[citricsquid]

> The current banking system is inherently insecure. If you have an account number and a routing number (written on the bottom of every check), you can pull money. Bitcoin is potentially much more secure.

If the company you store your wallet with is hacked you lose everything, if your laptop is stolen or your dropbox account is hacked... it's as safe as keeping cash in your apartment. If your bank fucks up your money is (almost always) insured.

http://arstechnica.com/tech-policy/2012/09/hacker-steals-250... http://arstechnica.com/business/2012/03/bitcoins-worth-22800... http://arstechnica.com/tech-policy/2011/06/bitcoin-price-plu...

> It's way too difficult to send money today, especially internationally, and fraud is a huge issue. We shouldn't need something like PayPal. Bitcoin solves this.

Fraud is a huge issue that Bitcoin does not solve. Send your money over bitcoin and it's gone, forever. Paypal etc. offer protections, they're not bulletproof but they're better than nothing.

[mrb]

"If the company you store your wallet with is hacked you lose everything"

Which is why it is not recommended to store Bitcoin wallets with third parties. Store it and secure it yourself.

"if your laptop is stolen or your dropbox account is hacked... it's as safe as keeping cash in your apartment."

Which is why it is recommended to encrypt your wallet, so that if your laptop is stolen, the attacker has no access to it.

"If your bank fucks up your money is (almost always) insured."

Eventually, if the Bitcoin economy continues to grow, an insurance market will develop itself.

"Fraud is a huge issue that Bitcoin does not solve"

Actually it does solve the biggest fraud issue of today: fraud during purchases. Merchants receiving bitcoins are guaranteed that transactions are irreversible and cannot be charged back.

What you mean, is not that Bitcoin does not solve fraud, it is that Bitcoin is hard to "secure". It is a hassle for a user to encrypt his local Bitcoin wallet with a secure passphrase and to ensure that his computer is not infected by keyloggers/malware attempting to steal the passphrase.

Fortunately, there are efforts from different groups to develop credit-card sized tamper-proof hardware Bitcoin wallets (think about typing a pin code on a small device, which sends a Bitcoin transaction via NFC or via showing a QR code on an e-paper display).

[khuey]

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

[xur17]

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?

[mrb]

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.

[oleganza]

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.

[neilkumar]

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.

[oleganza]

Compromised credit card adds significant hassle while Bitcoin transaction adds zero hassle. So CC is worse than Bitcoin for both parties: merchant can lose money and have to insure against it with paper work and higher prices, customer has to worry about reputation of a merchant and check his balance regularly, call the bank quickly etc.

Yes, if the merchant steals from the buyer, the raw BTC transaction is not reversible. But normally merchant has much more to lose than you if he is not nice (and merchants show their commitment by investing a lot in marketing and development) and in rare cases when you transact more money, you can use escrow and extra paperwork. But that's totally optional and is not needed when paying for a coffee, a book, or some inexpensive service.

[rishimoko]

> If the company you store your wallet with is hacked you lose everything, if your laptop is stolen or your dropbox account is hacked... it's as safe as keeping cash in your apartment. If your bank fucks up your money is (almost always) insured.

What unthinking person leaves his bitcoins with a third party or on a computer? Would you leave your RL wallet with a stranger? Would you leave something easily stolen in public?

Store bitcoins in a paper wallet until you need to use them. They'll never get lost or stolen unless one is just as careless with the paper as they might be with their live keys.

[mattbarrie]

Unless you live in Cyprus, or maybe another European country.