanked, because nobody's actually using this shit to any meaningful extent. The main activities are speculation and bitcoiner circle-jerks about "you can-so buy things with bitcoins, BITPAY!!!!" while steadfastly refusing to examine or think about the absurdly low (and falling) amount of actual sales transacted with bitcoin, or the fact that virtually all of the retailers involved in these experiments actually take dollars from VC-funded startups, not bitcoins. Your bubble is going to burst soon. Hope you're smart enough to cash out before the other suckers.

Re:I am here for the pain

[LF11]

True, although I don't think many non-nerds come to Slashdot, especially with the decline in viewership.

Re:I am here for the pain

[LF11]

> There will be a real bitconomy the day that real people can meaningfully run their real lives living on bitcoin. As in, can a McDonald's worker ask to be paid in bitcoin, and spend bitcoin directly on everything they need to live, from rent to transportation to food to clothing?

I already buy food and clothing with bitcoin. Rent and transportation aren't happening yet for me personally, but you can buy cars and gasoline with bitcoin in some areas and there are various landlords (and whole LOT of hotels) that you can pay with bitcoin.

Not bad for an upstart nerd-currency barely 5 years old with no political backing whatsoever.

> Your bubble is going to burst soon.

This bubble's crash is double the last bubble's peak, and people such as yourself were saying the exact same thing on the last bubble. And the one before that. Of course maybe *this* one will be its death knell....right? Or maybe you'll be weeping to your grandchildren some day about how you could have bought bitcoin when it was under $500... hmm, sure you want to risk it? Don't you want to have just a *little*, just in case it really does take off?

You think you are playing it safe by staying out. At what point do you realize that buying in has become the safe thing to do? $1,000 per? $10,000 per? When you can spend it for rent/transportation/food/clothing? Or when the grocer down the street puts up a sign, "Bitcoin Accepted Here"?

Careful now, Toshiba bought their POS systems from IBM a while back. And now they accept bitcoin. A real POS system used by real, brick-and-mortar stores, accepts bitcoin. This isn't nerd currency any more, this is becoming real.

Sure you want to miss out?

No you can't

[Anonymous Coward]

After all, nothing's stopping you from later calling up your bank/credit card company and getting the charge taken off for reasons ranging between fraud and "I didn't like the way that waiter looked at me, but I paid anyway, but after some more thinking I believe he was staring at my ass".

There's only two ways to do a charge back: not getting what you paid for and fraud.

In your scenario's case, the only way you could do a charge back is if you paid for a meal and found extra charges on the credit card. Because with restaurants, if you eat more than half the food, you owe them.

And since 2008 with the new backing laws, many of the consumer protections have been taken away - especially when it comes to bankruptcy.

Bitcoin is reversible

[Anonymous Coward]

You can double-spend bitcoin until it's confirmed, and confirmation takes about an hour. While it might not work every time, it will work sometimes, meaning the merchant won't get the coin. The alternative that's safe for the merchant is to wait 1 hour before handing over the goods, which is a bit long for a retail scenario or paying in a restaurant. The minimum sane amount of time for the merchant to wait is the transaction interval, 10 minutes, still too long.

I don't think this is the right way to use bitcoin in retail. Rather, people should be funding web wallets which proxy the payments for the customers, and POS vendors settle with the web wallets every couple hours. so, there are still middlemen involved, but with less barrier to entry than credit cards.

Secondly everyone likes to pontificate these retail deals will result in lower fees. In fact the bitcoin acceptance is usually bundled with the POS or shopping cart, and is an afterthought for the merchant, so the exchange rates are absolute shit. In theory I should be able to fund coinbase, convert to bitcoin, then the merchant converts back to dollars also on coinbase, the same exchange, so there's little arbitrage, and coinbase should keep their fees low. I don't see a technical reason the exchange rate needs to add a large percentage to the transaction, but so far it does.

However if you're going to use a cryptocoin for retail, Dogecoin makes more sense because of the shorter transaction interval and the other virtues of the doge.

Re:Bitcoin is reversible

[edibobb]

Excellent sanity check!

Re:Bitcoin is reversible

[Anonymous Coward]

10-minute waiting time is quite reasonable if one is buying a car, isin't it? Waiting an hour does not make much sense, since taking over any large part of the bitcoin network for tens of minutes costs way more than the car one is buying.

Litecoin might be useful for buying beer, though. Then again, it takes a very dedicated crook to exert effort on double spending their beer cost :)

Re:Bitcoin is reversible

[LF11]

BitPay protects its merchants from double spend risk. Problem solved. All you wait for is for the tx to appear on the network, which often takes less time than a CC auth.

Bitcoin is faster, safer, and more elegant than credit cards. Once you use bitcoin a few times to pay for real-world things, credit cards start to seem distinctly archaic.

You're talking about tinfoil hat land not reality.

[DerekLyons]

While the seller may collect sales tax, the state needs some kind of paper trail of the buyer's finances as well to catch tax cheats.

The state may want that, but neither the seller nor the buyer is for the most part in no way obligated (morally or legally) in the US to provide that.

Great Steop Forward!

[Optali]

Now they only need to find some vict... I mean shoppers willing to buy real stuff with it!!!
Maybe a bottle of Jack Daniels with a few milligrams of LSD would help ;)

Re:

[SydShamino]

You mean all in the same currency? I think you didn't even read my post.