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Expedia To Accept Bitcoin
An anonymous reader writes With the debacle of Mt. GoX, Bitcoin's future was looking a little murky. But in a significant mainline acceptance, Expedia has said they will begin accepting Bitcoins as a form of payment. At first, they will accept it for hotel bookings only, will accept it only in USA, and also will not be holding Bitcoins for any length of time — converting it to dollars as soon as they can. But, quoting Emily Spaven, managing editor of Bitcoin news site CoinDesk, as told to the BBC, the move was "brilliant news" and it "brings digital currency further into the consciousness of the mainstream." So you can't quite fly to Galt's Gulch to your newly Bitcoiin-purchased real estate without switching currencies.
...Bitcoin will not fulfill its promise: keeping cash flow untaxable, allowing people to hold on to their hard-earned income instead of the state taking it away from them at gunpoint.
Bitcoin makes no such promises. The only "promises" (goals, really) bitcoin purports to make are centered around the current trust-based model of payment processing and it's unnecessarily high transaction costs. Only people (like you, apparently) with an agenda/ax to grind believe bitcoin promises anything else.
I've seen a reasonable number of announcements regarding accepting Bitcoins, but am still looking for a good case where it accounts for a significant proportion of someone's business. People either seem never to report the numbers, or only those with relatively poor Bitcoin numbers report them.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
bitcoin has to much fluctuation for them to hold it. and do you want to show up at the hotel and be told you have to pay more to make up the short fall and or be told you can only get a room at the walk up / Max rack rate that can be sat 3-5 times the Expedia rate.
You would never "show up at the hotel and be told you have to pay more". Normally I would just call you an idiot. But it is not your fault. The Mainstream Media has done you a disservice. When you pay a merchant with Bitcoin they can choose to have it INSTANTLY converted to cash or save a portion of the Bitcoin payment. There is no "fluctuation risk" for the merchant unless they choose to hold Bitcoin.
Unfortunately, American regulatory practices mean that for the foreseeable future, businesses will convert Bitcoin to cash as soon as they get it, and deposit it into ordinary bank accounts. As long as that goes on, Bitcoin will not fulfill its promise: keeping cash flow untaxable, allowing people to hold on to their hard-earned income instead of the state taking it away from them at gunpoint.
Its not American regulatory practices, i.e. the recent IRS advisory about virtual currency being an asset not a currency. It is, and has been since before the IRS spoke, bitcoins volatility that causes merchants not to **hold** bitcoins.
Also, merchants don't have to convert bitcoins to fiat currency. They may never even touch or see a bitcoin. Various bitcoin exchanges have merchant services where the merchant tells the exchange the price in fiat currency and the exchange calculate the equivalent number of bitcoins to display to the customer, provides an exchange payment address, and when bitcoins are received at this address the exchange credits the merchant's account the exact fiat currency amount they originally stated regardless of any bitcoin fluctuations. The merchant does all its pricing and accounting in fiat currency and receives the exact correct payment in fiat currency. It merely receives the payment from a 3rd party, the exchange rather than directly from the customer.
Again, all of this was in place **before** the IRS advisory. It was due to bit coin's price volatility, which continues today. This week bitcoin lost 11.6% of its value. Bitcoin acts much like an asset, i.e. gold, stocks, etc.
That said, bitcoin is an excellent payment system. It will probably replace paypal and such, put a dent in credit cards, but probably not compete with the US Dollar, the Euro, etc to a large degree. Bitcoin has to become a stable store of value before it can become a serious currency.
And of course if you are a speculator bitcoins have a value there too.
People either seem never to report the numbers, or only those with relatively poor Bitcoin numbers report them.
Perhaps they are reporting the numbers, but most of the numbers are "poor"?
The "carrot" has always been "we can use this as currency for purchasing goods!" but the reality has always been that Bitcoin is in reality a speculative commodity that is rarely used in commerce.
If you want news from today, you have to come back tomorrow.
I've seen a reasonable number of announcements regarding accepting Bitcoins, but am still looking for a good case where it accounts for a significant proportion of someone's business. People either seem never to report the numbers, or only those with relatively poor Bitcoin numbers report them.
To be honest most of the large merchants/service providers announcing that they accept Bitcoins never actually see a bitcoin. They contract merchant services where a bitcoin exchange acts as an intermediary that converts the price to bitcoins, accepts bitcoins and then pays the merchant in the currency the original price was stated in. And they pay the exact amount originally stated regardless of any bitcoin fluctuations.
All accepting bitcoins means for most of these merchants is that they work with a different payment processor, say Coinbase rather than VISA. The merchant still prices, receives payments and does all their accounting in dollars, euros, etc.
"American regulatory practices"
Such as...?
A recent IRS advisory said virtual currency is to be treated as an assent not a currency. So lets say you receive some bitcoins. At some future date you spend these bitcoins. Since these bitcoins are an asset you have to account for their gain or loss in value for the days you held them an declare a loss or gain on your taxes. In short spending bitcoins has the paperwork overhead of selling stocks, its not like spending dollars at all.
Ex. You buy one coin at $500 and another at $600. Coins are priced at $800 at the time of a future purchase. You buy something for $1,200, 1.5 coins. Using FIFO (first in first out) your basis for the outgoing 1.5 coins is $500 + $300 = $800, and the basis for the returning 0.5 coins is still $300. You experienced a gain of $400 on the 1.5 coins at the time of the sale and that $400 would seem to be taxable income. Apologies if I botched the math, hopefully the point gets across.
If you desire an all-bitcoin environment, then this is a required precursor. If a business is accepting bitcoins, and they in turn do business with another that accepts bitcoins, then someone there will soon realise that skipping the dollar-conversion in the middle saves a lot of commission costs.
Bitcoin does have a few advantages aside from those sought by crypto-anarchist idealists. For one, it's conveniently international - even Paypal isn't active in all countries. It means you can offer a service globally without having to worry about handling a hundred different currencies and ten different payment services.
Yup, they do not accept Euros either. They convert your Euros into US dollars, which they accept.
0.0001 BTC is 5 cents in today's market (1 BTC = $568) which is quite cheap for a transaction. Suppose the buyer also does not want the risk of BTC fluctuations, so he purchases BTC just before buying from the online store. But the cost to convert USD to $100 worth of BTC and then reconverting the BTC to USD seems both inefficient and expensive because there is usually a spread (or difference in buying and selling prices of a commodity). So after all the fees and conversions, the buyer may have spend $101 or $103 for transaction, which is not much cheaper than a credit card transaction.
What is a bitcoin? It's an entry in a shared block chain (list of transactions) which requires computing a very difficult hash function to verify. That computation is called a "proof of work." The computer that successfully verifies a block also gets an entry in the ledger giving it a reward for calculating the hash. You can't arbitrarily create a bitcoin precisely because everyone on the network has the same shared block chain. All of this requires a lot of computational cycles and hence electrical power. So in a fashion you're translating electrical power into currency.
The effort required to mine a block is (almost) independent of the number of transactions in it. Mining happens against a tree hash of all the transactions in the block, so the only difference between mining a block with 1 transaction and a block with 1,000,000 is generating that tree. And that is something desktop computers do routinely, for example magnet links used for P2P are based on hash trees. So a larger amount of transactions always leads to a larger total reward for mining.
A bigger technical challenge is whether a broadcast network can handle transaction rates resulting from large-scale adoption.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
That's not intrinsic. If you don't want to do those things, it has no value for them. All value is subjective.
Gold's utility value is way below its current market valuation though.