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 Bitcoins
 A practical common sense way to use them
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James R. Davis
Male Administrator
17396 Posts
[Mentor]


Houston, TX
USA

Honda

GoldWing 1500

Posted - 07/23/2014 :  6:29 AM Follow poster on Twitter  Join poster on Facebook as Friend                        Like
It occurs to me that Bitcoins are just an interesting theoretical subject for most people. They are not investors and have no intention of actually buying into the Bitcoin world.

But that could change, very quickly, if they understood the value and utility of Bitcoins.

For example ...

Let's assume that you want to buy a new flat-screen TV and you discover that your local merchant is selling what you want for $1,000. Oh, that merchant will give you a 1% discount if you pay with Bitcoins.

[He will do this because his credit card processing service charges him 2% to handle the credit card transaction so that if he sells to you using Bitcoins, you can save 1% and he can keep almost all of the other 1% as a larger profit on the sale.]

So you go to your favorite Bitcoin exchange and purchase $990 worth of Bitcoins and transfer them to the merchant who, in turn, provides you with the TV. The exchange charges you 0.15% to buy those Bitcoins, so your out-of-pocket cost for the TV was $990 plus $1.485 for a total of less than $991.49.

You owned Bitcoins for a total of 10 minutes. Market fluctuation risk is almost non-existent in 10 minutes.

Everybody has benefited - except the credit card processor.

Downside? Bitcoin transactions are not reversible. You can't stop payment on a Bitcoin transaction. You can't call on your credit card company for help if you are unsatisfied with the quality of the merchandise, etc. But most merchants are honest and will protect their reputations with a refund policy - and will refund your purchase (with Bitcoins) if requested. [You would accept those Bitcoins into your Bitcoin exchange wallet and immediately sell them for US Dollars - which would cost you another $1.485.]

Convenient? You could buy that TV using your iPhone!

So what if you wanted to buy a $10,000 motorcycle? Same thing and you would save nearly $100. How about a $100,000 piece of art? Use Bitcoins and save about $1,000. A $1,000,000 house? Save nearly $10,000.

And no bank can know about or track your purchases.

Another obvious way to use Bitcoins: You are traveling abroad and decide to buy something from a merchant that only accepts Lira (or Bitcoins). You avoid entirely the cost of converting US Dollars into Lira by paying in Bitcoins - and you didn't have to carry cash across any borders, just your iPhone.
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