[simias]

That's the definition of insurance. The problem with bitcoin, if you think that's a problem, is that there's no obvious way to implement this scheme. You'd have to insure your coins to a third party but then you'd probably have to give them some control over your wallet so that you can't just "steal" your own coins and make a claim.

But clearly people want this type of guarantee so I think the cryptopunk dream of having every human being owning a bitcoin wallet aligns poorly with what real world human beings want.

Everytime I read about long term adoption of cryptocurrency by the masses I always end up asking myself the same question: "Why would a random person for whom money is not a political statement care about any of that? What's the added value?" As far as I'm concerned I still haven't found a satisfactory answer to this question.

[kcanini]

I can think of at least two real-world uses where cryptocurrency is a better choice than fiat: (1) sending money overseas with very low transaction fee, and (2) transacting on the black market.

[root_axis]

> sending money overseas with very low transaction fee

Except that fluctuations in the conversion rate make this very touchy, especially if you're talking about a significant sum of money. Also, sending crypto anywhere outside of a handful of developed nations is fraught with difficulty because recipients need to be able to convert bitcoin into spendable money which often involves risky in-person meetups and gigantic markups on the conversion rate.

[vinceguidry]

These are market problems that are especially suited for developing nations to be able to solve themselves. I am forever impressed by the ability of local populations to work out collective solutions to scaling and trust problems.

Also, having options is better than not having them. Sure, there's the international wire system, but it wouldn't hurt to give it some competition.

[root_axis]

I'm not saying cryptocurrencies shouldn't exist, only that they are not at this time a serious or practical alternative except for very unique scenarios that are generally outside the scope of the average citizen, especially in the developing world. In the developing world, very often, even access to computers, electricity, and internet are serious obstacles, not to mention a gap in technical literacy compared to the developed world.

[wmf]

Didn't developing nations already solve this with hawala?

[reinhardt1053]

>difficulty because recipients need to be able to convert ? bitcoin into spendable money which often involves risky in-person meetups and gigantic markups on the conversion rate.

One day there will be no need to convert to fiat.

[root_axis]

Unlikely, but even if true, it still needs to be converted today and into the foreseeable future.

[ricardonunez]

About number (1). TransferWise is affordable and it doesn't have the currency exchange scam.

[thephyber]

> That's the definition of insurance.

The GP was talking about the marketing (cash back / rebates, discount rates, travel insurance) aspects of credit cards. These aren't insurance in any meaningful way. They are marketing expenditures designed to persuade credit card end-users to stay with a credit card brand. It's not unlike the Apple / Google / Amazon walled gardens for their {devices, paid apps, paid downloads, DRMed content}.

It's not "insurance". Banks and credit cards are regulated by government, so their offerings must meet the standards of the regulations. If cryptocurrencies become widely used for purchases, they, too, will likely become subject to tighter regulation. Additionally, contracts with other parties (cryptocurrency exchangers, retailers, etc) will need to ensure a certain amount of "insurance" of some sort in order to gain wider market acceptance.

The reason you don't get "cash back" from cryptocurrency (or cash) transactions is because there is no (hidden from the end user) 2.5%+ (sometimes 4%+) transaction fee paid by the merchant. That means the merchant passes on that cost onto the end user in the form of higher prices. Their merchant contracts with the credit card systems restrict how they can message this to the end user, so it's an opaque cost. When the Bitcoin protocol change dust settles, Bitcoin transactions will again be far lower than comparable credit card transaction fees.

The only reasonable aspect of credit card purchases that could be considered some form of "insurance" are the protections granted by state governments in the form of consumer protections for retailer purchases (in the form of returns, warranties, etc). Presumably these exist in the same form whether you purchase via cash, plastic, or cryptocurrency. The trick is that these protections are limited if you purchase anything outside of your state (like international transactions).

[simias]

Does it matter as far as bitcoin's adoption is concerned though? I don't know if it works differently in other countries but at least in Europe you pay the same price whether you pay cash or use a debit/credit card, even though the shops probably prefer cash because they don't have to pay any fees on it.

Do you think thinks will be different for bitcoins? Because if I end up having to pay the same price in BTC as I would with cash or Visa and on top of that I have to pay the bitcoin fee then as a consumer I'm not exactly better off.

>if cryptocurrencies become widely used for purchases, they, too, will likely become subject to tighter regulation.

I thought the whole point was to make a currency that could not be regulated by governments? If my coins are stolen what can the government do? It's as difficult to track as cash (if not more difficult) and it's completely immaterial like a credit card number. It's the perfect tool for thieves, as this ICO hack demonstrates. If the thieves are a bit patient and take the time to split and move their money around to hide their tracks they might never be found.

[jtmarmon]

>As far as I'm concerned I still haven't found a satisfactory answer to this question.

Me too. What's better: people are now trying to take advantage of this uselessness beyond money using ETH. every idea for an etherium-based app I've come across seems better served by a real institutional intermediary.