In the last 24 hours, Bitcoin has been worth between $232 and $238, so that could be called a 3% fee on top of the 0.5% fee, and that 3% is just from the last 24 hours. If you look at the last week, the fee could be considered even higher (more than double or quad that).
The problem with Bitcoin is that it is extreme volatile. So you may gain or lose money. So while a 2.9% free on dollars is fairly predictable, you really don't know what the final "fee" would be on Bitcoin.
He's probably more referring to the customers side.
Why should I buy bitcoins for let's say $300 and risk them being worth $200 in a few weeks (which would cost me 33%) instead of keeping my money and paying directly (maybe 3% fees for the seller)?
It's a much more nuanced question if you don't hold USD in the first place. Here I have a choice between holding BTC and holding CAD. Both fluctuate compared to the prices of stuff I want to buy from US retailers.
They both fluctuate, but not that much. If you saw that much fluctuation in CAD to USD conversion, no US based company would sell goods in Canada. Just look at what happened due to the ruble value fluctuations last month.
If you are in Canada that isn't really true. It is extremely easy to open a USD denominated bank account and credit card. Couple banks have Euro accounts as well.
Yeah, but if you get paid in CAD, it's still a question of when you want to deal with the volatility—point of sale, or point of forex-exchange-during-account-transfer. You still have to deal with timing it right (possibly waiting months) if you want to avoid losing tens of cents on the dollar.
And if you're already thinking like that, Bitcoin isn't nearly as scary.
Bullshit. And this is not a matter of opinion or speculation. There is data and history. Take a look: http://imgur.com/FmpI0HY
That's the past year. The flat blue line around 0% is CAD vs USD. The crazy red line that's all over the place, swinging by as much as 100% in a matter of weeks, is CAD/BTC.
Unless you're planning on holding the currency, those graphs are irrelevant - what would matter would be short term changes (1-2 days, perhaps). And while USD might still come out better, your graph grossly distorts how this would affect someone wanting to use USD or BTC primarily purchases while holding their assets in CAD.
Cheaper fees are moot points in the context of what costs the end user will incur at the end of the day. Anonymity? Are we still keeping our talk limited to "BC payments for VPNs" and "BC payment for those seedboxes in the DMCA agnostic parts of the EU" (not that it's not a valid use case)? I guess not, at least that's not the popular argument around.
Volatility of Bitcoin prices puts stock market rate fluctuations to shame. Think of it from the market price point of view and from the point of view of an end user, like me - who'll buy Bitcoins (yes, one who didn't win the gold rush lottery or couldn't afford the mean machines or wasn't just aware) to buy a pair of jeans which has its price fixed at, let's say, $59.99 since last 7 months. When I bought the Bitcoins it cost me $1200/b.c, but the next day when I went to buy that jeans with my Bitcoins - or maybe I just wanted to convert it back to dollars, it was at $800/b.c or let's just say $1100/b.c if you find the former rate too far fetched.
Trust me, it just doesn't make any practical financial sense to me and no, I am not in the minority, I am part of the majority. If you say that "Bitcoins were never meant for the majority in the first place" then it's a different story altogether.
Also, if I would have had the 1000s or even 10s or maybe 100s of Bitcoins from the initial gold rush (given I was able to afford an able and mean mining rig) it would have been a different story - I mean my "different" point of view then.
And just to be clear I value my privacy just like I know my affordability and financial limits too.
bitcoin's not really that anonymous. Sure, the ledger doesn't contain identities, but it's not extremely difficult for the mapping between addresses and identities to "leak" and once they do, it's anything but anonymous.
The currency itself is not anonymous. In fact it's a huge mistake to suggest such a thing. That would be like saying keeping a ledger at a currency trade makes the currency 'anonymous'.
Since there are more avenues of trade available than say, with cash, laundering and other clever tactics can be used as tools to cover your tracks.
As always, the only way to keep yourself safe is through GOOD OPSEC. Bitcoin is an evolution of the currency concept, a tool for moving and representing wealth; nothing more.
there is no mapping to leak, there is no join between your identity and the bitcoin ledger, there may be some sites such as coinbase that can say "well coins were sent from this address controlled by Mr. Bob, to a new address". Mr. Bob says he sent it to a gambling website, exchange, merchant, localbitcoin sale, in person trade etc. After that he has no idea where it has gone or no way to link the identity of the current owner of those bitcoins, add in 3 or 4 more steps and it doesnt become difficult to obfuscate the trail enough that there is no conclusive link.
that says nothing for coins mined directly, wjere there is no link to any real world identity held anywhere, just a bitcoin payment address.
When I spend money with a vendor I often reveal my identity to them intentionally (so that they can ship me goods!). There's the join right there. You can argue that I shouldn't have sent money to this vendor but I think that eliminates an enormous existing use case for cryptocoins.
There are benefits to anonymity, which arguably outweigh disadvantages.
I was just pointing out that bitcoin is anonymous when used by someone with a brain. (I.e not Ross Ulbricht, who apparently sent money to an assassin from his personal wallet, without using a mixer.)
I understand that there are benefits to anonymity, but I don't think anonymous transactions are really a priority at this time, except for people doing illegal business. I certainly don't want politicians to be able to receive anonymous funding.
It's different with something like speech, where we have a rational principle that says "people can speak as a general proxy for hypothetical positions." But you can't make hypothetical purchases, and you can't represent a general population with anonymous purchases. So anonymous purchases don't have a social basis for the same protections.
People need free speech to speak freely. Your Wikileaks example is cherry-picking: it is not illegal to donate to Wikileaks. It might be illegal to donate to a drug cartel, or somebody like ISIS. Or to that police officer who wanted to give you a ticket. Or that government agent deciding who to give a big contract to.
I think think of far more cases where anonymous transactions are harmful than I can where they are beneficial.
No, I don't think all free speech should be with identity. I would anticipate that it is hard to have free speech under such conditions.
I wouldn't care if my spending history were public, but that's obviously not relevant. I don't believe spending should be anonymous. I don't believe people should be allowed to make any purchase they desire without penalty. I do believe people should be able to speak without penalty, as people are better able to ignore bad words than they are bad money. Money corrupts people far more effectively and quickly than speech.
>It's not illegal per se to donate to wikileaks, but you may be put on a list somewhere.
So? You're already on a list somewhere. Are you arguing that you have a right not to be on lists, and that this has anything to do with currency?
>In most of your examples, you can easily pay with cash, which is anonymous.
No, not "easily." You have to go to a bank and sit in front of their cameras while they hand you money. That's not the same as anonymous internet transactions. And the person you are giving money to will see you hand it to them, unless you jump through some hoops. And jumping through hoops is shady when you're doing something illegal. And someone cannot steal your cash without being physically present, and thus requiring knowledge of your location and opportunity to leave a trail of evidence.
I mean, if it were so easy to pay cash, what value does bitcoin even bring to the table? Why are all these bitcoin advocates not just using cash, if they are so similar?
What if it gets sent through a mixer, then sent to an exchange, traded for an alt-coin, that's sent through its own mixer, then sent to a different exchange and traded back, then sent to another mixer? All you need is one link on the chain to not keep logs (which many mixers claim not to anyway), and you've hit a dead end.
Look at Tor. It's never been broken by tracing back each relay, even though there are usually only 3. All the hacks were vulnerabilities in other things, like browsers or websites.
Mixing large amounts is pretty damn hard, there's not enough volume to hide large transactions. Trading massive amounts of BTC to an altcoin would be even harder, concealing the movements of that altcoin would be pretty much impossible.
In the end the process of money laundering ends up being significantly more complicated than with "real money".
Don't go and compare Tor to BTC, just don't. They share nothing from a technical PoV.
I'm not so sure about what you say about large mixing. https://bitmixer.io/faqs.html claims to have 2000 btc available, around $500,000. I argued that exchanges function as a mixer of sorts, and they're going to have a lot more btc lying around.
The comparison of Tor to BTC was mainly comparing mixers to relays. Just like you need every relay to store logs if you're going to go after all of them to break the chain, the same holds true by mixers.
2000BTC isn't very much at all, especially since the mixer having 2000BTC doesn't mean they can securely mix 2000BTC.
Exchanges will most definitely be storing logs, so that won't help much.
Comparing mixers to relays isn't valid either, with BTC the attacker will have access to the blockchain, which is basically the worst possible attack scenario for Tor.
And in any case, there isn't enough BTC transaction volume to reliably hide large amounts of BTC.
is it that different from buying bitcoins by meeting physically with someone and paying cash? or do you buy bitcoins from your personal computer? I guess no way will be truly anonymous
The seller has your mailing address. Mining is probably the most anonymous way to do it, and by far the least cost-effective. There are, however, ways to launder your bitcoins if you really want them to be anonymous, regardless of how you acquired them.
You can mine another cryptocurrency with your GPU and use that to convert to BTC. That's actually mildly profitable if you choose the right currency and your electricity costs are not too high.
I mean, imagine you go in with a baseball cap, and you go to a store that's nowhere near where you live. Is anyone really gonna be able to pull that up and ID you in 6 months? A year?
Cheaper fees (0.5% vs 2.9%) can be potentially passed on to consumers.
And anonymity.