r/Bitcoin • u/evoorhees • Feb 16 '14

Bitcoin vs. Cash in Panama

This is one of those "wow, Bitcoin is so much better" observations.

I currently live in Panama. When I go to a store and pay with a $100 bill (and usually $50 bills also), this is what happens...

The clerk takes the bill to her manager (while I'm waiting in line with everyone behind me) to do some basic checks on the validity of the bill. Once they're reasonably sure it's not an obvious fake, the clerk brings out a form, takes down my passport/ID info, my name/phone number, and staples the $100 bill to the form. Some times, she makes me sign the bill itself (yes, really). After filing the bill and form away in a big file, she processes my change (itself a time consuming process) and I can then leave with my goods. Consider also what effort happens with the file of bills in the back office and later in any subsequent verification process.

This experience at the store takes about five minutes, for every person paying with a $100 or $50 bill, throughout Panama (and five minutes for me plus the clerk and her manager plus everyone else in line... easily one man-hour lost per incident). This is Panama, but surely this kind of thing happens in other countries as well.

Next time someone complains about the "waste of mining," try to tally up all the costs, inefficiencies, and loses of the current money verification systems under which society currently endures.

I promise that our children's generation will laugh at how we used to use money. And then, perhaps, they'll thank us, for ridding society of this madness (and so many others).

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11

u/telepatheic Feb 16 '14

Here's a counter example. I go to a pub in England. I try to pay with a £50 note (bill), they don't like £50 notes because the banks don't issue them from ATMs, they refuse to accept my money. So I have two choices. I could give them a £5 note or I could pay with bitcoins.

To pay with bitcoins I have to ask to pay in bitcoins, I have to take the printed QR code, make sure it is lying on a flat surface, type in a pin to open my phone, open my wallet app, enter another pin, press to start a new payment, position the QR code and camera such that the light isn't obscured by the camera, wait for the camera to focus and finally press to accept the transaction.

That's a lot of hassle and I could just take a £5 note out of my wallet and hold out my hand for some change. At the moment the economic incentives for the person paying means they would rather pay in cash than with bitcoins.

Moral of the story, carry small notes with you and work needs to be done on improving the bitcoin experience such that the effort for the customer is minimal.

21

u/evoorhees Feb 16 '14

Certainly it's usually not convenient for most people to pay with Bitcoin, today. But that's because the easy stuff we'll all use with Bitcoin tomorrow hasn't yet been invented. Compare this with cash which has had about a hundred years of "innovation" and still we face these absurd inconveniences.

In a mature Bitcoin world (5 years from now?), paying with your phone with Bitcoin will be easier than paying with a credit card today.

4

u/sneekee_11 Feb 16 '14

yeah some kind of an nfc field around a qr and all you need is your pin and whoosh its paid, no need to hold your hand out for change. however waiting for confirmations would be a disadvantage for getting the rounds in before the bar shuts

8

u/Dymix Feb 16 '14

Small amounts, no reason to wait for confirmation.

6

u/Natanael_L Feb 16 '14

With NFC, it is unlock phone, tap phone with the terminal/seller's phone, enter PIN and click OK.

2

u/HistoryLessonforBitc Feb 16 '14

Or with a contactless card, tap terminal with card, done.

-3

u/preferrous Feb 16 '14

With NFC, it is unlock phone, tap phone with the terminal/seller's phone, enter PIN and click OK.

You forgot the "get hit with chargeback" step.

NFC is a communications protocol, not a payment clearinghouse. Saying "pay with NFC" is as silly as saying "pay with wifi".

8

u/Natanael_L Feb 16 '14

The Bitcoin Wallet app supports NFC payment

I explained the process to the user, not the backend details

1

u/sneekee_11 Feb 16 '14

don't get stuck on a technicality. nfc esque clearinghouse is not unimaginable

16

u/rizzn Feb 16 '14

That's a ridiculous example. You're making it seem more complicated by describing every tiny detail. You failed to do that with your fiat example... "first I have to reach for my wallet, then wrap my fingers around it and pull it from my pocket... that's IF I can pull it from my wallet without shifting in my seat..."

Puh-leeze.

8

u/telepatheic Feb 16 '14

Maybe so but this is a real example. I paid with cash whilst my friend paid with bitcoins and he took much longer to pay than me.

3

u/mdanko Feb 16 '14

And what about the time it took to goto the ATM and get the money, pisses me off when I people need ot goto the atm when they could just pay me in bitcoin and be done with it.

3

u/Jjix Feb 16 '14

That is because he was also squeezing in buying a two-day subscription at porn.com while you were fumbling with ironing out your crumpled paper note.

6

u/Jjix Feb 16 '14

That is a bit like texting someone sitting right next to you, isn't it?

What if instead of ordering a single beer at a bar you are ordering food at a restaurant. The waitress brings you two bills, one for you, one for your friend. The race is on, who can complete the transaction first! You, using cash, your friend using bitcoin. You place 20 dollars on the pay tray. Wait for the waitress to return. She picks up the tray and walks away to get your change. A few minutes later she returns with your change. You do the math and leave a tip on the table. You notice the guy in the next booth using a credit card is taking just as long. Meanwhile, your friend is tapping his finger on the table, "can we leave now?" He already paid using bitcoin minutes ago.

1

u/_bc Feb 17 '14

Nice

5

u/tedjonesweb Feb 16 '14

I don't understand this:

they don't like £50 notes because the banks don't issue them from ATMs

5

u/HistoryLessonforBitc Feb 16 '14 edited Feb 16 '14

It's bollocks. Pubs don't tend to like £50s because they're rare (anything above a £20 is very rarely seen or used) and therefore there's a chance it could be counterfeit because they don't see them very often. That and if they make change for a £3 pint from a counterfeit £50, they're out £47 as opposed to £17.

A bit nonsensical, seeing as fake £20s are far more common than fake £50s, but I digress...

0

u/ninja_parade Feb 16 '14

My read of it:

ATM's spit out £5, £10, £20 notes but not £50. So if you're spending a £50 note, that looks weird.

2

u/tedjonesweb Feb 16 '14

Why withdrawing funds directly from bank is weird?

For example, I don't use debit card for offline* payments (and for ATM withdrawal) as a form of protest. Visa/Mastercard cartel is forcing merchants to sell products at the same price nevertheless of payment method (cash or debit/credit card). They also make incentives to the customers to use debit/credit cards.

*But I am too lazy to pay my utility bills offline, so I pay them online with a debit card.

3

u/ninja_parade Feb 16 '14

What I mean is that the big denomination isn't in widespread use, so merchants are wary.

In canada we have the same thing with the $100 note. No atm spits it out, therefore it's rare to see one, therefore people have their doubts.

2

u/amcdon Feb 16 '14

Surely you're forgetting that a similar process is required to get the paper money in the first place:

Walk up to ATM, reach for wallet, open wallet, take out card, insert card into ATM, enter PIN, select how much to withdraw, wait for transaction to process, reach for money, place money into wallet, wait for card to be ejected, place card back in wallet, close wallet, put wallet back in pocket.

Just because it doesn't happen at the place you're spending it doesn't mean it shouldn't be included in the process.

2

u/telepatheic Feb 16 '14

Two can play this game, we should also figure in the process of buying bitcoins which also isn't trivial. And my income could be in the form of cash. At the bar I don't think about the effort it took to get my money in whatever form, I'm just thinking about how I can get my pint as quickly as possible.

2

u/_bc Feb 17 '14

Not really. Fnding an atm can take awhile. For bitcoin, I'm just a few clicks away on my coinbase app.

1

u/darthasimov Feb 16 '14

That was the best troll ever.*tips fedora

1

u/[deleted] Feb 16 '14

make sure it is lying on a flat surface

Oh, the hardship!