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0 pointskhuey13y ago0 comments

BTC may solve buyer-side fraud, but it creates a giant seller-side fraud problem.

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I basically see advantages for the seller (lower fees, fraud protection), but none for the buyer (seller-side fraud potential, no cash-back).

Therefore, why would I, a buyer use this vs a credit card?

mrb13y ago

Your thinking is too narrow. You are focused on the small subset of transactions where you use credit cards. Bitcoin is a solution to a much larger set of problems where credit cards do not work at all, or well enough.

Firstly, you just cannot use your credit card (or Paypal, or Western Union) to do certain transactions: sending any amount of money to a family member overseas (WU does not operate in many countries, and has limits), making a donation to an organization censored/oppressed by governments (PP blocks donations to Wikileaks), etc.

Secondly, even when you can use the traditional banking system, it is inconvenient: driving 30min to a WU office to receive money, waiting days for wire transfers to complete, etc.

Thirdly, your credit card is tied to an account that your government, bank, or a court can seize for whatever reason (your spouse making fraudulent claims during a divorce going badly, etc). Bitcoin protects you from that. With Bitcoin, you own a purchasing power that no one can regulate or block.

Fourthly, Bitcoin transactions fees are voluntary, hence very low: typically less than 0.01%. This benefits not only sellers, but also buyers. Credit card transactions cost 1-2% (even if you do not see them as a buyer, the seller increase its prices to cover them).

Fifthly, the USD in your account tied to a credit card depreciates over time, because the Federal Reserve prints money continuously (causing long-term inflation). Whereas with Bitcoin your purchasing power is preserved or increased over time, as the maximum number of Bitcoins is capped (causing long-term deflation). Therefore you do not have to resort to various more or less risky investment options to preserve your net worth over your lifetime.

oleganza13y ago

Since transactions are irreversible, buyers need to fill less forms and have lower prices. Coindl.com sells you stuff with no registration/forms/emails - it shows a QR code and gives you a download button within two seconds after you sent a transaction. And buyer does not need to trust his CC details to new merchants. He only risks the amount to be paid, not the whole bank account.

neilkumar13y ago

But a compromised credit card doesn't mean you risk your whole bank account. First, at least in the US, there are limits to what you are liable if you are card is compromised -- report within 48 hours, the limit is $50, report within 60 days, the limit is $500. Second, credit cards have a credit limit -- so, worst case scenario, you'd be out to whatever your limit is (which is unlikely to happen as any weird use of your card would probably trigger it for a security review, which wouldn't allow any transactions until someone talks to you). Finally, credit cards (unlike debit cards), are not linked to your bank account.

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