RE: Seeing the forrest from the BTCs

No, I'm advocating Bitcoin as the rail, not the currency.

Users would never hold Bitcoin prior to a purchase (unless they wanted to for some reason), and right when they initiate a buy, the USD/Euro/fiat wallet provider they choose would instantly convert to BTC JIT under the covers solely to use the Bitcoin network as the transmission rail for the value, and enable a simple, universal, payment UX flow. On the other end the BTC would be instantly converted back to the local fiat and neither party would have held Bitcoin at any point.

This does a few things:

- Eliminates the volatility issues (users never hold Bitcoin)
- Allows all UAs to implement against Bitcoin's open APIs and do amazing things that are nearly impossible with a standard that just slaps an intermediate layer between the user and legacy payment mechanisms
- Doesn't exclude banks and other legacy monetary institutions (your bank could be a wallet provider)
- Standardizes the value transfer mechanism by default
- Inherently simplifies payment flows - the flow of a BTC transfer is already 1 or 0 click

Bitreserve already does this: http://vimeo.com/104126081

- Daniel
________________________________________
From: Anders Rundgren [anders.rundgren.net@gmail.com]
Sent: Monday, January 19, 2015 10:31 PM
To: Daniel.Buchner; "Web Payments CG ý[public-webpayments@w3.org]ý"
Subject: Re: Seeing the forrest from the BTCs

Hi Daniel,
I have no problems understanding and agreeing with what you write with one exception:
The mixing of BTC and "Ordinary Money".

Is it correct that you advocate using BTC as a universal currency/value which could be automatically exchanged during transactions?
I.e. BTC would be like the dollar has (effectively) been?

Anders

On 2015-01-20 05:01, Daniel.Buchner wrote:

Hey Folks,

I've been thinking a lot about payments the last few weeks from the perspective of a consumer, retailer, and CG/IG/WG member. In doing so I came up with a few important concerns/requirements for each stakeholder-type:

Consumer

  *   Let me pay easily with a single simplified solution, and let the mechanism, medium, and flow be ubiquitous.
  *   Let me pay securely without the inherent susceptibility to ID theft, fraud, and malicious activity that is common with current mediums (ex: credit cards)

Retailer

  *   The solution should be easy to integrate
  *   The solution needs to be more secure than the status quo
  *   The solution should lower/eliminate fees and costs, if possible
  *   The solution should allow us to easily account for our unique business logic (different consumer interfaces and internal processing requirements)

CG/IG/WG Members

  *   Don't force numerous, hefty specs on implementers that try to do it all
  *   Make sure user stories are priority #1
  *   Don't pit forward-looking solutions against legacy ones in the name of unifying all current mechanisms/mediums of payment

What in the world fulfills all of these points that we can shape into something actionable? There is an option, but it requires two things:

  1.  Completely separate development of solution meant to unite legacy payment systems from an unencumbered, future-forward solution based on a completely open payment network
  2.  Fundamentally modify how we view Bitcoin as that latter solution

Most Bitcoin proponents pour the majority of their effort into pushing Bitcoin as a currency (it could be at some point in the future), but what if that's not the right way to think about the opportunity Bitcoin presents us as a payment standards-based group? Instead, what if we used Bitcoin for the thing it has done well since day 1: transport value across an open network.

In the coming months you will see Bitcoin companies move to offer USD wallets (some already are - Coinbase, Bitreserve, etc.). This raises an interesting question: what if users held local fiat currency in a provider's wallet and could purchase anything through one simple, unified flow without ever knowing the system performs on-the-fly conversion between Bitcoin and back to transfer funds? Here's what this would mean:

  *   Any company/actor could leverage this simple, unified payment rail/solution (Coinbase, traditional bank, browser, app, etc.)
  *   Users would realize all the benefits of a simple, universal payment system without needing to understand, care about, or ever even hear about the nerdy Bitcoin tech that acts as the rail
  *   The scope and effort required on the part of UAs shrinks dramatically
  *   Site/app integration is also radically simplified (for some sites/apps it can be as easy as adding a link to their pages/views)
  *   Business costs drop for every party involved

Let me know what you think.


- Daniel

Received on Tuesday, 20 January 2015 07:47:24 UTC